Monday PM July 26th, 2010

Change at the top appears imminent at BP…Lundberg survey finds gasoline prices rising slightly…Families of those who died from Concorde crash in Paris mark tenth anniversary…


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An official says BP CEO Tony Hayward will step down in October and take a job with TNK-BP, the company’s joint venture in Russia. Hayward became the face of BP’s flailing efforts to contain the Gulf of Mexico oil spill and clean up millions in damages. A person familiar with the matter spoke to the Associated Press on condition of anonymity because an announcement has not yet been made. Hayward’s likely successor at BP is Managing Director Bob Dudley, an American who has been overseeing the spill response since June.

Efforts to plug the leaky oil well in the Gulf of Mexico are back on track after work was brought to a halt late last week because of the threat from Tropical Storm Bonnie. Workers plan to reconnect a drill rig to the relief tunnel that will be used to pump in mud and cement to seal the well. Drilling could resume in the next few days. Finishing the relief well is the best chance to permanently stop the oil leak. Completion is set for mid-August, but Thad Allen, the government’s point man for the spill, says he won’t hesitate to bring work to a halt again and order evacuations if there’s another storm forecast for the area.

A survey says the average price of regular gasoline in the United States has gone up in the last two weeks, but by less than a cent. The Lundberg survey of fuel prices says the price of regular rose slightly to $2.73. Analyst Trilby Lundberg says the average price for a gallon of mid-grade was $2.88, and premium was at $2.99. Charleston, South Carolina, had the lowest average price among cities surveyed at $2.47 a gallon for regular. San Francisco was highest among surveyed cities at $3.17.

Sales of new homes jumped last month, but the overall pace was the second slowest on record. The lackluster economy has made potential buyers skittish about shopping for homes. The Commerce Department says new home sales rose nearly 24 percent in June from a month earlier to a seasonally adjusted annual sales pace of 330,000. May’s number was revised downward to 267,000, the slowest pace on records dating back to 1963. Sales for April and March were also revised downward. The housing market had boomed earlier in the year on the strength of federal tax credits. Since they have expired, the number of people looking to buy has dropped.

Treasury Secretary Tim Geithner says allowing tax cuts for the wealthy to expire is the responsible thing to do. Geithner said in an interview broadcast Sunday on ABC’s This Week that President Obama supports extending the tax cuts that he says apply to 95 percent of working Americans, as well as tax breaks for small businesses. But allowing tax cuts to expire for three percent of Americans will help show the world that the U.S. is willing to begin reducing its long-term budget deficits. Speaking on NBC News’ meet the press, Geithner says he supports allowing the capital gains tax rate to rise to 20 percent. It’s at 15 percent now.

Families of those who died when a supersonic Concorde jet crashed on takeoff from Paris have gathered to mark the tenth anniversary of the disaster. Air France officials gave flowers to some 100 family members, mostly from Germany, to lay at a monument to the dead in Gonesse, near Charles de Gaulle Airport. Many of the 109 people aboard the plane who were killed were German. The crash on July 25th, 2000 also killed four people on the ground and devastated the reputation of the Concorde, which was capable of flying at twice the speed of sound. The Concorde program was discontinued in 2003. After a decade of investigation, a French court held a trial earlier this year in which Houston-based Continental and two of its employees were accused of manslaughter in the crash. The verdict is expected in December.

Texas is appealing the U.S. Environmental Protection Agency’s overturning of a 16-year-old Texas air permitting program. Texas Attorney General Greg Abbott says he filed the state’s petition for reconsideration with the U.S. Court of Appeals for the Fifth Circuit in New Orleans. The EPA had said the state’s so-called flexible permit program violated the Clean Air Act. The state’s program set a general limit on how much air pollutants an entire facility can release. The Federal Clean Air Act requires state-issued permits to set limits on each of the dozens of individual production units inside a plant. Governor Rick Perry praised the appeal, saying “the EPA’s overreach is as potentially devastating as it is unnecessary.”

Teamsters drivers have voted overwhelmingly to accept a proposed contract from Hollywood movie and television studios, avoiding a potentially disruptive nationwide entertainment industry strike. Talks between the union and the Alliance of Motion Picture & Television Producers, representing the studios and independent producers, ended Friday night with no new negotiating sessions scheduled. More than 3,000 Teamsters drivers ferry equipment and performers to movie and TV sets. But last minute back-channel talks Saturday led to a compromise as Teamsters Local 399 leaders prepared to seek a strike authorization vote. Teamsters leader Leo Reed asked members at a Burbank meeting Sunday for a vote and the contract was approved by 97 percent–about 840-20.

Nissan is recalling 46,000 of its Cube model over possible problems with fuel spilling during rear end collisions. In documents filed with the federal government, Nissan says tests conducted by the National Highway Traffic Safety Administration found more fuel spilled than federal standards allow. Nissan says its own earlier tests did not show any fuel leakage, but it will issue a voluntary recall. It notified dealers last week and will contact owners on August 30th. The recall covers some model year 2009 and 2010 cubes. Dealers will attach a special protector to prevent future leaks.

Owners of the iPhone will be able to legally break electronic locks on their devices in order to download software applications that haven’t been approved by Apple. That’s according to new government rules announced today. The decision allows the practice commonly known as “jailbreaking.” It’s one of a handful of new exemptions from a 1998 federal law that prohibits people from bypassing technical measures that companies put on their products to prevent unauthorized uses. The Library of Congress, which oversees the Copyright Office, reviews and authorizes exemptions every three years to ensure that the law does not prevent certain non-infringing use of copyright-protected material. Among the exemptions just announced, owners of used cell phones would be allowed to break access controls on their phones in order to switch wireless carriers.

A fungus spreading among the nation’s basil crop may leave lovers of Italian and Thai food feeling a bit bland. Basil downy mildew surfaced in the U.S. around 2007, and is slowly ruining the herb for growers nationwide. Hardest hit areas are on the East Coast, but it also has been found in California. Francesco deBaggio of deBaggio’s Herb Farm in Chantilly, Virginia, says he had to destroy his entire crop of about 6,000 plants, a loss of around $18,000. Cornell University plant pathologist Margaret McGrath says the fungus is worst for home gardeners and herb farmers who may not have access to fungicides used by large commercial growers. She says gardeners can help control the fungus by spacing plants farther apart and planting them in areas that get more sun.

This week will offer new readings on the struggling housing sector, the crucial consumer sector and the overall economy. Among the data economists and investors will have for guidance are an S&P/Case-Shiller index of home prices for May to be released tomorrow by Standard & Poor’s. Also tomorrow, the Conference Board releases its consumer confidence index. The consumer sector is closely watched because it represents about 70 percent of the U.S. economy. On Wednesday, the Commerce Department will report on durable goods for June, and the Federal Reserve will release its Beige Book for an update on regional economic conditions. The weekly reports on new jobless claims and mortgage interest rates will be available Thursday. And the week will end with a fresh look at the nation’s total output of goods and services on Friday, when the Commerce Department releases the second-quarter gross domestic product.

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