Wednesday AM March 14th, 2007

Purchasing managers index drops slightly: business inventories and retail sales rise slightly...Employee confidence in Texas decreases...Houston Symphony's "A Touch of Class(ical) and All That Jazz" 2007 Ball brings in $1 million...

February slowed one point from last month's Purchasing Managers Index, according to the National Association of Purchasing Management. The PMI was 58.9, with respondents pointing to 42 percent higher sales and a 54 percent increase in lead times. Employment has 96 percent reporting the same or increased, with only four percent reporting a decrease in personnel. The index is based on a monthly survey of purchasing executives in oil and gas exploration and production, manufacturing, engineering and construction, chemicals, distribution, business and financial services and healthcare. Components of the index include sales, production, employment, purchases, prices paid and inventory levels.

Business inventories rose two-tenths percent during January--pretty much what Wall Street was expecting. At the same time, the Commerce Department says sales were down by seven-tenths percent as customers took a post-holiday break. Businesses have been investing less in their stockpiles of goods on back lots and warehouses out of concern that extra supplies might get out of whack with customer demand. At some point, though, businesses will have to replenish supplies, a development that would help give a boost to economic activity.

The Commerce Department says retail sales rose a lackluster one-tenth of one percent last month. The weaker-than-expected showing is blamed in part on bad winter weather. Consumer spending is watched closely for signs regarding the overall direction of the economy. One bright spot involved auto sales, rising nine-tenths of one percent. Excluding the auto sector, retail sales dipped one-tenth last month. That's the worst showing since last October.

A new employment survey by Manpower Incorporated finds that the nation's employers may be a little reluctant to expand their payrolls in the second quarter. Just 28 percent of the 14,000 employers who were asked expect to add workers, while seven percent say they plan to cut back. Fifty-nine percent expect no change in the hiring pace, and six percent are undecided. Sectors in which hiring is expected to increase include transportation/public utilities and finance/insurance/real estate. Employers in the northeast and south expect to maintain levels of employment activity that are close to what they did in the first three months of the year, while those in the midwest and west anticipate slightly weaker hiring conditions in the next three months.

Employee confidence in Texas decreased in January, according to Fort Lauderdale, Florida-based Spherion Corporation's employment report. After reaching its highest level since 2004 in December 2006, the Employee Confidence Index dipped to 61.7 in January. But that's still 7.3 points higher than the same time last year. The survey finds that 28 percent of workers are optimistic about the strength of the economy. That's a decrease of six percentage points from December.

The typical working American household is on track to replace 58 percent of its income in retirement. The Fidelity Research Institute says that's progress--albeit a baby step--from the 57 percent level last year. It means that the retirees' income level will be down 42 percent from when they were working. The Fidelity survey says baby boomers had the highest level of readiness, with an income replacement level of 62 percent. Workers who believe they are saving enough for retirement are on track to replace 68 percent of their pre-retirement income--due largely to better saving habits.

Continental Airlines has ordered five more Boeing 787 Dreamliners, bringing its total order to 25. The five new orders are for the 787-9, which can fly farther and carry more passengers than other Dreamliner versions. Continental is converting 12 previously-ordered 787-8s to the larger and more fuel-efficient model. The new plane's first flight is scheduled for this year, and commercial service is to begin in 2008.

Continental Airlines is rated the top airline in Fortune magazine's annual airline industry list of Most Admired Global Companies. This is the fourth year continental has topped the list.

The Houston Symphony's "A Touch of Class(ical) and All That Jazz" 2007 Ball on March 2nd brought in $1 million—the second year in a row the tally was in seven-figures. Profits from the ball support the Houston Symphony's year-round education and outreach activities.

Dallas-based chip-making leader for cell phones Texas Instruments said it expected to grow in the second quarter but gave only a middling outlook for first-quarter profit. TI also tightened its profit and sales outlook for the first quarter but didn't change the midpoint of earlier projections. The company says it expects sales of $3.07 billion to $3.22 billion in the quarter. TI had said it expected to earn $3.01 billion to $3.28 billion. Analysts surveyed by Thomson Financial had expected sales of $3.15 billion for the January-March quarter. Analysts said many investors were expecting a more upbeat forecast.

An advisory firm to institutional shareholders recommends investors vote against a planned $19 billion buyout of Clear Channel Communications. The panel suggests San Antonio-based Clear Channel has better options to boost shareholder value. Clear Channel says it's "disappointed'' by the Glass Lewis recommendation. The media company last November agreed to an acquisition offer from private-equity firms Bain Capital Partners and Thomas H. Lee. Several large Clear Channel shareholders oppose the deal, in part on concerns the offer of $37.60 per share--is too low. Clear channel's leveraged buyout needs approval from an unusually high two-thirds of company shares. A shareholder vote is expected March 21st.

BOK Financial says it plans to expand its presence in Texas by purchasing Fort Worth-based Worth Bancorporation for $127 million in cash. Tulsa-based BOK Financial is the parent of Oklahoma's largest bank. Worth is a privately held bank holding company with five branches in the fort worth market through its bank subsidiary, Worth National Bank. BOK finance chief Steven Nell says the deal should close by June, pending approval by regulators and Worth Bancorporation shareholders. Bank of Oklahoma is by far BOK Financial's largest bank with $14.4 billion in assets. Bank of Texas is its number two bank property with $3.9 billion in assets. BOK Financial banking subsidiaries include Bank of Arkansas, Bank of Arizona, Bank of Albuquerque, Bank of Kansas City and Colorado State Bank and Trust.

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