China bank hit by multi-day cash run

Hundreds of customers have taken their money out of a Chinese bank after rumors suggested it was nearing collapse.

HONG KONG (CNNMoney)

The details of the bank run, which took place in a coastal province north of Shanghai and lasted at least three days, were reported by state media.

Customers were worried their savings would be lost -- a very real concern in China, which has no official insurance system to protect bank deposits.

The panic was so widespread that the bank placed stacks of cash in bank teller windows to reassure customers that it had enough funds to meet demand.

A Reuters journalist reported from the scene that the bank was staying open 24-hours a day, and that the cash needed to satisfy hundreds of waiting depositors was being trucked in by armored car.

Local government officials responded to the bank run in a video statement that sought to reassure customers that their money was safe.

The China Banking Association issued a similar statement that expressed confidence in the bank's financial health, and warned that rumor mongers would be held legally accountable.

The Sheyang county governor also said the People's Bank of China would protect depositors, although the central bank hasn't publicly addressed the situation.

In a pinch, the central bank could tap a credit facility for rural banks that was established in January.

Related story: China's high wire act on failing companies

Analysts said the episode highlights the need for deposit insurance in China, a reform that is on Beijing's to-do list. Doing so should give depositors greater confidence, and help prevent future bank runs.

The government is widely expected to begin work on the issue this year as it seeks to implement financial and economic reforms.

In the meantime, it appears that the immediate risks from this week's run are contained.

"We believe the government will not allow deposit-taking institutions to fail, so this incident will likely be resolved soon without significant repercussions on the financial system," said Zhiwei Zhang, an economist at Japanese brokerage Nomura.

UBS economist Wang Tao has before called deposit insurance a "prerequisite" for a more market-oriented economy that would include flexible interest rates.

A "crisis resolution mechanism will also lay the foundation for allowing more credit defaults and exit of small financial institutions," she said.

Attempts to contact the bank Thursday were unsuccessful, but it appeared the incident may have run its course -- with only one real victim.

Local police said in a social media post that they had "captured" the suspected gossipmonger on Wednesday night.

First Published: March 27, 2014: 2:37 AM ET

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Ukraine to get $18 billion rescue from IMF

Ukraine will receive as much as $18 billion in aid from the International Monetary Fund. The country was on the brink of bankruptcy.

LONDON (CNNMoney)

Kiev has been running dangerously low on cash to pay for imports and service its debts since the ousting of pro-Moscow former President Vitkor Yanukovych last month, which killed off a $15 billion financial lifeline from Russia.

The IMF said it had reached preliminary agreement with Ukraine on a program of reforms aimed at stabilizing the economy and creating the conditions for a return to sustained growth.

Related: Soros: Ukraine needs EU Marshall Plan

Central to the program are commitments by Ukraine to tackle corruption -- a major concern of international donors -- and reforming the country's energy market, including the gradual withdrawal of subsidies on natural gas.

"Importantly, this will be accompanied by scaled up social protection to mitigate the impact on the most vulnerable," the IMF said in a statement.

Related: Recession warning for Russia

With its foreign currency reserves shrinking rapidly and economic turmoil rising following Russia's annexation of Crimea, Ukraine was staring bankruptcy in the face.

Analysts estimate it needs $12-13 billion this year alone to pay for imports and service debt -- including a $1 billion bond falling due in June -- and arrears on Russian gas imports.

The EU has already offered Ukraine financial assistance worth $15 billion over the next two years, in the form of loans, grants, investments and trade concessions. The U.S. has promised $1 billion in loan guarantees, and the World Bank is talking about backing infrastructure and social security projects worth $3 billion.

First Published: March 27, 2014: 5:10 AM ET

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Stocks: Banking sector in focus

Click chart for in-depth premarket data.

NEW YORK (CNNMoney)

The Federal Reserve rejected Citigroup's (C, Fortune 500) capital plan Wednesday, saying it was troubled by the bank's inability to predict how much it could lose in a severe economic downturn. It banned the bank from any dividend hikes or share repurchases for the next year.

Citi was among 30 large banks required to submit capital plans for an annual stress tests. The Fed approved 25 plans. Citi and four other banks faced rejections.

Trading volume could also be higher than normal in Bank of America (BAC, Fortune 500) shares after the firm announced first quarter earnings would take a hit due to a $9.5 billion settlement with the Federal Housing Finance Agency. The deal settles all litigation between Bank of America and the agency over mortgage-backed securities.

Aside from the banks, U.S. stock futures were looking firm ahead of the opening bell.

Related: Fear & Greed Index

Investors are waiting on the U.S. government to report initial jobless claims at 8:30 a.m. ET. The final estimate of fourth quarter GDP will be released at the same time.

On the earnings front, Lululemon (LULU), Accenture (ACN), and Gamestop (GME, Fortune 500) will report earnings before the opening bell.

