Morning Business Memo…
Billions of dollars in the red, and facing a financial crisis, the US Postal Service says it plans to stop delivering mail on Saturdays, but continue delivering packages six days a week. In an announcement set for later today, the USPS is expected to say the cut, due to begin in August, would mean an annual cost saving of about $2 billion a year. One of the few bright spots for the Postal Service is package delivery, which has increased by 14 percent since 2010. The delivery of letters and other mail has declined with the increasing use of email and the internet. Last September the service reported a record $15.9 billion loss for its fiscal year. For the first time last year the post office was forced to default on payments owed to its future retiree health benefits fund.
Shares in McGraw-Hill, the parent company of ratings firm Standard and Poor’s, plunged more than 23 percent since the Justice Department announced its lawsuit. The government could be settling in for a long battle with Standard and Poor’s over claims that the firm defrauded investors by giving rosy to bundles of mortgage bonds The government’s complaint alleging wrongdoing in the three years leading up to the financial crisis cites a series of e-mails. One example reported by The Wall Street Journal: “In March 2007, an analyst sent colleagues song lyrics about the deteriorating market, set to the tune of the Talking Heads 1980′s song “Burning Down The House,” according to the government’s complaint. The government alleges that S&P gave glowing ratings of products that crumbled later. The government wants the firm to pay back at least $5 billion.
Down one day, back up the next. Stock averages reversed Monday’s slide largely thanks to a surge in home prices and cautious signs of improvement in the European economy. The Dow closed up 99 points yesterday. The high-tech Nasdaq surged 40 points. Apple had its biggest gain in three months rising 3.5 percent.
A sign of times for online TV viewing. CBS says a record 3 million people streamed the Super Bowl – up nearly 50 percent on 2012. The game was seen on TV by more than 108 million viewers, but streaming is clearly gaining ground, and that’s a potential threat to cable operators.
Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc