Thursday PM July 30th, 2009

Southwest Airlines makes a bid to acquire Frontier Airlines Holdings, which is operating under bankruptcy protection. A court had already approved the sale of Denver-based Frontier to the parent of regional carrier Republic Airways for $108.8 million, but that deal can be nixed if a better offer comes along. Frontier did not specify in a statement how much Dallas-based Southwest is offering in its initial nonbinding proposal. The deadline for bidders to make an initial offer is Monday. An auction, if necessary, will be held August 11th.


The government says the number of newly laid-off workers filing first-time claims for jobless benefits rose last week, though the increase was mostly due to seasonal distortions. The Labor Department says new claims for unemployment insurance increased by 25,000 to a seasonally adjusted 584,000, above analysts' estimates. A department analyst says the increase comes after claims were artificially lowered earlier this month by the timing of auto factory shutdowns, which happened earlier this year than usual.

Forty-one of the top 100 major labor markets now have double-digit unemployment rates, according to the Bureau of Labor Statistics. Detroit has the worst rate at 17.1 percent. The lowest rate in that group is 5.4 percent in Omaha. Houston's unemployment rate is eight percent.


Houston-based Farouk Systems, which manufactures professional hair care products, has opened a new "green" facility on Fernbush Drive for its CHI USA brand. The company held a job fair at Greenspoint Mall, planning to hire another 800 people by the end of the year. The company expects to have created almost 1,300 new jobs in the Houston area within a year.


A new survey by Challenger, Gray & Christmas indicates that the percentage of job seekers starting their own businesses has jumped to its highest level since 2007, in spite of continued tightness in the lending market. Some 8.7 percent of job seekers gaining employment in the second quarter did so by starting their own businesses—up from 6.4 percent in the previous quarter. The increases in start-up activity have yet to impact the overall number of self-employed workers tracked by the government.


Retail gasoline prices increased an average of nine cents across Texas this week. AAA Texas reports the average price at the pump is $2.40 a gallon. The nationwide cost for gasoline increased by six cents to settle at $2.52. Houston had the cheapest gasoline this week at $2.34 a gallon. El Paso gasoline prices were the highest statewide, averaging $2.45. The auto club says Texas gasoline prices have followed the movements of oil prices for much of the summer and will likely continue to do so in the short term. Some analysts predict prices will not move significantly in either direction barring any unexpected events.


Texas continues leading the nation in wind power generating capacity, with 454 megawatts added in the past three months. That six percent growth means Texas now generates more than 8,000 megawatts by wind, according to the American Wind Energy Association. An additional 1,210 megawatts of wind power was added to the nation's power grid in the second quarter.

The U.S. Senate has approved an energy and water development appropriations bill that includes $2 million for the University of Houston Wind Energy Center. The bill is now being reconciled with the House version.


The largest U.S.-owned cement company has filed a lawsuit alleging unconstitutional discrimination from a large Dallas suburb. That's after Plano City officials decided to buy cement made in a more environmentally friendly process than that used by Ash Grove Cement. The Overland Park, Kansas-based Ash Grove filed suit against Plano in a federal court in Dallas. It alleges Plano's move is unconstitutional and violates state competitive bidding laws. Ash Grove also has sued Dallas, Fort Worth and other local governments for favoring cement from "dry kilns" instead of older "wet kilns" that pollute more. Ash Grove's lawsuit asks that the city of about 264,000 to stop the preferential purchasing.


The Federal Reserve says banks nudged up borrowing from its emergency lending facility over the past week, but cut back on other programs designed to ease the financial crisis. The overall picture, though, still suggests some credit stresses are easing. Commercial banks averaged $33.8 billion in daily borrowing over the week that ended Wednesday. That was up slightly from $33.7 billion in the week ended July 22nd. The identities of the financial institutions are not released. They pay just 0.50 percent in interest for the emergency loans.


The government program that provides $40 coupons for digital TV converter boxes is winding down. Friday will be the last day it accepts requests. Full-power U.S. TV stations turned off their analog broadcasts on June 12th. Households that still need the boxes to get digital signals to their TVs can order a coupon at www.dtv2009.gov or by calling 1-888-DTV-2009. Each household can request two coupons. As of Wednesday, the government had sent out 63.4 million coupons, of which 33.8 million had been redeemed at a cost of $1.3 billion. Government data show that there's still demand for coupons. On Tuesday, 49,000 were requested.


Americans spend about $34 billion a year on alternative medicine, without knowing whether it really works. That's why the head of the federal agency that leads research in the field says more research is critically needed. Dr. Josephine Briggs, director of the National Center for Complementary and Alternative Medicine, says the report confirms that people are spending "substantial" amounts of money on health practices that "range from promising and sensible to potentially harmful." The report looks at spending for such things as chiropractors, acupuncturists and herbal remedies. Researchers found that alternative medicine now accounts for more than 11 percent of out-of-pocket spending on health care in the United States. About 44 cents out of every dollar spent on alternative medicine was for products like fish oil, glucosamine and echinacea. Spending on those products was nearly $15 billion, or about a third of what Americans spend out-of-pocket for prescription drugs. Vitamins and minerals were not included in this report.


There's less drought in Texas, but the areas where conditions are worst actually expanded. The federal drought monitor map shows 61 percent of the nation's most drought-stricken state is under some form of drought. That's down from about 68 percent last week and 86 percent a year ago. About 19 percent of Texas is under the most severe level of drought, up slightly from last week and way up from about three percent a year ago. Nearly 25 percent of Texas is under the worst two categories of drought, mostly in south-central Texas.

Earnings ExxonMobil has reported its lowest profit in nearly six years. The 66 percent drop from a year earlier comes as the world's biggest publicly traded oil company manages against sharply lower crude and gas prices and weak demand for refined products. For the king of corporate profit records, it marks the third straight quarter of lower year-over-year earnings, providing a clear picture of how demand for oil and gasoline has evaporated. ExxonMobil, based in Irving, said earnings for the April-June period came to nearly $3.6 billion. That was down from $11.7 billion a year ago, a record at the time. Excluding one-time items, net income in the most-recent quarter amounted to $4.1 billion.


Waste Management, the nation's largest trash hauler, says its second-quarter profit fell sharply due largely to a continuing drop in recycling prices. Net income was $247 million, down 22 percent from $318 million last year. Analysts surveyed by Thomson Reuters expected the Houston-based company to earn revenue of $3.02 billion. Revenue for the quarter ended June 30th was $2.95 billion, down 15 percent from $3.49 billion a year ago.

 

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