Business news in brief

QUOTE OF THE DAY

“We’ve gotten through the first phase of the industry.The original vision has been built out.We’re now in a market where Apple is fighting on more equal terms.”

Benedict Evans, analyst at Enders Analysis, on Apple Inc.’s new iPhones Article, 1D

Tests find health computer hub secure

A computer system underpinning the U.S. health-care overhaul has completed security testing and is ready to go, the federal government said Wednesday.

The update may ease concerns that the network might not be functional when the uninsured begin shopping for coverage on Oct. 1. The computer hub, a frequent target of Republicans, will route data on customers using new insurance exchanges. The data will be from seven federal agencies, including the Internal Revenue Service and Social Security Administration.

“After over two years of work, it is built and ready for operation, and we have completed security testing and certification to operate,” U.S. Chief Technology Officer Todd Park said in an email from a spokesman for the Centers for Medicare and Medicaid Services.

The system will enable the marketplaces to provide “accurate and timely eligibility determinations,” Park said.

Congressional Republicans have questioned whether the hub presents a security risk because of the amount of sensitive data it will handle. The system will use the databases of the IRS and the other federal agencies to confirm information about Americans’ income, citizenship and insurance coverage when they apply for plans through the exchanges.

Citigroup shuts unit, cuts mortgage jobs

Citigroup Inc., the fifth-biggest U.S. mortgage originator last year, shut an office and is eliminating jobs as rising mortgage rates cut off loan refinancings and volumes slow.

The bank recently closed its Danville, Ill., facility because of “decreased refinance volumes,” Mark Rodgers, a bank spokesman, said in an emailed statement. The lender also cut some telephone-sales agents, he said. Rodgers declined to comment on the number of employees affected.

Citigroup joins other U.S. mortgage lenders including the largest, Wells Fargo & Co., and Bank of America Corp.

in cutting jobs tied to home lending as Federal Reserve discussions about paring bond purchases push mortgage rates higher. Banks are trimming their staffs as a surge in borrowing costs slowed refinancing by more than 70 percent and curbed what had been record profits.

Mortgage applications in the U.S. fell last week to the lowest level in almost five years, according to the Mortgage Bankers Association. The average rate on a 30-year, fixed loan climbed to 4.8 percent, matching the highest level since April 2011.

Bank of America is eliminating 2,100 jobs and closing 16 offices by Oct. 31, two people with knowledge of the plan said earlier this week. Wells Fargo last month said it will cut 2,300 jobs in mortgage production.

  • Bloomberg News

Oil in Canada rail disaster mislabeled

Canada’s transportation-safety authority said the crude oil carried on a train that crashed in Quebec, killing 47 people, should have been labeled as being more dangerous.

An unattended Montreal Maine & Atlantic Railway Ltd. train with 72 tankers of crude crashed in the Quebec town of Lac- Megantic in July, causing the worst Canadian rail disaster in more than a century. The Transportation Safety Board said in a statement from Ottawa on Wednesday that the oil was labeled as a “lower hazard, less volatile flammable liquid.”

“Test results indicate that the level of hazard posed by the petroleum crude oil transported in the tank cars on the accident train was not accurately documented,” the agency said.

  • Bloomberg News

1,100-job International Paper mill at end

MEMPHIS - International Paper is laying off 1,100 people who work at an Alabama paper mill that it plans to permanently close because of waning demand for the facility’s paper.

International Paper Co. has about 70,000 employees.

The Memphis company said Wednesday that it looked for ways to repurpose the Courtland mill but determined that permanently closing it puts the company in the best position for the future.

The mill makes paper for forms, envelopes, labels, copiers, printers and magazines. Demand for such paper has steadily dropped as businesses shift to options such as online applications and electronic billing and filing.

The mill is part of the company’s printing and communications business. Once the mill closes, the business will have four paper mills, in Eastover, S.C.; Riverdale, Ala.; Georgetown, S.C.; and Ticonderoga, N.Y.

International Paper said that its fluff-pulp business is not affected by the mill closing.

The company expects the closing to result in about $550 million in pretax asset write-off and accelerated depreciation charges. It expects about $125 million in pretax severance and other charges. The charges are expected to be recorded this year and in 2014.

Shares of International Paper rose 9 cents to close Wednesday at $49.36.

Wholesale stockpiles rise 0.1% in July

WASHINGTON - U.S. wholesalers increased their stockpiles only slightly in July after three monthly declines, and their sales improved at the weakest pace in seven months.

The Commerce Department said Wednesday that wholesale stockpiles rose just 0.1 percent in July from June. That followed a 0.3 percent decline in June.

Sales rose just 0.1 percent in July, the smallest gain since December. Still, that’s the fourth-straight month that sales have risen.

Some economists had thought that wholesalers might ramp up their stockpiles in July after cutting them beginning in April. The tiny increase could add to worries that the July-September quarter is off to a weak start.

More restocking boosts factory production, driving overall economic growth.

The economy grew at a 2.5 percent annual rate in the April-June quarter. Restocking by all businesses added 0.6 percentage point to growth in the second quarter, but the gain was driven by retailers, manufacturers and farmers.

Many economists believe economic growth is slowing in the July-September quarter to an annual rate of 2.3 percent.

  • The Associated Press

Business, Pages 24 on 09/12/2013

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