NEW YORK (AP) — Home Depot said Thursday that a data breach that lasted for months at its stores in the U.S. and Canada affected 56 million debit and credit cards, far more than a pre-Christmas 2013 attack on Target customers.
The size of the theft at Home Depot trails only that of TJX Companies' heist of 90 million records disclosed in 2007. Target's breach compromised 40 million credit and debit cards.
Home Depot, the nation's largest home-improvement retailer, said that the malware used in the data breach that took place between April and September has been eliminated.
It said there was no evidence that debit PIN numbers were compromised or that the breach affected stores in Mexico or customers who shopped online at Homedepot.com. It said it has also completed a "major" payment security project that provides enhanced encryption of customers' payment data in the company's U.S. stores.
But unlike Target's breach, which sent the retailer's sales and profits falling as wary shoppers went elsewhere, customers seem to have stuck with Atlanta-based Home Depot. Still, the breach's ultimate cost to the company remains unknown. Greg Melich, an analyst at International Strategy & Investment Group LLC, estimates the costs will run in the several hundred million dollars, similar to Target's breach.
"This is a massive breach, and a lot of people are affected," said John Kindervag, vice president and principal analyst at Forrester Research. But he added, "Home Depot is very lucky that Target happened because there is this numbness factor."
Customers appear to be growing used to breaches, following a string of them this past year, including at Michaels, SuperValu and Neiman Marcus. Home Depot might have also benefited from the disclosure of the breach coming in September, months after the spring season, which is the busiest time of year for home improvement.
And unlike Target, which has a myriad of competitors, analysts note that home-improvement shoppers don't have many options. Moreover, Home Depot's customer base is different from Target's. Nearly 40 percent of Home Depot's sales come from professional and contractor services. Those buyers tend to be fiercely loyal and shop a couple of times a week for supplies.
Home Depot Thursday confirmed its sales-growth estimates for the fiscal year and said it expects to earn $4.54 per share in fiscal 2014, up 2 cents from its prior guidance. The company's fiscal 2014 outlook includes estimates for the cost to investigate the data breach, providing credit monitoring services to its customers, increasing call center staffing and paying legal and professional services.
However, the profit guidance doesn't include potential yet-to-be determined losses related to the breach. The company said it has not yet estimated costs beyond those included in the guidance issued Thursday. Those costs could include liabilities related to payment card networks for reimbursements of credit card fraud and card reissuance costs. It could also include future civil litigation and governmental investigations and enforcement proceedings.
"We apologize to our customers for the inconvenience and anxiety this has caused, and want to reassure them that they will not be liable for fraudulent charges," Home Depot's chairman and CEO, Frank Blake, said in a statement. "From the time this investigation began, our guiding principal has been to put our customers first, and we will continue to do so."
The breach at Home Depot was first reported on Sept. 2 by Brian Krebs of Krebs on Security, a website that focuses on cybersecurity.
Target's high-profile breach pushed banks, retailers and card companies to increase security by speeding the adoption of microchips in U.S. credit and debit cards. Supporters say chip cards are safer, because unlike magnetic strip cards that transfer a credit card number when they are swiped at a point-of-sale terminal, chip cards use a one-time code that moves between the chip and the retailer's register. The result is a transfer of data that is useless to anyone except the parties involved. Chip cards are also nearly impossible to copy, experts say.
Target has been overhauling its security department and systems and is accelerating its $100 million plan to roll out chip-based credit card technology in all of its nearly 1,800 stores. Home Depot said it will be activating chip-enabled checkout terminals at all of its U.S. stores by the end of the year.
WASHINGTON (AP) — The number of jobs at U.S. airlines keeps growing — although slowly — as some of them post record profits.
The U.S. Department of Transportation said Thursday that the nation's passenger airlines employed the equivalent of 386,243 full-time workers in July, up 1.3 percent from the same month last year. It was the eighth straight monthly gain over year-earlier numbers.
The largest employer, United Airlines, cut its work force 3.3 percent, while Delta, American, Southwest and US Airways added jobs.
Two small, low-cost carriers, Spirit and Allegiant, had double-digit gains. Some regional airlines that operate shorter flights for major carriers cut jobs, including Envoy (American) and Endeavor (Delta), while others grew.
