Friday AM August 15th, 2008
by: Ed Mayberry, August 15, 2008 4:08:00 am
The Texas sales tax holiday runs Friday through Sunday. State Comptroller Susan Combs says most clothing and shoes priced less than $100, with some exceptions, can be purchased tax free. Combs estimates shoppers will save about $54 million in the state's 10th annual tax-free weekend as families prepare for school to resume.
There's more proof of the toll being taken by rising prices. Between food and energy costs, the Labor Department says the July consumer price index rose eight-tenths of a per cent, twice the size of the gain that was expected. Inflation at the retail level has risen by more than 5.5 per cent over the past year, the fastest pace in 17 years. The increase in prices is squeezing consumers. Average weekly earnings, adjusted for inflation, fell 3.1 per cent in July. That's the biggest year-over-year decline in earnings since November 1990. Excluding volatile food and energy costs, the core rate rose three-tenths of a per cent last month.
The number of newly laid-off workers filing applications for unemployment benefits fell less than expected last week, indicating continued stress in labor markets from the weak economy. The Labor Department reported that applications for jobless benefits dropped to 450,000, down by 10,000 from the previous week. However, that was a smaller decline than had been expected and left the four-week average for claims at the highest level in six years. The big jump in the four-week average for claims was attributed to a number of factors, including a surge in layoffs and increased publicity boosting applications as laid-off workers reapply for extended benefits recently passed by Congress.
Americans love a bargain, even in the housing market. An industry group says a measure of home prices fell in more than three-quarters of U.S. cities in the second quarter. At the same time, home sales rose in markets saturated with foreclosures, indicating that borrowers are taking advantage of the price discounts. The National Association of Realtors says Nevada and California, hit hard by the slump, were the only states to see sales gains in the second quarter, compared to a year earlier. Nationally, sales were down 16 per cent in the second quarter, compared to a year ago. Median prices for existing single-family homes dropped in 115 of 150 metropolitan areas in the April-June period, while 35 metro areas saw prices increase. The median price is the point where half sell for more and half sell for less.
The number of foreclosure filings grew by eight per cent last month compared to June. That's also up 55 per cent compared to July of last year. RealtyTrac says more than 272,000 homes received at least one foreclosure-related notice in July. That comes out to one out of every 464 U.S. households. RealtyTrac monitors default notices, auction sale notices and bank repossessions. More than 77,000 properties were also repossessed in July. The highest foreclosure rates are found in Nevada, California, Florida, Arizona, Ohio, Georgia and Michigan. Forty-two states saw foreclosure filings increase compared to a year ago.
Anadarko Petroleum has terminated negotiations with Iraq to develop an oil field. The Woodlands-based company has a memorandum of understanding with the Iraqi government under which it has provided free technical advice. Iraqi officials continue negotiating short-term technical service contracts with Royal Dutch Shell, BP, ExxonMobil, Chevron and Total.
Smith International's planned $3.2 billion acquisition of W.H. Energy Services has been approved by the Federal Trade Commission. The two Houston-based oilfield services companies were granted early termination of the waiting period from the FTC.
The latest Business Confidence Survey from Houston-based Administaff indicates more than 75 per cent of small business owners say their companies are growing as well or better than expected earlier in the year. But the number of companies say they are hiring additional full-time employees fell to 43 per cent compared with 50 per cent for the same period in 2007. Half those businesses surveyed say they are relying on existing staff.
The Woodlands-based Lexicon Pharmaceuticals has begun preclinical development of its glaucoma drug LX7101. It's a small molecule compound that may treat glaucoma by lowering fluid pressure in the eye. Glaucoma gradually impairs vision and is a leading cause of blindness in the United States.
Cox Enterprises wants to sell the Austin American-Statesman and five other Texas newspapers. It's part of the Atlanta-based company's effort to also sell three papers in North Carolina and two in Colorado.
New government projections find white people will no longer make up a majority of Americans by 2042. That's eight years sooner than previous estimates. Immigration and higher birth rates, especially among Hispanics, are fueling the gains in non-white population. Brookings Institution demographer William Frey says the white population is older and very much centered on aging baby boomers, who he says are well past their high fertility years. White non-Hispanics make up about two-thirds of the population, but only 55 percent of those younger than five. The new projections say Hispanics, who make up about 15 per cent of the population, will account for 30 per cent in 2050. By 2050, whites will make up 46 per cent of the population and blacks will make up 15 per cent, a relatively small increase from today.
