Leading US shares tumbled last night after the Federal Reserve said that the
American economy could slow to the brink of stagnation this year, but
signalled that rising inflation may prevent more cuts in US interest rates. Source: Latest Business News from Times Online | 22 May 2008 | 6:33 pm
Sky-high volatile prices in oil, food and a swath of minerals are now a permanent feature of the economy, a Nobel prize-winning economist has warned as crude touched a new record peak. Source: Telegraph Business | 22 May 2008 | 2:45 pm
Oil prices surge through $135 a barrel as weekly US oil stocks figures show an unexpected fall. Source: BBC News | Business | World Edition | 22 May 2008 | 2:24 pm
ST GALLEN, Switzerland (Reuters) - The judge who signed a landmark European antitrust ruling against Microsoft said on Thursday he was surprised by the large size of a record 899 million euro ($1.42 billion) fine imposed by the EU executive against the software company after he had retired.
Ford Motor Co. said Thursday that high gas prices are hitting sales of pickups and SUVs and will likely cause it to miss its long-held goal to return its core North American auto unit to profitability next year.
BOSTON (MarketWatch) -- Drug stocks mixed with shares of Myriad Genetics Inc. up on news that it has signed a deal with Swedish drug conglomerate H. Lundbeck A/S for the European commercialization of Myriad's Alzheimer's drug candidate Flurizan.
Shares of natural gas, oil producers and oil services companies rise, with oil prices falling back from a fresh record above $135 a barrel and the broad market advancing.
U.S. stocks rose in morning trade Thursday, with investors cheering oil backing off from record highs above $135 a barrel and a drop in jobless claims after two days of heavy losses.
NEW YORK (MarketWatch) -- Bargain hunters converge on airline stocks after the sector's record sell off in prior-day trading due to record-high oil prices.
NEW YORK (Reuters) - Children's Place Retail Stores Inc reported a better-than-expected rise in quarterly profit on Thursday, helped by an increase in sales, sending its shares up 12 percent.
Stocks expected to trade actively on Thursday include the U.K. banking groups, Akamai, Calpine, Computer Sciences, Limited Brands, Longs Drug, NetApp, NRG, PetSmart, Salesforce, Sanderson Farms, Suntech Power and UBS.
Evergreen Solar rises sharply on Thursday as the solar panel maker announced $1 billion in contracts after a challenging start-up of its new factory north of Boston.
French workers hold a day of strikes and protests against President Nicolas Sarkozy's pension reform plans. Source: BBC News | Business | World Edition | 22 May 2008 | 2:01 pm
TEL AVIV (MarketWatch) -- Israel stocks looked set to finish the week about where they started with stocks modestly lower, led by the country’s two biggest banks and holding company Israel Corp.
The sale of Bell Canada Inc. to a private buyout group has been jeopardized by a Canadian court’s decision that the proposed $51 billion deal is unfair to bondholders.
Suntech Power Holdings Co. shares are higher in pre-market trades Thursday after it issued a bright 2008 forecast for its silicon solar panel manufacturing business and said its first-quarter net income doubled.
Stocks tiptoed higher Thursday morning as investors made tentative steps back into the market after a two-day exodus sparked by record oil and gas prices.
After over a year of saying it would make a profit in 2009, the new management at Ford (F) has given up the ghost. Once auto sales started to move down sharply the middle of last year, the company never had a chance. It is a shame that they did not admit their mistake earlier. Getting back on Wall St.'s good side will take months if not a year or more. Ford's shares opened down over 7% on word that "it no longer expects to meet a long-held goal of returning to profitability in 2009 and would cut production through...
Reuters - Stocks rose on Thursday after a
surprise drop in jobless claims and a takeover offer in the
utilities sector buoyed investor optimism and offset worries of
inflation spurred by crude oil above $135 a barrel.
NEW YORK (Reuters) - Stocks rose on Thursday after a surprise drop in jobless claims and a takeover offer in the utilities sector buoyed investor optimism and offset worries of inflation spurred by crude oil above $135 a barrel.
Reuters - Ford Motor Co said on Thursday it
no longer expects to meet a long-held goal of returning to
profitability in 2009 and would cut production through the
remainder of this year to adjust to a slumping U.S. market.
DETROIT (Reuters) - Ford Motor Co said on Thursday it no longer expects to meet a long-held goal of returning to profitability in 2009 and would cut production through the remainder of this year to adjust to a slumping U.S. market.
For a guy who supposedly has lost his credibility, Fed chief Ben Bernanke has been surprisingly effective in soothing stressed-out financial markets - maybe a little too effective.
NEW YORK (Reuters) - Barnes & Noble Inc reported a first-quarter loss on Thursday, hurt by a charge, and the bookseller lowered its second-quarter and full-year forecast for sales at existing stores, citing the difficult retail environment.
AP - The number of newly laid off workers filing for unemployment benefits unexpectedly fell last week to the lowest level in a month. Source: Yahoo! News: Business | 22 May 2008 | 1:22 pm
Reuters - Oil sped to new peaks for a third
straight day on Thursday to top $135 a barrel as investors
fretted over long-term supply constraints and a big drop in
U.S. crude stocks.
LONDON (Reuters) - Oil sped to new peaks for a third straight day on Thursday to top $135 a barrel as investors fretted over long-term supply constraints and a big drop in U.S. crude stocks.
