Early Edition August 26 2008 at 01:36 PM Chi-Chu Tschang and Harry Maurer
Consumer Confidence Inches Up Again
"A little bit of the gloom is lifting," said one economist in reaction to the Conference Board's report of a second straight monthly rise in U.S. consumer confidence. The index rose to 56.9 in August, up from 51.9 in July. That's a bigger boost than analysts expected.
And why are consumers feeling a tad cheerier? For one thing, gasoline prices have fallen from a peak average of $4.11 on July 16 to $3.67 yesterday. And housing prices are sliding at a slower rate. The S&P/Case-Shiller index showed that prices in 20 metropolitan areas dropped by 0.5% in June from the previous month and are down 15.9% from last year. Economists had predicted a 16.2% drop. Prices in the second quarter sank 2.3% from the previous quarter, compared with a 6.8% drop in the first quarter from the fourth quarter of 2007. The Commerce Dept. also said that new-home sales hit a three-month high in July.
Source: Bloomberg
More Americans Have Health Insurance
In other economic news, the Census Bureau reports that 15.3% of Americans lacked health insurance in 2007, compared with 15.8% in 2006, as more people signed up for government insurance programs. Also, median income rose 1.3% to $50,200, the third straight annual increase. But economists warned that economic conditions have deteriorated in 2008, so the gains may not last.
Source: CNNMoney.com
Delta Borrows $1 Billion
The airline announced it has tapped a $1 billion line of credit prior to closing its merger with Northwest. Ed Bastian, Delta's CFO, said the airline doesn't need the money for operating expenses but to make it has plenty of cash on hand as the merger takes place and the two align their credit agreements.
Source: Wall Street Journal
Tropical Storm Gustav Sends Oil Prices Up
Tropical Storm Gustav's top sustained winds approached 80 miles per hour or hurricane strength as it approached Haiti. Oil prices rose on concerns that Gustav could disrupt U.S. oil and gas output in the Gulf of Mexico.
Source: Miami Herald
Infosys Buys Axon, Expands into Europe
India's second-largest information technology outsourcing company, Infosys, acquired UK-based SAP consulting company Axon Group for $755.5 million, in the largest overseas acquisition by an Indian IT company to date. The acquisition is the first takeover in Europe by Infosys.
Source: Business Standard
Facebook Cuts Off Scrabulous Except in India
Facebook decided to block access to Scrabulous - an online version of Scrabble - in all other countries outside North America except for India, after receiving a formal request to do so from Mattel, which owns the rights to Scrabble outside the U.S. and Canada. Scrabulous was developed by two brothers in Calcutta, Rajat and Jayant Agarwalla, who criticized Facebook for taking down Scrabulous without waiting for India's court to rule on Mattel's lawsuit over Scrabulous.
Source: San Jose Mercury News
Dozen States Sue EPA over Refineries
New York and 11 other states sued the Environmental Protection Agency for refusing to control pollution from oil refineries. The states charge that the EPA's air pollution control regulations for refineries violate the Clean Air Act
Source: Seattle Post-Intelligencer
MGM Seeking Capital "Enhancements"
Legendary Hollywood studio Metro-Goldwyn-Mayer said that it is not for sale. But MGM says it has hired investment bank Goldman Sachs to "explore enhancements to MGM's long-term capital structure," which could mean bringing on another investor, selling shares to the public, or restructuring its $3.7 billion debt.
Source: BusinessWeek
Citigroup Scrap Executive Committee, Names Rubin Senior Counselor
Citigroup eliminated the bank's seven-member board executive committee headed by former U.S. Treasury Secretary Robert Rubin in a move to simplify corporate hierarchy. Rubin received a new title of "senior counselor." Rubin says his roles and functions within Citigroup are unchanged.
Source: Financial Times
Conversation of the Day: Brace for U.S. Inflation
Reader Marik7 writes: "It will take a VERY long time for American voters to begin to wonder why they're in the state they're in."
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