Import prices post biggest fall in five months

WASHINGTON, Wed Dec 12, 2012 — Import prices recorded the biggest drop in five months in November as food and fuel costs tumbled, keeping inflation pressures subdued against the backdrop of weak economic activity.

Overall import prices fell 0.9 percent, the Labor Department said on Wednesday. October’s data was revised to show a 0.3 percent increase rather than the previously reported 0.5 percent gain.

Economists polled by Reuters had expected prices to fall 0.5 percent last month. In the 12 months to November, import prices fell 1.2 percent.

Stripping out fuels and food prices, import prices dipped 0.1 percent as the costs of capital goods fell by the most since March 2010 and automobile prices were flat, indicating that broader inflation pressures remained benign.

The tame inflation environment should allow the Federal Reserve to stay on its ultra-easy monetary policy course as it tries to nurse the economy back to health.

Officials at the U.S. central bank resume policy deliberations on Wednesday and are expected to reaffirm the Fed’s accommodative stance at the end of the two-day meeting.

Last month, imported petroleum prices fell 3.6 percent after slipping 0.2 percent in October. The price of imported natural gas surged 18.2 percent, the largest increase in three years. Imported food prices fell 1.3 percent, the biggest decline since February 2012, after edging up 0.2 percent the prior month.

Elsewhere, imported capital goods prices fell 0.3 percent after being flat in October.

Durable goods drop worst since recession

WASHINGTON, Thu Sep 27, 2012 – New orders for long-lasting U.S. manufactured goods in August fell by the most in 3-1/2 years, pointing to a sharp slowdown in factory activity even as a gauge of planned business spending rebounded.

The Commerce Department said on Thursday durable goods orders dived 13.2 percent, the largest drop since January 2009, when the economy was in the throes of a recession. Orders for July were revised down to show a 3.3 percent increase instead of the previously reported 4.1 percent gain.

Economists polled by Reuters had expected orders for durable good  – items from toasters to aircraft that are meant to last at least three years – to fall 5 percent.

Last month, the drop in orders reflected weak aircraft and automobiles demand. Boeing received only one aircraft order in August, down from 260 in July, according to information posted on the plane maker’s website.

Transportation equipment tumbled 34.9 percent after racing ahead 13.1 percent in July. Excluding transportation, orders fell 1.6 percent after dropping 1.3 percent the prior month. Economists had expected this category to rise 0.3 percent after a previously reported 0.6 percent fall.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rose 1.1 percent, halting two straight months of hefty declines. That was above economists’ expectations for 0.5 percent gain.

Intel cuts outlook on weak PC demand; shares slump

SAN FRANCISCO, Fri Sep 7, 2012 – Intel Corp. cut its third-quarter revenue estimate more than expected on Friday due to a decline in demand for its chips as customers reduce inventories and businesses buy fewer personal computers.

Intel also said it was scaling back capital spending as a result of the business slowdown. Intel’s stock fell 3.6 percent, and shares of ASML and other companies that make chip-manufacturing equipment also lost ground.

A revision of Intel targets had been anticipated by some analysts after PC makers Hewlett Packard and Dell Inc. warned of slow demand last month, a development that has been compounded by a shaky global economy and consumers shifting toward tablets and smartphones.

But the 8 percent reduction in the top chipmaker’s revenue outlook was much more severe than expected. Intel also withdrew its full-year forecast.

The scaled-back outlook comes just days ahead of a major event where Intel will tout a new generation of processors that consume less power, central to its strategy of reinvigorating a stagnant PC industry.

Bernstein analyst Stacy Rasgon said the size of the Intel cut was surprising and was a worrying new sign that the company is seeing weakness in PC sales to businesses and governments, known as enterprise sales.

“They also have weakness in enterprise PCs in emerging markets. In the last six to eight quarters, consumers have been weak but the enterprise was strong. Now the enterprise is weak,” Rasgon said.

Supervalu shares tumble 44 percent after poor results

MINNEAPOLIS, Thu Jul 12, 2012 – Shares of Supervalu Inc. tumbled 44 percent on Thursday as several Wall Street firms cut their price targets on the supermarket chain after it reported declining sales and profit.
Analysts also questioned Supervalu’s ability to withstand a price war with rival companies such as Kroger Co. and Wal-Mart Stores Inc.
Supervalu shares were down 44 percent at $2.96 in morning trading.
After the stock market closed on Wednesday, Supervalu, the third-largest U.S. supermarket operator, said it had suspended its dividend to fund aggressive price cuts aimed at winning back shoppers.
“SVU (Supervalu)’s future is highly uncertain given the magnitude and speed of the deterioration,” said BMO Capital Markets analyst Karen Short.
The company, which reported a sharply lower quarterly profit, said it was mulling including a sale. Supervalu owns grocery chains such as Jewel-Osco and Save-A-Lot.
“Our belief that operations will improve has eroded meaningfully,” JPMorgan analyst Ken Goldman wrote in a research note, citing the aggressiveness of Supervalu’s rivals.
He said Supervalu’s pricing plans boded ill for other food retailers.

