- Associated Press - Tuesday, March 11, 2014

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How investors may be getting fooled by buybacks

NEW YORK (AP) - If you’re puzzled why the U.S. stock market has risen so fast in a slow-growing economy, consider the stock buyback.

Companies are increasingly engaged in massive stock buyback programs, which reduce the number of its shares in circulation by purchasing them from investors. Spreading earnings over fewer shares translates into higher earnings per share.

It’s a common practice but is one that has exaggerated the health of many companies. Critics say the obsessive focus on buybacks has led companies to put off replacing plant and equipment, funding research and development, and generally doing the kind of spending needed to produce long-term profits.

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US House committee investigating GM recall

DETROIT (AP) - A congressional committee is investigating the way General Motors and a federal safety agency handled a deadly ignition switch problem.

House Energy and Commerce Committee Chairman Fred Upton of Michigan says the National Highway Traffic Safety Administration received a large number of complaints about the problem during the past decade. But GM didn’t recall the 1.6 million cars worldwide until last month.

Ignition switches on older-model Chevrolet Cobalts and five other GM models can shift from the “run” position to “accessory” or “off” without warning, shutting off the engine and turning off power-assisted steering and brakes. The problem also can stop the front air bags from inflating in a crash.

GM says 13 deaths and 31 crashes have been linked to the problem.

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A bid of $1.8 billion suits Jos A Bank just fine

NEW YORK (AP) - It looks like the best suitor won.

Men’s Wearhouse Inc. said Tuesday that it’s buying its rival Jos. A. Bank Clothiers Inc. for $1.8 billion to create the nation’s fourth largest men’s wear retail chain. The acquisition comes after months of the two chains publicly fighting over who would acquire whom.

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