Thursday PM June 28th, 2007

Two sites proposed for new Texas nuclear plant...Feds keep key short-term interest rate at 5.25 percent...California judge dismisses remaining charges against defendants in Hewlett-Packard boardroom spying case...

Illinois-based Exelon Nuclear has picked two possible sites southwest of Houston for a proposed nuclear power plant, according to the Houston Chronicle. The primary site is about ten miles south of Collegeport in Matagorda County, and the secondary site is about 20 miles south of Victoria in Victoria County. Matagorda County is already home to the South Texas Project near Bay City, which is seeking to add two new reactors. After site selection, Exelon plans to submit an application to the Nuclear Regulatory Commission in November of 2008.

The Federal Reserve is keeping a key short-term interest rate at 5.25 percent, where it has been for the past year. The decision was widely expected by analysts, who believe rates could remain on hold through the rest of this year and well into 2008. Investors have been hoping that weakness in housing market will trigger rate cuts in coming months. But that seems unlikely now that the economy is showing signs of a rebound. In the statement accompanying the decision, the central bank continues to say that its greatest concern is that the risk of inflation will not moderate as expected. At the same time, though, officials expressed some optimism about recent developments on inflation, saying "readings on core inflation have improved modestly in recent months.''

Dallas-based Blockbuster plans to close 282 stores in the U.S. this year to improve operating margins and expand domestic share. Blockbuster's effort to accelerate closures of underperforming and marginal U.S. stores comes as the company is spending heavily to beef up its online-rental business to compete with Netflix. In 2006, Blockbuster closed U.S. stores and transferred a quarter of the revenue from closed stores to surrounding stores. It expects similar benefits to surrounding stores from the anticipated closures this year.

Capital One plans to eliminate about 2,000 jobs in a move designed to save $700 million by 2009. The McLean, Virginia-based credit card and banking company expects to incur $300 million of pre-tax charges for the restructuring. About half of the planned job eliminations have already occurred and the company says the affected employees have been notified. Other cuts will come through attrition and the elimination of selected positions that are currently vacant by the end of next year. In November 2005, Capital One bought New Orleans-based Hibernia Corporation, which had branches in Texas and Louisiana, for $4.9 billion.

A California judge has dismissed the remaining charges against three defendants in the Hewlett-Packard boardroom spying case. Superior Court Judge Ray Cunningham said that while their conduct was a "betrayal of trust and honor,'' it did not rise to the level of criminal activity. Former HP ethics chief Kevin Hunsaker and private investigators Ronald Delia and Matthew Depante each completed 96 hours of community service. It is the end of the state case, though a federal investigation is still ongoing. Prosecutors say the spy tactics included "pretexting,'' in which some of the accused allegedly pretended to be someone else, to obtain the calling records of directors, employees and journalists.

The nation's largest airline is giving storm-affected travelers a break. American Airlines cites recent bad weather in the eastern half of the U.S. Parts of Texas this week have been inundated by flooding. Fort Worth-based American is allowing passengers to change their travel plans--within a certain time frame--once, at no cost. The ticket change applies to people traveling to, from or through Florida, Illinois, New Jersey, New York and Texas. The time frame for such travel was Tuesday, June 26th, through Sunday, July 1st. Tickets must have been issued no later than Tuesday, June 26th. Such passengers may change their American Airlines reservations to travel as late as Monday, July 9th, with no fee for the re-ticketing.

Heavy rain in parts of Texas is affecting wheat harvesting--and the quality of the crop that's for sale. The Texas Cooperative Extension reports producers in the panhandle are dealing with more than just weather-related delays. Entomologist Carl Patrick in Amarillo says some wheat head armyworm damage is showing up when producers haul their crops to elevators. Patrick blames the wet spring, and the rain going into early summer. He says wet conditions, thick wheat and mild temperatures combine to allow the worms to survive in greater numbers than usual. Patrick says wheat head armyworm usually isn't a problem. But he says the damage started showing up when crops were taken to elevators--then officials started seeing how big the problem has become.

Crude oil futures topped $70 a barrel for the first time since last September. Traders have been reacting to word that gasoline inventories dropped just as the summer driving season typically peaks. AAA says retail gasoline prices have held steady overnight. The national average price for regular unleaded is put at about $2.98 a gallon. Gas has been falling since the May 24th peak of nearly $3.23 a gallon. Analysts say that pump prices could start rising again if gas supplies don't increase.

A Texas Education Agency internal investigation found the agency didn't follow policy when awarding contracts for state work. The report by the agency's inspector general details problems with six grant programs run by the agency. The report will be sent to State Auditor John Keel. The report says top agency officials--including Deputy Education Commissioner Robert Scott--steered contracts to their associates. Scott says there are no concrete allegations in that report that can be substantiated about wrongdoing. The Associated Press reports Scott is widely considered to be a candidate to replace outgoing State Education Commissioner Shirley Neeley. The report also says that a consultant for the Bill & Melinda Gates Foundation recommended hiring specific people, including his ex-wife, for grant contracts. Greg Shaw with the Gates Foundation says the consultant worked part-time--and that the foundation staff holds itself to the highest ethical standards.

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