Friday PM October 9th, 2009
by: Ed Mayberry, October 9, 2009 10:10:31 pm
The U.S. trade deficit unexpectedly narrowed in August as exports posted a small gain and imports fell on a big drop in demand for foreign oil. The Commerce Department says the trade deficit declined 3.5 per cent to $30.7 billion, surprising economists who had expected higher oil prices to push the imbalance to $33 billion. Oil prices did shoot up, but the volume of shipments dropped sharply in August. The continued rise in exports may be viewed as an encouraging sign that the global economy is starting to recover from a severe recession that began in the united states and quickly spread to other parts of the world.
Plans to expand a South Texas nuclear plant into the largest in the U.S. are going before the San Antonio city council this month. CPS Energy this week asked city leaders to approve $400 million to keep expansion plans to the South Texas Project nuclear plant on track. The utility and New Jersey-based NRG Energy want to add two reactors to the nuclear plant near Houston. The two new reactors are expected to go online around 2018. The plant says the expansion would make the plant the largest nuclear power facility in the nation. Nuclear power opponents say the $13 billion price tag on the plant is too costly and contradicts with plans to make San Antonio greener. The council is set to vote October 29th.
The Texas Offshore Port System is continuing with permit applications for a $1.8 billion oil port off the Texas coast, according to the Houston Chronicle. Remaining partner Oiltanking Holding Americas continues looking for new investors, having settled with former partners Houston-based Enterprise Projects Partners and Teppco Partners, which pulled out of the project. The project would locate a platform 36 miles off Freeport to unload crude from two supertankers at a time, for distribution through undersea pipelines to a new storage facility in Hitchcock. ExxonMobil and Motiva, a joint venture of Royal Dutch Shell and Saudi Aramco, are signed on as customers.
Interior Secretary Ken Salazar says he will permit oil gas drilling on 17 of the 77 Utah land parcels that were hurriedly readied for leasing in the waning days of the Bush administration. Salazar also said at a news conference that leasing will be prohibited on eight parcels. The fate of the remaining 52 is unclear as government officials seek more information before making a final determination. The parcels are all in eastern or northeastern Utah, and much the land borders national parks and other areas prized for their vistas and their recreational and cultural amenities. The Bush administration's decision to lease the land drew fire from critics who said drilling might harm the nearby parks and other protected lands.
The Dallas office of the U.S. Bureau of Labor Statistics says there were 457 fatal occupational injuries in Texas in 2008, down from 528 in 2007. The decline was distributed across nearly all occupational groups, but was particularly notable among protective service workers and construction and extraction workers. Large decreases were recorded in electrocutions, falls and homicides. But the number of worker deaths in the state from highway mishaps, aircraft incidents and self-inflicted injuries rose last year. Highway incidents accounted for 30 per cent of the total work-related deaths in Texas, remaining the leading cause of on-the-job deaths in the state and in the nation.
Meanwhile, the U.S. Department of Labor's Occupational Safety and Health Administration has cited Houston-based CES Environmental Services with one alleged willful, 32 alleged serious and other-than-serious violations following the death of a worker at the company's worksite in Port Arthur. Improper handling of hazardous chemicals is blamed.
The 7th annual Historically Black Colleges and Universities College & Career Fair is set for tomorrow morning beginning at eight at the Judson Robinson, Jr., Community Center at 2020 Hermann Drive. Workshops on college planning and admissions, as well as financial aid and scholarships are scheduled.
San Antonio-based Valero Energy says it plans to eliminate 100 jobs out of the 550 it has in its Paulsboro, New Jersey, plant by year's end. The company told employees it will seek voluntary retirements from both union and salaried workers. Spokesman bill day says the offers will be attractive to workers. Valero says the struggling economy has reduced demand for fuel and higher costs. Last month it said it would idle two units at its Delaware City, Delaware, plant, cutting about 150 jobs. Earlier in the week, Sunoco said it would indefinitely idle its nearby facility, Eagle Point in West Deptford. That facility has 400 full-time workers.
Fluor Corporation plans to cut 500 jobs by the end of the year. The Irving-based engineering and construction services provider will then have 3,500 people employed in Sugar Land—still that city's biggest employer. The company has a worldwide workforce of 42,000.
Senate Democrats have reached a deal to extend unemployment insurance benefits to workers in every state who are in danger of seeing their benefits run dry in the coming weeks. The agreement would give an additional 14 weeks of benefits to jobless workers in all 50 states. Workers in states with an unemployment rate at 8.5 per cent or above would receive six weeks on top of that. The House last month approved legislation that gives 13 weeks of extended benefits, but only in those 27 states that have unemployment rates of at least 8.5 per cent.
Texas collected $1.47 billion in sales tax receipts in September—down 12.5 per cent compared to a year ago. Comptroller Susan Combs sent local governments $418.5 million in monthly sales tax allocations—a 7.6 per cent decrease compared to last year Monthly sales tax allocations of $282.8 million were sent to Texas cities, which is down 7.3 per cent compared to last October.