The amount being spent globally on food imports is set to top $1 trillion (£528bn) in 2008, a report estimates. Source: BBC News | Business | World Edition | 22 May 2008 | 1:10 pm
Goldman Sachs has issued a research report noting that Sirius Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR) are likely going to need to raise capital. The note projects that it believes the combined companies may need to raise $500 million to $1 Billion on top of the need to refinance $1.46 Billion in putable debt that XM has, or $1.06 Billion if some debt is converted. This puts the estimated time frame as soon as Q3 2008 but more likely by Q1 2009. Goldman Sachs noted that the companies can both get through 2008, but not comfortably...
The European Commission launches an investigation into the French utility Gaz de France. Source: BBC News | Business | World Edition | 22 May 2008 | 12:58 pm
Reuters - Airlines around the world
braced for slower growth, tighter earnings and deeper cost
cutting on Thursday as oil prices surged and the biggest
carrier by revenue, Air France KLM , warned on
profits.
Cable & Wireless on Thursday said it was considering plans for a possible demerger and expects to make a decision this financial year, as it reported a 7 per cent rise in full year pre-tax profits... Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 12:53 pm
Wall Street stocks were set for a mixed start on Thursday as investors digested deal news as well as record high oil prices and anticipated the latest data on housing and employment Source: FT.com - US homepage | 22 May 2008 | 12:50 pm
The Times of London calls C.K. Prahalad "the No. 1 most influential management thinker in the world." I wouldn't argue. And he's about to contribute another important idea to business.
A High Court judge tells the Office of Fair Trading to reveal when it will decide if bank charges are fair or not. Source: BBC News | Business | World Edition | 22 May 2008 | 12:37 pm
Reuters - As U.S. banks mop up the mess from
billions of dollars of bad home loans, buyers are finding the
days of cheap money are over and, in many cases, tougher
versions of old lending rules now apply.
LOS ANGELES (Reuters) - As U.S. banks mop up the mess from billions of dollars of bad home loans, buyers are finding the days of cheap money are over and, in many cases, tougher versions of old lending rules now apply.
Someone is not telling the truth about oil supply and demand. It appears to be the fellows over at OPEC. According to Bloomberg, Abdullah bin Hamad al-Attiyah, Qatar's oil minister said The Organization of Petroleum Exporting Countries, which produces 40 percent of the world's oil, has no plans to react before its scheduled meeting in September because there is nothing it can do. Odd, since Saudi Arabia did push up production, only a little, after a visit from President Bush, and left the impression that there is more where that came from Douglas A. McIntyre
The nearly daily recordbreaking is numbing: $100-a-barrel oil in March, then $120, quickly followed by $130.
Today, oil prices rose above $135 for the first time, extending Wednesday's surge that was sparked by an unexpected decline in inventories of crude oil in the United States last week.
The oil rally this year has shaken the airline industry to the core and triggered fears about inflation and concerns about slowing economic growth. The scene is set for a replay of the 1970s, when oil-price spikes and runaway inflation dragged down the U.S. economy.
At $135 a barrel, oil is more than twice as expensive as it was a year ago and more than four times as costly as it was four years ago.
What's driving the rally? A report by Bloomberg News bolsters the view that this is a speculative frenzy, an investment bubble ready to pop.
Alexander Kwiatkowski and Grant Smith of Bloomberg say that the number of short positions on the New York Mercantile (in other words, bets that oil prices would fall) have shrunk sharply, suggesting that traders have been buying to cover their positions and limit their losses.
The number of outstanding futures contracts fell 8.1 percent in the same week that oil prices rose 2.6 percent, Bloomberg says.
James Hamilton, the economist, however, contends that the price gains are largely about fundamentals, supporting the view of Goldman Sachs and others.
Hamilton points to data that show that it is the newly industrialized countries, China in particular, that account for 60 percent of the increase in petroleum use between 2003 and 2006.
And China has the immense potential to increase consumption even further. He notes that in 2006, China used about two barrels of oil per person. In comparison, the U.S. used nearly 25 barrels, while Mexico used 6.6.
Hamilton does say "I think we will see some net production gains this year, and I expect this to bring some relief for oil prices."
Others are less certain that world oil production can increase. The closely followed International Energy Agency is in the middle of a survey of the world's biggest oil fields, but it is already apparent, the Wall Street Journalreports, that supply is much tighter than previously thought.
The view that oil production will soon peak has already fostered fears and caused buying in the market.
Neil McMahon of Sanford Bernstein told the Financial Times: "Peak oil views—regardless of whether right or wrong—are seeping into the market and supporting high prices."
The European Commission said on Thursday it would scrutinise a decision by Microsoft to make its Office programme compatible with a rival document format. With the US... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 11:58 am
Suntech Power Holdings (NYSE: STP) has posted earnings ahead of expectations. The earnings were $0.35 EPS and revenues rose 76% to $434.5 million; First Call estimates were $0.28 and $378 million. The gross margin increased to 22.2% in Q108 compared to 19.0% for Q107. The company also sees Q2 revenues of $430 to $440 million, above the $426.62 million consensus. PV cell production capacity was 540MW at end of the first quarter and it is on track to reach its goal of 1GW PV cell production capacity by 2008 year-end. Suntech shares are up 6% pre-market at $49.20; its 52-week...
