July wholesale figures point to economic growth
WASHINGTON (AP) -- U.S.
businesses reduced inventories at the wholesale level for a record 11th
consecutive month in July, although sales rose by the largest amount in more
than a year, sparking hope for better days ahead.
Economists expect that some
modest restocking triggered by the higher sales helped boost the economy out of
recession in the current quarter. Some analysts said the economy could rebound
to growth approaching 4 percent, after it fell at a 1 percent rate in the
April-June period.
The Commerce Department
reported Friday that wholesale inventories declined 1.4 percent in July, more
than the 1 percent drop economists expected. That decline followed a 2.1
percent fall in June, worse than the 1.7 percent drop originally reported.
Stocks slide after 5 days of
gains as oil falls
NEW YORK (AP) -- Investors
pulled money out of stocks after a five-day rally left the market at its
highest levels in nearly a year.
Even with the latest surge,
stocks have little to show for the past decade. Eight years to the day after
the 9/11 terror attacks, the Dow Jones industrial average finished within
one-tenth of a point where it ended on Sept. 10, 2001, illustrating how hard
markets have been hit by the recession.
Stocks slipped in quiet
trading Friday after the recent string of gains and a drop in oil prices. Crude
slid 3.7 percent, which hurt energy stocks like Exxon Mobil Corp. That
overshadowed a rosier profit forecast from FedEx Corp. and a government report
on improving sales at wholesalers.
Even with the losses, stocks
still logged big gains for the week.
FedEx boosts 1Q forecast,
signals global recovery
NEW YORK (AP) -- FedEx
Corp., the world's second largest package delivery company, on Friday offered a
signal that the global economy is improving, as it raised its first-quarter
earnings forecast on better-than-expected international shipments and cost
cuts.
Its shares leapt more than 6
percent in afternoon trading. The company's performance is seen as a key
indicator of overall economic health, but FedEx hesitated to predict when a
recovery may ramp up.
The Memphis, Tenn.-based
company said it expects earnings of 58 cents per share for the first quarter
ended Aug. 31. That's down 53 percent from a year ago, but well above the
company's previous prediction of 30 cents to 45 cents per share.
Federal deficit hits $1.38
trillion through August
WASHINGTON (AP) -- The
federal deficit surged higher into record territory in August, hitting $1.38
trillion with one month left in the budget year.
The soaring deficits have
raised worries about the willingness of foreigners to keep purchasing Treasury
debt. The Chinese, now the largest foreign owners of U.S. Treasury securities,
have expressed concerns about runaway deficits. Treasury Secretary Timothy
Geithner and other administration officials have sought to address those
concerns by insisting that once the recession is over and the financial system
is stabilized, the administration will move forcefully to get the deficits
under control.
Republican critics contend
the administration does not have a credible plan to address future deficits.
Oil falls back below $70
even as dollar weakens
NEW YORK (AP) -- Oil prices
fell sharply Friday, giving up some of the gains crude made this week even as
the dollar fell to a fresh low for 2009.
Benchmark crude for October
delivery tumbled $2.65 to $69.29 a barrel on the New York Mercantile Exchange.
On Thursday, the contract rose 63 cents.
Gasoline, heating oil and
natural gas prices also were down. Natural gas prices had jumped 15 percent on
Thursday and then fell 9 percent Friday.
Oil had been up more than $4
this week and rose as much as 96 cents to $72.90 Friday as investors eyed
rising stock markets and a slumping U.S. dollar, but the rally stalled Friday.
Judge declares mistrial in first
Fosamax trial
TRENTON, N.J. (AP) -- A
federal judge declared a mistrial Friday in the first trial over whether Merck
& Co.'s former blockbuster osteoporosis drug, Fosamax, causes painful jaw
bone destruction.
Since Monday, jurors in the
month-long trial in New York City had been telling the judge via a series of
notes that they couldn't reach a verdict, with one holdout juror accusing
others of intimidation. Lawyers waiting in the courtroom could hear loud voices
coming from the jury room this week. One female juror -- apparently the holdout
-- wrote in a note to the judge Wednesday that another juror had thrown a chair
and one had threatened to "beat me up."
After just an hour of
deliberations Friday, Judge John F. Keenan declared a mistrial in the case of
plaintiff Shirley Boles.
Morgan Stanley CEO to
inherit bank in transition
NEW YORK (AP) -- Morgan
Stanley's incoming CEO will be facing a drastically different landscape on Wall
Street from when John Mack took over in 2005.
James Gorman is poised to take
over a bank that some say is still looking for direction after surviving a
credit crisis that wiped out most of its competitors.
Morgan Stanley announced the
CEO succession plan late Thursday. Gorman will take over the CEO post in
January, while Mack will remain at the company as chairman.
GM rescinds white-collar pay
cuts made in spring
DETROIT (AP) -- General
Motors Co., in an effort to keep employees happy as it tries to climb back to
profitability, has rescinded white-collar pay cuts it made last spring as it
desperately tried to conserve cash and avoid bankruptcy protection.
The struggling automaker was
losing staff because its pay scales were no longer competitive with other
automakers and manufacturing companies, spokesman Tom Wilkinson said Friday. He
did not know how many had left or exactly how many workers were affected by the
cuts.
The moves come as GM tries
to lure buyers back to its brands and fix its image after filing for Chapter 11
earlier this year. This weekend it will launch a new advertising campaign that
offers to buy back cars and trucks if customers aren't satisfied with them.
AP Source: Delta considers
ties to Japan Airlines
ATLANTA (AP) -- Delta Air
Lines Inc. is considering making a cash infusion of a couple hundred million
dollars to aid struggling Japan Airlines Corp., a person briefed on the talks
said Friday.
In exchange for the
infusion, the person said the world's biggest airline operator could get a
stake in Japan Airlines, an expanded presence in Japan and coveted access to
the closest airport to the Tokyo business center.
The talks between the two
carriers were in their preliminary stage, and it was unclear what form a
partnership between Delta and Japan Airlines might take, said the person, who
asked not to be identified by name because of the sensitivity of the
discussions.
Campbell Soup Co. expects
more normal economy
MOUNT LAUREL, N.J. (AP) --
The Campbell Soup Co., hurt lately by rising ingredient prices and a strong
U.S. dollar but boosted by shoppers looking for cheap meals, is expecting a
more stable economy -- and more conventional soup-selling challenges.
The Camden-based company
reported Friday that its fourth-quarter net income fell 22 percent, but
stronger soup sales helped its profit rise 11 percent excluding one-time items.
The world's largest
soupmaker reported that it earned $69 million, or 20 cents per share, for the
three months ended Aug. 2. That's down from $89 million, or 24 cents per share,
in the same period a year ago.
By The Associated Press
The Dow Jones industrial
average fell 22.07, or 0.2 percent, to 9,605.41.
The broader Standard &
Poor's 500 index fell 1.41, or 0.1 percent, to 1,042.73, and the Nasdaq
composite index fell 3.12, or 0.2 percent, to 2,080.90.
Benchmark crude for October
delivery tumbled $2.65 to $69.29 a barrel on the New York Mercantile Exchange.
In other Nymex trading,
gasoline for October delivery fell 4.38 cents to $1.7598 a gallon, and heating
oil declined 4.77 cents to $1.7308 a gallon. Natural gas was off 29.6 cents to
$2.96 per 1,000 cubic feet.
In London, Brent crude fell
$2.23 to $67.66 on the ICE Futures Exchange.