The government counts two part-time employees as one full-time worker.
Government bulletin: http://bit.ly/1qO0qsK
NEW YORK (AP) — More encouraging economic news and friendly signals from the Federal Reserve cheered investors Thursday, as the stock market climbed to another record high.
The gains came a day after the Fed made clear that it's in no hurry to raise a key bank lending rate, easing a major concern for the stock market.
Eight of 10 industry groups in the Standard & Poor's 500 index rose, led by financial stocks.
"The question isn't 'Why are we up today?'" said Dan Veru, chief investment officer at Palisade Capital Partners in New York. "It's 'Why aren't we up a lot more?' What you're seeing is the U.S. economy growing at a modest pace, not too hot and not too cold."
Veru said it's an environment that allows the Fed to stick to a policy that coaxes businesses to borrow and spend and could fuel further gains for stocks.
Two of three major U.S. indexes finished at all-time highs: The S&P 500 index gained 9.79 points, or 0.5 percent, to 2,011.36, while the Dow surged 109.14 points, or 0.6 percent, to 17,265.99. It was the second straight day the blue-chip index has closed at a record.
The Nasdaq composite, meanwhile climbed 31.24 points, or 0.7 percent, to 4,593.43, well below its dot-com era peak.
The S&P Financials sector rose 1.1 percent. Bank profits could rise if short-term rates stay low while the rates they charge on longer-term loans creep higher.
The day began with good news about the economy. Fewer Americans filed first-time claims for unemployment benefits last week, according to the Labor Department. Weekly applications fell to 280,000, well below economists' forecasts. The four-week average, a less-volatile measure, also dropped.
Major markets in Europe headed higher as voters in Scotland decided whether to break from the United Kingdom. Germany's DAX advanced 1.4 percent, and France's CAC 40 gained 0.8 percent. Britain's FTSE 100 added 0.6 percent.
Scotland opened polling stations on Thursday for a referendum on whether the country should leave the United Kingdom of Great Britain and Northern Ireland to become an independent state. Opinion polls have suggested the "Yes" campaign favoring independence is neck and neck with the "No" campaign that wants Scotland to stay in the U.K.
"A 'yes' vote is likely to weigh heavily on the sterling and equities," said IG strategist Stan Shamu in a commentary. "A 'no' vote should result in a relief rally and is likely to be positive for the sterling and equities."
The pound was trading at a two-year high against the euro at €1.27, and holding steady against the dollar at $1.64.
On Wednesday in the U.S., the Fed maintained its stance of keeping short-term interest rates near zero for a "considerable time." Investors had speculated that the Fed might hint at an earlier start for rate hikes.
Among companies making big moves on Thursday, Rite Aid plunged 19 percent after it cut its profit forecasts for the full year, laying part of the blame on higher costs for generic drugs. The drugstore chain still expects sales of $26 billion this year. Rite Aid's stock fell $1.23 to $5.41.
ConAgra said its quarterly profits nearly tripled, sending its stock up $1.47, or 5 percent, to $33.48. Sales for the company behind Chef Boyardee canned pasta and Hebrew National hot dogs were flat, but other costs fell.
Alibaba Group is expected to wrap up its mammoth initial public offering later Thursday, then make its debut on the New York Stock Exchange on Friday under the symbol "BABA." The Chinese e-commerce company could raise as much as $21.8 billion from institutional investors, making it the largest IPO on record in the U.S.
Elsewhere, Hong Kong's Hang Seng finished 0.9 percent lower and Japan's Nikkei 225 gained 1 percent as the yen traded at a six-year low against the dollar. Markets in mainland China, India and Southeast Asia also rose.
In commodity trading, prices for precious and industrial metals fell broadly. Gold dropped $9 to settle at $1,226.90 an ounce, and silver sank 22 cents to $18.52. Copper dropped 5 cents to $3.09.
The price of oil fell on expectations of a quick return of Libyan production and continuing signals of lower global demand. Benchmark U.S. crude fell $1.35 to close at $93.07 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.27 to close at $97.70 in London.
In other energy trading, wholesale gasoline fell 0.8 cent to close at $2.561 a gallon. Heating oil fell 3.3 cents to $2.712 a gallon. Natural gas fell 10.3 cents to $3.910 per 1,000 cubic feet