Archive for the ‘Uncategorized’ Category

Apple launches the iPad Air

The 9.7-inch iPad Air is 20% thinner than the previous model, and weighs only one pound. It features the zippier A7 processing chip as well as the M7 coprocessor, both of which are found in Apple’s iPhone 5s.

Stakes are high for Apple, as the company continues to lose market share in the crowded tablet space. During the third quarter, Apple commanded a 29.6% market share for global tablet shipments, down from more than 40% last year, says IDC. Meanwhile, rival Samsung is gaining ground, boosting its share in the third quarter from 12% to 20%.

Apple is looking to top the 3 million iPads sold last year, when the fourth-generation iPad and the iPad mini launched. A new iPad mini with Retina display is slated to hit stores later this month.

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Wholesale Inventories in U.S. Increase by Most in Seven Months

Inventories at U.S. wholesalers increased in August by the most in seven months as merchants tried to keep pace with stronger demand.

The value of unsold goods increased 0.5 percent after a revised 0.2 percent gain in July that was larger than previously reported, the Commerce Department said today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.3 percent increase. Sales jumped 0.6 percent in August after no change the month before.

Wholesalers had enough goods on hand to last 1.17 months at the current sales pace, matching the previous two months as the lowest since September 2011. With inventories already running lean, companies would need to increase production or import more amid signs of increased demand.

Estimates of the 28 economists surveyed by Bloomberg for wholesale inventories ranged from no change to a 0.6 percent increase. Distributors’ sales were also projected to climb 0.3 percent, the survey median showed.

Wholesalers’ stockpiles of durable goods — those meant to last three years or more — increased 0.6 percent in August, outpaced by a 0.9 percent jump in sales. Inventories of imported automobiles rose 2.4 percent as purchases eased 0.9 percent.

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HSBC unit to pay $2.5 billion in fraud case

A division of Europe’s HSBC has been ordered to pay about $2.46 billion in a class action lawsuit claiming it violated federal securities laws.

Lawyers for the plaintiffs said that the judgment, which includes $1.48 billion in damages and nearly $1 billion in prejudgment interest, was the biggest ever following a securities fraud class action trial.

HSBC Holdings, Europe’s biggest bank by market value, said in a statement on Friday that it will appeal, noting that it was “the next step in an 11-year-old case and we believe we have a strong argument.”

James Glickenhaus of Glickenhaus & Co., one of the three lead plaintiffs appointed by the court in 2002 to represent the class, said in a statement that the judgment “shows that the fraud committed by Household International and the individual defendant officers will not go unpunished, and we look forward to having the judgment affirmed on appeal.”

The lawsuit named Household International Inc., which is now HSBC Finance Corp., and former executives William Aldinger, David Schoenholz and Gary Gilmer. It claimed that the company fraudulently misled investors about its predatory lending practices, the quality of its loans and its financial accounting from March 23, 2001 through Oct. 11, 2002.

HSBC acquired consumer lender Household International in 2003. The acquisition made HSBC the biggest subprime lender in the U.S. at the time, which resulted in billions of losses to HSBC leading up to the financial crisis of 2008.

A jury in Chicago found in favor of the plaintiffs in May 2009. In the final judgment entered in the U.S. District Court Northern District of Illinois Eastern Division on Thursday, Household International, Aldinger, and Schoenholz are held jointly and severally liable for the judgment. Gilmer is held severally liable for 10 percent of the judgment.

HSBC’s U.S. shares shed 8 cents to $55.08 in premarket trading. They are up less than 2% for the year.

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Jump in Jobless Claims Flashes Warning on U.S. Shutdown: Economy

“The economic costs of a shutdown are going to increase the longer the shutdown occurs,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester,Pennsylvania and the second-best claims forecaster over the past two years, according to data compiled by Bloomberg. “If this drags along for the next couple of weeks, the economic toll will be even more significant.”

Shares surged today amid signs lawmakers were moving to reach agreement on increasing the nation’s debt ceiling to avoid a government default. Absent a deal, the possibility that federal agencies will need to slash spending once the borrowing limit is reached probably means hiring plans will be put on hold as business leaders prepare for an economic slump.

Shares Jump

The Standard & Poor’s 500 Index climbed 1.6 percent to 1,683.21 at 11:42 a.m. in New York. President Barack Obamasaid he would accept a short-term increase in the debt limit without policy conditions and that he would negotiate on broader fiscal and health-care policy after the ceiling is raised and the shutdown ends.

