Jan. 15 - Summary: S&P 500 sets record high, erases loss for 2014; J.C. Penney cutting staff, shutting some stores in new effort to rebound; Bank of America earnings inspire confidence; IMF's Lagarde warns against hasty Fed. Conway G. Gittens reports.
The S&P 500 turns positive for the year as economic data and earnings inspire investors to get back in following a new year slump. Market gains were widespread with the S&P 500 hitting its first record high of the year. Bank of America set the tone. Quarterly profits were stronger-than-expected as it set aside less money to cover bad loans and revenues were solid in every major unit. Shares of the second-largest U.S. bank climbed more than 2 percent. When it comes to the economy: Producer prices jumped in December to their highest in six months, but prices are subdued enough to suggest consumers will not face a spike in prices. Meanwhile, the U.S. economy expanded at a moderate pace, with hiring on the rise in the final weeks of last year, according to a summary by the Federal Reserve. Though the U.S. economy is improving, the Fed shouldn't act too fast, warns Christine Lagarde, managing director of the International Monetary Fund. SOUNDBITE: CHRISTINE LAGARDE, MANAGING DIRECTOR, INTERNATIONAL MONETARY FUND (ENGLISH) SAYING: "Growth in the United States is certainly picking up, driven, essentially by private demand. And, that recovery that we observed in 2013, that, unfortunately, was dragged by the fiscal consolidation of 2013, will be helped by the loosening of the fiscal corset as a result of the recent budget deal. Still, it will be critical to avoid premature withdrawal of monetary support and to return to an orderly budget process, including removing the threat of the debt ceiling." Topping corporate headlines: J.C. Penney is cutting about 2,000 jobs and closing 33 underperforming stores as it looks to save $65 million annually starting this year. It expects store closings to be complete by early May as turnaround attempts enter a new phase. Apple customers will share at least $32.5 million in refunds for children who made in-app purchases on mobile devices without parental permission. The cash payout is part of a settlement with the Federal Trade Commission. A widening probe of possible manipulation in the $5.3 trillion-a-day foreign exchange market intensified with Deutsche Bank suspending several traders in New York, according to sources. U.S. listed shares climbed more than 2 percent and shares of Citi were up after U.S. regulators visited that bank's London offices. European markets rallied to 5-1/2 year highs after the World Bank raised is global growth forecast.