On the eve of earnings season, the Dow Jones Industrial Average gave back some of last week's gains, falling 51 points, or 0.4% today. Markets appear to be worried about the debt ceiling standoff and negotiations over spending cuts that were left unresolved in the fiscal cliff agreement.
Today's big story was the nation's banks taking a major step toward leaving the bailout era behind, with a massive settlement with Fannie Mae. In total, the banks agreed to pay $18.5 billion to resolve outstanding claims over bad mortgages. Bank of America , which bought the mortgage originator Countrywide, said it would pay more than $10 billion to Fannie Mae, while, in a separate settlement, B of A, JPMorgan Chase, Citibank, and others agreed to pay a sum of $8.5 billion as a result of foreclosure abuses. Investors were unfazed by the news, as Bank of America shares fell just 0.17%, and JPMorgan gained 0.1%.
Elsewhere, Boeing found itself in trouble again when a battery in one of its Dreamliner 787 jets caught fire at Boston's Logan airport. No one was hurt, as the Japan Airlines flight had already landed and passengers had departed, but this is yet another headache for the new jet, which has seen mechanical failures in other instances. Shares of the aircraft maker fell 2% on the day.
Only Disney had a worse day than Boeing, falling 2.3% on reports that it was preparing to implement cost-cutting measures. Wall Street generally rewards companies making such moves, but the announcement apparently caught the market off guard. The internal review could lead to layoffs in several areas, and CEO Bob Iger has called 2013 a "transition year," after the company made large investments in theme parks and cruise ships last year.
Finally, McDonald's bucked the broad trend today, gaining 1.1% on word that it's expanding its chicken wings pilot program. The fast food chain had rolled out wings in Atlanta last year, and is now planning a test starting this week at about 500 restaurants in Chicago. Rising costs for wings could present a challenge for McDonald's, however, and a nationwide rollout by McDonald's could send prices even higher. Separately, rival Yum! Brands fell more than 5% after hours, saying that KFC sales in China will fall due to a recent government investigation of its poultry.
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