Friday PM April 6th, 2007

Enron shareholders and investors ask for Supreme Court help...Halliburton completes KBR separation...Higher gasoline prices, housing slump and stock market gyrations send Consumer Confidence Index down...

Some Enron shareholders and investors have asked the U.S. Supreme Court to help them get their money back. They're trying to recoup billions of dollars lost after Enron collapsed into bankruptcy in 2001. The 5th U.S. Circuit Court of Appeals last month reversed a ruling by a federal judge in Houston who said shareholders could sue as a class. The $40 billion suit alleges Merrill Lynch, Credit Suisse First Boston and Barclays played roles in Enron's accounting fraud. Attorneys General from 30 states have sided with Enron shareholders. A spokesman for Credit Suisse and an attorney for Barclays declined comment on the motion. A spokesman for Merrill Lynch didn't immediately comment.


Officials say that the separation of oil services firm Halliburton its subsidiary, KBR, is complete. The separation process began in 2005. KBR has been a subsidiary of the oil services company for 44 years. KBR is headquartered in Houston and employs more than 50,000 people around the world. Also, KBR announced the appointment of two new independent directors to fill vacancies created by the resignation of the Halliburton executive officers who had been serving on the board before the separation. One is John Huff, chairman of Oceaneering International and CEO of Huff International. The other is Loren Carroll, former president and CEO of MI Swaco and former executive vice president of Smith International.


Employers were doing more hiring last month, helping to drive down the unemployment rate. The jobless rate at 4.4 percent matches a five-year-low. The Labor Department says payrolls expanded by some 180,000 jobs, also stronger than expected. Job gains in January and February were revised to be stronger than previously reported. The unemployment rate, down from 4.5 percent in February, matches the reading in October, which was the lowest in five years. Labor Secretary Elaine Chao says the report shows ''our economy is firmly on the path of steady, sustainable growth.''


U.S. Treasury bond prices tumbled in today's holiday-shortened session. That reaction came after the Labor Department delivered a stronger-than-expected March jobs report. The yield on the benchmark ten-year Treasury note surged to 4.76 percent from 4.68 percent late yesterday. Yields move in the opposite direction of bond prices. The bond market closed at 11 a.m. eastern time for Good Friday. Stock and many other financial markets are closed today. The U.S. dollar also strengthened on the March jobs report.


Consumers increased their borrowing at the slowest pace in four months during February. The Federal Reserve reports consumer debt rose at an annual rate of just 1.5 percent following a surge of 3.3 percent in January. The moderation came from a drop in borrowing for cars, vacations, education and other so-called non-revolving credit. Demand for credit in that category was up just four-tenths percent. Consumers didn't lay off the plastic though as the use of revolving credit--primarily credit cards--was up 3.3 percent. Total consumer debt rose nearly $3 billion in February--to a record $2.41 trillion.


Higher gasoline prices, a housing slump and stock market gyrations sent the Ipsos-based Consumer Confidence Index skidding, as more and more people fret about the economy. The index slipped from 92.3 in March to 85.4 in April, the lowest reading since last October, when it was at 83.1. One economist says a lot of consumers think $3-a-gallon gas will poison the economy. The consumer softness comes as President Bush continues to cope with a job-approval rating of 35 percent, according to a separate AP-Ipsos poll.


A new $60 million, 25-story, high-rise apartment tower is planned for Studemont at Memorial Drive, according to the Houston Chronicle. The Legacy at Memorial will have 274 units and will also feature an additional 60 smaller units.


Planned Community Developers plans to begin construction this summer on an eight-story office building on Town Square Place in Sugar Land, according to the Houston Business Journal. The new property will include covered parking, 24-hour roving security and monitored call boxes.


Burlington Northern Santa Fe announced it will record an $80 million charge against first-quarter earnings. Fort Worth-based BNSF points to environmental cleanup and technology costs. The company says the charges will reduce first-quarter earnings to about 96 cents per share. Analysts were expecting the company to earn a $1.09 per share. Analysts usually exclude special items from their forecasts. The environmental costs to clean up a site in Skykomish, Washington, and an appeals court's reversal of a decision on a site in Arvin, California.


State leaders say they have reached an agreement with the plaintiffs in a 14-year-old lawsuit regarding children's Medicaid. The agreement comes days before a court hearing on the case. The agreement must be approved by U.S. District Judge William Wayne Justice, who had been scheduled to hear the lawsuit on Monday. Lieutenant Governor David Dewhurst and House Speaker Tom Craddick did not disclose the proposed terms of the settlement. The class-action lawsuit filed was filed in 1993 claiming the state did not provide adequate care for children enrolled in Medicaid. The state entered into a consent decree in 1996 to settle the suit, agreeing to improve the program. The state has since tried to have the decree dissolved, but the U.S. Supreme Court rejected the appeal earlier this year. The state has exhausted its appeals process. Among the items that the state needed to address in the settlement are Medicaid provider rate reimbursements, the availability of dental care in rural areas and transportation. The Texas case immediately affects about 1.5 million children who rely on the government for health and dental care.


The University of Texas has put its financial aid director on paid leave during a stock-related investigation. Allegations have been raised that a loan company gave him stock--in exchange for making it one of the school's preferred lenders. Associate Vice President Lawrence Burt is part of a widening investigation by New York Attorney General Andrew Cuomo into the $85 billion student loan industry. Burt denies wrongdoing. The General Counsel for the UT System will lead an internal investigation. Securities and Exchange Commission records show Burt at one time owned 1,500 shares in Education Lending Group. That's the former parent company of Student Loan Xpress, which is a preferred lender at UT. Burt has denied any financial arrangement between either himself or UT and the company. Education Lending Group was bought by another company in 2005.


Baker Hughes in Houston says the number of rigs actively exploring for oil and natural gas in the U.S. fell by 23 this week--to reach 1,726. One year ago the rig count stood at 1,579. Texas lost 17 rigs. Baker Hughes has tracked rig counts since 1944.


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