Wednesday PM October 27th, 2010
by: Ed Mayberry, October 27, 2010 5:10:00 pm
Sales of new homes improved last month after the worst summer in nearly five decades, but not enough to lift the struggling economy. The Commerce Department says new home sales in September grew 6.6 percent from a month earlier to a seasonally adjusted annual sales pace of 307,000. The increase follows a stretch where three of the past four months were the slowest on records dating back to 1963. High unemployment, tight credit and uncertainty about home prices have kept people from buying homes. Government tax credits propelled the market earlier in the year, but those expired in April. The median sales price was $223,800. That was up 3.3 percent from a year earlier.
A surge in demand for commercial aircraft lifted orders for big-ticket manufactured goods in September, but businesses spent less on computers and machinery. The Commerce Department says orders for durable goods rose 3.3 percent last month. Overall, it was the best showing since January. But excluding transportation, orders fell 0.8 percent after having risen 1.9 percent in August. And spending by companies on capital goods dropped 0.6 percent after rising 4.8 percent in August. The category is viewed as a good proxy for business investment in the economy.
Jailed Texas financier R. Allen Stanford is once again getting new attorneys, his fifth set of lawyers since being indicted last year on charges he bilked investors out of $7 billion in a massive ponzi scheme. During a court hearing in Houston federal court, U.S. District Judge David Hittner appointed the new legal team of two local attorneys after the financier had accused his current lawyer of ethical violations. The nature of the accusations were filed under seal, and attorneys in the case cannot comment because of a gag order issued by Hittner. Stanford has had problems with previous attorneys, who have accused the financier of being difficult to work with. Despite the new attorneys, Hittner says he still expects Stanford's trial to begin on January 24th.
The government says the nation's commercial crude inventories jumped last week while gasoline and distillate stockpiles fell. The Energy Department says crude oil inventories surged by five million barrels. That is nearly eight percent above year-ago levels. Gasoline inventories fell by 4.4 million barrels, more than three percent above year-ago levels. U.S. refineries ran at 83.7 percent of total capacity on average, compared with 82.5 percent in the prior week. Inventories of distillates, which include diesel and heating oil, fell by 1.6 million barrels.
Former oil tycoon Mikhail Khodorkovsky has begun delivering his final arguments in his second trial, urging the court to reject a 14-year sentence sought by the prosecution for alleged fraud and embezzlement. Khodorkovsky was Russia's richest man when he was arrested in 2003 on charges of tax evasion by his now defunct oil company Yukos. Observers considered the charges punishment for challenging then-President Vladimir Putin. His eight-year sentence is a year from completion, but a second raft of fraud and embezzlement charges could see him remain incarcerated until 2017. Prosecutors last week requested the 14-year sentence, which according to lawyers would include time already served. The West is watching the case to gauge commitment to the rule of law.
A promising new source of domestically produced fuels being tested on the nation's jets and warships is derived from forest green algae bubbling in a stainless steel fermenting tank in a suburban San Francisco warehouse. In a laboratory for a company called Solazyme, white-coated scientists are changing the genetic makeup of algae to construct a new generation of fuels. These “bioengineered” algae are placed into tanks, where they get fat on sugar beets, switch grass or other plants. The sun's energy, stored in the plants, is transformed by algae into oil, which is refined into fuels. The U.S. Navy in September ordered more than 150,000 gallons of Solazyme's ship and jet fuel and has already begun testing the fuels on its entire non-nuclear fleet.
Chatham County officials have rejected a tax break requested by Sugar Land-based Imperial Sugar. The county's Board of Assessors voted to reject the company's request for a five-year sales tax exemption of about $95 million worth of real and personal property. The vote came after Stacey Scott, the county's personal property supervisor, said Imperial did not meet the requirements for the capital improvement exemption which applies to new businesses and to companies that increase productivity and employment. The company had applied for the exemption after rebuilding its sugar refinery in Port Wentworth, which was shut down in 2008 after a deadly explosion killed 14 people and injured dozens more. The exemption would have amounted to a savings of about $562,000 this tax year.
The Federal Trade Commission is scolding Google, but not taking any further action against the company for collecting personal information transmitted over unsecured wireless networks. The regulatory agency chastised Google for allowing people's e-mails, passwords and web surfing activity to be scooped up for several years before management realized it. It took an inquiry from German regulators earlier this year for Google to realize it had been inadvertently pulling in information off of wireless networks as its cars took photos of neighborhoods around the world for its “street view” mapping service. The FTC says it closed its investigation because it's satisfied with a series of measures that Google announced last week in an effort to improve its internal privacy controls.
And now, a word from our sponsors. A very brief word. TV commercials are shrinking along with attention spans and advertising budgets. The 15-second ad is increasingly common, gradually supplanting the 30-second spot just as it knocked off the full-minute pitch decades ago. For viewers, it means more commercials in a more rapid-fire format. For advertisers, shorter commercials are a way to save some money, and research shows they hold on to more eyeballs than the longer format. The number of 15-second television commercials has jumped more than 70 percent in five years to nearly 5.5 million last year, according to Nielsen. They made up 34 percent of all national ads on the air last year, up from 29 percent in 2005.
ConocoPhillips says its third-quarter earnings doubled on higher oil prices and better refining margins. The Houston oil company reported net income of $3.06 billion. That compares with $1.47 billion in the year-ago period. Excluding gains from asset sales and other special items, Conoco said it made $2.23 billion for third quarter. Analysts, who typically exclude special items, expected revenue of $45.6 billion. Revenue totaled $49.55 billion, up from $41.27 billion in the same quarter last year. The company said it expects to produce about 1.71 million barrels of oil and gas per day in the final three months of the year.