U.S. retail sales jumped one per cent in January, reversing a six-month declining trend and defying economists’ expectations by posting the biggest increase in 14 months. The Commerce Department says January retail sales rose a per cent from December after having fallen for six straight months. Wall Street economists surveyed by Thomson Reuters had expected January sales to show a drop of 0.8 per cent. They plunged 2.7 per cent in December, which had the weakest holiday selling season since at least 1969. The January report shows strong increases in sales of automobiles and in general merchandise stores — the “big box” outlets — though sales by department stores, carrying fewer varieties of items, posted a decline.
U.S. businesses slashed inventories in December by the biggest amount in seven years as they coped with plunging sales in a dismal holiday season. The Commerce Department says inventories fell 1.3 per cent in December, far worse than the 0.9 per cent decline analysts expected. It was the largest cut since the record 1.5 per cent in October 2001. It also marked the fourth straight month that companies cut their stockpiles, matching a similar stretch of reductions that ended in August 2003.
Houston-based Citgo Petroleum is cutting about 75 employees—about two per cent of its work force—as part of restructuring efforts. Affected employees are being offered separation packages. Citgo is owned by the American subsidiary of Venezuela’s national oil company.
Equistar Chemicals is indefinitely closing its Chocolate Bayou plant, cutting 220 jobs. The LyondellBasell affiliate produces ethylene, used in hundreds of products that have suffered plummeting sales. Equistar is one of dozens of LyondellBasell subsidiaries placed in Chapter 11 bankruptcy protection on January 6th.
The government says the number of new claims for unemployment benefits dropped slightly last week but remains near a 26-year high as companies lay off workers amid a deepening recession. The Commerce Department says the number of first-time applications for jobless benefits dropped to a seasonally-adjusted 623,000, from an upwardly revised figure of 631,000 the previous week. The latest tally still was above analysts’ expectations. The 631,000 figure was the highest number of new jobless claims since October 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then. The number of people claiming benefits for more than one week rose to 4.81 million from 4.78 million, the highest total since records began in 1967.
Former Enron CEO Jeff Skilling has been denied a request for the entire federal appeals court in New Orleans to review his convictions. The Fifth U.S. Circuit Court of Appeals also rejected Skilling’s petition to reconsider his case. Skilling was convicted in May 2006 on 19 counts of conspiracy, fraud, insider trading and lying to auditors. He’s serving a 24-year sentence in a Colorado federal prison. Skilling’s attorney Daniel Petrocelli now plans to appeal to the U.S. Supreme Court.
U.S. regulators are investigating a Texas billionaire’s investment firm and his Caribbean bank. Officials reported the case involves higher-than-average returns to investors and depositors–despite the global meltdown. The Associated Press reports investigators in January visited the Florida offices of the Houston-based Stanford Group. AP quotes a U.S. official with knowledge of the probe who spoke on condition of anonymity. The official says the matter has drawn the attention of the Securities and Exchange Commission, the Financial Industry
Regulatory Authority and the Florida Office of Financial Regulation. All are trying to determine if the investment company and bank controlled by billionaire R. Allen Stanford violated financial regulations or laws. The SEC and the financial industry regulatory authority declined comment. A Stanford spokesman denied anything was unusual about what he called the “routine” visit last month by regulators. Stanford International Bank is based in the twin-island Caribbean nation of Antigua and Barbuda, which has carved out a niche as a tax haven and offshore base for Internet gambling. The investigation of his financial group was reported earlier by Business Week and Bloomberg News.
A consultant is recommending all patient beds from the hurricane-damaged University of Texas Medical Branch in Galveston be moved to the mainland. Hurricane Ike hit the Galveston area on September 13th and the area is still struggling to recover. Kurt Salmon Associates tells the UT System Board of Regents that moving all patient beds to inland facilities offers the best hope for securing the financial future of UTMB. The second-best option is splitting the beds between the island city and the mainland. Regents will hold a public hearing February 20th in Galveston to take comment on the future of Ike-damaged UTMB. Research and classes at UTMB have returned nearly to normal, but only about 250 of 600 beds are in service. Meanwhile, a Texas House committee that looked at Ike’s destruction has recommended spending $6 million to restore UTMB to a level one trauma center.
Gasoline prices at the pump continue rising with the cost per gallon up three cents this week in Texas. AAA Texas reports the statewide retail average reached $1.83 a gallon. Nationally, gasoline prices rose a nickel to $1.95. Houston is holding steady at about $1.80 a gallon. Corpus Christi had the cheapest gasoline this week, at $1.79, while El Paso had the most expensive, at $1.97 a gallon. AAA Texas reports gasoline prices have jumped 19 cents in the past month, while oil prices have slipped to the $35 per barrel range. Spokesman Dan Ronan says retail gasoline prices have gone up amid reductions in capacity that many refiners are making “to cope with less demand for gasoline and the recession.”
