July 14, 2004
Retail Sales:
Larger-than-expected Fall
U.S. retail sales slid a
larger-than-expected 1.1 percent in June, the Commerce Department said
today, Reuters reported. The June decline was the largest since a
matching 1.1 percent drop in February 2003.Retail purchases fell a
smaller 0.2 percent. Both measures were weaker than anticipated by Wall
Street economists who had projected a smaller 0.6 percent fall overall
and a 0.2 percent rise in sales aside from autos. While prices at the
pump have come down slightly in recent weeks, economists had expected
them to drag on consumer spending in June. As gas prices rise, consumers
have less money to spend on other items, the newswire
reported.
Former Qwest CEO
Advises Leucadia on Telecoms
Former chief of Qwest
Communications International Inc., Joseph Nacchio, is working as an
adviser to Leucadia National, the investment company that is seeking
approval to buy at least half of MCI Inc., the Wall Street
Journal reported. Nacchio, who was ousted as Qwest's CEO in
June 2002 amid questions about its accounting and financial health, is
working with Leucadia on telecommunications matters that include MCI,
the newspaper said, citing unspecified people familiar with the matter.
MCI disclosed on Monday that Leucadia has sought regulatory clearance to
buy at least 50 percent of its stock, the newspaper reported.
Portland Diocese, Abuse
Victims Meet on Bankruptcy
Sex abuse victims and the Roman
Catholic Archdiocese of Portland squared off in a closed-door federal
court session on Tuesday in their first meeting since the church filed
an unprecedented U.S. bankruptcy petition last week, Reuters reported.
Archdiocese officials pledged to compensate all claimants, according to
participants at the meeting, but the church insists it cannot afford the
big payouts likely if the abuse cases went to trial. While the
proceedings were mostly cordial, some victims filed court papers
criticizing the church for refusing to make any sacrifices during
bankruptcy protection. The Portland Archdiocese became the first in the
United States to file for protection from costly clergy abuse lawsuits
that began more than two years ago in Boston and spread to many U.S.
cities, Reuters reported.
U.S. Firms Struggle to Meet
Audit Reform Deadline
Many U.S. companies are
struggling to meet a second deadline set by regulators to improve
internal controls to prevent fraud, a study said on Tuesday, Reuters
reported. The U.S. Securities and Exchange Commission has already
extended the deadline for corporations to strengthen their checks and
balances and comply with the Sarbanes-Oxley Act by five months to
November 2004, but they are still less than 60 percent finished doing
so, the study said. The study, jointly conducted by ACL Services, an
analytics provider to audit professionals, and the Center for Continuous
Auditing polled 248 audit professionals at corporations that generate
sales of over $1 billion dollars, the newswire reported.
Continental, Pilots Put off
Talks on Money Issues
Continental Airlines and the
union that represents its pilots have put off talks on major economic
issues in their contract negotiations due to the soaring cost of jet
fuel, they said on Tuesday, Reuters reported. The two sides have been in
talks for almost two years on a new deal and have delayed on more
expensive items until at least August, when both sides hope they will be
in a better position to calculate how the soaring and volatile price of
jet fuel will affect the airline and the industry, they said. 'We are
giving it a little break to see what fuel prices are going to do,' said
Gordon Shattles, a spokesman for the Air Line Pilots Association, which
represents 6,000 pilots at the Houston-base airline. Continental said in
mid-May that record high jet fuel prices would add an extra $700 million
in operating expenses this year, contributing to a 'significant' loss
for 2004, the newswire reported.
Delta Plans $1.65 Billion
Charge in Quarter
Delta Air Lines said yesterday
that it would take a $1.65 billion charge in the second quarter largely
related to income taxes, sending its shares lower amid concerns about
the company's financial problems, Reuters reported. Delta, which has
warned it could be forced to seek bankruptcy protection without
significant cost cuts, said it would take a $1.53 billion charge related
to deferred income taxes and a $117 million charge for its pilot pension
plan as more pilots than usual retired. The charges do not affect
Delta's liquidity, which Wall Street analysts are closely monitoring to
assess its financial health.
For Mike Ramsey, Enron's Ken Lay Is Another
Colorful Client
An article in the Wall Street
Journal focuses on Michael Ramsey, the chief defender
of Kenneth Lay, who last week was indicted by a grand jury in
Houston federal court for his role in an alleged conspiracy to defraud
Enron investors. Read the full article at
href='http://www.wsj.com/'>
size='3'>www.wsj.com (subscription
required).
Corporations To the Rescue? Not So
Fast
Economists recognize that the
traditional stuff of economic expansions isn't available this time, the
Wall Street Journal reported. Consumers usually hold off on buying their
cars and bigger houses until the economy clearly is on solid footing.
Instead, through cheap money and tax rebates, this time they already
have purchased steadily throughout the recession and stubborn recovery.
Read the article at
href='http://www.wsj.com/'>
size='3'>www.wsj.com (subscription
required).