Thursday PM April 22nd, 2010

The Coast Guard is saying an oil platform that suffered a massive explosion two days ago has sunk in the Gulf of Mexico about 50 miles off the coast of Louisiana. Coast Guard Petty Officer Katherine McNamara says that the Deepwater Horizon had gone under. The rig had been burning since the explosion. Supply vessels had been shooting water at it to try to control the flames and prevent the platform from sinking. The rig was about twice the size of a football field. It's owned by Transocean, which is under contract to BP. The Coast Guard is still searching for 11 workers who went missing after the blast Tuesday. Rescue crews have covered a nearly-2,000-square-mile search area 12 times by air, and five times by boat. Officials are hoping the workers made it to a covered lifeboat with enough supplies to survive for an extended period. More than 100 workers who were able to get off the rig safely after the blast have been brought ashore, where they've been checked out by doctors. Four others are still on a boat that operates an underwater robot. Seventeen others who were hurt in the blast were brought to shore with burns, broken legs and smoke inhalation.

Three recent federal inspections turned up no violations at an offshore drilling rig that exploded and sank in the Gulf of Mexico. The Minerals Management Service said it inspected the Deepwater Horizon in February, March and on April 1st. Spokeswoman Eileen Angelico says the rig moved to the site about 50 miles southeast of the Louisiana coast in January. It was inspected three times as part of the agency's regular drilling program.


US Airways says it has ended talks with United Airlines about a combination. The announcement comes as United and Continental Airlines have exchanged information as a prelude to a possible combination between those two carriers.

Continental says it lost $146 million in the first quarter as higher fuel costs offset an increase in revenue. The Houston-based airline says that revenue rose seven percent, another sign that travel is slowly recovering from a deep slump. But the average price of a gallon of jet fuel jumped 17 percent. A year ago, Continental lost $136 million in the first quarter as traffic tumbled during the recession.

By the slimmest of margins, Southwest Airlines made a profit in the first quarter while other big carriers were losing money. Southwest says it earned $11 million and revenue rose 11.6 percent. The airline says it's seeing an uptick in business travel but is struggling with high jet fuel prices. A year ago, Southwest lost $91 million on revenue of $2.36 billion.

The Obama administration is turning down requests from five airlines for temporary exemptions to a new rule limiting how long passengers can be kept waiting in planes on airport tarmacs. The new rule limits time stranded on the tarmac to three hours. Transportation Secretary Ray LaHood said that passengers have a right to know they won't be held on planes indefinitely. The department has said airlines may be fined up to $27,500 per passenger for each violation of the new rule.


Senator Kay Bailey Hutchison is raising concerns about what she calls "the real risk of losing the space station without a space shuttle or replacement capability." The ranking member on the Senate Commerce, Science and Transportation Committee questioned NASA administrator Charles Bolden on the president's restated vision for the space agency in a Senate Appropriations subcommittee hearing.


The nation's oil and chemical plants are spewing a lot more pollution than they report to the Environmental Protection Agency--and the EPA knows it. Records, scientific studies and interviews by the Associated Press suggest pollution from petrochemical plants is at least ten times greater than what is reported to the government and the public. But the federal agency has yet to adopt more accurate, higher-tech measuring methods that have been available for years. Significant changes will not be seen for at least two more years, even though an internal EPA watchdog called for improvements in 2006. Some of the more sophisticated measuring devices have been used in Europe since the 1990s. Some European countries employ lasers, solar technology and remote sensors to measure air pollution. Meanwhile, Uncle Sam relies to a large degree on estimates derived from readings taken by plant employees using hand-held "sniffer" devices that check for leaks in pumps and valves.


Wholesale prices rose more than expected last month as food prices surged by the most in 26 years. The Labor Department said the producer price index rose by 0.7 percent in March. Analysts expected a 0.4 percent rise. A rise in gas prices also helped push up the index. Still, there was little sign of budding inflation in the report, which measures price changes before they reach the consumer. Excluding volatile food and energy costs, wholesale prices rose by 0.1 percent, matching analysts' expectations. Low inflation has enabled the Federal Reserve to keep the short-term interest rate it controls at a record low of near zero in an effort to boost the economy.


