Feb 06 - Summary of business headlines: Cable TV leads to higher results at News Corp, Time Warner; 16 U.S. states sue S&P over mortgage-debt ratings; Treasury to make profit on Citigroup sale; J.C. Penney struggles on; Wall Street inches higher. Conway G. Gittens reports.
Stocks stage a last minute rally to close higher for the second time this week. The action actually amounted to the smallest move of any kind in three weeks. Earnings news to digest: News Corp. After the close, the media giant announced a higher-than-expected rise in quarterly revenues thanks to an 8 percent jump in ad sales at its cable business. Cable is also working for Time Warner. The media conglomerate is reaping the benefits from pay-TV channel HBO. Earnings topped forecasts and the company is returning cash to shareholders. The Justice Department's $5 billion lawsuit is not the only problem facing Standard & Poor's. 16 states along with Washington, D.C. are filing separate lawsuits. Colorado Attorney General John Suthers says S&P engaged in false advertising with its pre-crisis credit ratings. SOUNDBITE: COLORADO ATTORNEY GENERAL JOHN SUTHERS (ENGLISH) SAYING: "S&P has represented to the public and investors for years that they are wholly objective, wholly independent and not motivated by any kind of financial incentives in their ratings. We are out to disprove that. We believe that we have evidence that between 2004 and 2007 and continuing even after that point in time, as they saw this huge market for these residential mortgage-backed securities develop, they were willing to frankly change their standards of evaluation to make sure that they maintained their dominant market share and didn't lose business to other raters." S&P parent McGraw Hill has lost nearly $4 billion in market cap since word of a lawsuit broke Monday. Citigroup will no longer have the U.S. taxpayer as a shareholder. The U.S. Treasury is selling its final stake in the bank for just under $900 million as a result of the controversial 2008 bailout. That means taxpayers are actually turning a profit of $13.4 billion. J.C. Penney is still having a hard sell one-year after announcing a turnaround plan. The company suffered a steep decline in sales for the fiscal year, but CEO Ron Johnson told CNBC he thinks the retailer can return to growth this year. But investors are not convinced. The stock is down 53 percent over the past year. European shares - mixed for the day as political tensions grow.