Investors will also be watching King Digital Entertainment (KING). Shares in the maker of online game Candy Crush Saga took a beating after going public Wednesday.

Related: CNNMoney's Tech30

U.S. stocks ended lower Wednesday. The Nasdaq fell more than 1% and the Dow Jones industrial average and S&P 500 also closed in the red.

European markets were all declining in Thursday morning trading.

Asian markets ended with mixed results.

Shares in tech company Tencent (TCEHY) in Hong Kong fell by nearly 6%, leading Asian Internet companies lower. Investors and traders have been growing concerned that valuations have become too rich in the Asian tech, media and telecommunications sector.

First Published: March 27, 2014: 6:09 AM ET

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Connecticut boosts minimum wage to $10.10 by 2017

Gov. Dannel Malloy will sign the bill Thursday at a cafe where he discussed wages earlier this month with President Obama.

NEW YORK (CNNMoney)

The state legislature approved the bill Wednesday and Gov. Dannel Malloy, who proposed the increase, announced he would sign it on Thursday evening.

The hike will be made in steps, first from the current rate of $8.70 to $9.15 on Jan. 1, 2015. It will go up to $9.60 the following year and reach $10.10 in 2017.

The move makes Connecticut the first state to match Democrats' proposal to raise the federal minimum wage to $10.10, a move President Obama supports.

The President has encouraged mayors, governors and state legislators not to wait for Congress to adopt the $10.10 rate.

Bills similar to Connecticut's are being debated in Maryland and Hawaii and the city of Santa Fe, New Mexico, raised minimum wage to $10.66 earlier this month.

Connecticut is only one of many states that have already hiked the minimum wage above the current federal rate of $7.25. Washington currently has the highest statewide minimum wage rate, set at $9.32 per hour.

Obama commended Connecticut legislators in a statement Wednesday, and at the same time urged Congress to act on the federal rate.

First Published: March 26, 2014: 9:02 PM ET

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Slow down! A ticket hikes up your insurance

NEW YORK (CNNMoney)

Driving without buckling up results in a 5% increase, but that's the smallest hike according to a report from insuranceQuotes.com, a website that allows consumers to compare quotes. Those caught not signaling a turn or failing to yield for a pedestrian pay 19% more on average for insurance as a result.

Speeding, up to 15 miles per hour over the limit, can result in a 21% hike, according to the study.

Those are significant penalties, but still much lower than the 93% rate hike that can result after a DUI or the 82% increase for reckless driving.

Related: Study says car insurance is cheapest in December

"Some carriers see these violations as indicators that you might get into a future accident," said Laura Adams, senior insurance analyst for insuranceQuotes.com.

For most of those minor violations, the insurance rate hike could last for the next three years until the points fall off the driver's license.

But a driver could get rid of them faster by taking a safety course at a traffic school, Adams said. And she encourages consumers to shop around after committing a violation, because not every carrier takes them into consideration the same way.

"One carrier may really want to raise your rate while another may be more lenient with you," Adams said.

insuranceQuote.com partnered with Quadrant Information Services to calculate the impact of 17 types of moving violations in 50 states and Washington D.C using data from 60-70% of insurers in each. The average insurance increases are based on a hypothetical 45-year-old, married female who has a clean record and drives a 2012 sedan.

First Published: March 27, 2014: 12:17 AM ET

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China bank hit by multi-day cash run

Hundreds of customers have taken their money out of a Chinese bank after rumors suggested it was nearing collapse.

HONG KONG (CNNMoney)

The details of the bank run, which took place in a coastal province north of Shanghai and lasted at least three days, were reported by state media.

Customers were worried their savings would be lost -- a very real concern in China, which has no official insurance system to protect bank deposits.

The panic was so widespread that the bank placed stacks of cash in bank teller windows to reassure customers that it had enough funds to meet demand.

A Reuters journalist reported from the scene that the bank was staying open 24-hours a day, and that the cash needed to satisfy hundreds of waiting depositors was being trucked in by armored car.

Local government officials responded to the bank run in a video statement that sought to reassure customers that their money was safe.

The China Banking Association issued a similar statement that expressed confidence in the bank's financial health, and warned that rumor mongers would be held legally accountable.

The Sheyang county governor also said the People's Bank of China would protect depositors, although the central bank hasn't publicly addressed the situation.

In a pinch, the central bank could tap a credit facility for rural banks that was established in January.

Related story: China's high wire act on failing companies

Analysts said the episode highlights the need for deposit insurance in China, a reform that is on Beijing's to-do list. Doing so should give depositors greater confidence, and help prevent future bank runs.

The government is widely expected to begin work on the issue this year as it seeks to implement financial and economic reforms.

In the meantime, it appears that the immediate risks from this week's run are contained.

