No Nuts?
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Stocks plunge after retail, unemployment data
Wall Street tumbled Thursday on more disappointing economic news – retailers posted sluggish back-to-school sales reports and the government said the number of workers seeking unemployment benefits spiked last week. The Dow Jones industrials fell more than 200 points.
Investors, already highly anxious about the overall state of the economy, were further unsettled when many of the nation’s retailers said shoppers curtailed spending last month due to higher gas and food prices. Wal-Mart Stores Inc., the world’s largest retailer, beat Wall Street projections because of its discounts.
Meanwhile, the Labor Department said new applications for unemployment insurance rose by 15,000 from the previous week. That broadly missed expectations for a fourth-straight week of declines.
“We’re seeing nothing but sellers,” said Ted Oberhaus, director of equity trading at Lord, Abbett & Co. LLC. “In a bear market, you sort of really don’t need an excuse to sell.”
The market showed little reaction when the Institute for Supply Management said the service sector grew unexpectedly in July for the first time in three months as new orders increased and inflation moderated.
The trade group of purchasing executives said its services sector index rose to 50.6 in August from 49.2 in July. It beat economists’ prediction of a reading of 50.0; a reading below 50 signals contraction, while a reading above 50 indicates growth.
In late morning trading, the Dow Jones industrial average fell 231.07, or 2.00 percent, to 11,301.81.
Broader indexes were also lower. The Standard & Poor’s 500 index fell 23.32, or 1.83 percent, to 1,251.66; the Nasdaq composite index dropped 44.50, or 1.91 percent, to 2,289.23.
Bond prices moved higher Thursday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.67 percent from 3.70 percent late Wednesday.
A barrel of light sweet crude fell 60 cents to $108.76 cents to on the New York Mercantile Exchange. It dipped below $108 a barrel on Wednesday.
In corporate news, Wal-Mart said sales of groceries and back-to-school products helped its August same-store sales rise 3 percent, beating expectations. Shares rose 43 cents to $60.25.
But other retailers fell. JCPenney Co. slipped 87 cents to $40.77, while Gap Inc. fell 54 cents to $19.43.
Toll Brothers Inc. reported it swung to a third-quarter loss as sales fell amid the housing slump. However, Chief Executive Robert Toll said he is seeing signs the market is stabilizing, and that pushed shares up 33 cents to $25.15.
The Russell 2000 index of smaller companies fell 17.09, or 2.30 percent, to 724.82.
Declining issues outpaced advancers by a 3 to 1 basis on the New York Stock Exchange, where volume came to 257.8 million shares.
Overseas, the Bank of England and European Central Bank left their benchmark interest rates unchanged, a move analysts expected as both face rising inflation and slowing economic growth. Britain’s FTSE 100 fell 1.75 percent, Germany’s DAX index fell 2.60 percent, and France’s CAC-40 shed 2.61 percent. Japan’s Nikkei stock closed down 1.04 percent.
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Cindy McCain parts with Palin on abortion, sex ed
ST. PAUL, Minn. (AP) — The wife of Republican presidential nominee John McCain doesn’t agree with vice presidential candidate Sarah Palin’s opposition to abortion in cases of rape and incest.Cindy McCain also parts ways with her husband’s running mate on sex education.
Palin opposes abortion and rejects the view that pregnancies caused by rape and incest should be exceptions.
Cindy McCain tells ABC’s “Good Morning America” that “I don’t agree with that aspect, but I do respect her for her views.”
Palin has opposed funding sex-education programs in Alaska.
Cindy McCain tells ABC that she advocated abstinence as a part of sex education at her children’s school. “I believe that it’s twofold and I think all of it should be taught.”
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August auto sales fall; some say worst may be over
Nearly every major automaker saw its U.S. sales drop in August, but many are seeing signs that the worst slump in recent history may have bottomed out.
Most upbeat were executives from General Motors Corp., which posted a 20.3 percent sales decline from a year ago but a 31 percent improvement over July’s totals.
Much of the gain came from offering all buyers employee discounts on many models, but Mark LaNeve, GM’s vice president of North American sales, said there’s hope that June and July were the trough for U.S. sales.
“We are very encouraged by what we saw in August. It gives us reason to think that we are starting to pull our way out of this,” he said Wednesday in a conference call with reporters and industry analysts.
Overall, U.S. sales fell 15.5 percent compared with August of last year but rose 10 percent from July’s dismal figures, according to Autodata Corp. The seasonally adjusted annual sales rate for August was 13.7 million, up from 12.5 million in July, the worst month in 16 years.