The dollar recovered against the euro and yen on Thursday after the Federal Reserve signalled an end to its rate-cutting policy, analysts said. In European trading, the euro... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 11:55 am
These are ten of the analyst calls we are focusing on this Thursday morning: Akamai Tech (NASDAQ: AKAM) cut to Sell at Goldman Sachs. American Electric Power (NYSE: AEP) Cut to Hold From Buy at Jefferies. Apple (NASDAQ: AAPL) started as Outperform at Oppenheimer. Bidz.com (NASDAQ: BIDZ) Started as Buy at Merriman Curhan Ford. CDC (NASDAQ: CHINA) Cut to Neutral From Buy at Piper Jaffray. First Marblehead (NYSE: FMD) Raised to Market Perform at FBR. Level 3 Communications (NASDAQ: LVLT) Raised to Market Perform from Underperform at Wachovia. Panera Bread (NASDAQ: PNRA) Started as Buy at Jefferies. Salesforce.com (NYSE: CRM)...
Investors in UK equities trod carefully on Thursday as surging oil prices left transport stocks nursing losses, while wider concerns over rising inflation depressed the market.A key driver of inflation... Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 11:39 am
Air France-KLM shares suffered their biggest daily fall for for six years on Thursday after the carrier announced a net quarterly loss and warned of the impact of high oil prices for the coming year.The... Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 11:39 am
Tate & Lyle said on Thursday that after three years of a 1bn four-year capital-investment programme, and a number of disposals, it had now laid the foundations for an improvement in returns. Iain Ferguson,... Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 11:36 am
Air France KLM shares fall after the airline warns that fuel prices will slash its profits this year. Source: BBC News | Business | World Edition | 22 May 2008 | 11:18 am
Air France-KLM, Europe's largest airline, has warned that surging oil prices will hit profits this year a day after its larger rival American Airlines unveiled plans to cut jobs and capacity. Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 11:15 am
Air France-KLM, Europe's largest airline, has warned that surging oil prices will hit profits this year a day after its larger rival American Airlines unveiled plans to cut jobs and capacity. Source: Telegraph Business | 22 May 2008 | 11:15 am
NEW YORK (Reuters) - Power company NRG Energy Inc has made an unsolicited bid to buy competitor Calpine Corp for about $11 billion in stock, the companies said on Wednesday.
supply worries, global demand and an ever weakening U.S dollar driving crude futures up. The world's top energy watchdog is preparing a sharp downward revision of its oil-supply... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 11:11 am
The purchase of BCE Inc., the parent of telecommunications holding company Bell Canada by a group led by one of Canada's largest pension funds hit a snag Wednesday when an appeals court... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 11:10 am
The growth of China's toy exports slowed dramatically in the first quarter, hurt by higher production costs, a stronger currency and safety concerns, a state news agency said Thursday. Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 11:05 am
Cable & Wireless (C&W) today risked re-igniting shareholder anger
after its full-year results revealed that the UK telecoms group had inflated
its controversial senior executives' bonus pool by a further £27 million. Source: Latest Business News from Times Online | 22 May 2008 | 11:04 am
UBS AG said Thursday that it would raise $15.5 billion in a rights issue at a 31 percent discount below the current share price. UBS, hard hit by its exposure to the U.S. mortgage... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 11:00 am
Chris Mort is stepping down from his role as chairman of Newcastle United,
less than a year after he replaced Freddy Shepherd in July 2007. Source: Latest Business News from Times Online | 22 May 2008 | 10:53 am
Some of the fat cats in the Senate think that the Sirius Satellite (SIRI) merger with XM Satellite might be OK if the combined company would give up a large portion of its spectrum. According to The Wall Street Journal, these legislators would propose that the firms “divest as much as half of their combined radio spectrum as a condition of their proposed merger.” Although it is not clearly articulated, the reason for the proposal is so that the US government could, if it wanted to, sell that spectrum to another party to start a new satellite radio company. Even...
U.S. stocks headed for a moderately higher open Thursday after two sessions of steep declines brought by the surging price of oil. While oil futures broke through $135 per barrel for... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 10:52 am
High level politics and the soaring oil price have combined to create the most positive backdrop yet for EU-US talks focused on the abolition of laws preventing transatlantic airline takeovers, a senior... Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 10:52 am
High level politics and the soaring oil price have combined to create the most positive backdrop yet for EU-US talks focused on the abolition of laws preventing transatlantic airline takeovers, a senior British Airways executive has said. Source: Telegraph Business | 22 May 2008 | 10:52 am
supply worries, global demand and an ever weakening U.S dollar driving crude futures up. The world's top energy watchdog is preparing a sharp downward revision of its oil-supply... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 10:50 am
supply worries, global demand and an ever weakening U.S dollar driving crude futures up. The world's top energy watchdog is preparing a sharp downward revision of its oil-supply... Source: Infocious RSS raw feed - channel BNewsBusiness | 22 May 2008 | 10:47 am
UBS (UBS) had to raise money. The sins of its subprime addiction have come back to haunt it. US bank shareholders should shudder when they look at the pricing that the Swiss bank had to offer to get $15.5 billion. The rights offering is at a discount of over 30% to where the stock currently trades. UBS would make the case that each subscription right per share held will entitle the owner to buy more shares in the future. The bank must reason that its price will go up and that the right will be worth something. That may be...
