Posted by: Harry Maurer on September 25
It’s been almost two years since US consumers were this blue. The Conference Board’s index of consumer confidence tumbled in September even more than experts had predicted, to 99.8 from 105.6. One likely contributor: Sales of previously owned homes in August fell 4.3%, said the National Association of Realtors, and a different index of home values fell more in July than it has in six years.
There’s a silver lining in all this, if you choose to look at it that way: Every sign of economic weakness makes it more likely that the Fed will keep cutting rates.
In yet another sign that the housing slump is far from over, big Miami-based builder Lennar racked up a loss of almost $514 million in the third quarter and will lay off 35% of its workers. The red ink is about six times deeper than what analysts had expected. The company’s stock is down more than 50% since the beginning of the year.
Source: Wall Street Journal
The world’s biggest retailer is launching a program aimed at cutting the energy used to make and distribute its products. The first step, undertaken in partnership with the nonprofit Carbon Disclosure Project, will be to take a close look at energy use in seven categories including DVDs, soap, and beer.
Soon it’ll be more convenient to get from Atlanta, Detroit, and Philadelphia to cities in China, as six US airlines were awarded new routes. When the routes open next year, nine US cities will enjoy direct service to China, leaving the transportation market between the two giant economic powers still underserved, but not as badly as before.
The satellite TV outfit says it may separate its Dish Network subscriber unit from its other assets to create two publicly traded companies. The idea is to unlock value in the less-visible businesses, which include design of set-top boxes and international operations.
Microsoft is in talks to acquire a 5% stake in fast-growing social-networking site Facebook for $300 million to $500 million, a deal that would value the three-year-old start-up at more than $10 billion. Arch-rival Google is also interested in a tie-up. The actual money is pocket change for the software behemoth, but the valuation is so high as to be fanciful, given that Facebook may earn $30 million this year on revenues of $150 million. That’s a multiple reminiscent of the days of the internet bubble of the late 1990s. Indeed, Microsoft’s interest in Facebook says more about its own failure to keep pace with Google in the online advertising business than it does about the real prospects for Facebook, whose ability to lure advertising dollars remains mostly hypothetical.
Source: Wall Street Journal
General Motors and the United Auto Workers were back at the bargaining table within hours of the union walkout, a move that underscores how close they are to a settlement and how little either side has to gain from a prolonged walkout.
Shares of Britian’s biggest company slumped in early trading after its chairman warned employees in a private briefing that third-quarter results would be lousy and said he planned to overhaul the company’s structure to speed decision-making and encourage managers to take reasonable risks. The company has been lagging its peers in overall performance.
Source: Financial Times
The audio equipment maker said its fiscal first-quarter profit would be less than half what analysts expected, triggering an 8% plunge in its shares. The bad news comes days after a planned $8 billion buyout of the firm by Kohlberg Kravis Roberts and the private equity arm of Goldman Sachs was canceled..
NRG Energy today will seek Nuclear Regulatory Commission approval to build two nuclear power plants in Texas, marking the first time a utility has sought permission to build a nuclear plant in the US since the 1970s. The NRG move, which is expected to be followed by other operators, reflects renewed optimism that nuclear power can stage a comeback in an era of high oil prices and concern over global warming.
Source: New York Times
Microsoft’s newest online game seeks to harness the attraction of social-networking to build sales. With more and more game players being lured away by such sites as Facebook and MySpace, the industry is scrambling to find ways to hang on to—and build—its core audience.
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