Consumer credit up $18.1B in August
Americans boosted their borrowing in August by the largest amount in three months with strong gains in the category that covers auto and student loans and in credit card debt.
Total consumer borrowing increased $18.1 billion in August compared to July, the Federal Reserve reported Friday. In July, consumer borrowing had fallen for the first time in nearly a year.
The rebound in August along with a separate report that showed the nation’s unemployment rate dropped to 7.8 percent in September were viewed as encouraging signs for an economy that has been struggling in recent months.
The August borrowing gains reflected a $4.2 billion increase in borrowing on credit cards and a $13.9 billion increase in auto and student loans.
Feds probe trouble with Ford Escapes
Federal safety regulators have started looking into throttle problems with older-model Ford Escape SUVs.
The North Carolina Consumers Council has asked for an investigation into two complaints that the SUVs stalled or surged.
The request affects 1.6 million Escapes from the 2005 to 2012 model years. The National Highway Traffic Safety Administration says it has two complaints from drivers who experienced repeated stalling or surging. No crashes or injuries have been reported.
The council says in its petition that Ford has sent a number of service bulletins to dealers about hesitation and stalling.
The Escapes have not been recalled.
18-year tenure of Avon chairman ends
Avon Products said Friday its chairman and former CEO Andrea Jung will step down at the end of the year. The move will end her 18 year tenure at the company.
Jung joined Avon in 1994 and became the first woman CEO for the 126-year old company In 1999. But she came under fire for failing to stem the company’s declines and wrap up a bribery investigation.
She was replaced by Sherilyn S. McCoy as CEO in April but retained her chairman title.
Jung will be replaced as chairman by lead director Fred Hassan. He joined the board in 1999 and has served as lead independent director since 2009.
Samsung earnings hitting new highs
Samsung Electronics Co. forecast another record quarterly operating profit, likely driven by strong sales of high-end smartphones that offset weak semiconductor orders.
The guidance for Samsung’s third quarter earnings showed it was on track to report a record-high profit for a fourth straight quarter, despite legal tussles with Apple Inc. that resulted in a $1 billion compensation judgment in August.
But analysts said a rise in marketing spending will decrease the company’s profit in the October-December quarter and sustaining fat margins in premium mobile devices could be increasingly tough.
Samsung estimated in a regulatory filing that its July-September operating income nearly doubled to $7.3 billion from the year-earlier quarter. The estimate is better than the market consensus, according to a poll of 26 analysts by FnGuide Inc., a financial information provider.
Four on Wet Seal board step down
The chairman of Wet Seal and three other directors have stepped down from its board, replaced by four nominees of the activist investor group unhappy with the struggling teen retailer’s performance.
Wet Seal Inc. and The Clinton Group have been in a proxy fight. The Clinton Group holds about a 7 percent stake in Wet Seal.
As a result of the board changes, Clinton Group has agreed to terminate its effort to get support from shareholders for its nominees, Wet Seal said Friday.
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