The dollar fell through $1.58 against the euro for the first time in a month on Wednesday after the Federal Reserve painted a gloomy picture of the US economy and oil prices continued to surge Worries... Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 10:35 am
Shares in British Airways fell below £2 for the first time in almost five
years today as the oil prices soared to record levels, raising fears about
the UK flag carrier's fuel bill. Source: Latest Business News from Times Online | 22 May 2008 | 10:09 am
The International Energy Agency, the most well-regarded oil-price think tank in the world, says it is now concerned with whether the global supply of oil will be adequate to meet demand over the next two decades. The group had spent most of its time in recent years looking at the dynamics of demand, especially in crude-hungry regions like the US and China. The prevailing wisdom has been that oil supplies are ample in places like Saudi Arabia and Kuwait. The kings and princes who run those countries just wanted to hold back shipments to keep prices high. That thinking is...
UK retail sales fell by less than expected during April, reducing the chances
of a short-term interest rate cut in the face of rising inflation and
consumers' reluctance to rein in spending. Source: Latest Business News from Times Online | 22 May 2008 | 10:02 am
European oil companies rose on Thursday as oil stormed to a new record above $135 a barrel, while airlines and other fuel consumers got hammered.Oil companies dominated the leaderboard of the pan-European... Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 May 2008 | 10:02 am
Daily Mail and General Trust, the newspaper and information publisher, warned
this morning that revenues at its regional newspapers were tumbling after a
weak Easter period. Source: Latest Business News from Times Online | 22 May 2008 | 9:43 am
It looks like Pfizer’s (PFE) anti-smoking drug Chantix makes people kick the habit but at the same time can push them toward suicide or depression. It is a hard decision whether patients want to die slowly or fast. The Institute for Safe Medication Practices wants the warning labels on the drug to be changed, and, is it any wonder? The organization looks at problems with major drugs. According to The Wall Street Journal, in its most recent study the ISMP “found 988 serious incidents linked to Chantix in the U.S. during last year's fourth quarter.” Pfizer says that the label...
Retail sales fall by 0.2% in April, marking the first back-back to decline in monthly sales for two years. Source: BBC News | Business | World Edition | 22 May 2008 | 9:30 am
SINGAPORE (Reuters) - The world's top airlines warned on Thursday that soaring fuel prices were hitting profits, prompting some to increase fares, and global leader American Airlines announced thousands of job cuts to counter higher costs.
Power company NRG Energy has made an unsolicited bid to buy competitor Calpine for roughly $11bn in stock Source: FT.com - US homepage | 22 May 2008 | 9:07 am
Toyota increases the amount of overtime payments that can be made for officially voluntary activities. Source: BBC News | Business | World Edition | 22 May 2008 | 9:00 am
Short sellers are making significant bets that most financial stocks traded on the NYSE will fall sharply. Data is as of May 15 and compares to information on April 30. Short interest in Countrywide (CFC) rose 26 million shares to 102.4 million Share sold short in National City rose 39.6 million to 138.8 milion. Shares short in Fannie Mae (FNM) rose 17.9 to 104.3 million. Short interest in Washington Mutual (WM) moved up 8.4 million to 192.7 million. Shares short in Freddie Mac (FRE) rose 10 million to 63.2 million. Short interest in Ambac (ABK) moved up 10.1 million to...
UBS surprised investors by announcing it would raise more than expected in the deeply discounted rights issue that was approved last month Source: FT.com - US homepage | 22 May 2008 | 8:05 am
The rise followed data from the US government showing a sharp fall in inventories of crude oil and gasoline, just before the start of the US 'driving season' Source: FT.com - US homepage | 22 May 2008 | 7:52 am
Nationwide, Britain's biggest building society, halved its mortgage lending
last year as it halted an aggressive expansion drive and turned to retail
savers to fund growth in the face of the credit crunch. Source: Latest Business News from Times Online | 22 May 2008 | 7:49 am
American Airlines is to become the first US airline to charge passengers to check in a first bag, as well as a second. Source: BBC News | Business | World Edition | 22 May 2008 | 7:35 am
Swiss bank UBS launches its rights issue as it seeks to raise $15.5bn from its shareholders. Source: BBC News | Business | World Edition | 22 May 2008 | 7:22 am
ITV has failed to meet regulatory targets for the number of programmes it
makes outside London, placing it a risk of being fined for breaching the
rules. Source: Latest Business News from Times Online | 22 May 2008 | 7:22 am
The Government was today under increasing pressure to scrap October's planned
2p tax on a litre of fuel as the price of crude oil drove to fresh records
of $135 a barrel.$ Source: Latest Business News from Times Online | 22 May 2008 | 6:56 am
UBS, the Swiss-based banking group, has unveiled terms of a near SwFr16
billion ($16 billion) rights issue, one of the biggest in European corporate
history, as it moves to repair its ravaged balance sheet.$ Source: Latest Business News from Times Online | 22 May 2008 | 6:40 am
The New Zealand dollar jumped more than one US cent today after the Government delivered a budget that was far more stimulatory than anticipated.
Economists and traders assessed the Reserve Bank would now have to delay interest... Source: New Zealand Herald - Business | 22 May 2008 | 5:50 am
Australian ministers will join their New Zealand counterparts in Christchurch tomorrow to talk about climate change, regulatory reforms and small business.