"We believe the government will not allow deposit-taking institutions to fail, so this incident will likely be resolved soon without significant repercussions on the financial system," said Zhiwei Zhang, an economist at Japanese brokerage Nomura.

UBS economist Wang Tao has before called deposit insurance a "prerequisite" for a more market-oriented economy that would include flexible interest rates.

A "crisis resolution mechanism will also lay the foundation for allowing more credit defaults and exit of small financial institutions," she said.

Attempts to contact the bank Thursday were unsuccessful, but it appeared the incident may have run its course -- with only one real victim.

Local police said in a social media post that they had "captured" the suspected gossipmonger on Wednesday night.

First Published: March 27, 2014: 2:37 AM ET

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First legal steps taken against Malaysia Airlines, Boeing

NEW YORK (CNNMoney)

Monica Kelly, a lawyer at Ribbeck Law, asked an Illinois state judge on Tuesday to order Malaysia Airlines and Boeing, which manufactured the missing airplane, to provide documents and other information.

Kelly is seeking specific information about the airline's batteries, details on the fire and oxygen systems and records related to the fuselage.

The filing appears to be the first move toward U.S.-based litigation stemming from the March 8 incident. The firm said it plans to build a multi-million dollar suit against the airline and Boeing.

Related: How will families be compensated

Boeing (BA, Fortune 500) declined to comment late Tuesday, and Malaysia Airlines officials were not immediately available.

Kelly's client, Januari Siregar, is the father of a Flight 370 passenger. It was not immediately clear when a judge would consider the filing.

International law dictates where suits against an airline may be brought. The families of victims are allowed to pursue legal action in countries including where tickets were purchased and where the airline is based. Suits can also be filed in the passenger's final destination.

That means most suits against Malaysia Airlines would be filed in China or Malaysia.

Related: Malaysia Airlines' $5,000 payment is just the beginning

International law does not, however, dictate where lawsuits against other parties, including Chicago-based Boeing, may be brought. Legal experts say crafting a case against the airplane's manufacturer is more difficult than against the airline.

Malaysia Airlines said it believes the plane crashed in the Indian Ocean and that all 239 people aboard the aircraft died. No physical evidence of the plane or passengers has been found.

First Published: March 25, 2014: 11:21 PM ET

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Pew: Online news organizations have created 5,000 jobs

A select few news organization, including Al Jazeera America, have greatly expanded their operations.

NEW YORK (CNNMoney)

Pew Research Center has tried to put a number on it: 5,000.

The center's annual State of the News Media report, released on Wednesday, includes a first-of-its-kind tally of jobs at 30 big websites, like Buzzfeed and The Huffington Post, and 438 smaller startups.

"In a significant shift in the editorial ecosystem, most of these jobs have been created in the past half dozen years, and many have materialized within the last year alone," write the authors of the 2014 report, who credit the startups with bringing "a level of energy to the news industry not seen for a long time."

The Pew report cites hiring sprees at digitally-oriented companies like Gawker, Business Insider, First Look Media, Vox Media, and Vice Media. But it emphasizes that "the growth in new digital full-time journalism jobs seems to have compensated for only a modest percentage of the lost legacy jobs in newspaper newsrooms alone in the past decade."

"The vast majority of bodies producing original reporting still lie within the newspaper industry," the authors write. "But those newspaper jobs are far from secure." While reliable data for 2013 is not yet available, the report says that full-time newsroom employment dipped by 6.4% in 2012, "with more losses expected for 2013."

Related: Narrow ratings win for 'Today' shows how much trouble it's in

The State of the News Media report is an annual assessment of American journalism, financed by the nonpartisan Pew Research Center. This time last year, Pew focused on what it called signs of "shrinking reporting power" due to cutbacks at newspapers and television networks. That report warned of "a news industry that is more undermanned and unprepared to uncover stories, dig deep into emerging ones or to question information put into its hands."

This year's edition relays what it calls "a new sense of optimism," partly due to recent investments at a wide variety of online news organizations, some for-profit and others not-for-profit. It cites "a new breed of entrepreneurs" like Jeff Bezos, who acquired The Washington Post last year, and an increase in philanthropic support for news producers.

Related: China playing rough with big media

Pew arrived at the number of 5,000 new digital news gathering jobs by compiling the number of staffers at 30 big websites and estimating the head count at many smaller ones. The authors acknowledge that "while that does not represent a complete census of a digital news world, it is a robust a sample as may be possible from a variety of credible sources."

They say that "many digital outlets are working to fill reporting gaps created by the strain on resources at traditional outlets -- from niche topic areas like education to international coverage to local community news to investigative journalism." Others are experimenting with new ways to tell stories, whether through videos or lists or data visualization techniques.

"But the question of whether digital news outlets can ultimately replenish the loss of legacy jobs and reporting resources hinges on creating the kind of successful business model or models that have proved elusive," the authors say.

