Americans may be settling into low-spending habits. They spent about the same amount in October as they did in August and September. That’s according to SpendingPulse, a service of Mastercard Advisors. U.S. retail sales rose 1.5 per cent in October compared to a year earlier. The sales include everything from toys to food, but exclude cars and gasoline. Compared with the month before, however, sales fell 2.3 per cent in October. That’s the biggest month-to-month decline since December 2008.
A drop in energy stocks is dragging the market lower following a government report that consumers and businesses are trimming use of oil and gas. A jump in energy supplies last week is stirring worries that the economy will struggle to recover. The drop in energy erased early gains from technology stocks, which rose after 3com agreed to a $2.7 billion takeover by Hewlett-Packard and as Intel said it would pay $1.25 billion to Advanced Micro Devices to settle legal disputes.
Hewlett-Packard agreed to buy the networking software and equipment maker in a deal valued at $2.7 billion. HP also issued a preliminary quarterly financial update. It told of better than expected earnings and revenue. 3com’s products will be folded into HP’s own networking equipment business. HP said the deal will add new products to its line and help expand its presence in China. HP also said in a statement that customers want more than one vendor in the business dominated by Cisco systems.
President Barack Obama says he’s organizing a wide-ranging White House jobs summit to “talk about how we can work together” to create jobs. Obama said at the White House that a report showing fewer claims for jobless benefits is “a hopeful sign” but he also said that finding jobs for the millions without them remains one of his administration’s greatest challenges. The president said people “are desperately searching for work” and that the government has “an obligation to consider every additional responsible step we can” to get people back to work. He said the jobs summit in December will bring in experts in both the public and private sector to talk about how to get the job-creation engine running again.
A new report shows the number of homeowners on the brink of losing their homes fell last month. The RealtyTrac numbers show the third straight monthly decline. The drop comes as foreclosure prevention programs have been coming to the rescue of more borrowers. Even so, foreclosure filings are up 19 per cent from a year ago. And continued job losses continue to threaten the stabilizing trend. More than 332,000 households–or one in every 385 homes–received a foreclosure-related notice last month. Those include a notice of default or trustee’s sale. That’s down three per cent from September. Banks repossessed more than 77,000 homes last month, down from nearly 88,000 homes in September.
The Federal Housing Administration says its financial cushion has dipped to a dangerously low level but should remain above zero under “most economic scenarios.” The agency, a major source of funds for first-time homebuyers, faces mounting concerns that it will eventually need a taxpayer bailout as losses grow from homeowners who lose their jobs and can’t pay their mortgages. An independent audit being sent to Congress shows reserves for the fiscal year ending September 30th fell to $3.6 billion, compared with $685 billion in outstanding insured loans. That’s a ratio of 0.53 per cent and far below the two per cent level Congress has required since the 1990s. Officials, however, project agency’s financial picture should correct itself within two years.
The Obama administration is taking its first step toward trying to fix the ailing airline industry. Carriers are facing turbulent times, what with being mired in a severe economic slump and facing safety worries. Transportation Secretary Ray LaHood held a forum to discuss the state of the industry and ways government can help provide economic stability for airlines. The industry has been rocked by repeated crises in recent years, including the 9/11 terror attacks, the SARS virus and the current economic downturn. LaHood’s invitation to aviation stakeholders says the forum was organized at the request of the AFL-CIO’s transportation trades department. The forum is closed to the public and the media.
An environmental group says Texas still leads the nation in greenhouse gas pollution but has decreased emissions slightly in recent years–in part because the state’s using more renewable energy. Environment Texas released a report that shows the state’s release of the gases linked to climate change dropped two per cent between 2004 and 2007. In that same period, 33 states increased their emissions. The report analyzed the most recent U.S. Department of Energy statistics to calculate carbon dioxide emissions from oil, coal and natural gas from 1990 to 2007. It found that emissions from fossil fuels went up 19 per cent between 1990 and 2007, but has slowed in recent years.
Asia-Pacific finance ministers say nations of the world must rein in stimulus spending, ensure stable growth and strengthen financial systems to ensure a prosperous global economy in the post-crisis period. That’s according to a draft statement from the Asia-Pacific Economic Cooperation Forum obtained by the Associated Press. Foreign ministers from the group’s 21-member economies have been huddling in Singapore to discuss ways to sustain growth and encourage free trade at a time of fragile economic recovery. The draft statement also says that reducing public sector debt will require more than just “phasing out” stimulus measures. It calls for sustained budget consolidation and growth-enhancing reforms. The statement also calls for freer trade and warns against resorting to protectionism. The weeklong forum culminates in a leaders’ summit this weekend that includes President Barack Obama, Chinese President Hu Jintao and Japanese Prime Minister Yukio Hatoyama, among others from Pacific Rim nations.
U.S. banks will prepay about $45 billion in premiums to replenish a Federal Deposit Insurance Corporationfund now in the red, under a plan adopted by federal regulators. The FDIC board voted to mandate the early payments of premiums for 2010 through 2012. Amid the struggling economy and rising loan defaults, 120 banks have failed so far this year costing the insurance fund more than $28 billion. To address concerns of small banks, the FDIC also set up an exemption process for banks that prove the prepaid fees would be a financial hardship.
Drug companies are looking to move more of their advertising online, as they try to capitalize on the popularity of sites like Twitter and Facebook. The Food and Drug Administration opened a two-day meeting on Internet marketing. The FDA is agreeing to consider new rules for online ads after the drug companies complained that current guidelines for traditional media–which require a detailed list of possible side effects–have left them hamstrung on the Web. Industry observers say companies have largely steered clear of the Web for fear of running afoul of FDA regulators who have not defined rules on operating online. Last April, the FDA fired off warning letters to Pfizer, GlaxoSmithKline and a dozen other drug makers for search engine ads that didn’t mention drug risks. Most of the industry’s roughly $4.5 billion in annual marketing is still spent on traditional television and magazine advertising. There, the rules are clear: all ads that mention a drug must provide a balanced picture of its risks and benefits.
John King is replacing Lou Dobbs on CNN. John Klein, CNN president, said that veteran reporter King will move into the evening slot that’s been vacated by Lou Dobbs. King will host a show about politics beginning early next year. That puts him in direct competition with MSNBC’s Chris Matthews, whose “hardball” is also about politics. Fox News Channel’s Shepard Smith, who does a more general interest newscast, dominates the cable news ratings in that hour. Dobbs announced abruptly last night that Wednesday would be his last show on CNN. He said he wanted to pursue more advocacy journalism, a route that was no longer available to him on CNN.