Small Business Minister Clayton Cosgrove said it was the first time New... Source: New Zealand Herald - Business | 22 May 2008 | 5:30 am
Reuters - Power company NRG Energy Inc
has made an unsolicited bid to buy competitor Calpine Corp
for about $11 billion in stock, the companies said on
Wednesday.
Business reaction to today's Budget has ranged from a muted welcome acceptance to a more dismissive shrug of the shoulders.
Business New Zealand said it made some "useful microeconomic reform", but overall had not delivered a... Source: New Zealand Herald - Business | 22 May 2008 | 4:00 am
Finance Minister Michael Cullen's ninth budget was "extremely stimulatory" and will delay interest rate cuts and their magnitude, economists said today.
"Dr Cullen has thrown the kitchen sink and pot scrub at winning an election,"... Source: New Zealand Herald - Business | 22 May 2008 | 3:00 am
A number of changes to business tax filing and accounting rules have been announced in a joint Budget statement from Finance Minister Michael Cullen and Revenue Minister Peter Dunne.
"Compliance costs will be reduced by raising... Source: New Zealand Herald - Business | 22 May 2008 | 2:00 am
"Does your chewing gum lose its flavour on the bed-post overnight?" - not this time the Finance Minister must be hoping as voters digest the news that they will get tax cuts just weeks before the general election.
The Lonnie Donnegan... Source: New Zealand Herald - Business | 22 May 2008 | 1:00 am
Falling house prices could make homeowners feel a lot poorer and might mean they spend much less in future.
Treasury has examined the risks of our roller-coaster residential ride coming to an end and reckons tougher times are ahead.
New... Source: New Zealand Herald - Business | 22 May 2008 | 12:30 am
A real estate company believes home owners are holding back from trying to sell their property due to the current market sentiment.
Harcourts has recorded a 40 per cent decline in property sales last month from the same period... Source: New Zealand Herald - Business | 22 May 2008 | 12:06 am
They don't make people like Connie Marshall any more. The petite 78-year-old is breaking up wooden palettes with a crowbar when The Daily Telegraph arrives at JH Marshall Pressings, the small Wolverhampton metal-bashing firm founded by her father-in-law in 1929. Source: Telegraph Business | 22 May 2008 | 12:01 am
The two bidders stalking TDG have been given just under a month to submit a formal offer for the transport and logistics group. Source: Telegraph Business | 22 May 2008 | 12:01 am
Britvic, the maker of Tango and Robinson's soft drinks, said cost control and expansion had helped the company buck a "challenging" consumer market as it reported a 13pc rise in pre-tax profits. Source: Telegraph Business | 22 May 2008 | 12:01 am
Buy-to-let homeowners struggling to sell their properties are turning back to the rental market in droves after failing to attract acceptable offers, according to the Royal Institution of Chartered Surveyors. Source: Telegraph Business | 22 May 2008 | 12:01 am
MK One, the value fashion retailer, has been put into administration by new owner Hilco less than three weeks after it bought the chain from Baugur, the Icelandic retail investor. Source: Telegraph Business | 22 May 2008 | 12:01 am
Increased production from unexpected corners of the world may tame the perfect storm that has seen crude hitting record highs, reports Ambrose Evans-Pritchard Source: Telegraph Business | 22 May 2008 | 12:01 am
Funding to better protect investors is included in this year's budget.
In the past year large numbers of investors have been left out of pocket by a series of finance company collapses.
Many commentators have lashed advises... Source: New Zealand Herald - Business | 22 May 2008 | 12:00 am
A $168 million contribution over four years has been announced by Government for a plan designed to help workers get the right skills to cope in the modern workplace.
The funding was announced by Tertiary Education Minister Pete... Source: New Zealand Herald - Business | 21 May 2008 | 11:30 pm
Moody's has initiated an external review of its ratings of $4bn of complex debt products after revelations that the agency had awarded incorrect ratings because of a bug in its computer models Source: FT.com - US homepage | 21 May 2008 | 10:37 pm
Willie Walsh, British Airways' chief executive, said US rival Continental Airlines would make a "great addition" to its Oneworld alliance of global carriers Source: FT.com - US homepage | 21 May 2008 | 10:34 pm
The world's leading banks have stepped up pressure to relax controversial accounting rules with a new plan aimed at breaking the "downward spiral" of huge writedowns, emergency fundraisings and fire-sales of assets Source: FT.com - US homepage | 21 May 2008 | 10:04 pm
Hillary Clinton promised to take her dispute over the unseated delegates from Florida and Michigan to the Democratic convention in August if necessary in her most overt threat so far to stay in the race Source: FT.com - US homepage | 21 May 2008 | 9:38 pm
Circulation and ad revenues aren't just declining at newspapers, they're plummeting. Thousands of reporters and editors have lost their jobs. So how are papers surviving? Alisa Roth reports. Source: Marketplace | 21 May 2008 | 9:34 pm
A computer glitch at the Moody's credit-rating service reportedly gave a complicated kind of mortgage-backed security the coveted AAA rating when it should have been rated much lower. And Moody's kept it there for a year. Ashley Milne-Tyte reports. Source: Marketplace | 21 May 2008 | 9:34 pm
More than three-quarters of companies now offer flex-time as a way to keep workers happy while maintaining the corporate bottom line. That's an increase of 10% from a decade ago, a study says. Nancy Marshall Genzer has more. Source: Marketplace | 21 May 2008 | 9:34 pm
Why do some countries' economies grow and others don't? A World Bank commission says that, among other things, the ones that grow invest in their infrastructure. Commentator Robert Reich says that's what the United States ought to do. Source: Marketplace | 21 May 2008 | 9:34 pm