First Published: March 26, 2014: 12:24 AM ET

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Stocks: Tech companies take center stage

Click chart for in-depth premarket data.

NEW YORK (CNNMoney)

Facebook (FB, Fortune 500), King Digital Entertainment (KING) and International Game Technology (IGT) are all making waves for different reasons.

Trading volume in Facebook shares could be higher than usual as investors react to the company's $2 billion acquisition of virtual reality firm Oculus VR. Facebook shares dipped in pre-market trading.

Shares in King, maker of the popular online game Candy Crush Saga, begin trading after its initial public offering on the New York Stock Exchange was priced at $22.50 a share, raising nearly $500 million and valuing the company at about $7.6 billion.

King is one of 14 companies going public this week.

Related: Candy Crush maker to begin trading

International Game Technology shares fell in after-hours trading Tuesday after the company, which makes casino games, said it is planning to cut 7% of its staff and lowered its earnings guidance for the year. The stock has lost 18% so far this year.

Tech stocks have been volatile this week. U.S. stock futures were relatively stable early Wednesday.

Related: CNNMoney's Tech30

U.S. stocks made gains Tuesday. The Dow Jones industrial average, S&P 500 and Nasdaq all edged higher, but by less than 1%. Investors were feeling optimistic after a new report showed consumer confidence reached its highest level in six years.

There is little economic news on the docket Wednesday. The main economic release will come from the Census Bureau, which is reporting February data on durable goods orders at 8:30 a.m. ET.

Related: Fear & Greed Index

European markets were moving up in morning trading. The biggest gainer was the Dax in Germany, up by just over 1%.

Most Asian markets gained ground Wednesday. The Hang Seng in Hong Kong climbed by 0.7%.

First Published: March 26, 2014: 6:05 AM ET

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Candy Crush maker prices IPO

NEW YORK (CNNMoney)

King Digital Entertainment will begin trading Wednesday under the ticker KING on the New York Stock Exchange at $22.50 a share the company said on Tuesday night.

The Dublin, Ireland-based game maker sold 22.2 million shares raising nearly $500 million from the offering. Based on that, King would be worth about $7.6 billion.

Related: Candy Crush company founder left $1 billion on the table

By comparison, rivals Zynga (ZNGA) and Activision (ATVI) sport valuations of $4 billion and $14.6 billion, respectively.

Among the underwriters are JPMorgan Chase (JPM, Fortune 500), Credit Suisse and Bank of America Merrill Lynch (BAC, Fortune 500), the company said in its federal filing.

Candy Crush averages about 93 million daily users, who play the game more than a billion times a day, according to the company.

King reported annual revenue of $1.9 billion and a profit of about $568 million, despite offering games such as Candy Crush, Pet Rescue and Farm Heroes to players for free.

But its growth has soared. Sales in 2012 were $164 million with a profit of just $8 million. King makes money by selling virtual items to a small fraction of its players who wish to enhance their playing experience.

Despite its rapid gains, King's dependence on Candy Crush has some market strategists questioning its long-term strategy. There are concerns that this could be a repeat of Zynga, which has been unable to the match the success of former hit Farmville.

"Since only a a small group of players generate most of King's revenue, a loss of even a small number of these players would materially affect King's gross bookings," said financial data firm PrivCo in a recent report.

Other red flags include slowing growth for Candy Crush, as well as the way King "double counts" its players, according to PrivCo, which has advised investors to pass on the stock.

"An individual playing Candy Crush on his cell phone while commuting to work and then later plays Candy Crush on his computer during their lunch break would be counted as two users," PrivCo said. "If the person then played on a tablet during the same period, he would be counted as three users."

Still, King's profits are impressive and plenty of investors are hungry for a taste of what they view as a sweet IPO.

King's stock may be "fairly valued," said Tim Keating, chief executive of Keating Capital, a fund that specializes in making pre-IPO investments but does not own a stake in King. He added that King's profit margins are strong and its revenue growth over the past year has been an "eye popping" 1000%.

But using history as a guide, some analysts are harboring a healthy dose of skepticism. Zynga, for example, currently trades at around 50% less than its 2011 IPO price. Still, Zynga has regained some lost ground and is up almost 30% this year.

Related: How does King Digital compare to Zynga?

King's public debut comes amidst a busy year for new offerings. There have been 53 new listings in the United States so far this year, according to IPO research and investment firm Renaissance Capital. In the same period last year, there were just 30 companies that went public. At that rate, the number of IPOs this year could rival last year's total of 222, which was the highest number since 2000.

While the overall market has been volatile due to geopolitical concerns and the Fed's scaling back of stimulus, the average IPO has returned 28.3% from its offering price, according to Renaissance.

-- CNN's Ben Rooney contributed to this report

First Published: March 25, 2014: 7:00 PM ET

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