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July 28, 2005
Fed Survey Says Economy Expanded in June with Little Inflation
href='http://quote.bloomberg.com/apps/news?pid=10000006&sid=a6n3BKkxeLNA&refe…'>The
U.S. economy continued to grow last month, supported by gains in
manufacturing, housing and services such as tourism as inflation eased,
the Federal Reserve said today in its regional survey. “Economic
activity continued to expand in June and early July,” according to
the survey, known as the “Beige Book” for the color of its
cover. “Overall price pressures eased slightly or remained
unchanged” amid rising energy costs, Bloomberg reported today.
href='http://quote.bloomberg.com/apps/news?pid=10000006&sid=a6n3BKkxeLNA&refe…'>Read
the full story.
More U.S. Results Top Estimates; Expectations Rising
As the number of U.S. companies posting better-than-expected earnings
and revenue for the last quarter inches ahead of 2004 figures,
expectations for the second half of the year are starting to soar,
Reuters reported Tuesday. The fact that more companies are beating Wall
Street earnings and revenue estimates is good for investors already
hoping that earnings growth will break through the 10 percent mark for
the 13th quarter in a row. Earnings growth for the second quarter is now
expected to be 9.8 percent, with 8.1 percent revenue growth, according
to Reuters estimates. But that number will almost certainly rise if a
big chunk of companies reporting this afternoon post results higher than
consensus forecasts.
San Diego to Hold Mayoral Runoff in November
This troubled seaside city has seen three mayors hold office in July
alone, but it will have to wait until November to elect a fourth, the
Associated Press reported yesterday. Councilwoman and surf shop owner
Donna Frye led a field of 11 candidates in Tuesday’s mayoral
election, but fell short of the majority required to avoid a runoff. She
will face former Police Chief Jerry Sanders on Nov. 8. Earlier this
month, former Mayor Dick Murphy resigned just seven months into his term
amid a pension fund scandal that has left City Hall in shambles. Less
than 72 hours later, his interim replacement lost the job when he was
convicted of corruption for taking bribes from a strip club owner.
Delta Shares Sink on CEO Comments
Shares of Delta Air Lines sank more than 20 percent Wednesday after
the struggling No. 3 U.S. carrier’s CEO said that the
airline’s restructuring plan is not enough to save it, Reuters
reported yesterday. The comments from Gerald Grinstein, in an internal
memo dated July 26, fueled concern of a possible chapter 11 filing,
analysts said, sending the stock as low as $2.65. By early afternoon
yesterday, shares of Delta (down $0.49 to $2.90) were down 15 percent on
the New York Stock Exchange, which asked Delta Wednesday to issue a
public statement to indicate whether there had been any developments
that could explain the unusual activity in the company’s stock,
which plunged nearly 15 percent, the Wall Street Journal
reported yesterday.
In other news, Delta is now offering passengers a new risk-free
cancellation policy. The carrier said that the no-questions-asked plan
is good for tickets purchased at Delta.com, Flysong.com, or other direct
Delta ticketing locations. Flysong.com is the web site for Delta’s
discount carrier, Song. The new guarantee will allow customers to cancel
certain tickets within 24 hours of purchase without penalty if they find
lower fares anywhere else or if their travel plans change. The policy
applies to tickets valid for travel originating in the United States,
Virgin Islands, Puerto Rico and Canada, regardless of where the ticket
is purchased.
Mediation in Bankruptcy Case on Verge of Breakdown
Court-ordered mediations between the Archdiocese of Portland and
dozens of sexual-abuse plaintiffs
href='http://www.gazettetimes.com/articles/2005/07/28/news/oregon/thuore03.txt'>are
on the verge of breaking down, with lawyers for both sides accusing
the other of acting in bad faith, the Associated Press reported
yesterday. To head off an impasse, U.S. Bankruptcy Judge Elizabeth
Perris has arranged for a fellow judge, Randall Dunn, to meet
informally with the two sides Friday to work toward agreement.
href='http://www.gazettetimes.com/articles/2005/07/28/news/oregon/thuore03.txt'>Read
the full story.
Firms Raise Minimum Payments
Over the next few months, credit card companies will be raising their
minimum payment requirements to answer federal regulatory changes to the
way they do business, the County Courier Times reported
today. And while consumer advocates say this will help Americans reduce
their debt in the long run, it’s going to be a painful change for
some. “The good is that you will take less time to pay off a
balance and, therefore, pay less money in interest,” said Joan
Reading, president of the Credit Counseling Center in Richboro, Penn.
“The bad thing is, if you are only making minimum payments at the
moment, your monthly outlay is going to increase, which means
you’re going to have to go back into your budget and find the
extra monies to make your minimum payment.”
Steelworkers, Stelco CEO Disagree over Restructuring
The
href='http://www.cbc.ca/story/business/national/2005/07/27/steelworkers-stelc…'>steelworkers’
union local at Stelco’s Lake Erie Works has set a strike
deadline, warning that the company’s restructuring plan is the
main issue, CBC News reported yesterday. United Steelworkers Local 8782
said on Wednesday that it issued the company a 90-day strike notice.
Oct. 25 is 90 days away. The local, which represents about 1,000 workers
at the company’s newest and most profitable mill, in Nanticoke,
Ont., said that Stelco’s restructuring plan was the key issue in
the strike notice.
href='http://www.cbc.ca/story/business/national/2005/07/27/steelworkers-stelc…'>Read
the full story.
Cingular Pact Could Help BCGI Avoid Potential Bankruptcy
Boston Communications Group Inc. (BCGI)
href='http://boston.bizjournals.com/boston/stories/2005/07/25/daily39.html?js…'>placed
$41 million into escrow, to be posted as bond should it be forced to
pay a $128 million judgment against it, and said that Cingular Wireless
LLC agreed to post bond for any amount owed beyond that for which it may
be held jointly liable, the Boston Business Journal
reported yesterday. The $128 million award stems from a patent suit
brought by Arizona-based Freedom Wireless Inc., which accused BCGI of
infringing patents on managing subscriber accounts for prepaid mobile
telephone service. Cingular Wireless also agreed to dismiss a May
lawsuit that would have forced BCGI to indemnify Cingular. BCGI CEO E.Y.
Snowden said that the Cingular agreements allow BCGI to proceed with its
appeal of the verdict and may allow it to avoid filing for bankruptcy
protection.
href='http://boston.bizjournals.com/boston/stories/2005/07/25/daily39.html?js…'>Read
the full story.