The energy bill approved by the House includes a specific credit for biodiesel, which is promoted as a cleaner way to wean us off petroleum products. But there's a loophole that's giving the biodiesel subsidy a bad rap. Sarah Gardner reports. Source: Marketplace | 21 May 2008 | 9:34 pm
Shortages of rice in Asia have forced Japan and several other big producers of the grain to reconsider their recent export bans. But will it help ease global markets? Sam Eaton reports. Source: Marketplace | 21 May 2008 | 9:34 pm
Reacting to higher fuel prices, American Airlines is retiring dozens of less fuel-efficient planes, laying off thousands of workers and charging passengers to check bags. Kai Ryssdal talks with former airline executive Howard Putnam about airlines' future. Source: Marketplace | 21 May 2008 | 9:34 pm
The price of oil hit $133 a barrel today. What we want to know is who's pocketing the extra money we're all paying to fill our tanks? Bob Moon tried to find the answer. Source: Marketplace | 21 May 2008 | 9:34 pm
US stock markets fell sharply for a second session after the Federal Reserve indicated it was finished with rate-cuts for the moment even as it slashed its economic growth forecasts and raised its projections for inflation and unemployment Source: FT.com - US homepage | 21 May 2008 | 8:50 pm
As the price of oil surged passed $130 a barrel today, American Airlines chief Gerard Arpey walked into the company's annual meeting in Dallas with a list of brutal cutbacks for the nation's largest airline.
By the end of the year, he told shareholders, American would be slashing its seat capacity by more than 10 percent, grounding as many as 75 of its aging and fuel-guzzling aircraft, and next month begin charging most fliers $15 to check a bag.
Expect similar moves from American's network competitors—United, Continental, U.S. Airways and hoping-to-merge Delta and Northwest—in the coming days. It's what the airlines do best: Hit the panic button after ignoring the easy-to-see long-term financial changes that have been drastically remaking airline economics for more than a decade.
Unlikely as it may seem, the big airlines had been betting that oil costs would decline. As a group, they are less well-hedged for the rest of 2008 than they were in 2007. Continental Airlines, for example, has hedged just 5 percent of its fuel needs in the third quarter of the year.
The poster child for this energy self-delusion is United Airlines chief financial officer Jake Brace. When United exited the longest and most costly bankruptcy in history on February 1, 2006, he produced a five-year plan of reorganization that prognosticated average fuel costs at $50 a barrel. Oil was already selling north of $60 a barrel when he made the prediction, and a panel at the World Economic Forum in Davos, Switzerland, that week warned that oil would imminently shoot to $120 a barrel.
The network carriers have also been living in a pricing fantasyland. For decades they priced fares without regard to the actual cost of manufacturing a seat. It overcharged some fliers based on the perception of their willingness to pay and undercharged others because they might not be interested in paying a reasonable fare.
Airline traffic is also plummeting as business travelers cut back and leisure fliers defer vacation travel. "Business has fallen off the plateau," one usually upbeat executive at an international carrier said today. "Anyone who tells you anything different is lying."
And the airline industry has alienated its customers by driving service levels to unprecedented lows. Two separate surveys this week—one from the University of Michigan, the other from J.D. Power—showed exactly how much customers loathe the product peddled by American Airlines and its ilk.
The result of the oil delusions, goofy fares and lousy service? Since the dawn of deregulation in 1978, the biggest carriers have lost a point of market share each year. Travelers have moved in unprecedented numbers to simple-service-at-rational-prices carriers such as JetBlue, AirTran and Southwest Airlines.
In fact, the biggest beneficiary of the latest airline chaos is likely to be Southwest. While carriers collectively lost upward of $100 million since 9/11, Southwest has remained profitable. In fact, it has rung up annual profits for 37 consecutive years. It now carries more passengers than any other U.S. carrier, continues to buy new, fuel-efficient aircraft and has deferred plans to retire some older planes in order to expand its route network. It is sitting on about $3 billion in cash and short-term equities to ride out the current crisis, and its fuel needs are about 70 percent hedged at $51 a barrel for the rest of the year.
Last week Southwest borrowed $600 million by mortgaging some older aircraft. The only logical assumption is that it has earmarked the funds to pick up some assets that American and its other competitors are preparing to shed at distressed prices.
While American Airlines was announcing broad capacity cuts and a new baggage surcharge on Wednesday, British Airways was passing the morning in a more celebratory spirit: Unveiling a $30 million renovation to its terminal at Kennedy Airport in New York.
Portfolio.com caught up with British Airways chief executive Willie Walsh to get his perspective on the future of American Airlines, and what the industry can do to fight back against scorching fuel prices.
Air Heads AMR's ugly service cuts show U.S. airline executives are still flying around fantasyland.
Oil Prices Pass $134 Supply worries, rising demand and a slumping dollar send crude to a record.
Portfolio.com:I'm sure you're aware of American's announcement this morning that they're planning on cutting capacity. Any plans for British Airways to do the same?
Willie Walsh: No, not in the immediate future. In fact we've already taken a decision that we will not be taking any capacity out during the summer period. I think it's inevitable that as we go into the weaker demand through the winter period that we will take some capacity out. But quite honestly, I felt that it was inevitable for carriers like American, and I expect others to follow suit.
