Friday AM April 13th, 2007
by: Ed Mayberry, April 13, 2007 5:04:00 am
The Labor Department says new claims for jobless benefits are on the rise. New claims rose by 19,000 last week to 342,000. That's the highest level in two months. The increase, following a rise of 13,000 in the previous week, is larger than expected. Even with the recent increase in jobless claims, the job market is regarded as generally firm. The government reported last week that the unemployment rate dropped to 4.4 percent in March, matching a five-year low.
Long-term mortgage rates are higher this week, the result of the strong March employment report. Freddie Mac reports the average for the 30-year fixed-rate mortgage rose to 6.22 percent from 6.17 percent last week. A year ago, the average was 6.49 percent. The rate for 15-year fixed rate mortgage is 5.9 percent this week--up three basis points. Freddie Mac Vice President and Chief Economist Frank Nothaft says interest rates in general rose following last Friday's release of the March employment data. The report showed stronger job growth than the market expected.
The outlook for consumer spending is in question after warnings of weak sales have overshadowed better-than-expected March numbers coming from some the nation's retail chains. Analysts say rising gasoline prices and the possibility of higher interest rates could lead shoppers to limit spending ahead. Wal-Mart, whose customers cut back on shopping when gas prices were high last year, warns that April's selling environment will be tough. Federated Department Stores says first-quarter sales will come in at the low end of expectations. An analyst at J.P. Morgan is predicting department store numbers could be "huge,'' with gains of eight percent at both Kohl's and J.C. Penney, ten percent at Nordstrom and seven percent at Macy's. Arrival of warmer weather following an unusually cold January and February helped retailers like Wal-Mart recover from a slow start to the spring selling season. An early Easter, which occurred eight days earlier than a year ago, also helped, though it will depress April's results. However, cooler weather in recent days has restrained sales of spring clothing. And the slowing economy, particularly the weakening housing market, could challenge shoppers in the coming months.
The Rotary Club's 20th annual Camp Enterprise is underway through the weekend at Camp Allen, near Navasota. The camp provides first-hand, practical introductions to the business world for high school juniors, according to the Rotary Club's Linda Caruso.
"We typically have between 75 and 85 juniors each year. We divide those juniors into teams of six, and those teams then compete in business simulations, where they are actually working on computer simulations running their own business over the three-day period of the camp" Ed: "Is it also sort of a real camp environment, I mean, do you traditional stuff, too, to sort of round out things?" "The kids actually are in more of a conference-type setting most of the time of the camp. But on Saturday afternoon, they go in the woods and they actually are doing all kinds of team-building activities that are very hands-on, and more traditionally-challenged course types of activity. We want to keep the kids starting off the project so that they are in a brand new environment with kids that they don't know, adults that they don't know, kind of starting from scratch."
Graduates of Camp Enterprise often return to talk with students about their professional business careers.
"Absolutely. Last year we even had a Camp Enterprise alumni event, where we invited Camp Enterprise students from previous years to come back and meet with some of the kids, that had been in the camp in the previous 19 years of the camp's history. And it was wonderful! We had a gentleman who started the camp with an idea at the Rotary Club of Houston, and he talked with the kids about why he had started it. And the kids that came back, we had one individual who came back who's now in biomedical sales. He's in the Houston area, and he talked with the kids about how the camp really gave him the confidence to start this whole process and to start a business of his own."
Speakers from manufacturing, engineering, health, communications and business services speak to campers about various business topics, including starting your own business, government relations, management and employee relations, ethics, the role of business in society, leadership and making connections.
The Texas Senate set about adopting its version of a two-year state budget that would stash away about $3 billion for future tax cuts. Lawmakers took turns declaring their spending preferences in the $152.6 billion budget--arguing for more funding for their priorities. One highlight of the spending plan involves a settlement in a 14-year-old lawsuit over health care for poor children. The terms, which still must be approved by a federal judge, would cost the state about $700 million in improving access to Medicaid services. The settlement will be funded by cutting money spent on other state agencies by about one-half percent across the board.
The defense attorney for former Enron CEO Jeff Skilling is speaking at the American Bar Association conference that runs through Sunday in San Antonio. Daniel Petrocelli joins Richard Scruggs, who won multibillion-dollar tobacco lawsuits and Lois Greisman, who launched the Federal Trade Commission's "do not call" initiatives and identity theft division.
College professors have had their biggest salary increase in five years--but most still make a lot less than do big-time college football coaches. According to an annual survey, salaries for full-time college faculty rose almost four percent this year, the biggest increase since 2002. The American Association of University Professors says salaries of full professors rose a little more than four percent, slightly better than the increases for lower ranks. The AAUP says the faculty increases pale in comparison to those given to college presidents and division-one football coaches, which the group says shows misplaced priorities. According to the survey, salaries for full professors at NCAA Division One-A schools ranged up to $135,000. Head football coaches averaged more than $900,000.