Chrysler LLC said its U.S. sales fell more than 34 percent last month, while Ford Motor Co. reported a 26.5 percent decline. Toyota Motor Corp.‘s sales dipped 9.4 percent, and Honda Motor Co. saw a 7.3 percent slide.
Nissan Motor Co. was the only major automaker to report an increase over August 2007: Its sales climbed 13.6 percent.
But the increase over July buoyed most automakers, with sales executives saying that lower fuel prices were starting to ease consumers’ minds. They also reported the market shifting a little bit back toward trucks and sport utility vehicles, driven by incentives and lower gas prices.
Automakers said consumer sentiment was improving, housing price declines and manufacturing production are stabilizing, and exports continue to be strong.
“Some bright spots are emerging,” said Irv Miller, group vice president for communications with Toyota, whose sales improved 7.1 percent from July to August.
Officials at GM and other automakers tempered their remarks by saying that they’ll face challenging conditions for the rest of this year and even into 2009, with the housing slump projected to continue and tight credit and leasing combining to knock buyers out of the market.
George Pipas, Ford’s top sales analyst, cautioned that higher incentives industrywide helped push August sales.
“I think there are some positives,” Pipas said. “But the underlying economic conditions and the credit situation, which has given rise to this summer’s low level of sales, still persist. So I think we still have to be careful about popping the champagne cork after a month whose sales were inflated by incentives.”
Fueled by the employee discounts for everyone, which GM extended Wednesday until Sept. 30, the Detroit automaker posted its best sales month of the year in August.
LaNeve said he didn’t think there would be a huge payback for the discounts, which amount to around 10 percent off invoice prices but vary by model. He said the discounts may cost GM 4,000 to 5,000 sales during the next four months or so, but that could be erased by a market uptick.
“The market’s been operating at such a depressed level that I think with any improvement in the market, we don’t have any payback at all,” LaNeve said.
GM’s incentive spending per vehicle, he said, was flat with July but up $700 over August 2007.
Employee pricing, low-interest financing and other incentives pulled buyers off the fence and into the market last month and raised pickup truck sales, said Jesse Toprak, executive director of industry analysis for the automotive information site Edmunds.com.
Many buyers have postponed purchases for the past year, so GM may not see a decline in coming months, he said. Toprak predicted month-over-month sales improvements for the rest of the year, but sales still below last year’s levels.
“I think this is the bottom,” he said. “I think that we are going to start seeing some steady improvement from here on.”
While Chrysler had a huge decline from the year-ago period, it showed a 12.3 percent gain over July. But compared with August of last year, Chrysler’s car sales were down 39 percent and its truck sales were off 33 percent.
Ford sales dropped 3.6 percent compared with July, due in part to its continuing plan to reduce low-profit sales to rental car companies and other fleet buyers, Pipas said. The company said Wednesday that it plans to cut 50,000 more vehicles from its production plan in the second half of the year, reducing its output to 890,000 in the last six months of 2008.
The Dearborn-based automaker said its Ford, Lincoln and Mercury car sales dropped nearly 9 percent in August, while truck sales were off more than 32 percent from a year earlier.
There were some bright spots for Ford. Sales of its Focus small car were up 23 percent in August, while Escape small SUV sales rose 17 percent compared with the same month a year ago.
Both Ford and GM reported big inventory reductions in August as they switch to the 2009 model year.
Toyota said its car sales were down 3.4 percent from August 2007, and trucks were down 17.6 percent. Sales of the tiny Yaris were up more than 20 percent for the month, while the Camry midsize sedan saw sales grow by 3.3 percent, the company said.
GM said its sales of light trucks tumbled 24.1 percent from August of last year, while car sales fell 13.9 percent.
Honda’s car sales fell 4.9 percent and demand for trucks dropped 10.3 percent.
Nissan said its car sales fell 0.8 percent but its truck sales climbed 34.8 percent on strong sales of its Frontier, Xterra and Rogue models and the Infiniti EX and FX crossovers.
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Cablevision completes first phase of WiFi buildout
Cablevision Systems Corp. said Thursday it has finished the first phase of its wireless network buildout in New York and remains on track to complete the project in two years.
The diversified cable operator is offering the WiFi service at no charge to its 2.4 million Internet customers at speeds of up to 1.5 Megabits per second, similar to DSL at home.
The company currently doesn’t have plans to offer the service to non-subscribers.
The WiFi network, which is expected to cost about $310 million overall, is Cablevision’s answer to a wireless option being pursued by other cable operators.
Bethpage, N.Y.-based Cablevision announced the WiFi project in May, soon after cable operators Comcast Corp., Time Warner Cable Inc. and Bright House Networks joined chipmaker Intel Corp., Google Inc., Clearwire Corp. and Sprint Nextel Corp. in a joint venture to offer a wireless Internet service.
