Business news in brief

QUOTE OF THE DAY “Marchionne clearly spent his Christmas

holiday working harder than we did.” Max Warburton, Bernstein Research analyst, on Sergio Marchionne’s negotiations to merge Fiat SpA with Chrysler Group LLC Article, 1D

After merger, Arvest set to shut branches

Arvest Bank plans to close several branches in central Arkansas in connection with its purchase of National Bank of Arkansas, said John Womack, chief executive officer of Arvest’s central Arkansas division.

In several locations, Arvest will close one of its former locations and keep a nearby National Bank branch open, Womack said. Most of the changes will take effect Feb. 7, when the conversion of National Bank into Arvest’s systems occurs.

Arvest will retain National Bank’s headquarters office on McCain Boulevard in North Little Rock and close its own McCain branch, Womack said. National Bank’s branch on Pershing Boulevard will be closed.

Arvest will keep National Bank’s branch at Bowman Road and Markham Street in Little Rock and close the Arvest express lane branch on Markham.

In Conway, Arvest will retain National Bank’s two branches for now. But after Arvest renovates its own Oak Street branch, it will close National Bank’s Oak Street office.

In Sherwood, Arvest will keep its branch open and close National Bank’s branch, Womack said.

30-year mortgages inch higher to 4.53%

WASHINGTON - Average U.S. rates for fixed mortgages edged higher this week for the third straight week.

Mortgage buyer Freddie Mac said Thursday that the average for the 30-year loan rose to 4.53 percent from 4.48 percent last week. The average for the 15-year loan increased to 3.55 percent from 3.52 percent.

Mortgage rates peaked in August at 4.6 percent as expectations arose that the Federal Reserve would reduce its $85 billion a month in bond purchases. The purchases push mortgage and other long-term rates lower. Last month the Fed deemed the economy strong enough for it to reduce the monthly purchases by $10 billion.

Mortgage rates are higher than they were a year ago when the 30-year fixed rate was 3.35 percent and the 15-year was 2.65 percent.

Still, the average for the 30-year loan has been below 5 percent for nearly three years, a trend that has made homebuying more affordable.

To calculate average mortgage rates, Freddie Mac, the Federal Home Loan Mortgage Corp., surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage rose to 0.8 point from 0.7 point. The fee for a 15-year loan remained at 0.7 point.

Target notes some gift cards not activated

Less than two weeks after disclosing a security breach of its credit- and debit-card system, Target said some customers have been unable to use its gift cards because they weren’t fully activated.

“We are aware that some Target gift cards were not fully activated and apologize for the inconvenience,” Molly Snyder, a spokesman for Minneapolis-based Target, said in an email message. Less than 0.1 percent of the cards sold during the Christmas season were affected, Snyder said, adding that the company will honor the affected cards.

Target has been working to retain customers’ loyalty after saying Dec. 19 that security for 40 million cards may have been compromised as shoppers made purchases in stores from Nov.

27 to Dec. 15. The company also said data related to shoppers’ personal identification numbers were stolen. While the chain said it had identified and resolved the issue, the breach occurred during the most important period of the year for retailers and with shoppers already showing reluctance to spend.

Panama Canal expanders threaten to halt

A group led by Sacyr SA threatened to abandon expansion of the Panama Canal if waterway managers don’t meet a cost overrun amounting to about half the initial $3.1 billion contract. Sacyr shares fell as much as 19 percent.

The group, including Spanish builder Sacyr and Italy’s Impregilo SpA, notified the Panama Canal Authority it would suspend work if demands aren’t met in 21 days. The additional cost amounts to $1.63 billion, Sacyr said in a filing to Spanish regulators Thursday.

The European builders beat rivals including San Franciscobased Bechtel Group Inc. to win the contract in 2009 as part of an expansion that will allow larger ships in the waterway that connects the Pacific and Atlantic oceans. They are due to build a third set of locks to accommodate bigger vessels in the 50-mile canal, shortening voyages from the U.S. to Asia and potentially reducing transport costs for commodities such as liquefied natural gas.

Sacyr said the Panama Canal Authority was responsible for serious breaches of the terms of the contract, and it has been asking the managers to meet the cost overrun.

  • Bloomberg News

Beanie Baby maker hopes to avoid prison

Billionaire Beanie Baby creator H. Ty Warner asked a U.S.

judge to spare him prison and impose a probationary sentence for evading taxes on secret Swiss accounts that held as much as $107 million.

Warner, 69, faces 46 months to 57 months in prison when he is sentenced Jan. 14 in federal court in Chicago.

Warner, a maker of plush toys who also runs hotels, wants U.S. District Judge Charles Kocoras to sentence him instead to probation with community service, according to a Dec. 31 court filing.

  • Bloomberg News

Revlon to exit China, cutting 1,100 jobs

NEW YORK - Revlon, the maker of cosmetics that bear its name and Almay brands, will cease operations in China and eliminate about 1,100 positions, including 940 beauty advisers, as it restructures its struggling business.

China makes up about 2 percent of Revlon’s net sales, and the restructuring will result in about $22 million of pretax charges, the New York-based company said in a filing with the U.S. Securities and Exchange Commission. The changes are expected to reduce costs by about $11 million a year, Revlon said.

The company, which posted profit declines in 2011 and 2012, has been making acquisitions and introducing new products as sales in some of its larger brands slow. Early last year it bought Colomer Group, giving it Creative Nail professional and Shellac nail polishes, as well as American Crew men’s hair-care products.

“Revlon was unable to gain scale and relevance in the important Chinese beauty market,” Connie Maneaty, an analyst at BMO Capital Markets in New York, wrote in a note Tuesday.

She rates the shares market perform, the equivalent of a hold.

  • The Associated Press

Business, Pages 24 on 01/03/2014

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