Other news today showed the world’s third-biggest economy was strengthening. Machinery orders in Japan jumped in August to the highest level since 2008.

A partial U.S. federal government shutdown lasting through the end of the week could cost the economy 0.2 percentage point in growth, according to the median estimate in a Bloomberg survey of economists issued today. The damage escalates to a 0.5-point loss if the shutdown carries through Oct. 25.

Last week’s surge in the number of jobless claims was the biggest since the aftermath of superstorm Sandy in November. The median forecast of 47 economists surveyed projected an increase to 311,000 from the prior week’s 308,000. Estimates ranged from claims of 304,000 to 340,000.

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Investors take big bite of Potbelly IPO

Potbelly, which raised $105 million from the stock sale, is the latest in the a hot streak of initial public offering. It is on track to be the fourth to more than double on its first day of trading this year.

Fellow restaurant chain Noodles & Co. (NDLS) also doubled on its first day in June. Organic food companySprouts (SFM) and software firm Benefitfocus(BNFT) also rose more than 100% on their market debuts. That’s a pretty rare feat following the bursting of the Internet bubble. Only six companies doubled on their first day of trading between 2001 and 2012, according to Renaissance Capital.

Related: Twitter-hungry investors rush to wrong Tweet shares

If Potbelly closes above $33, it would be the biggest first-day gain for a U.S.-listed IPO since a 161% surge for Chinese online video firm Youku.com (YOKU) in December 2010. (Youku has since merged with rival Tudou.)

Potbelly started in 1977 as a small antique shop in the Windy City that began serving toasted deli sandwiches to boost sales.

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Consumers boost spending 0.3%; income grows

WASHINGTON (AP) — U.S. consumers increased their spending slightly last month as their income grew at the fastest pace in six months. The figures point to only modest economic growth in the July-September quarter.

Consumers’ spending on goods and services rose 0.3% in August, the Commerce Department said Friday. That’s up from a 0.2% gain in July, which was slightly more than the 0.1% reported last month.

CONFIDENCEDrops for second straight month

FRIDAY: How markets are doing

Income rose 0.4% in August, the best gain since February and up from a 0.2% July increase. Private wages and salaries rose 0.5%, while the government wages and salaries rose 0.2%.

The government figures would have been higher if not for forced federal furloughs that reduced wages and salaries by $7.3 billion.

Consumer spending drives 70% of economic activity. Many analysts say the increases are not enough to accelerate economic growth in the third quarter from the 2.5% annual rate in the April-June quarter.

“With more money coming in, consumers spent a little, just a little, more freely,” said Jennifer Lee, senior economist at BMO Capital Markets.

Paul Ashworth predicts the economy is growing at an annual rate of 2% to 2.5% in the July-September quarter. Still, the pickup in August could signal stronger growth in the final three months of the year.

Other economists are less hopeful. Peter Newland, an economist at Barclays, said that the modest increase did not change Barclay’s forecast for growth at a 1.7% rate.

Americans saved some of the extra money they earned last month. The personal savings rate edged up to 4.6% of after-tax income, a slight improvement from 4.5% in July.

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Olive Garden parent company’s profit falls

The parent of Olive Garden and Red Lobster is replacing its president after reporting a sharp drop in profits over its summer quarter.

Darden Restaurants said it earned $70.2 million, or 53 cents per share, for the three months ended Aug. 25. That’s compared with $110.8 million, or 85 cents per share, in the year-ago period. Analysts expected a profit of 70 cents per share.

Sales rose to $2.16 billion, helped by the opening of new locations. That was short of the $2.19 billion Wall Street expected, according to FactSet.

The company said Drew Madsen, 57, will retire and be succeeded by the president of its specialty restaurant group, Gene Lee. The appointment is effective immediately.

Darden also will reduce its workforce by 80 to 85 positions and take other steps to save $50 million — half of that in its current 2014 fiscal year. It forecast net earnings per share in this fiscal year will fall between 3% and 5% from a year ago.

The company has struggled despite revamped menus and changes in pricing. Sales at Olive Garden, Darden’s biggest chain, fell 4% at restaurants open at least a year in the latest quarter. At Red Lobster, they fell 5.2%. Longhorn Steakhouse‘s same-store sales were up 3.2%.

