Yes, retail sales declined in February, but it’s the size of the decline that got everyone’s attention: just 0.1%, less than economists had expected. And excluding autos and auto parts, retail revenue actually increased by 0.7% for the month. What’s more, the Commerce Dept. revised January’s rise in retail sales to 1.8%. So while consumers are steering clear of big-ticket items, especially cars, the numbers do offer some hope that the retail sector may begin to stabilize.

However, the news on the labor market front remains bad. The number of U.S. workers drawing unemployment benefits hit a new record of 5.317 million in the week ended February 28, a rise of 193,000. And initial claims for benefits ticked up to a seasonally adjusted 654,000 in the week ended Mar. 7, up from 645,000 the previous week, indicating that employers are continuing to lay off workers in huge numbers. And RealtyTrac reports that foreclosure filings in the U.S. jumped 30% from a year earlier despite government and private efforts to stem the tide of people losing their homes.

Source: Reuters, Bloomberg

GE Loses Its Top Credit Rating

The company tried mightily to prevent it, but Standard & Poor’s downgraded GE’s long-term debt rating from its coveted AAA to AA+ with a “stable” outlook. The move is a setback for CEO Jeffrey Immelt and is the first time since 1956 that GE’s rating has dipped below AAA. Nevertheless, S&P’s report, which attributed the downgrade largely to problems at GE’s finance arm, GE Capital, was otherwise surprisingly upbeat, and the company’s shares were up 14% in midafternoon trading. The broader market also rose, with the Dow up more than 200 points.

Source: Forbes

BofA in the Black

Bank of America CEO Kenneth Lewis followed the lead of Citigroup and JP Morgan Chase in announcing that the company was profitable in January and February. He added that “we expect to be profitable” in 2009, and that BofA will take no more government money. The bank and its subsidiaries have accepted some $163 billion in federal capital and guarantees. The stock was up nearly 15% around 3 p.m.

Source: Forbes

Madoff: What’s the Right Penalty?

In the wake of his guilty plea, and amid a clamor for justice, Bernie Madoff’s lawyers are trying to limit their client’s punishment for what may be the largest financial fraud in history. But a long prison sentence for the 70-year-old financier won’t bring the money back. Madoff had his bail revoked after his plea and went directly to jail.

Source: BusinessWeek

Roche Says It Has a Deal for Genentech

Swiss pharmaceutical giant Roche said Mar. 12 that it has reached an agreement in its long-running effort to acquire the 44% share of U.S. biotech company Genentech it didn’t already own. Basel-based Roche will pay $46.8 billion, after raising its offer price for San Francisco-based Genentech to $95 per share. The new company will generate annual revenue of $17 billion and employ about 17,500 people in the U.S. pharmaceuticals business alone. Roche’s bidding for Genentech turned hostile in January after its offer of $86.50 a share, down from the $89 it first offered in July, was rejected. A special committee appointed by Genentech’s board has approved the latest offer and recommend it to Genentech shareholders. The deal marks the third major pharmaceutical acquisition this year.

Source: Wall Street Journal, Marketwatch, New York Times

G-20: Can They Find Common Ground?

G-20 finance ministers meeting this weekend to discuss the global banking crisis share a common desire for rapid solutions. But U.S. strategy is still markedly different from Europe’s, so reaching agreement may be tough. In the run-up to the meeting, World Bank President Robert Zoellick forecast that the global economy will shrink 1% to 2% this year as China’s industrial output slows.

Source: BusinessWeek, Reuters

Europe Faulted for Timid Stimulus Response

As the evidence of economic pain mounts in Europe, a growing number of analysts say the Continent’s leaders are reacting too slowly. In statements Mar. 11, President Obama and U.S. Treasury Secretary Timothy Geithner seemingly turned up the heat on their European counterparts before this weekend’s meeting of G-20 finance officials.

Source: New York Times, Times of London

Another Huge Loss for Freddie Mac

U.S. mortgage backer Freddie Mac said Mar. 11 that it lost nearly $24 billion in the fourth quarter of 2008 and will need to draw down another $31 billion from the U.S. Treasury—though it may have trouble paying back the capital.

Source: Financial Times

Madoff: What’s the Right Penalty?

In the wake of his guilty plea, and amid a clamor for justice, Bernie Madoff’s lawyers are trying to limit their client’s punishment for what may be the largest financial fraud in history. But a long prison sentence for the 70-year-old financier won’t bring the money back.

Source: BusinessWeek

BMW Shares Plummet on Earnings Miss

Bayerische Motor Werke, the world’s biggest luxury carmaker, said it had a fourth-quarter loss before interest and taxes after setting aside money for slower used-car sales and spending on job cuts. The surprise loss drove BMW shares down as much as 12% in early trading on Mar. 12.

Source: Bloomberg

EBay Outlines Three-Year Turnaround Plan

Talking frankly about past mistakes, eBay CEO John Donahoe told analysts Mar. 11 he plans a one-stop shop for consumers that will be easier to use and offer better bargains.

Source: BusinessWeek

Toyota Urges Aid to U.S. Car Parts Makers

The Japanese auto giant joined its American rivals on Mar. 11 urging the U.S. government to lend a hand to the struggling parts suppliers it shares in common with Detroit.

Source: Washington Post

Conversation of the Day: EBay’s Big Plans for PayPal

Reader Doug writes: “It’s almost as if these guys are deliberately trying to destroy eBay. After 11 years, I’m selling off the last of my inventory and getting out for good.”

Read the story and tell us what you think

Hot Topic on the Business Exchange: Bernard L. Madoff

The Madoff financial scandal is reaching its denouement. Henry Blodget and others are sharing their insights.

Join the Exchange