Portfolio.com:There's been talk about a joint venture between American and British Airways, and potentially Continental. Are those talks ongoing? Do you think that the state of the airline industry will make it easier to get that regulatory approval for that type of joint venture?
Walsh: Yeah, absolutely. I think the economic conditions that we're seeing now with high oil prices will drive the industry toward consolidation. ... These discussions take place against a backdrop of a difficult economic environment and high oil prices – we've never seen this before. Typically when we see weak economic situations you see a low oil price. So this is uncharted waters for us. And I think it's going to drive more consolidation.
Portfolio.com:Was there a moment you can point to when you realized where oil was going? Did you anticipate this?
Walsh: I never, never thought I'd see oil at the prices we're seeing today. I didn't think that we'd see it go through the $100 barrier and I hope we don't see it at $200 because it's not just going to impact on the airline industry. Fuel is very significant part of our cost base. It's about 35 percent of the British Airways cost base, and increasing. ... The great thing from a British Airways point of view is that we're coming off the back of very strong financial results. We reported profits of about $1.7 billion last Friday. We have a very strong cash position, very strong balance shape, we're probably in a better shape than we've ever been.
Portfolio.com:You mentioned potential capacity cuts later in the year and inevitably fare increases. Are there any other things that BA is plotting out to mitigate this financial pressure?
Walsh: One of the key things that we were doing — and its disappointing that we're not going to see the benefits of this — is we're investing billions in new aircraft. We have orders for the Boeing787 Dreamliner and the Airbus A380. So it's very disappointing to see the Boeing program delayed, because these aircraft are very fuel efficient and it would be great to see them in the fleet today.
Portfolio.com:Will those delayed deliveries be reflected in ticket prices?
Walsh: I certainly hope so. ... The profitability we announced last Friday will be wiped out by the increase in fuel price we've seen in recent times. It's inevitable that consumers will see some of the high energy prices flowing into ticket prices. It has to happen; otherwise the industry is broken.
Portfolio.com:Do you see a joint venture with AA significantly changing this for both airlines?
Walsh: It's always been our ambition to get a closer relationship with American, and it's been hampered by our inability to secure antitrust immunity at what we would consider to be an acceptable price. I think the consumer would benefit from that closer relationship; I think we would be able to provide a better and more seamless integration of our flights from a consumer point of view. ... But these are ongoing discussions, and I suspect they will go on for some time yet.Related Links The I.T. Road Show Something Special on the Ground British Airways Aims High
Federal Reserve officials slashed their forecasts for growth this year and raised projections for inflation as minutes revealed growing tension between the two objectives Source: FT.com - US homepage | 21 May 2008 | 8:09 pm
Hamptons summer rentals start in just three days, but even that isn't enough to cheer the embattled troops on Wall Street this week. Doom and gloom dominated the moods in nearly every corner of the economy today.
The price of oil skyrocketed again to a record $133 per barrel after the Department of Energy said supplies dropped more than expected.
While the impact of higher oil prices is widespread, it was American Airlines' turn to vent about them today. Shares in the airline plunged after it blamed fuel costs for a significant reduction to capacity and a slew of new fees for passengers.
But oil wasn't the only downer today. The Federal Reserve released the minutes from its committee meeting at the end of last month, and it appears all but certain that the rate cuts have come to an end.
The Fed also significantly lowered its economic outlook for the U.S. It now expects the economy to grow by between 0.3 percent and 1.2 percent this year, down from its previous expected range of 1.3 percent to 2 percent. It also raised its unemployment and inflation expectations.
Indeed, any optimism that the central bankers held on to until now appears to have been dashed completely. Housing? "Bleak." Consumer spending? "Slowed to a crawl." Business-spending outlook? "Decidedly downbeat."
Mr. Market, understandably, didn't like the sound of this one bit. The Dow Jones industrials lost 227 points, or 1.8 percent.
Or rather, it can no longer afford to carry your luggage. And it can't afford to fly about 12 percent of you that may have flown with American in recent months. It also can't handle its reservation service, and please don't ask it about carrying your pet or your golf clubs.
In response to the rapid rise in the cost of fuel, AMR, the parent of American Airlines, announced significant capacity reduction and a host of "revenue growth efforts," commonly known to passengers as "additional fees" and "higher fares."
American will cut back on as much as 12 percent of its domestic capacity by the end of this year, but it has not announced which routes will be impacted. It will retire as many as 85 planes from its mainline and regional fleets.
The airline will also try the novel approach of charging $15 for passengers' first checked bags, starting on June 15. It will raise fees for a range of other services, from reservation services to transporting pet and oversize bags.
It's easy to imagine the passenger revolt in response to these efforts. Their new mantra seems to be: If you want to fly American, pack light and be flexible with your destination. It's not our fault oil is at $130 a barrel.
To be fair, the soaring cost of oil has caused airlines' expenses to balloon, and it's no surprise that they have little choice but to pass much of that cost to their customers. American said it spent 12 cents per dollar of revenue on fuel in 2000. Today it spends three times that amount. It spends 10 percent more on fuel today than it did just a month ago.
American's announcement today sounded like a desperate plea to OPEC to do something about the price of oil. "The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak U.S. economy," said AMR chief Gerard Arpey in a statement.
