Gun Industry Shares Plunge After Shootings
Morning Business Memo:
The gun industry is under growing pressure to respond to the Newtown, Conn., school massacre. Despite soaring sales, shares of gun makers have been sinking since last week. Smith & Wesson fell 10 percent yesterday and another big manufacturer, Sturm, Roger & Co., fell nearly 8 percent. Private equity firm Cerberus Capital Management is planning to sell its stake in Freedom Group, maker of the Bushmaster rifle. The gunman in Newtown used a .223-caliber Bushmaster rifle during the shootings. In a statement Cerberus said it will hire a financial adviser to help with the process of selling its Freedom Group interests. Dick's Sporting Goods has suspended sales of semiautomatic rifles at its stores across the country.
The approach of the fiscal cliff may be taking a bite out of consumer spending during the busiest shopping weeks of the year. A new poll for Bankrate.com says Americans' ratings of their financial security is down. One in three say "they have cut back on their spending within the last 30 days specifically due to concerns about the fiscal cliff," Greg McBride of Bankrate tells ABC News Radio. "Concerns about the fiscal cliff are starting to resonate with consumers much the way we've see them resonate with businesses in recent months." The Bankrate survey finds many people feel less financially secure than they did a few months ago. "That's not good news regardless of whether or not it's holiday shopping season," says McBride.
Wall Street is betting on a fiscal cliff deal. The Dow Jones Index closed yesterday at a two-month high with straight days of triple digit gains for the first time since July. Much of this comes with investor optimism that progress has been made in negotiations on the fiscal cliff.
Housing will be in the spotlight today with an update from the Commerce Department this morning on November housing starts. The National Association of home builders says industry sentiment rose last month to its highest reading in six years.
Two new decisions in the Apple vs. Samsung copyright fight. A federal judge in California rejected Apple's demands to block US sales of three Samsung smartphones. Hours later Samsung announced it was dropping its demands that several European countries prohibit sales of Apple smartphones.
There's fresh fallout from the LIBOR rate rigging scandal. Swiss bank UBS says it has admitted to fraud - and has agreed to pay US British and Swiss authorities about $1.5 billion to settle the joint investigation. LIBOR is used to set interest rate on trillions of dollars in loans and contracts around the world. UBS said some of its employees tried to rig the LIBOR rate in several currencies, but that its Japan unit, where much of the manipulation took place, entered a plea to one count of wire fraud in a the proposed agreement with the U.S. Justice Department.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc
