Business news in brief

QUOTE OF THE DAY

“We would love to put our cash to work in loans, but we just don’t see that level of demand at this point of time.”

John Gerspach,

Citigroup’s chief financial officer Article, 1D

T-bill interest rates drop at auction

WASHINGTON - Interest rates on short-term Treasury bills fell in Monday’s auction with rates on six-month bills dropping to the lowest level since early March.

The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.080 percent, down from 0.085 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.135 percent, down from 0.150 percent last week.

The three-month rate was the lowest since three month bills averaged 0.075 percent on April 2. The six month rate was the lowest since those bills averaged 0.130 percent on March 5.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.98 while a six-month bill sold for $9,993.18.

That would equal an annualized rate of 0.081 percent for the three-month bills and 0.137 percent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged down to 0.18 percent last week from 0.19 percent the previous week.

Wal-Mart taps Google exec for board

Wal-Mart Stores Inc. nominated Google Inc. executive Marissa Mayer for election to the board of the world’s largest retailer.

Mayer, 36, would stand for election at the annual shareholders meeting June 1 in Fayetteville, Wal-Mart said Monday in a statement.

Mayer, who would become the 16th member of the board, has been vice president of “local and maps” for Google since 2010. She oversees products and software used on mobile devices such as smart phones or tablet computers. Retailers like Wal-Mart are competing to sell more of their goods through mobile devices as more consumers use them to shop.

She began her career at Mountain View, Calif.-based Google in 1999 as its first woman engineer and serves on the boards of the San Francisco Museum of Modern Art and the San Francisco Ballet, according to the statement.

“We are on the cusp of a massive transformation in the way people shop in our increasingly connected world. Marissa’s insights and expertise in the technology and consumer areas are valuable assets to Wal-Mart as we move forward,” Wal-Mart Chairman Rob Walton said in a statement.

Hobby Lobby to raise minimum wage

OKLAHOMA CITY - Hobby Lobby Stores Inc. says it’s raising its minimum wage for full-time employees to $13 per hour.

The Oklahoma City-based retail chain announced Monday that part-time employees’ pay would increase to $9 per hour.

The company has more than 500 arts and crafts stores in 41 states, including 10 stores in Arkansas, according to its website. The increase will affect more than 15,300 employees nationwide. Hobby Lobby notes that its minimum wage for full-time workers is far above the national minimum wage of $7.25.

Last year, Hobby Lobby raised its minimum wage to $12 per hour.

The company says it’s the fourth year in a row that it has offered pay increases to workers. Founder and Chief Executive Officer David Green said Hobby Lobby workers are key to the company’s success and that they deserve to be rewarded for their work.

Moody’s lowers Nokia stock status

HELSINKI - Moody’s ratings agency downgraded Nokia’s debt grade to near non-investment status Monday, citing a sharp decline in first-quarter cell phone sales that led to a 35 percent fall in revenue.

The agency lowered Nokia Corp.’s long-term credit rating by one notch to Baa3 - just a step above non-investment grade - after last week’s profit warning, which had caused Nokia’s shares to plunge by more than 20 percent.

It left a negative outlook on the ratings, meaning it could downgrade Nokia to non-investment status if the new smart phones don’t sell well and revenue fails to recover later this year.

Moody’s noted that Nokia’s cell phone volumes dropped 16 percent in the first quarter because of increasing competition from makers of low-end phones or new phone promotions by Chinese carriers.

“While volatility by quarters is not uncommon, Moody’s believes that the structural challenges facing Nokia’s mobile phones segment may not be easy to address,” the rating agency said.

Reacting to the downgrade, Nokia said its financial position remains strong, with its investment grade rating “backed by Nokia’s strong liquidity position and capital structure.”

Chief Financial Officer Timo Ihamuotila said Nokia is “quickly taking action” to improve its financial position.

BMW probe finds 16 wrecks, 5 hurt

DETROIT - U.S. safety regulators have found 16 crashes and five injuries in an eight-month investigation of transmission control problems with BMW 7-Series cars, the German company’s top-of-the-line sedans.

The National Highway Traffic Safety Administration began the probe in August and has now upgraded it to an engineering analysis, which is a step closer to a recall.

However the cars have not been recalled.

The investigation covers nearly 122,000 BMWs from the 2002 through 2008 model years.

The cars have push-button start and electronic transmission controls. In some cases the owners may think the cars are in park when they actually are in neutral. The safety agency said in documents on its website Monday that the cars can roll away unexpectedly and crash.

Messages seeking comment from BMW were not immediately returned Monday.

The safety administration said in the documents that BMW and investigators have received 50 complaints about the problem.

The safety administration said it upgraded the investigation to an engineering analysis “to further assess the potential safety consequences of the alleged defect.”

Business, Pages 22 on 04/17/2012

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