Chesapeake Energy shares fall on downgrade, loan

OKLAHOMA CITY, Okla., Tue May 15, 2012 – Chesapeake Energy Corp. shares dropped as much as 6.5 percent on Tuesday following a credit rating downgrade and news that the natural gas producer will boost its borrowings to $4 billion from the planned $3 billion as it faces a liquidity crunch.

The company, facing a funding shortfall of $9 billion to $10 billion this year, said on Friday that Goldman Sachs and Jefferies Group would provide it with $3 billion.

Chesapeake’s cash flows have shrunk as natural gas prices slumped to their lowest levels in a decade, putting pressure on the second-largest U.S. producer of the fuel to raise money to fund drilling operations.

Ratings agency Standard & Poor’s said it had cut Chesapeake’s credit rating to “BB-” from “BB,” one notch lower into noninvestment, or “junk,” status. S&P cited shortcomings in the company’s corporate governance practices, concerns about loan covenants and the likelihood of a wider gap between operating cash flow and capital expenditures.

Reuters reported last month that CEO Aubrey McClendon had borrowed at least $1.1 billion against his personal stakes in the company’s wells from lenders who also had dealings with Chesapeake, a deal that analysts and academics said raises possible conflicts of interest.

Factory orders for March suffer largest drop in three years

WASHINGTON, Wed May 2, 2012 – New orders for U.S. factory goods in March recorded their biggest decline in three years as demand for transportation equipment and a range of other goods slumped, government data showed on Wednesday.

The Commerce Department said orders for manufactured goods dropped 1.5 percent after a revised 1.1 percent rise in February.

Economists had forecast orders falling 1.6 percent after a previously reported 1.3 percent increase in February.

While the report showed broad weakness in March in a sector that has carried the economic recovery, anecdotal evidence suggests factories continued to expand as the second quarter started.

The Institute for Supply Management’s index of national manufacturing activity climbed to a 10-month high in April, with a measure of new orders received by factories the highest in a year, data showed on Tuesday.

The Commerce Department report showed orders for transportation equipment tumbled 12.6 percent in March on weak orders for civilian aircraft. Orders for motor vehicles and parts was flat in March after rising 1 percent in February.

Auto sales surged early in the year reflecting pent-up demand from households after a devastating earthquake and tsunami in Japan caused disruptions to auto production in 2011 and left dealers without models that consumers wanted to buy.

Industry data on Tuesday showed motor vehicle sales increased at an annual rate of 14.4 million units in April after rising at a 14.3 million unit pace in March, suggesting fundamental strength in the sector.

Strong auto sales buoyed consumer spending in the first quarter and contributed significantly to the economy’s 2.2 percent growth pace during that period.

Penney quarterly same-store sales fall 1.8 percent

PLANO, Texas – J.C. Penney Co. Inc. said on Friday that sales at its stores open at least a year fell 1.8 percent over the holiday quarter, contributing to a sharp drop in its gross profit margin.

In the fourth quarter ended on Jan. 28, Penney had a net loss of $87 million, or 41 cents per share, compared with a profit of $271 million, or $1.13 per share, a year earlier.

Gross margin fell 7.4 percentage points to 30.2 percent, hurt by weak sales that prompted the department store chain to cut prices.

Penney reiterated its forecast of an adjusted profit of $2.16 per share this fiscal year.

Carl Icahn drops $1.73 billion bid for Commercial Metals Co.

IRVING, Texas ― Billionaire investor Carl Icahn on Wednesday dropped his $1.73 billion hostile bid for Commercial Metals Co. after failing to pick up support among the metal company’s other shareholders.

Shares of the company fell about 7 percent in before-the-bell trading. They closed at $14.76 Tuesday on the New York Stock Exchange. Icahn had offered $15 a share.

Icahn, who controls about 10 percent of the company, had hoped to secure support from investors holding another 40.1 percent of the company’s shares. Only 23 percent of the shares were tendered in response to his offer, Icahn said.

The activist investor also withdrew his slate of nominees to the company’s board.

“The company has made a number of promises to shareholders, which shareholders appear to believe will be beneficial to the stock,” Icahn said in a statement. “We respect the views of the shareholders and hopefully their decision not to tender will prove to be the right one.”

Icahn has lost out on a number of recent high-profile proxy contests and takeover attempts. Last year, he gave up on his years-long public campaign against Lions Gate Entertainment LGF.TO, as well as attempts to get board seats at Clorox Co. and drugmaker Forest Laboratories.

Commercial Metals had dismissed Icahn’s $15-a-share tender offer — which represented a 31 percent premium when Icahn made his original approach in November — as “substantially undervalued” and “opportunistic.” The stock briefly topped the $15 mark last week.