The company’s specialty restaurant group, which includes chains such as The Capital Grille and Bahama Breeze, has performed better than the company’s flagship chains. Within that group, sales ticked up 0.5% at restaurants open at least a year. The metric is a key gauge because it strips out the impact of newly opened and closed locations.

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Wall Street little changed after data as eyes on Fed

(Reuters) – U.S. stocks were little changed on Friday, after a host of economic data did little to cause investors to recalibrate expectations the Federal Reserve may begin to scale back its stimulus measures next week.

Retail sales rose 0.2 percent in August, below economists’ expectations of a 0.4 percent increase and the 0.4 percent climb in July. Sales were weaker than expected despite increased demand for automobiles and other big-ticket items and added to signs economic growth slowed in the third quarter.

In a separate report, producer prices rose 0.3 percent in August, slightly above expectations, as energy prices rose. However, the Producer Price Index excluding volatile food and energy costs was unchanged.

The Fed is widely expected to announce a reduction in stimulus when it concludes a two-day policy meeting on Wednesday.

“These were the two big numbers, the PPI and retail sales and I don’t think either of them change the outlook, which our base case is the Fed goes in and begins the (tapering) process here on the September 17-18 meeting,” said Darrell Cronk, regional chief investment officer at Wells Fargo Private Bank in New York.

“We’ll do a little bit of moving sideways probably, at least until we see the Fed meeting next week.”

Equities were unfazed as the Thomson Reuters/University of Michigan‘s preliminary reading on the overall index of consumer sentiment fell to 76.8 in September, the lowest since April and well shy of August’s 82.1 and the 82.0 economists had expected.

In the last major piece of economic data on Friday’s schedule, business inventories rose 0.4 percent in July, their largest increase in six months and above the 0.2 percent estimate, suggesting restocking could provide a boost to third-quarter economic growth.

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Stocks slump in early trading after weak jobs report

NEW YORK — Stocks slumped in early trading Friday as investors weighed what August’s unemployment report could mean for continued Federal Reserve stimulus.

The Dow Jones industrial average fell 109.25 points, or 0.73%, to 14,828.23 shortly after the opening bell.

The broader Standard & Poor’s 500 shed 8.71 points, or 0.53%, to 1,646.37. The technology-focused Nasdaq composite index lost 25.09 points, or 0.69%, to 3,633.69.

QUIZ: How much do you know about the stock market?

The federal government Friday morning issued a lackluster report on the nation’s labor market in August. The U.S. economy added 169,000 net new jobs in August, fewer than the 177,000 analysts had expected, and the Labor Department revised significantly downward earlier months’ job gains.

The Labor Department said the unemployment rate ticked lower to 7.3%, from 7.4% in July.The Fed has signaled that it could begin scaling back its extraordinary monetary stimulus program as early as this month, depending on how data portray the economy’s health.

When the Fed will “taper” its so-called quantitative easing program has been the obsession of investors for months. By buying bonds, the Fed has pushed down interest rates and made riskier investments like stocks more attractive, helping to fuel this year’s stock rally.

Despite the less-the-stellar jobs report, some analysts predict the Fed will nonetheless start to wean the economy off of its easy-money policies starting this month.

Douglas Coté, chief market strategist for ING U.S. Investment Management, said in a note that he was skeptical the Labor Department report would mean a delayed Fed taper.

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Signed contracts to buy US homes slip in July but remain at healthy pace, despite higher rates

The small decline suggests sales of previously owned homes should remain healthy in the coming months. There is generally a one- to two-month lag between a signed contract and a completed sale.

Final sales jumped to an annual pace of 5.4 million in July, the highest in 3 ½ years, the Realtors said last week. That’s consistent with a healthy housing market.

Higher mortgage rates appeared to have had a bigger impact on new-home sales, which plummeted last month. That raised fears that rate increases were restraining the housing recovery.

But many economists note that home prices and mortgage rates remain low by historical standards. Consistent job gains and rising consumer confidence may also support sales in the coming months.

“Higher mortgage rates are clearly negative for housing, but other key drivers, including the labor market, confidence, and expectations for prices and interest rates still point to improvement,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said in a note to clients.

The average rate on a 30-year mortgage reached 4.58 percent last week, the highest level in two years and up from 3.35 percent in early May. Still, that’s below the average since 1985 of about 7 percent, according to Bankrate.com.

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