Retail gasoline rises, but at slower rate…Consumer Price Index up four-tenths of a percent; Consumer Sentiment Index drops…Landry’s Restaurants makes $84 million offer for Smith and Wollensky…
Retail gasoline prices rose in Texas this week for a sixth week in a row. But the weekly AAA Texas Gas Price Survey released finds the upward trend slowed this week. The statewide average price for regular-grade gasoline rose three cents this week to $2.41 per gallon. That’s after an 11-cent increase the week before. The most expensive regular-grade gasoline is in Amarillo, where the average price rose five cents this week to $2.51 per gallon. The cheapest gas is in Corpus Christi, where it increased a penny to $2.32 per gallon. Gasoline in Houston averages $2.38, up 2.3 cents, and Galveston’s average is up a penny to $2.39. Nationally, the price average rose four cents per gallon to $2.55. Auto club spokeswoman Rose Rougeau says strong consumer demand, a relatively high crude oil price, and seasonal refinery conversions to warm-weather blends are behind the price spikes.
The Labor Department’s Consumer Price Index surged four-tenths of one percent last month. That is slightly larger than expected. It reflects increased costs for gasoline and food, as the impact of bad winter weather on citrus crops began to take hold. Excluding food and energy, the core CPI was up two-tenths, in line with forecasts. The report follows this week’s higher-than-expected Producer Price Index release. The wholesale inflation gauge rose 1.3 percent, paced by higher food and energy costs. The Federal Reserve, scheduled to hold a policy-setting session next week, is expected to leave interest rates steady.
There’s word that consumers are taking a dimmer view of the economy this month than they did in February. Those who have seen it say the preliminary University of Michigan Consumer Sentiment Index dropped to a reading of 88.8 from February’s final reading of 91.3. Economists had expected it to come in at 89.5. The report is released to subscribers only.
The Federal Reserve says industrial production rose one percent last month. That’s a sharp rebound given the three-tenths-of-one-percent drop in the previous month. Much of the strength was because of a surge in utility production, as colder-than-normal temperatures in much of the country boosted production by the biggest amount since December 1989. Factory output rose four-tenths. Industry was operating at 82 percent of capacity, up six-tenths from the previous month.
Landry’s Restaurants is digging deeper into its corporate pockets in making an $84 million offer for Smith and Wollensky, signaling a bidding showdown. The bid of $9.75 a share is a premium of 50 cents a share over what was offered by Patina Restaurant Group, accepted last month. Patina’s offer is worth nearly $80 million. Smith and Wollensky operates 13 restaurants under a variety of names. Houston-based Landry’s operates a number of restaurant chains including Landry’s Restaurants, Willie G’s Seafood and Steak House, Joes’s Crab Shack and Chart House.
A federal bankruptcy judge in Corpus Christi signed off on a $94.5 million labor deal between Arizona-based Asarco and the United Steelworkers. The approval came over the strong objections of the copper miner’s corporate parent, Grupo Mexico. They called the deal a “giveaway.” Asarco workers went on strike in July 2005, a month before the company filed for bankruptcy. Employees didn’t return to work until December of that year and had been working under an interim contract. The deal includes wage and benefit increases. Asarco operated a smelter in El Paso but idled the plant in 1999 because of low copper prices. Critics claim the plant caused high levels of arsenic and lead found in soil samples nearby.
The Federal Trade Commission wants more information about Whole Foods’ purchase of rival natural foods retailer Wild Oats Markets. The companies said in regulatory filings that they received the requests from the FTC this week. Last month, Austin-based Whole Foods announced that it would pay $565 million–or $18.50 per share–Wild Oats. Whole Foods has experienced slower growth recently, raising pressure on company executives to grow more quickly. Wild Oats operates about 110 natural foods stores in 24 states and Canada under several names, including Wild Oats Marketplace and Sun Harvest.
Southwest Airlines said that its board authorized the repurchase of up to $300 million in stock. The authorization comes on top of a $400 million buyback program that was approved in November and completed this month. The airline said it has bought back 62.1 million shares for $1 billion since the beginning of last year. Dallas-based Southwest has about 785 million outstanding shares. Southwest shares have been essentially flat for the past two years, while the stock of rivals such as American Airlines and Continental Airlines has more than tripled.
JetBlue and other airlines are canceling flights in advance of a big winter storm expected to hit the northeast and New England today. JetBlue has been under pressure to do better in bad weather since passengers were stranded in planes at Kennedy Airport for up to ten and a-half hours during a storm last month. JetBlue was unable to resume normal operations for days afterward because flight crews weren’t where they were supposed to be. JetBlue has canceled more than 200 flights today, about one-third of all JetBlue flights. Meantime, Delta has also canceled more than 200 flights and Dallas-based American Airlines has canceled about 120 flights to or from New York and other northeastern airports. Northwest Airlines canceled about 35 flights to or from the east coast. The storm could dump up to six inches in New York and as much as a foot in other areas.
The desks once used by former Enron executives Ken Lay and Jeff Skilling could wind up helping a good cause. A nonprofit group wants to auction the desks to raise money for spaying and neutering cats and dogs. A news release says the custom-designed desks would cost more than five-figures to replicate today. Bidding on eBay starts at $25,000 each. The desks were donated to Saving Animals Across Borders by a group that bought Enron’s Houston building. The energy company was once the nation’s seventh-largest firm. It collapsed in December 2001 when top executives were no longer able to hide billions of dollars in debt with accounting tricks. Saving animals says it decided to accept the desks because Enron and the Lay family had a history of supporting animal-welfare groups.