The U.S. Department of Commerce has named Texas the number one exporting state for the seventh consecutive year. Exports from the state increased more than 14 per cent over the last year, with a total of $192.14 billion in exports. Governor Rick Perry credits low taxes and reasonable and predictable regulations. Top export recipients include Mexico, Canada, China, The Netherlands and Brazil. Top exporting industries include chemicals, computers and electronics, machinery, petroleum and coal, as well as transportation equipment.
Governor Rick Perry is announcing a $5 million state investment to expand and recruit researchers at an institute of regenerative medicine. And he’s urging the legislature to keep supplying money to his Emerging Technology Fund. Perry announced the grant for the Texas A&M Health Science Center College of Medicine’s Institute of Regenerative Medicine at Scott and White. He says commercialization of adult stem cell research will help Texans suffering from tissue and organ disorders. He also says it will protect the unborn from exploitation. Perry has made it clear he supports adult stem cell research, but not embryonic stem cell research. The Emerging Technology Fund is a $200 million fund created by the legislature in 2005 at Perry’s request.
A real estate trade group says home prices fell in nearly nine out of every ten cities in the fourth quarter of last year, as the housing market’s woes spread nationwide. The National Association of Realtors says median sales prices of existing homes declined in 134 out of 153 metropolitan areas compared with the same period in 2007. Existing home sales fell in all but six states — Nevada, California, Arizona, Florida, Minnesota and Virginia — where buyers have been able to snap up foreclosed homes at a bargain.
The Federal Reserve says the recession has cut many Americans’ net worth by about 20 per cent as the value of homes, stock portfolios and businesses plummet. The Fed says the average net worth of American households plunged 22.7 per cent since the recession began in December 2007 through October, when the report was prepared. The median net worth, or the midpoint between the wealthiest and poorest, fell 17.8 per cent. The Fed report says if the value of second homes and businesses are excluded, the average household net worth fell 12 per cent, which reflects that such assets are “relatively concentrated among wealthier families.”
The Federal Reserve says commercial banks and investment firms reduced their borrowing over the past week from its emergency lending program. The Fed says commercial banks averaged $64.6 billion in daily borrowing over the week ending Wednesday. That’s down from $67.4 billion in average daily borrowing for the week that ended February 4th. Investment firms, meanwhile, drew $25.8 billion over the past week from the Fed program, down from $30.3 billion the previous week. This category includes any loans that were made to the U.S.- and London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley and Bank of America’s Merrill Lynch.
Pilots’ union officials say the chief executive of American Airlines and its parent won’t meet the union president to discuss stalled contract talks. The Allied Pilots Union says American CEO Gerard Arpey is suggesting instead that both sides let federal mediators have more time to broker a deal on a new contract. The standoff is detailed in letters back and forth between the two leaders and is the latest sign of tension between Fort Worth-based American and its three unions. Federal mediators are also involved in negotiations between American and its flight attendants and ground workers. Employees want to recover wage cuts they took in 2003. But American wants to hold the line on spending after losing $2.1 billion last year.
Houston-based Boots & Coots International Well control has acquired John Wright Company of Houston in a $10 million deal. Boots $ Coots provides well pressure control services, and will integrate John Wright’s proprietary relief well drilling and risk management technology.
An expansion of a major Texas-to-New England gas pipeline is being proposed to handle a drilling rush on the Marcellus shale rock formation in northeastern Pennsylvania. The Federal Energy Regulatory Commission has begun notifying local authorities of its intention to conduct an environmental review of the Tennessee gas pipeline’s proposed expansion. El Paso Corporation owns the Tennessee gas pipeline. The Houston-based company wants to expand the pipeline in Bradford, Pike, Potter, and Susquehanna Counties in Pennsylvania, as well as Passaic and Sussex Counties in New Jersey. The expansion would add 128 miles of new 30-inch-diameter pipeline in the two states. Analysts say Marcellus shale could become the nation’s largest natural gas field.
Eighteen conventions, trade shows and other events have been booked by the Greater Houston Convention & Visitors Bureau for March. More than 28,200 attendees will spend an estimated $27.4 million in Houston during the month. Gatherings include Pri-Med’s 2009 Southwest conference March 18th through the 21st at the George R. Brown Convention Center. The Spring North American Bridge Championships take place Mach 12th through the 22nd at the Hilton-Americas Hotel.
Waste Management, the nation’s number one waste hauler, says its fourth-quarter profit slid 29 per cent on declines in its recycling business and one-time charges. Net income fell to $218 million from $309 million in the year-earlier period. Revenue was $3.11 billion–down seven per cent from $3.36 billion in the fourth quarter of 2007. Houston-based Waste Management said the latest quarter’s results were hurt by falling commodity prices that affected its recycling business and special charges related to a withdrawal from a pension plan and accounting and tax impacts. Without the charges, net income would have been $241 million.