Friday PM April 23rd, 2010

Coast Guard officials say there is no oil currently leaking from a drilling rig that exploded and sank in the Gulf of Mexico, leaving 11 workers unaccounted for. Coast Guard Rear Admiral Mary Landry says that no oil appeared to be leaking from the well head at the ocean floor 5,000 feet deep, nor was any oil leaking at the water's surface. Landry says the oil being contained now was residual from the explosion and sinking. The Deepwater Horizon had burned violently for nearly two days until it sank Thursday morning. BP, which leased the rig and took the lead in the cleanup, says it is using 32 vessels to mop up the current spill. Officials had initially estimated 336,000 gallons of crude oil a day could be leaking.

The Coast Guard continues searching for the 11 missing crew members, with the realization that with every passing hour, the chance of survivability decreases. There were 115 workers evacuated after Tuesday's explosion and fire.

U.S. Senator Bill Nelson is calling for a Congressional investigation of safety at offshore oil rigs. Nelson, a Democrat, says he asked the U.S. Interior Department to investigate and provide a comprehensive report on all U.S. drilling accidents over at least the last decade. Nelson also wants a Congressional probe by the Senate Commerce Committee he serves on. Nelson has led opposition to offshore drilling. Senator Mary Landrieu of Louisiana has also called for an investigation into what caused the explosion.


Sales of new homes surged 27 percent last month, bouncing off the previous month's record low and blowing past expectations as better weather and government incentives boosted sales. The Commerce Department says new home sales rose in March to a seasonally adjusted annual sales pace of 411,000. It was the strongest month since last July and the biggest monthly increase in 47 years. Economists surveyed by Thomson Reuters had expected a sales pace of 330,000. February's results were revised upward to 324,000, but remained an all-time low. Sales had been especially weak over the winter, partly due to bad weather in much of the country. The median sales price was $214,000, up more than four percent from a year earlier but down more than three percent from February.


New orders for big-ticket manufactured goods dropped sharply last month due to a plunge in demand for commercial aircraft. But excluding the volatile transportation category, orders rose by the most since the recession began. The report is the latest sign that the once-battered manufacturing sector is now a driving force behind the economic recovery. U.S. factories are benefiting from overseas sales and a sharp increase in business spending. The Commerce Department says new orders for durable goods, or those expected to last three years, dropped 1.3 percent in March. Analysts expected a 0.3 percent increase, according to a survey by Thomson Reuters. Excluding the transportation sector, new orders rose 2.8 percent, much more than economists forecast and the most since December 2007.


There's a new sign of economic recovery in the U.S. auto industry: sales to fleets surged 47 percent in the first quarter. Analysts say it's a sign of economic improvement as governments, construction businesses and rental-car companies begin buying again. Automakers are expecting sales to continue to climb. Ford's Americas President Mark Fields said the company expects further increases for some fleets, although it expects government sales will level off. Automakers usually try to limit fleet sales, which are less profitable and can hurt brand image and residual values. But J.D. Power analyst Jeff Schuster says the current boost in fleet sales is healthy because sales were so low last year.

Ford is recalling 33,000 midsize vehicles and SUVs in the United States to fix front seat recliners. The recall affects some versions of the 2010 Ford Fusion, Explorer, Explorer Sport Trac and 2010 Mercury Milan and Mountaineer with front seat manual recliners. The vehicles under recall were built from mid-December through early February. The recliner's gears could have problems that would lead to the seat back and head restraint moving toward the rear in a crash, increasing the risk of injury. The government says the vehicles don't comply with federal requirements for head restraints. Dealers will replace the manual seat recliners free of charge. Owners can call Ford at (866) 436-7332. A Ford spokesman says there have been no accidents or injuries reported.


Finance officials from the world's major countries believe the global economy is in far better shape than it was a year ago. They're worried, however, that a growing debt crisis in Greece could cause the hard-won gains to unravel. Some are also concerned about the failure so far to achieve consensus on the steps needed to toughen regulations to make sure the financial crisis that triggered the worst recession since the 1930s isn't repeated. Finance ministers and the heads of central banks from the group of 20 major economies have been taking part in daylong talks at the International Monetary Fund.


A group of developing countries from Asia, Africa and Latin America is urging rich countries to avoid protectionism and trade restrictions that they say could hurt global growth and stability. Ministers from the Group of 24, also called for changes to the international monetary fund and world bank to be a priority this year. The ministers are meeting on the sidelines of the annual meetings of the world bank and the IMF. They're calling for more power for emerging and developing countries. They want the heads of the IMF and World Bank to be chosen without regard to nationality. Traditionally, Europe picks the IMF chief, while the United States chooses the head of the World Bank.


Earnings

Schlumberger says its first-quarter profit fell 28 percent as the world's biggest oilfield services provider posted lower revenue and charges related to health care reform. The company, based in Paris, earned $672 million, compared with $938 million a year earlier. Revenue fell 6.7 percent to $5.6 billion, as oilfield services revenue slipped six percent. Wall Street expected revenue of $5.69 billion. Schlumberger posted a charge of $40 million for the reduction in future tax deductions for retiree medical benefits due to changes related to recently enacted health care reform legislation.


 

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