Monday PM March 15th, 2010
by: Ed Mayberry, March 15, 2010 4:03:00 pm
The National Association of Home Builders says its housing market index slipped in March, as harsh winter weather and competition from foreclosed properties hurt builders' sales prospects. The Washington-based trade association said its index slipped two points to 15, back to its January level. Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006. The report reflects a survey of 477 residential developers nationwide. The reading for current sales conditions also slipped two points to 15. The index measuring foot traffic from prospective buyers fell two points to ten, while the index for sales expectations over the next six months fell three points to 24.
The Federal Reserve says industrial production edged up 0.1 percent in February. The eighth straight monthly increase was stronger than expected. The manufacturing sector--for months a rare bright spot in the economy--produced less due to winter storms but is expected to rebound in March. Manufacturing, the index's largest component, fell 0.2 percent. Mining and utilities rose 2.0 percent and 0.5 percent, respectively. Manufacturing took a hit from winter storms that shut down most of the northeast in February. The storms reduced hours worked at factories and workers' earnings. Still, the severe weather increased demand for heating energy, boosting mining and utility production. U.S. industry was operating at 72.7 percent of its capacity. The eighth straight monthly improvement.
A coalition representing governors of 29 states is urging the federal government to take steps to boost wind energy, such as requiring utilities to produce at least ten percent of their energy from renewable sources by 2012. The bipartisan Governors' Wind Energy Coalition plans to make the recommendations in a report to Congress and the White House. The Associated Press obtained a copy of the report ahead of its official release. The coalition, chaired by Iowa Governor Chet Culver, also urges support for offshore wind development and new infrastructure for electric transmission, among other things. The report comes as Senate sponsors of a climate bill prepare to unveil their legislation, perhaps as soon as this week.
The CEO of the nation's largest railroad says shipments are stronger than expected this year. In an interview with the Associated Press, Union Pacific's Jim Young said some key segments, including agricultural, automotive and intermodal shipments from trucks show signs of strength. Young said automotive shipments are up 60 percent from a year ago, but far from their peak. Intermodal shipments, which handle a good deal of consumer goods, are up about 20 percent, he said.
China retained its spot as the biggest foreign holder of U.S. Treasury debt in January although it trimmed its holdings for a third straight month. The string of declines are likely to underscore worries that the U.S. government could face much higher interest rates to finance soaring budget deficits. The Treasury Department said that China's holdings dipped by $5.8 billion to $889 billion in January compared to December. Japan, the second largest foreign holder of U.S. government debt, also trimmed its holdings but by a much smaller $300 million to $765.4 billion. Net foreign purchases of long-term securities, a category that includes both government and corporate debt, totaled $19.1 billion in January, as net purchases of private corporate bonds fell by $24.8 billion, the biggest drop on record.
Brazil says it may let local companies break U.S. patents on products including movies, music, pharmaceutical products and chemicals. The World Trade Organization says Brazil can take punitive action because the United States has failed to get rid of illegal subsidies provided to American cotton farmers. Brazil last week announced $591 million in possible sanctions against other U.S. products through higher tariffs. The WTO authorized Brazil a total of $829 million in sanctions. Brazilian and U.S. officials say they will try to negotiate a deal so the sanctions are not imposed.
Thousands of illegal immigrants paid in-state tuition or received other financial aid at public colleges and universities across Texas during late 2009. Figures from the Texas Higher Education Coordinating Board show about one percent of all Texas college students, in the fall semester, benefited from a 2001 law granting such in-state tuition. The Dallas Morning News reported that the figure topped 12,000 students who are illegal immigrants, not legal permanent residents or not U.S. citizens. A challenge to the state law was filed in December by the Immigration Reform Coalition of Texas. The law requires students to attend school in the state for at least three years before graduation from a Texas high school. Students also must file an affidavit saying they plan to seek permanent residency.
Texas has joined a federal effort to offer low-interest loans to beginning farmers. The state's Young Farmer Grant Program is funded by fees from farm license plates and aims to help farmers from ages 18 to 46 start or expand their agricultural businesses. The Austin American Statesman reports that Texas Agriculture Commissioner Todd Staples issued the first grants from the program last month. A total of $100,000 in matching grants went to 13 young farmers who put up $10,000 of their own money. Staples says the program aims to encourage more young people to take up farming at a time when more than 80 percent of the state's farmers are older than age 45. The farm service agency of the U.S. Department of Agriculture has managed similar loan program at the federal level since 1992.
An explosion has been heard at amnesty talks under way in Nigeria's restive and oil-rich Niger delta region. Someone said “stay calm” before a live television feed cut out. The explosion came after the main militant group in the region claimed it had set bombs that would be remotely detonated in the area. The Movement for the Emancipation of the Niger Delta also vowed to carry out “a number of attacks'' against installations and oil companies in the coming days. Militants in the Niger delta have attacked pipelines, kidnapped petroleum company employees and fought government troops since January 2006. They want more oil money to flow into the region, which is still poor and polluted after 50 years of oil exploration.
Phillips-Van Heusen says it will buy privately held Tommy Hilfiger in a cash-and-stock deal valued at about $3 billion, creating one of the world's biggest clothing companies. The deal announced includes approximately 1.9 billion euros in cash ($2.6 billion) and 276 million euros ($379.9 million) in Phillips-Van Heusen stock. The New York clothing retailer will also assume 100 million euros ($137.6 million) in liabilities. The combined company's revenue will total about $4.6 billion. Tommy Hilfiger was acquired in May 2006 for about 1.2 billion euros by a group led by the buyout firm Apax Partners. The sale to Phillips-Van Heusen is expected to close in Phillips-Van Heusen's second quarter.
Galveston is getting more time to use federal dollars to pay for clearing and cleaning the Hurricane Ike-recovering island. The Federal Emergency Management Agency, which is picking up the cost to clean storm drains and cut down dead trees, has agreed to extend what was an 18-month deadline. Ike slammed Galveston on September 13th, 2008, swamping parts of the city and damaging or destroying stretches of property. The Galveston County Daily News reports that so far crews have removed more than 12,000 dead trees. City spokeswoman Alicia Cahill says contractors using vacuum trucks are nearly finished cleaning almost 40 miles of storm drains. Galveston will use the sand and silt to elevate the city's recycling center. FEMA will reevaluate in June if the deadline needs to be extended again.
Continental Airlines is ending free hamburgers, barbecue and sandwich rolls for many of its passengers in favor of a food-for-sale program that mirrors what other carriers are already doing. A spokesman says the airline expects a $35 million annual benefit, from cost savings and added revenue. Delta Air Lines, American Airlines and US Airways are among carriers that already charge for food on flights. Continental passengers on some international routes, on domestic flights over six hours and those who sit in first or business class on routes worldwide will continue to get free food. Snacks like pretzels and nonalcoholic drinks will continue to be offered for free. The changes takes effect in the fall. Menu choices and prices will be disclosed later.
Change is in the air for Detroit city workers. City employees will be urged not to wear perfume, cologne or aftershave as a result of a settlement in a federal lawsuit. Officials plan to place warning placards in three city buildings. The signs will warn workers to avoid “wearing scented products, including…colognes, aftershave lotions, perfumes, deodorants, body/face lotions...(and) the use of scented candles, perfume samples from magazines, spray or solid air fresheners.” The employee handbook and Americans with Disabilities Act training also will bear warnings. The Detroit News reports the move stems from a $100,000 settlement in a federal lawsuit filed in 2008 by a city employee who said a colleague's perfume made it challenging for her to do her job.