Late Edition July 29 2008 at 02:30 PM Chi-Chu Tschang and Harry Maurer
Consumers Feel A Bit Brighter
Afrter a six-month slide, consumer confidencee rebounded in July, rising to 51.9 from an upwardly revised 51.0 in June. Analysts noted that the recent drop in oil prices (see item below) may account for the slight improvement, and warned that oil could well escalate again.
Americans also won't be cheered by the latest housing news. The Standard & Poor's/Case-Shiller Index showed that U.S. single-home prices sank in May by a record amount, 15.8%, from a year earlier. For the second month in a row, all 20 of the regions in the survey recorded a drop in prices. But partly thanks to cheaper oil and the uptick in consumer confidence, the stock market rose, with the Dow up 200 points at 2:30 p.m.
Source: Reuters
Oil Prices Drop Again
The cost of oil hasn't been this low in 14 weeks. In midmorning trading on the New York Merc, the price of a barrel of crude for September delivery had fallen by nearly $4, to $120.75, down 18% from its July record. Two reasons for the slippage: a stronger dollar, and less use of gasoline in the U.S.
Source: Bloomberg
Will BA Merge with Iberia?
The two airlines, which already cooperate and own stakes in each other, are holding talks, as sky-high fuel costs and a widespread economic slowdown spur the urge to merge. "The aviation landscape is changing and airline consolidation is long overdue," said BA CEO Willie Walsh.
Source: New York Times
Sirius and XM-At Last
A few days after getting the O.K. from the FCC, satellite radio operators Sirius and XM finally completed their merger. The new company will be called Sirius XM Radio and will trade on Nasdaq. Shares of Sirius continued to fall, however, partly because the company announced a $375 million common stock offering, and XM is issuing $550 million in senior debt that can be converted into shares of Sirius. Investors hadn't expected the companies to issue new debt.
Source: TheStreet.com
Russo Out at Alcatel
Pat Russo, the CEO of Alcatel-Lucent, announced her resignation on Tuesday after the telecom equipment company reported a worse-than-expected quarterly loss of 1.1 billion euros ($1.73 billion), its sixth in a row. Slumping demand for its CDMA cellular equipment contributed to the loss. Russo will depart by the end of the year. The company also announced the resignation of Chairman Serge Tchuruk, like Russo an architect of Alcatel's 2006 takeover of Lucent.
Source: BusinessWeek
The Nano: Tata's Costly Promise
India's Tata Motors won kudos early this year when it unveiled its Nano, a car that would sell for just $2,500. But Tata, expected to report a big quarterly loss tomorrow, is being hurt by rising prices for steel and other raw materials. With the Nano's October launch now just a few months away, investors fear that eking out a profit on the Nano will be far harder than earlier hoped.
Source: BusinessWeek
Weak Cellular Sales Send Sony Profit Down 47%
Sony's quarterly profits tumbled 47%, to 35 billion yen ($325 million) on weak demand for Sony Ericsson phones. The company also revised downward its forecast for full-year profits 17%, to 240 billion yen ($2.32 billion).
Source: Financial Times
Merrill to Raise $8.5 Billion by Issuing New Shares
In its latest bid to cope with the subprime crisis, Merrill Lynch announced plans to write down $5.7 billion for the third quarter and raise $8.5 billion in fresh capital. Singapore's state-owned investment company, Temasek Holdings, will increase its Merrill stake with an investment of $3.4 billion.
Source: New York Times
'Dark Knight' May Near 'Titanic' Box-Office Record
After pulling in $300 million in just ten days, "The Dark Knight" is on track to become the second-biggest movie ever, passing the $461 million of 1977's "Star Wars Episode IV: A New Hope." Industry experts believe that the all-time champ, "Titanic" ($600.8 million) is safe for now but they expect the Batman sequel to top $500 million at the box office.
Source: Los Angeles Times
Mervyn's Close to Bankruptcy
Department-store owner Mervyn's, which has 177 stores, is on the verge of bankruptcy after declines in sales in California and Arizona. Unless there's a last-minute injection of cash, the retailer will file for bankruptcy protection in the coming days.
Source: Wall Street Journal
Oracle Broadens Allegations Against SAP
The fight between Oracle and SAP got uglier on Monday, with the American company amending a lawsuit originally launched last year against its German rival. Oracle alleges SAP executives were aware of illegal downloading of Oracle software and documents during SAP's acquisition of TomorrowNow, a support and maintenance company.
Source: CNet
U.S. Fight with China, India Threatens Trade Deal
A dispute over cotton and soybeans between the U.S. on one side and China and India on the other threatens to derail WTO talks underway in Geneva aimed at concluding the Doha round, now in its seventh year.
Source: Times of London
Conversation of the Day: IT Under Fire
Reader Heather Purifoy writes: "Next time you want to complain about IT, just remember: We know your password...and how to change it!"
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