An environmental group reports that emissions of the greenhouse gas carbon dioxide rose 18 percent in the United States from 1990 to 2004. The report from the U.S. Public Interest Research Group says Texas and Nevada had the leading increases. The report--which cites data from the U.S. Department of Energy--says only Delaware, Massachusetts and the District of Columbia cut back on those emissions. Among the findings was that carbon emissions grew in Texas by almost 96 million metric tons during the period. That's the largest increase of any state, followed by Florida, Illinois, North Carolina and Georgia. The report comes on the heels of a United Nations intergovernmental panel on climate change report. That report points to what scientists have concluded would be dire effects of unchecked carbon emissions and resulting global warming.
Tenet Healthcare said that it's added former Florida Governor Jeb Bush to its board. The 54-year-old Bush is the younger brother of President Bush. He left office in January after two terms. In a statement issued by Dallas-based Tenet, Bush said he was impressed by the company' commitment to improving patient care. Board member Bob Kerrey is a former U.S. senator from Nebraska. He says the Bush appointment "reflects the real strides the company has made in recent years to build a solid foundation for future growth based on integrity and quality.'' Tenet is among the largest hospital operators in the country, and Florida is its second-largest market. The company was the subject of several investigations into Medicare over-billing. For many years, a high percentage of its revenue came from exploiting a loophole in Medicare regulations overing high-cost patients. The company reached a $900 million settlement with the government last year to settle those charges.
Some attorneys for Hurricane Katrina victims who're suing State Farm say they have evidence to prove their claims the insurer tried to alter information to deny coverage. The lawyers cite internal e-mails from an engineering firm that helped state farm adjust claims following the 2005 storm. The e-mails, obtained by the Associated Press, indicate the insurer threatened to dismiss the firm--forensic analysis and engineering--shortly after the disaster. In one e-mail, Forensic Vice President Randy Down questions State Farm's motives and if there was an ethical problem with the insurer telling the firm what to put in reports. State Farm denies pressuring the firm's engineers to change their conclusions. It and other insurers say their homeowner policies cover wind damage but not damage from rising water.
There are some new twists to the report earlier in the week that Dow Chemical could be targeted in a buyout. The company has said since then that it is not in such talks. Dow Chemical says it has fired a senior adviser and a company officer over what it describes as unauthorized discussions with third parties about the possibility of buying the company. At least one of them is saying the charge is groundless. The company says Pedro Reinhard, a senior adviser and member of the board of directors, and Romeo Kreinberg, a company officer, were given their walking papers. The two had, in the words of a company statement, "engaged in business activity that was highly inappropriate and a clear violation of Dow's code of business conduct.'' Kreinberg, asked for reaction at his home, says there is no truth to the accusation and that he's seeking the advice of an attorney. On Monday, Dow Chemical shares surged after a British tabloid reported that investors were preparing a bid for the company.
A Dallas-based private equity firm that bought the Bi-Lo supermarket chain two years ago--is now putting the stores up for sale. Lone Star Funds has retained Merrill Lynch to help with its evaluation process. Bi-Lo wouldn't disclose any developments related to the possible sale until a transaction has been approved by Lone Star's board of directors. Bi-Lo President Brian Hotarek declined comment. South Carolina-based Bi-Lo has 228 stores in four southeastern states.
Southwest Airlines is adding to non-strop services from Houston's Hobby airport beginning June 17th. Daily flights to and from Tampa Bay and Orlando, Florida, are being added, for a total of four flights daily.
Daybreak Oil and Gas has opened an operating office in Houston, although its exploration and production headquarters will remain in Spokane, Washington, according to the Houston Business Journal. The firm's outside auditors and accounting service are also based in Houston.
USA Superior Energy Holdings of Houston has listed its common stock and has begun trading on the Frankfurt Stock Exchange in Germany under the symbol "F2S." The oil and gas technologies company also trades on the U.S. Over-the-Counter Bulletin Board under the symbol "USSU."
Sony says it plans to start selling smaller flat screen Televisions using technology that could be the next big thing. A spokeswoman says the Japanese electronics giant will sell an 11-inch television using an organic electro-luminescent screen by year-end. The screens are already used in smaller products like mobile phones, personal digital assistants and camcorders. Sony believes its product would be the first such television to go on the market. Rival Toshiba says it will begin making large TVs with the new technology by 2009. The screens make use of the self-luminescent properties of organic materials. They use less power than comparable LCD screens because they don't have a backlight, and are much thinner.
The days of peeling produce stickers off apples and tomatoes may soon be over. A Georgia company wants the government to approve the use of a laser that etches indelible but edible labels onto the skins of fruits and vegetables. Durand-Wayland, which makes spraying, packing and labeling machinery, wanted to start selling the lasers two years ago, but the Food and Drug Administration told it to hold off until it could show they were safe. Regulators concerns include whether etching could allow germs to penetrate treated produce and whether the laser affects the fruit or vegetable, including how it compares to cooking. Tests results submitted by the company are now under review. The FDA has 180 days to review findings filed March 5th.