Amid troubles in the housing and auto industry, a forward-looking barometer of the economy is pointing down again. The Conference Board's Index of Leading Indicators dropped five-tenths of one percent last month. The group's economist Ken Goldstein says the LEI suggests "moderate but choppy growth.'' The group also revised January's previously-reported increase to a decline.
The Labor Department says the number of Americans filing first-time claims for unemployment benefits has dropped for a third straight week. That is typically seen as a sign of a firm job market. The decline of 4,000 last week takes the number of claims down to 316,000. Claims stand at the lowest level in six weeks, indicating the job market is holding up even as the overall economy is seen as slowing. Analysts had been looking for an increase.
Long-term mortgage interest rates edged a little higher this week. Freddie Mac says the rate for the 30-year fixed-rate loan averaged 6.16 percent, compared with 6.14 percent the week before. A year ago, it stood at 6.32 percent. The average for the 15-year fixed-rate mortgage was 5.9 percent--up two basis points from a week ago. The 15-year loan is often used in mortgage refinancing. Freddie Mac Vice President and Chief Economist Frank Nothaft says rates were generally steady as the bond market took the latest wholesale and consumer inflation readings in stride.
Personal bankruptcy filings are taking a toll in credit-card payment performance. Moody's Investors Service says more credit card balances were written off as uncollectible and more borrowers fell behind in their payments in January, compared with a year earlier. The delinquency rate rose to 3.91 percent from 3.4 percent a year earlier. It's the third month that the delinquency rate increased from its year-earlier level. The delinquency rate has been on the rise since mid-2006. And, Moody's says, the deterioration is likely to continue.
A handwritten note has been turned over in the investigation of backdated stock options at Dallas-based Affiliated Computer Systems. Chairman and founder Darwin Deason and an investment group are trying to buy out the outsourcing company. The note was part of a board-initiated investigation that led to the November resignation of Chief Executive and President Mark King and Chief Financial Officer Warren Edwards. Investigators found that King, Edwards and former CEO Jeffrey Rich benefited from backdated options. The company and Deason have maintained he was unaware of any backdated options. But in a note for a 2002 board meeting, Deason wrote that ACS had "always picked stock strike price on options at lowest (price) so far'' in the quarter. He said: "hundreds of grantees expect that and to change now would seem strange. We will run business as we have until a law says different.'' The Wall Street Journal reported the existence of the personalized post-it note written by Deason. Deason's attorney, Marc Rosenberg, confirmed the note's legitimacy, and read its contents to the Associated Press. But Rosenberg said the note was just one of two million documents handed over to investigators in the wide-ranging probe initiated by the board into stock option grants.
A Houston frozen foods company has expressed an interest in the closed Mississippi beef processors plant near Oakland, Mississippi. A spokeswoman for Windsor Quality Food Company says a deal could be completed in May, depending on the success of negotiations with Mississippi state and local officials. The Oakland plant closed in August 2004, three months after it opened, because of failed equipment and a lack of operating capital. The plant employed 400 workers and cost the state of Mississippi at least $55 million. Two people, including former plant owner Richard N. Hall, Jr., have pleaded guilty to charges related to the failure. Community Bank, which financed the state-guaranteed loan, ended up owning the defunct plant. Windsor has nine manufacturing plants in six states. It employs 2,500 people and has annual sales of $650 million.
The corporate parent of the WaldenBooks store chain says it will close more than 200 of those stores by the end of next year. Borders Group says it is also considering the sale of most of its international business. There were 564 WaldenBooks stores at the end of last year, and the company intends to trim that number to about 300 by the end of next year. Borders says it plans to develop its own e-commerce site, having partnered with Amazon.com. Borders reports swinging to a fourth-quarter loss.
The outgoing chairman of Blockbuster received 2006 compensation valued by the company at $5.62 million. Details are in a regulatory filing. Dallas-based Blockbuster on Tuesday announced chief executive John Antioco would leave the company--after an unusually public dispute with directors over his bonus. Antioco got a bonus of $3.05 million. That's higher than the $2.3 the board originally offered, but less than Antioco's request for $7.7 million. Antioco also was paid a salary of $2.55 million and other compensation of nearly $24,000. Under Antioco, Blockbuster responded to Netflix by launching its own service for ordering movies online for mail delivery. Blockbuster still trails Netflix in online customers. The Associated Press calculates total compensation including salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits or the value of stock and option awards granted in prior years. For that reason, the total can differ from the figure the company reports to the Securities and Exchange Commission.
Do you change your oil every 3,000 miles? You probably don't need to. Most major automakers now agree that even 5,000 miles may be too often. Ford has become the latest manufacturer to extend its oil life guidelines. The recommended oil change interval has been raised from 5,000 miles to 7,500 on its newly redesigned 2007 models and all subsequent redesigned or new models. The company, like many other manufacturers, says higher oil quality standards and new engine designs are responsible for the change, which affects vehicles driven under normal conditions.
Despite rising costs at the pump, the people who sell RVs, some costing better than a million dollars, are still doing a brisk business. One example is the turnout at a motor-home convention in Georgia this week. About 20,000 motor home owners and industry representatives showed up to check out what's new and different. There are more than a thousand new models to choose from, including some six-mile-a-gallon guzzlers. Insiders say the booming recreational vehicle industry has aging baby boomers to thank. They apparently want the gas-guzzling vehicles for retirement. And some younger families are opting for vacations closer to home, offsetting any potential losses due to steeper gasoline prices. One 70-year-old sums it up this way: "I can sleep in my own bed and I can eat my own food. I travel at my own pace. I go where I want.''