Wednesday PM August 6th, 2008
by: Ed Mayberry, August 6, 2008 4:08:37 pm
Freddie Mac has posted a second-quarter loss more than three times bigger than Wall Street expected, as more homeowners fell behind on their mortgages. The mortgage financier also says it expects to cut its third-quarter dividend as it seeks to preserve capital. It set aside $2.5 billion for credit losses in the second quarter as the delinquency rate and foreclosures increased. That's more than double the amount it set aside in the first quarter.
The Energy Information Administration says crude oil supplies rose by 1.7 million barrels to 296.9 million last week. That's slightly more than the 1.2 million-barrel increase expected by analysts surveyed by energy research firm Platts. The EIA, the statistical arm of the Energy Department, says inventories of distillate fuel, which include diesel and heating oil, jumped 2.8 million barrels to 133.3 million barrels, above the 2.3 million barrels expected by analysts. But the EIA data show that gasoline stockpiles fell by 4.4 million barrels to 209.2 million barrels, a much bigger decline than the 1.4 million barrels expected by analysts.
Oil prices are falling, dropping briefly below $118 a barrel again on the New York Mercantile Exchange — the lowest since May 2nd — following a government report of bigger-than-expected jumps in supplies of crude oil and distillates, suggesting high energy prices are still eating into demand. Oil prices are now down about $30 from their record high of $147.27, reached July 11th. Falling crude kept weighing on retail gas prices. U.S. filling stations hungry for business ratcheted down the price for a gallon of regular on average by another penny overnight to $3.86, according to auto club AAA, Oil Price Information Service and Wright Express. Prices have now fallen more than six percent from all-time highs above $4 a gallon reached July 17th.
European regulators have cleared the proposed acquisition of Northwest Airlines by Delta Air Lines. The European Commission says in a statement that after examining the operation, it concluded that the transaction would "not significantly impede effective competition in the European Economic area or any substantial part of it." Delta still needs Justice Department approval and the approval of its shareholders and the shareholders at Northwest.
The government will auction off a take-off and landing slot at Newark Liberty International Airport next month. It's the first step in an experiment to ease travel delays through the New York metro area's airspace. The Transportation Department announced the plan a day after the managers of the three major airports in the New York City area vowed to block it—in courts or Congress. The Bush administration has championed a limited auction of take-off and landing slots at Newark, LaGuardia and JFK airports to reduce flight delays. Such delays have a ripple effect, causing backups throughout the country. The Air Transport Association has said it will sue to block the September 3rd auction. Continental Airlines argues that the extra flights would add congestion at the airports, adding flights at times the airport already has significant delays.