A government watchdog says the Obama administration's effort to help homeowners avoid foreclosure may not achieve its goal of helping up to four million borrowers and may not be enough to dampen the impact of the foreclosure crisis on the economy. The Congressional Oversight Panel report says the program is aimed at the crisis "as it existed six months ago," but the problem has now moved beyond homeowners who took out risky mortgages in the subprime market. It says unemployment has raised the threat of foreclosure for a growing number of families with conventional, fixed-rate mortgages who put down ten to 20 per cent on their homes. The report concludes that the Treasury Department should consider either improving the current $50 billion program or adopting new programs to meet an expected rise in foreclosures. The Oversight Panel accepted the report by a 3-2 vote. One of the two Republican members voting against it, Texas Representative Jeb Hensarling, says the foreclosure mitigation program is a failure and shouldn't be expanded.
Federal Reserve Chairman Ben Bernanke sent a fresh signal that he's in no rush to reverse course and start boosting interest rates. The Fed's key bank lending rate is now at a record low near zero and will probably stay there for an "extended period," Bernanke said in a speech to a Fed conference in Washington. That echoed the pledge he and his colleagues made at their meeting in late September. The goal: super-low rates will entice people and businesses to spend more, nurturing the budding recovery. In a surprise move earlier this week, Australia's central bank raised rates, the first nation in the group of 20 countries to do so. The move raised questions about which country would be next.
Banks reduced their borrowing from the Federal Reserve's emergency lending facility over the past week, and cut back their use of other programs designed to ease the financial crisis. The Fed says banks averaged $27.9 billion in daily borrowing over the week ended Wednesday, down slightly from $28 billion in the week ended September 30th. The central bank has pumped trillions of dollars into the financial system through an array of short-term lending programs in an effort to ease the crisis. The reduced borrowing shows banks are having a slightly easier time getting short-term loans in private markets. The identities of the financial institutions that receive emergency loans are not released. They pay just 0.50 per cent in interest for the loans.
The Senate has passed legislation to deliver $350 million in aid to dairy farmers struggling to cope with low milk prices. The money includes $60 million to cover the federal purchase of surplus cheese and other dairy products. The purchased products would go to food banks and other nutrition programs. The remaining $290 million is expected to go out in direct payments to farmers. The emergency funding was attached to a $121 billion agriculture spending bill for the 2010 budget year. The measure now goes to President Barack Obama to be signed into law. The bill also delivers a record $58.2 billion for the food stamp program. That works out to be a 19 per cent increase in food stamp spending when combined with benefit increases passed earlier in the year.
Kimberly-Clark says it will add higher-margin medical devices to its healthcare unit by buying healthcare company I-Flow in a cash deal valued at approximately $276 million. Kimberly-Clark, maker of Huggies diapers and Kleenex tissues, will start a tender offer to buy all of Lake Forest, California-based I-Flow's outstanding stock at $12.65 per share. The price represents an right per cent premium to I-Flow's Thursday closing price of $11.76. Both companies' boards have unanimously approved the deal, which is targeted to close in the fourth quarter. Kimberly-Clark's health care unit provides products and educational resources to help prevent, diagnose and manage various healthcare-related infections. On Monday, Dallas-based Kimberly-Clark said it purchased Baylis Medical's pain management business for an undisclosed sum.
It looks likely that U.S. regulators will impose conditions on the merger of concert promoter Live Nation and the giant ticket-seller Ticketmaster. British authorities have already come out against the deal. Antitrust experts predict that before the merger could go through, Ticketmaster and Live Nation could be forced to sell off some of its assets, or forced to sell some tickets through a competitor. British authorities are afraid that the deal could "severely inhibit" a new competitor from entering the market.
Record harvests are being forecast for corn and soybean farmers despite earlier concerns over a cool growing season. In the report, the National Agricultural Statistics Service forecasts record yields for corn and record production for soybeans. Corn production is estimated at 13 billion bushels, up eight per cent from 2008. If true, it will be the second-highest production since 2007. Yields are forecast to average a record 164 bushels per acre, up more than ten bushels from 2008. A record is also forecast for soybeans, up ten per cent from 2008. Yields are expected to average 42 bushels per acre, the third highest on record.
The U.S. orange crop is expected to be ten per cent smaller than last season's yield. Estimates released by the U.S. Department of Agriculture put the overall U.S. orange crop at 8.25 million tons, down ten per cent from last season's final count. If the estimate holds true, the 2009-2010 orange crop will be 18 per cent smaller than two seasons ago. In Florida, the nation's largest producer, the crop is expected to be down 16 per cent from last season. Below-average rainfall and freezing temperatures earlier this year are to blame. The California orange crop is expected to be up 13 per cent from last season. In Texas, orange production is expected to be down one percent.
U.S. cotton production is forecast to reach 13 million bales, slightly more than a year ago, with farmers in parts of the south expecting record yields. The forecast was reported by the U.S. Department of Agriculture. The report shows many states are expecting higher production totals than in 2008 even though growers planted fewer cotton acres this year. Production in Texas, for example, is forecast to reach five million bales, up from 4.5 million. Georgia production is expected to reach about 1.9 million bales, up from 1.6 million. However, big declines are forecast in several states, including California and Mississippi, where recent soggy weather has taken a toll. The forecasts are based on October 1st conditions.
The number of rigs actively exploring for oil and natural gas in the U.S. this week rose by 17 to 1,041. Houston-based Baker Hughes said that 726 rigs were exploring for natural gas and 305 for oil. Ten were listed as miscellaneous. A year ago this week, the rig count stood at 1,990. Texas gained six rigs. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.