Morning Market Roundup: Starbucks to Open 1,500 new Cafes, Citigroup to cut 11K+ Jobs, L.A. Port Strike Ends
Here’s what’s important in the business world this morning:
Starbucks: Another Starbucks may soon pop up around the corner, with the world’s biggest coffee company planning to add at least 1,500 cafes in the U.S. over the next five years.
The plan, which would boost the number of Starbucks cafes in the country by about 13 percent, is set to be announced at the company’s investor day in New York Wednesday.
Worldwide, the company says it will have more than 20,000 cafes by 2014, up from its current count of about 18,000. Much of that growth will come from China, which the company says will surpass Canada as its second-biggest market.
Sales at new cafes are averaging about $1 million a year, for example, above the company’s target of $900,000. It costs about $450,000 to build a new cafe.
Los Angeles Strikes: Clerical workers and longshoremen at the nation’s largest port complex will return to work Wednesday, eight days after they walked out in a crippling strike that prevented shippers from delivering billions of dollars in cargo across the country.
Negotiators reached a tentative agreement to end the strike late Tuesday, less than two hours after federal mediators arrived from Washington, D.C. No details about the terms of the deal were released, though a statement from the workers’ union said it had won new protections preventing jobs from being outsourced.
The strike began Nov. 27, when 450 members of the union’s local clerical workers unit walked off their jobs. The clerks had been working without a contract for more than two years.
The walkout quickly closed 10 of the ports’ 14 terminals when some 10,000 dockworkers, members of the clerks’ sister union, refused to cross picket lines.
Citigroup: Citigroup said Wednesday that it will cut 11,000 jobs. The cuts amount to about 4 percent of Citi’s workforce of 262,000.
The bank did not spell out how many of the jobs will be in the United States. Most of them, about 6,200, will come from Citi’s consumer banking unit, which handles everyday functions like branches and checking accounts.
Citi said that it will sell or scale back consumer operations in Pakistan, Paraguay, Romania, Turkey and Uruguay and focus on 150 cities around the world “that have the highest growth potential in consumer banking.”
U.S. Stocks: Stocks are opening mostly higher on Wall Street as traders hope for more economic stimulus measures from China.
Citigroup rose 4 percent after the bank said it would slash 11,000 jobs.
Shortly after the opening bell Wednesday, the Dow Jones industrial average was up 52 points at 13,003.
The Standard & Poor’s 500 index was up three points at 1,410. The Nasdaq composite slipped three points to 2,993.
Internet radio company Pandora Media predicted a loss in the fourth quarter, a bad surprise for investors. The stock plunged 14 percent.
The Shanghai Composite Index jumped 2.9 percent after the Chinese government pledged to maintain policies intended to strengthen the economy. China also said it was willing to “fine tune” those policies and make them more effective.
The Associated Press contributed to the report.
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