Tuesday PM January 12th, 2009
by: Ed Mayberry, January 12, 2010 4:01:30 pm
Walmart says it will close ten money-losing Sam's Club stores and cut 1,500 jobs to reduce costs. Walmart says it plans to disclose the financial details of the closures when it announces its fourth-quarter results on February 18th. It does not anticipate any effect on its fourth-quarter profit.
Gasoline prices have continued to drive toward $3 a gallon. Oil prices are now about three times what they were a year ago. AAA says prices are near $2.75 a gallon. They've risen close to nine cents a gallon in the past week and are up about 96 cents in the past year. Motorists are paying about $50 more a month for gasoline than a year ago, and the total fuel bill for Americans now tops $1 billion per day compared with $650 million per day last year.
The U.S. trade deficit jumped to the highest level in ten months as an improving U.S. economy pushed up demand for imports. However, exports rose as well, boosted by a weaker dollar, supporting the view that American manufacturers will be helped by a rebounding global economy. The Commerce Department reports that the trade deficit jumped 9.7 per cent to $36.4 billion in November, a bigger imbalance than the $34.5 billion deficit economists had forecast. Exports rose 0.9 per cent, the seventh consecutive gain, as demand was up for American-made autos, farm products and industrial machinery. Imports, however, rose a much faster 2.6 per cent, led by a 7.3 per cent rise in petroleum imports.
A police spokesman in oil-rich southern Nigeria says militants have kidnapped four foreign oil services workers. Rivers state police spokesman Rita Abbey said the three Britons and one Colombian were taken this morning. She says they were contractors with a Dutch company working for the Nigerian subsidiary of Royal Dutch Shell. She says no militant group has claimed responsibility. Militants in the troubled Niger delta have attacked pipelines, kidnapped petroleum company employees and fought government troops since January 2006. They demand that the federal government send more oil-industry funds to Nigeria's southern region, which remains poor despite five decades of oil production.
American Airlines and its flight attendants are back at the bargaining table. In returning to bargaining, the Euless-based Association of Professional Flight Attendants has raised a strike threat if the two sides can't agree on economic issues within two weeks. Union President Laura Glading said in a message to members that the union won't ask members to vote on a concessionary contract. Instead, she says union leaders would ask members for authority to call a strike and would ask the national mediation board to start a 30-day cooling-off period before the workers could legally strike. American officials said talk of a strike was premature, and that airline negotiations routinely drag on and last an average of 19 months even after federal mediators are brought in. Talks between American and the flight attendants began in 2008, and the company said the two sides agreed on nearly three-fourths of articles in a new labor contract.
American Airlines, along with its alliance partners, has boosted its offer of support to Japan Airlines to keep the money-losing airline with the OneWorld family. American, British Airways, Qantas and Cathay Pacific say they're ready to inject $1.4 billion cash into Japan's flagship carrier, up from $1.1 billion. In addition, they'll guarantee $2 billion in revenue over the next three years if JAL stays in the OneWorld Alliance. Sources familiar with talks between the carriers say American made the new cash offer to JAL last week.
Reports of airplanes hitting birds and other wildlife could reach or even exceed 10,000 for the first time when the final, soaring, 2009 tally is completed. The spike in reports comes since a stricken US Airways jet landed in New York's Hudson River. Experts say there are two reasons: more diligent reporting by airports and airlines, along with more birds getting in the way of airplanes. An analysis of government figures by the Associated Press shows there were at least 57 cases in the first seven months of 2009 that caused serious damage, and three in which planes and a helicopter were destroyed. At least eight people died and six more were hurt. Richard Dolbeer, an expert on bird-plane collisions and an FAA adviser, says “birds and planes are fighting for airspace, and it's getting increasingly crowded.”
