Orders to factories for big-ticket manufactured goods fell for a third straight month in March, the longest string of declines since the 2001 recession. The Commerce Department says demand for durable goods dropped by 0.3 percent last month, a worse-than-expected performance that underscores the problems manufacturers are facing from a severe economic slowdown. The last time orders fell for three consecutive months was from February to April of 2001, when the country was sliding into the last recession. President Bush on Tuesday said the economy was not in a recession but a period of slower growth. However, economists who believe the country is in a recession will point to the string of declines in manufacturing orders.
Newly laid off workers filing claims for unemployment benefits posted a sharp decline last week. The Labor Department reports that claims for unemployment benefits fell by 33,000 last week to 342,000. Economists had been expecting claims would rise by 3,000. The four-week moving average for claims fell by 7,250 to 369,500. Even with the improvements, analysts are still worried that the weak economy is putting greater pressures on the labor market. The unemployment rate climbed to 5.1 percent in March as businesses laid off the largest number of workers in five years.
The Federal Reserve has auctioned $59.46 billion in treasury securities to big investment firms, part of an ongoing effort to help strained credit markets. The auction–the fifth of its kind–was held Thursday. The $59.46 billion was less than the $75 billion worth of securities the Fed was making available. In exchange for the 28-day loan of treasury securities, bidding firms can put up more risky investments, including certain shunned mortgage-backed securities, as collateral.
Maryland Treasurer Nancy Kopp wants ExxonMobil shareholders to approve a resolution at the company’s annual meeting next month. The resolution would seek to separate the roles of chairman and CEO at the Irving-based oil giant and make its board chairman independent. Kopp chairs the board of trustees for the Maryland Retirement and Pension Agency, which has assets of about $37 billion. About $400 million of the state pension fund is invested in ExxonMobil, the second-largest holding in the fund. Kopp spoke during a conference call with Robert Monks, the lead filer of the shareholder resolution, and California Controller John Chiang. Kopp and Chiang participate in the investor network on climate risk, which is a group of 60 institutional investors focused on how businesses affect climate change. The company’s board opposes the resolution, saying it wants to keep Rex Tillerson as both chairman and CEO.
Hamburgers and roast beef seem like a good fit. So, Wendy’s and Arby’s are getting together. After having fended off buyout bids, Wendy’s has agreed to be purchased by the owner of Arby’s for more than $2 billion. Wendy’s was made famous for its made-to-order square hamburgers and chocolate frosty dessert. Triarc Companies, owned by billionaire investor Nelson Peltz, will pay about $2.3 billion in an all-stock deal for the nation’s third-largest hamburger chain started in 1969 by Dave Thomas. Thomas’ daughter Pam Thomas Farber says the family is devastated by the news. She calls it “a very sad day for Wendy’s, and our family”. The deal is expected to be completed in the second half of the year.
The chief executives of Delta and Northwest Airlines are trying to convince lawmakers on Capitol Hill that the proposed merger between the two is the best way to cope with surging fuel prices. Delta CEO Richard Anderson and Northwest CEO Doug Steenland say their airlines would be stronger together than they are apart. They also say that they would be more competitive with large foreign carriers and better equipped to handle record fuel prices. The two airlines have reported a combined first-quarter loss totaling $10.5 billion. House Judiciary Committee Chairman John Conyers said he was keeping an “open mind” on the merger, but then questioned whether airline mergers would lead to job cuts and higher fares for air travelers.
The Federal Aviation Administration is trying for a second time in three years to stop its managers in Texas from covering up air safety violations. FAA chief operating officer Hank Krakowski said Thursday he had removed the manager and assistant manager of an air traffic control facility in Dallas-Fort Worth. He also announced a series of steps he said would finally put an end to deliberate underreporting or misreporting of incidents in which airplanes fly closer together than they are supposed to. Krakowski acknowledged that the agency had promised to do this in 2005. But a new investigation had made clear–as he put it–that those commitments “were not taken seriously by people in my organization who were responsible to do that.”
The Houston City Council has unanimously approved a $3 surcharge per ticket sold for outbound flights from George Bush Intercontinental Airport, to pay for the planned $1.1 billion expansion of Terminal B. Airport officials expect $400 million could be raised by 2014. The surcharge may begin appearing on tickets beginning as soon as December 1st. A $3 fee has been collected at William P. Hobby Airport since November 2006.
House Democrats have won committee approval of a $15 billion housing bill to let states and cities buy and fix up foreclosed properties. The measure passed the Financial Services panel Wednesday 38 to 26, mostly along party lines. Democrats say it will prevent blight in neighborhoods hit hardest by the recent wave of foreclosures. The Bush administration and Republicans view it as a bailout for lenders and speculators that could lead to even more foreclosures. The bill is part of Democrats’ broader housing overhaul plan whose centerpiece would let hundreds of thousands of struggling homeowners refinance into more affordable, government-insured loans. That measure is expected to get a committee vote next week.
House Speaker Nancy Pelosi says she has yet to brief her colleagues on a plan to keep lots of Democratic priorities out of President Bush’s war funding bill. House Democratic leaders will try to add extended unemployment benefits and new education funding, but some don’t want to try to add billions of dollars for roads, bridges and other ideas. The still-emerging plan is a sign that Democrats want to avoid loading up the war funding bill and lose a veto and public relations clash with the president. Democratic aides also say Pelosi’s plan is tentative. Bush has promised to veto any bill that exceeds his pending $108 billion request to fund U.S. military and diplomatic efforts in Iraq and Afghanistan.