First-time claims for jobless benefits fell sharply last week, evidence that employers are cutting fewer workers as the economy recovers. The Labor Department says initial claims for unemployment insurance fell 24,000 to a seasonally adjusted 456,000. That was slightly below analysts' estimates of 458,000, according to Thomson Reuters. The drop comes after claims rose sharply in the previous two weeks. A Labor Department analyst attributed those increases to seasonal adjustment difficulties around the Easter holiday, which falls on different weeks each year. The tally of people continuing to claim benefits, meanwhile, dropped by 40,000 to 4.65 million, the department says.


Home sales rose more than expected in March, reversing three months of declines, as government incentives drew in buyers and kicked off what's expected to be a strong spring selling season. The National Association of Realtors says sales of previously occupied homes rose 6.8 percent to a seasonally adjusted annual rate of 5.35 million last month, the highest level since December. February's sales figures were revised downward slightly to 5.01 million. Sales had been expected to rise about 5.2 percent to 5.28 million, according to economists surveyed by Thomson Reuters. The results show the housing market may be stabilizing after a devastating bust. But the true test will be whether the market can stand on its own after federal tax credits expire at the end of this month.


Treasury Secretary Timothy Geithner says a key goal of financial reform is to avoid the supersizing of banks while reining in unreasonable risk-taking. Geithner tells ABC there is "enormous resistance" to a regulation bill pending in Congress and says "that's why it's been so hard to get this done." The secretary said that the government must "make sure that you're limiting" how big banks can get. Geithner said Washington must "put them out of existence, dismember them," without a taxpayer bailout "if they mess up and they take themselves to the edge of the cliff again." He said he's confident Congress will come to agreement on sweeping financial overhaul legislation.

President Barack Obama criticized Wall Street for contributing to the economic meltdown, while at the same time seeking support for what he called "updated, commonsense" regulations to head off any new financial crisis. Speaking at Cooper Union College in Lower Manhattan, Obama said "ultimately there is no dividing line between Main Street and Wall Street." The president denounced criticism from some Republicans who claim a Democratic-sponsored bill headed for Senate action would encourage rather than discourage future bailouts of huge banks. A Senate measure could be debated next week. The House has passed its own version of financial overhaul legislation.


A new law that cuts banks out of the federal student loan business is costing 2,500 workers at Sallie Mae their jobs. The nation's largest student lender has told 1,200 staffers in service centers in Killeen and in Panama City, Florida, they will lose their jobs by year-end. The remaining cuts will follow in 2011. The cuts result from changes made to the federal student loan program as part of the health care reform signed by President Obama last month. The law strips the middleman role in student lending away from banks. It's expected to save at least $60 billion. But it will also mean a drastic reshaping of Reston, Virginia-based Sallie Mae, which wrote a record $7.7 billion in federal student loans in the first quarter.


The Department of Transportation is planning a series of workshops to help small and disadvantaged businesses get the insurance needed to obtain government work. Transportation Secretary Ray LaHood says many disadvantaged businesses, such as firms owned by women or minorities, are not able to compete for stimulus contracts because they don't have bonding. Bonding is a form of insurance that companies need to ensure they can complete government contracts. The DOT will hold ten-week workshops in Chicago, Dallas and Atlanta to teach businesses how to get bonded. At the end of the workshops, businesses will be matched with local bonding companies. LaHood says billions of dollars in stimulus contracts have not yet been awarded. He hopes this program will help small and disadvantaged businesses compete for that money.


Don't take your kids to work. That was the message from many school administrators across the country when it came to "Take Our Daughters and Sons to Work Day." They urged parents to keep their children in school during Thursday's annual event. They say the event disrupts learning at an increasingly critical time of year. They point to high-stakes standardized testing in some areas and the H1N1 virus that kept thousands of children home earlier this year. School officials say it would make more sense to hold the event during the summer. But a spokesman for the Take Our Daughters and Sons to Work Foundation says having the event during the school year means children can go back and share what they've learned with their classmates.


Earnings

Kimberly-Clark says high marketing costs and a charge related to Venezuela's currency devaluation sent its profit down six percent even as sales rose on higher prices. The maker of Huggies diapers and Kleenex tissues says it earned $384 million during the quarter. That's down from $407 million last year. Kimberly-Clark says sales rose eight percent to $4.84 billion. The weaker dollar and higher selling prices helped revenue. The company also is backing its full-year guidance.


 

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