Cablevision’s first phase of WiFi deployment comprised parts of Nassau and Suffolk counties and commuter rail platforms and station parking lots in Long Island.
The cable operator already has WiFi pockets in other parts of New York, as well as in New Jersey and Connecticut. These will be folded into the WiFi buildout announced in May.
Consumers seeking more information should log onto http://www.optimumwifi.com .
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Smoking riskier to women's hearts than men's
Women typically get heart disease much later than men, but not if they smoke, researchers said Tuesday.
In fact, women who smoke have heart attacks more than a dozen years earlier than women who don’t smoke, Norwegian doctors reported in a study presented to the European Society of Cardiology. For men, the gap is not so dramatic; male smokers have heart attacks about six years earlier than men who don’t smoke.
“This is not a minor difference,” said Dr. Silvia Priori, a cardiologist at the Scientific Institute in Pavia, Italy. “Women need to realize they are losing much more than men when they smoke,” she said. Priori was not connected to the research.
Dr. Morten Grundtvig and colleagues from the Innlandet Hospital Trust in Lillehammer, Norway, based their study on data from 1,784 patients admitted for a first heart attack at a hospital in Lillehammer.
Their study found that the men on average had their first heart attack at age 72 if they didn’t smoke, and at 64 if they did. Women in the study had their first heart attack at age 81 if they didn’t smoke, and at age 66 if they did.
That works out to eight and 15 years, respectively, for men and women. After adjusting for other heart risk factors like blood pressure, cholesterol and diabetes, researchers found that the difference for men was about six years for women about 14 years.
Previous studies looking at a possible gender difference have been inconclusive.
Doctors have long suspected that female hormones protect women against heart disease. Estrogen is thought to raise the levels of good cholesterol as well as enabling blood vessel walls to relax more easily, thus lowering the chances of a blockage.
Grundtvig said that smoking might make women go through menopause earlier, leaving them less protected against a heart attack. With rising rates of smoking in women – compared with falling rates in men – Grundtvig said that doctors expect to see increased heart disease in women.
“Smoking might erase the natural advantage that women have,” said Dr. Robert Harrington, a professor of medicine at Duke University and spokesman for the American College of Cardiology.
Doctors aren’t yet sure if other cardiac risk factors like cholesterol and obesity also affect women differently.
“The difference in how smoking affects women and men is profound,” Harrington said. “Unless women don’t smoke or quit, they risk ending up with the same terrible diseases as men, only at a much earlier age.”
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Coca-Cola offers to buy Huiyuan in $2.5B deal
The Coca-Cola Co., the world’s biggest beverage company, moved to expand its operations in the fast-growing Chinese market Wednesday with a $2.5 billion bid for major juicemaker China Huiyuan Juice Group Ltd.
Under the deal, Coca-Cola’s wholly-owned subsidiary Atlantic Industries would purchase the Chinese company’s shares for 12.20 Hong Kong dollars ($1.56) each, almost triple their last closing price, the companies said in a joint statement to the Hong Kong stock exchange. That would value the Beijing-based juice producer at around HK$17.9 billion ($2.3 billion).
Coca-Cola also offered to pay for all outstanding convertible bonds and options, bringing the total amount of the deal to as much as HK$19.6 billion (around $2.51 billion).
According to research firm Dealogic, it is the largest-ever deal in China’s food and beverage industry.
If approved by regulators, the acquisition would mark Coca-Cola’s biggest in China since it began operating in the country in 1979 and increase its share in the beverage market.
Huiyuan is China’s leading maker of pure fruit juices and nectars with about 31 production facilities.
“This acquisition will deliver value to our shareholders and provide a unique opportunity to strengthen our business in China,” Coca-Cola CEO Muhtar Kent said.
In particular, the U.S. company would bring a sprawling distribution and supply network along with management and strategies that could help develop Huiyuan’s brand.
“There are anticipated synergies that will drive operational and cost efficiencies, particularly in Huiyuan’s production footprint and in The Coca-Cola Company’s distribution and raw material purchasing capabilities,” the companies said in their statement to the exchange.
Already, Huiyuan has secured “irrevocable undertakings” from three large shareholders, accounting for 66 percent of the company’s shares, to accept the deal, the companies said.
Huiyuan shares, down more than 50 percent this year, jumped to HK$11.10 early Wednesday, suggesting investors believe the deal will go through.
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Guard "protecting" a playground
…Dance like nobody’s watching. Love like you’ve never been hurt. Sing like nobody’s listening. Fall asleep in a children’s playground with a fully loaded high-powered handgun on your belt!
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