Late Edition August 28 2008 at 03:31 PM Chi-Chu Tschang and Harry Maurer
A Stronger Second Quarter
The U.S. economy may have been faring better than many think. Revised figures from the Commerce Dept. show that gross domestic product grew at a 3.3% annual rate in the second quarter, considerably faster than the 1.9% rate initially reported. Economists had predicted a revision to 2.7% growth.
A surge in exports, which brought about the smallest trade gap in eight years, was responsible for most of the upward revision. The trade gap narrowed to a $373.6 billion annual pace, and trade added 3.1 percentage points to the growth rate. Excluding trade, the economy would have grown at just a 0.2% rate. And many economists figure that growth will slow sharply in the second half, as pinched consumers and a lackluster job market rein in spending. The Labor Dept. reported that initial jobless claims dropped slightly to 425,000 last week, but that's still well above the 321,000 average for last year.
Source: BusinessWeek
Gustav Drives Oil Still Higher
Crude oil futures hit $120 per barrel, continuing their quick rise as Tropical Storm Gustav barreled through the Caribbean and threatened oil and natural gas installations in the Gulf of Mexico. Various major oil companies announced they were shutting down operations in the Gulf and evacuating workers.
Source: Associated Press
Toyota Cuts Its 2009 Estimate
Even Japanese juggernaut Toyota is having trouble in the current automotive climate. The company cut its estimated sales for 2009 to 9.7 million vehicles from the previous prediction of 10.4 million, citing the difficult economic environment, especially in the U.S. Slowing sales may make it tough for Toyota to retain the position it has held for the last six months as the world's No. 1 carmaker, surpassing GM.
Source: BusinessWeek
The Democrats Nominate Obama
Barack Hussein Obama, a freshman senator who defeated the first family of Democratic Party politics with a call for a fundamentally new course in politics, was nominated by his party on Wednesday to be the 44th president of the U.S. The unanimous vote made Mr. Obama the first African-American to become a major party nominee for President. It brought to an end an often-bitter two-year political struggle for the nomination with Senator Hillary Rodham Clinton of New York, who, standing on a packed convention floor, moved to halt the roll call in progress so that the convention could nominate Obama by acclamation.
Source: New York Times
Toyota Cuts 2009 Sales Forecast
Toyota Motor, the world's most profitable carmaker, lowered its 2009 vehicle sales forecast by nearly 7 percent on Thursday, blaming a downturn in Western markets, high fuel prices and the credit crunch. Global automakers face softening demand in the United States and Western Europe, especially for higher-margin, gas-guzzling vehicles. Toyota said it expects to sell about 9.7 million vehicles globally next year including its minicar-making Daihatsu Motor and truck-making Hino Motors units. It had previously forecast sales of 10.4 million vehicles. No car maker has yet passed the 10 million annual unit sales milestone.
Source: Reuters
Russia Proposes Counterweight to NATO
The Shanghai Cooperation Organisation (SCO), a grouping of China and Russia's Central Asian allies, expressed grave concern on Thursday over tensions in Georgia and called for reconciliation and more talks. This appeared to be at odds with Russian president Dmitry Medvedev's earlier statement that Russia had "united" support from China and Central Asian allies for its actions in Georgia and said it should send a "serious signal" to the West. Russia is trying to expand the SCO, a loose security grouping with China and five Central Asian states, as a counterweight to NATO and the West.
Source: Financial Times
Boeing To Give Machinists Final Offer for 3-Year Contract
Boeing Co. plans to give its largest union a final offer Thursday for a three-year contract, to keep machinists working on a record plane-order backlog and prevent them from going on strike. The International Association of Machinists and Aerospace Workers has rejected two proposals in the past week from Chicago-based Boeing. The group is negotiating a contract for 27,000 machinists in Washington state, Oregon and Kansas. Workers will vote Sept. 3 on whether to accept Boeing's offer or walk out the next day and shut down the Seattle manufacturing hub for the world's No. 2 commercial-aircraft maker. A walk-out would likely add to delays for the new 787 Dreamliner. Boeing two days ago raised its proposal by 17 percent, offering to boost compensation by an average of $28,000 over three years.
Source: Bloomberg
General Motors to Invest in India
A senior executive for General Motors in India said the company will invest in a plant to produce auto engines and transmissions. Next week GM will begin production at a $320 million car factory with annual capacity of 140,000 vehicles.
Source: Wall Street Journal
Caterpillar To Invest $100 Million in China Plant
U.S. construction equipment maker Caterpillar will invest more than $100 million to triple the production capacity of its Shandong unit over three years, the company said Thursday. It will also spend $20 million to build the first phase of a research and development center in Wuxi, Chief Executive Jim Owens said. The expansion of Shandong SEM Machinery Co., which manufactures wheel loaders, will begin in 2009. It didn't specify the current or increased production capacity. Caterpillar purchased a 40% stake in SEM in 2005, and bought the remaining shares earlier this year.
Source: Dow Jones Newswires
Dell Unveils New PCs for Emerging Markets
Dell said it has begun selling computers designed specifically for 20 fast-growing markets outside the U.S. Dell joins rivals Hewlett-Packard, Lenovo Group and other top computer makers in targeting consumers and businesses in China, Indonesia and other markets that are healthier than the U.S. Dell should benefit: Unlike its main rival H-P, a relatively large percentage of Dell's sales come from inside the U.S.
Source: Wall Street Journal
Diabetes Researchers Convert Pancreas Cells to Produce Insulin
Injecting a cocktail of proteins directly into the bodies of diabetic mice, Harvard University researchers have converted normal pancreas cells into insulin-producing cells. The genetic transformation could offer a new way for treating diseases and injuries using a patient's own supply of healthy tissue. The scientists activated a trio of dormant genes that commanded the cells to transform themselves, much as a person might upload a new operating system onto a computer to change a PC into a Mac.
Source: Los Angeles Times
Conversation of the Day: Wall Street's Big Sell-Off
Reader Harry writes: "I frankly don't get it. $53 Trillion in health care costs. $2 Trillion in financial losses. $1.5 Trillion in unproductive wars. These numbers are looking more like Zimbabawe's Currency exchange than USD."
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