The Federal Reserve says banks borrowed slightly more over the past week from its emergency lending program while Wall Street firms did not draw any loans for a second straight week. The Fed reported that commercial banks averaged $17.70 billion in daily borrowing over the past week. That's compared with a daily average of $17.37 billion in the previous week. The central bank says investment houses, however, did not take out any loans. That could indicate pressures on these institutions for short-term credit may be easing.
JPMorgan Chase and Morgan Stanley have agreed to repurchase a combined $7 billion in auction-rate securities as part of a settlement with New York Attorney General Andrew Cuomo and other regulators. The companies will also pay a combined $60 million in fines. Last week, regulators reached settlements that required Swiss Bank UBS to repurchase $18.6 billion in the securities, while Citigroup agreed to buy back $7 billion of the securities. Auction-rate securities are investments that resembled corporate debt, but with interest rates reset at regular auctions. They joined Citigroup and the Swiss bank UBS in reaching settlements. The market for the securities collapsed in February amid deterioration in the broader credit markets.
Wachovia is close to agreeing to buy back $8 billion of auction-rate securities and pay fines to settle charges it misled investors about the risks, according to a person close to the negotiations. An agreement will be announced between the Charlotte, N.C.-based bank and regulators including New York Attorney General Andrew Cuomo could be announced.
EU statistics show the Euro-zone economy braking sharply in the second quarter as growth shrank in major economies Germany, France and Italy shrank. Growth in the 15 countries that share the Euro currency contracted by 0.2 per cent from the first quarter, although they expanded 1.5 per cent from the same period a year ago, according to the EU statistical agency Eurostat. Germany, Europe's largest economy, shrank 0.5 per cent in April-June from the previous quarter with France and Italy both down 0.3 per cent. No Euro country is yet officially in recession by showing two consecutive quarters of negative growth.
Houston is one of ten cities getting a new CNN news bureau, according to parent company Time-Warner, according to the Houston Business Journal. Operations are also being set up in Denver, Las Vegas, Minneapolis, Philadelphia, Phoenix, Seattle and in Columbus, Ohio, Raleigh-Durham, North Carolina and Orlando, Florida. Bureaus are already set up in Atlanta, Boston, Chicago, Dallas, New Orleans, Los Angeles, Miami, New York San Francisco and Washington, D.C.
Several hundred Chrysler manufacturing workers are protesting the automaker's decision to lay off people in St. Louis. Workers gathered Thursday across from Chrysler's headquarters outside Detroit. Organizers were expecting 500 protesters, including several busloads from St. Louis. The company announced June 30th that it was closing the minivan plant in St. Louis effective October 31st and removing a shift from a nearby truck plant. About 2,500 jobs will be affected. Chrysler says the cuts are necessary because of the decline in U.S. minivan and truck sales. Overall, U.S. auto sales were down 11 per cent through July, in part because of high gas prices. But workers say Chrysler should have kept jobs in the U.S. instead of keeping minivan and truck plants open in Canada and Mexico.
Toyota says it won't resume production of the Tundra pickup truck at its Princeton, Indiana, plant in November as previously announced. The company said last month that it would move production of the Tundra to a plant in San Antonio in early 2009 after suspending production at Princeton through November. Toyota spokeswoman Kelly Dillon said that production of the pickup trucks will not resume in November and tundra production will be moved to the Texas plant immediately. The Princeton plant will instead switch to production of the highlander sport utility vehicle. The plant will also resume making the Sequoia SUV in November. Toyota has said it will avoid laying off any of the 4,500 employees at the Princeton factory.
Wal-Mart stores says profit rose 17 per cent in the second quarter and is raising its full-year forecast as the world's largest retailer benefits from low prices that are attracting shoppers in a challenging economy, and its moves to cut costs. The Bentonville, Arkansas-based retailer says net income was $3.45 billion in the three-month period ended July 31st. That compares with $2.95 billion in the year-ago period. Sales were $101.6 billion, a 10.4 per cent increase from $92 billion in the year-ago period. Analysts surveyed by Thomson Reuters expected sales of $101.9 billion. Total revenue, which includes membership and other income was $102.7 billion.