The Senate has passed legislation to increase veterans’ benefits and establish pensions for Filipinos who served alongside Americans in World War II. The 96-1 vote Thursday sends the bill to the House, despite objections from some Republicans and President Bush. Bush has not said he would veto the bill, but the White House and some Republicans tried to strip out the pension for Filipino veterans because they said the money was better spent on soldiers serving in Iraq and Afghanistan. That effort failed, 56-41. The bill would make some benefits retroactive for more veterans. It also would increase the amount of mortgage life insurance that some disabled veterans can purchase and give severe burn injury victims new kinds of housing benefits.
The National Retail Federation says consumers will spend an average of $138.63 for Mother’s Day this year. That’s down 51 cents from last year. The trade group says the percentage of people planning to buy jewelry is down from last year as well. Special dinners or brunches are expected to garner the largest part of the spending. NRF President and CEO Tracy Mullin says in a statement that “retailers will offer specials on popular items such as digital cameras and gardening tools.”
A new report says there is probably a place for desalted seawater in meeting the nation’s future water needs, but research is needed to reduce the costs and impact on the environment. The National Research Council report says that improving technology is making it more realistic to consider desalination of water. Some 97 percent of the water on earth, including seawater and brackish groundwater, is too salty for drinking or irrigation. Environmental concerns include threats to fish and other aquatic animals from water intakes, high energy use in the salt-removal process and disposal of the salty sludge left over from the process. There is currently no overall coordination of federal research on desalination.
Phone bills may drop about one percent starting in January if a proposed $144 million cut to the state’s telecom taxes is approved today as expected. The Texas Universal Service Fund has some of the highest telecom taxes in the nation. The proposed cut was the result of a compromise agreement between the Public Utilities Commission and the phone companies. If the PUC approves the negotiated cut at its Friday meeting, it will be the second reduction to Texas’ telecom taxes. The first came last year, when legislators killed the telecommunications infrastructure fund that added 1.25 percent to telecom bills.
The Securities and Exchange Commission charged a Wall Street trader with spreading lies about Blackstone Group’s attempted purchase of Alliance Data Systems. The SEC says Paul Berliner profited from the scheme. The SEC’s action comes as agency officials hint they are also investigating rumors surrounding Bear Stearns before the investment bank collapsed last month. Berliner was a trader formerly associated with the Schottenfeld Group. The SEC says he spread a rumor last November that Blackstone would renegotiate its offer for Dallas-based ADS from $81.75 a share to $70 per share. The SEC says Berliner spread the rumor through instant messages to other traders at brokerage firms and hedge funds. That caused ADS’s shares to plummet 17 percent before recovering after ADS said the rumor was false. The SEC says Berliner, meanwhile, bet that ADS shares would fall by selling the company’s shares short and profited from doing so. Berliner agreed to settle the charges, without admitting or denying the allegations, by paying a fine of more than $156,000.
Liverpool Football Club manager Rafa Benitez doesn’t want to be caught in the middle between feuding owners Tom Hicks and George Gillett, Jr. Hicks met twice with Benitez this week. Gillett didn’t attend Tuesday’s European Champions League semifinal against Chelsea because of illness. Hicks has threatened to prevent Gillett from selling his 50 percent stake to PCP Capital Partners. That company’s senior partner, Amanda Staveley, is working with Dubai ruler Sheikh Mohammed Bin Rashid al Maktoum. The Reds were held to a 1-1 draw by Chelsea in the first leg of the semifinals at Anfield, and play the return leg at Stamford Bridge on Wednesday.
Ford posted a surprise profit for the first quarter. The automaker enjoyed strong results in Europe and South America, helping to make up for the poor car and truck sales in the U.S. during the period. It was the first profitable quarter for Ford since the spring of last year. CEO Alan Mulally says the rest of this year “will be a challenge.” but he says he’s “cautiously optimistic.” Ford also says that its latest round of early retirement and buyout offers netted 4,200 hourly workers. It had hoped for more.
ConocoPhillips said Thursday its first quarter profit rose almost 17 percent as the third-largest U.S. oil company benefited from record oil prices. But those same high levels squeezed results at its refining operations. The Houston-based company said net income rose to $4.14 billion for the January-March period, from $3.55 billion in the year-ago quarter. ConocoPhillips said revenue rose to $54.9 billion from $41.3 billion a year ago. In a statement, the company also said operations were hampered somewhat by unplanned downtime at refineries, however. The third-largest U.S. oil company said its average global sales price for a barrel of crude in the first quarter was a hefty $92.88, up from $53.38 a year ago. Crude prices have risen roughly 80 percent since this time last year, nearly reaching $120 a barrel this week. ConocoPhillips made out better on natural gas sales, thanks to a 26 percent increase in prices from a year earlier. Analysts have said other major oil companies will likely report similar gains from high energy prices when they post their own first-quarter results in the next couple of weeks. ExxonMobil and Chevron are scheduled to report earnings next week.
Information technology services company Electronic Data Systems says its first-quarter profit was less than half what it was a year-ago when it recorded a huge contract termination payment from Verizon. Results still beat analyst expectations, however. Plano-based Electronic Data Systems says it earned $62 million, down from $164 million in the same period a year earlier. A contract termination payment from Verizon added $100 million to results in the year-ago quarter. Sales for the three months ended March 31st climbed three percent to $5.37 billion from $5.22 billion. Analysts, on average, had expected a profit of 5 cents per share on sales of $5.21 billion, according to a poll by Thomson Financial.
American Electric Power says its earnings more than doubled in the first quarter compared with a year ago when it recorded large charges because of work on two West Virginia power plants. AEP says its results were bolstered by the settlement of litigation involving a power purchase and sale agreement. Columbus, Ohio-based AEP says it made $573 million, compared with a profit of $271 million a year ago. Revenue rose slightly to $3.5 billion. Excluding one-time special items, AEP earned $410 million. Analysts surveyed by Thomson Financial expected revenue of $3.4 billion.