The efforts were meant to show shareholders that the company is taking action in response to the drastic rise in the cost of operating its business. Unsurprisingly, it had quite the opposite effect.
Shares of American Airlines plunged more than 15 percent on the news, delivering a double-whammy effect of simultaneously disappointing investors and alienating customers.
With the traditional summer doldrums of TV programming looming, the major networks are introducing programs they think will keep audiences tuning in. Audiences—faced with a glut of second-rate reality shows and competition series—may beg to differ.
The summer viewing season typically starts the Thursday before Memorial Day weekend and ends in mid- to late-September. Fox kicks things off tomorrow with a two-hour season premiere of So You Think You Can Dance, the network's dance-choreography competition and, by our count, one of three dance shows on network TV this year—not including Bravo's Step It Up And Dance. NBC's summer standby Last Comic Standing debuts the same night. In early June, CBS will roll out a Regis Philbin game show, Million Dollar Password, and ABC will dig up The Mole to keep reality fans well fed.
More on the networks' summer schedules below. But if the mishmash of competitions, celebrities, and "American"-themed reality shows fills your heart with dread, remember that it wasn't until recently that networks even bothered to air original programming over the summer, says Brad Adgate, senior vice president at media-planning and buying agency Horizon Media.
"If you go back 10 years ago, it was all repeats or returning specials," he says.
Of course, nowadays, the summer is fertile ground for testing shows that networks may later bring into the regular fall rotation. American Idol,Dancing with the Stars, and Survivor—three reality shows that soon became ratings blockbusters—all aired for the first time over the summer months. And the networks are no doubt hoping that one of the many reality series they have lined up this summer will take off in similarly dramatic fashion.
But cable networks, whose most successful recent summer offerings have included The Closer (TNT), Damages (FX), Mad Men (AMC), Burn Notice, and Psych (both USA)—all of which are scheduled to return with new episodes this summer—are offering stronger competition to network TV over the summer months than ever. Last summer's two most talked-about shows—The Sopranos finale on HBO, and Disney's High School Musical 2—were both cable shows, says Adgate.
With network programming heavily affected by the writers' strike, and a surfeit of reality shows as a result, reality fatigue could have more viewers than ever channel-surfing to cable. According to Nielsen, last summer, basic cable attracted more than double the viewers of the six major broadcast channels.
ABC already started its summer programming, premiering The Bachelorette on Monday night this week, and tomorrow, it airs new episodes of hits Ugly Betty and Grey's Anatomy, hoping to steal viewers from the other net's reality show premieres.
Among the networks, CBS is alone in debuting two new dramas, Swingtown (June 5) and Flashpoint (July 11), this summer. The network's first summer offering, Million Dollar Password, premieres June 1. And along with the return of summer series Big Brother (July 13), CBS is debuting a much-hyped reality canine competition, Greatest American Dog (July 10). Jingles (July 27), a Mark Burnett reality show revolving around commercial tunes, is new this summer as well.
This summer, however, the must-see TV event will almost certainly be the Beijing Olympics, which start on Friday, August 8. That's the hope of NBC, anyway, and the network is packaging the Games up with a bevy of other America-themed shows for what it is calling NBC's All-American Summer. The network started the season earlier this month with the premier of American Gladiators. Fear Itself, a horror-anthology series, will begin May 29, and Nashville Star, a country-singing competition, kicks off June 9. Celebrity Circus, a celebrity talent competition (June 11), America's Got Talent, a talent show for regular folks (June 24), and The Baby Borrowers, a reality show that places kids with young couples (June 25), round out the schedule.
Over at Fox, Tuesday night will feature new episodes of reality game show The Moment of Truth (May 27), followed by Gordon Ramsay's Hell's Kitchen. New episodes of Are You Smarter Than a 5th Grader will air starting June 12.
In addition to The Bachelorette, ABC is bringing back competition series The Mole this summer (June 2). Starting June 24, the network will air two competition shows, both inspired by Japanese shows: Wipeout, which sends contestants through a degrading obstacle course, and I Survived a Japanese Game Show. Next comes Dance Machine (June 27), another dance-off series. And the network is taking advantage of Disney's hit High School Musical by rolling out a reality show based on it, High School Musical: Get in the Picture (July 20). Wanna Bet, a new celebrity game show, airs the next day.
It's almost enough to make Americans want to—gasp—leave their houses and enjoy the sunny weather.
Reuters - Stocks rose on Thursday after a
surprise drop in jobless claims and a takeover offer in the
utilities sector buoyed investor optimism and offset worries of
inflation spurred by crude oil above $135 a barrel.
Reuters - Ford Motor Co said on Thursday it
no longer expects to meet a long-held goal of returning to
profitability in 2009 and would cut production through the
remainder of this year to adjust to a slumping U.S. market.
Reuters - Airlines around the world
braced for slower growth, tighter earnings and deeper cost
cutting on Thursday as oil prices surged and the biggest
carrier by revenue, Air France KLM , warned on
profits.
Reuters - As U.S. banks mop up the mess from
billions of dollars of bad home loans, buyers are finding the
days of cheap money are over and, in many cases, tougher
versions of old lending rules now apply.
Reuters - Power company NRG Energy Inc
has made an unsolicited bid to buy competitor Calpine Corp
for about $11 billion in stock, the companies said on
Wednesday.