Television reports say Astros owner Drayton McLane is considering an offer to sell the team. KTRK-TV reports McLane has signed a working letter of intent to sell the team to a group consisting of local and out-of-town investors. McLane tells KRIV-TV that he's given the group until the end of January to negotiate a deal. But McLane also told KRIV that he hasn't set a price for the team, and added “there's probably less than a 50-50 chance” of a sale, ``for various reasons.” A person with knowledge of the situation confirms to the Associated Press that McLane had been approached by an investment group and was listening to its offer. The person spoke on condition of anonymity because the team has made no formal announcement. The 73-year-old Temple businessman has owned the team since November 1992. He recently acknowledged that he listened to an offer to sell the team from Houston businessman Jim Crane in October 2008, but both sides weren't able to reach a final deal. Since McLane purchased the team, the Astros have ranked sixth in the majors in winning percentage (.530) and made six playoff appearances, including the franchise's only World Series appearance in 2005.
Some homeowners will be paying a lower-than-initially-sought rate hike by Texas Farmers Insurance. The company agreed to trim its statewide rate hike request of nearly ten per cent. The Texas Department of Insurance says the increase will now be about 4.5 per cent for its 300,000 homeowner customers. The original rate request was filed in June 2009. Current rates will stay in effect until at least March 16th. Homeowners already paying the higher rate will not get a refund. Insurance Commissioner Mike Geeslin described the original rate increase request as “excessive and unfairly discriminatory.” Farmers spokesman Jerry Davies says the agreement shows that the company is committed to the Texas marketplace.
The CPS Energy board has chosen a retired AT&T executive to be a trustee as members deal with higher cost estimates for a nuclear expansion project. Charles Foster will serve the remaining two years of the five-year term of Chairwoman Aurora Geis, who in December announced she was leaving the board. Foster's appointment was made Monday. San Antonio-owned CPS Energy has faced scrutiny after revelations that a cost estimate for two more units at the South Texas Project came in $4 billion higher than previously disclosed. Foster in 2001 retired as a group president for Dallas-based AT&T. He spent 40 years with the telecommunications giant, which formerly was based in San Antonio. The current two-unit South Texas Project is about 90 miles southwest of Houston.
The Federal Reserve says it made a record profit of $46.1 billion last year as the central bank made money off its extraordinary efforts to rescue the country from the worst economic and financial crisis since the 1930s. The windfall gets turned over to the U.S. Treasury. It marks the biggest profit on records dating back to 1914 when the Fed was created. The previous record profit--of $34.6 billion--was registered in 2007. In 2008, the Fed reported a profit of $31.7 billion. The Fed says the increase was primarily due to increase earnings on securities it held last year.
An analyst firm says the technology industry will recover this year from a “dismal” 2009. Forrester Research says it expects global spending on technology products and services to grow 8.1 percent in 2010 to more than $1.6 trillion. U.S. spending is expected to rise 6.6 per cent to $568 billion. The increases follow sharp declines in 2009. Forrester analyst Andrew Bartels says the downturn of the past two years is officially over. Spending on computer hardware and software is expected to drive much of the growth as companies upgrade outdated systems and programs.
A Chinese product safety official says the government will look into findings that dangerous levels of cadmium are being used in exports of children's jewelry following a growing outcry in the United States. Attending a toy safety conference in Hong Kong, Wang Xin of the safety watchdog said that his agency only just learned of findings in an Associated Press investigation published Sunday. Wang's comments were China's first official reaction. On Monday, Walmart pulled products cited in the AP report from its stores in the U.S. Lab tests conducted for the AP on 103 pieces of low-priced children's jewelry found 12 items with raised levels of cadmium, which can potentially cause cancer.
Florida citrus growers are scrambling to assess damage from the prolonged deep freeze, but one says the weekend may have done some of them in despite the fight to save the crops. It's still cold in northern and central Florida, but the cold snap that gripped the south for days is showing signs of breaking.
Chevron warns that it expects to record lower profit for the fourth quarter compared with the previous quarter. The oil company blamed the shortfall in part on “significantly weaker” margins in its refining business. The company didn't give more specific guidance. It cautioned that its commentary is based only on two months of data for the fourth quarter. Chevron is scheduled to reports its results on January 29th. In the third quarter, Chevron reported profit of $1.92 per share. For the fourth quarter, analysts polled by Thomson Reuters expect Chevron to earn $1.75 per share on $43.5 billion in revenue.