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December 13, 2004
Retail Sales Edge Up Slightly, Cars Down
U.S. retail sales increased by 0.1 percent in November, the Commerce
Department said today, slightly stronger than expectations, while the
previous month was revised sharply higher, Reuters reported. Wall Street
had forecast a 0.1 percent drop in November sales following indications
of softness from consumer surveys, weaker car sales and a soft patch in
October. But the Commerce Department revised up October’s result
to a 0.8 percent increase from an initially reported 0.2 percent
gain.
Consumer Sentiment Improves in Early December
U.S. consumer sentiment improved in early December, according to
researchers at the University of Michigan, CBS MarketWatch
reported. The consumer sentiment index rose to 95.7 in December from
92.8 in November. The increase was above the consensus forecast of Wall
Street economists who had expected sentiment to improve to 93.2.
A Pre-Christmas Rate Hike
A rate hike is expected, according to most market observers, even
though December rate hikes are not all that common, CNN Money reported.
Investors will also be watching the statement by Fed policy-makers for
clues about what the central bank will do at its next meeting in
February. Jeffrey Saut, chief market strategist with Raymond James
Financial, said last week’s sluggish November jobs report shows
the economy is not nearly as strong as some had thought, meaning the Fed
will raise its target for the fed funds rate, an overnight bank lending
rate, to 2.25 percent from 2 percent on Tuesday. That would be the
Fed’s fifth quarter-point increase this year.
Bush Says Social Security Faces ‘Looming Danger’
President Bush said on Saturday Social Security must be overhauled to
avoid a “looming danger” of insolvency, as he launched a
public push for his proposal to add private accounts to the program,
Reuters reported. Bush’s proposal is estimated to involve $1
trillion to $2 trillion in transition costs. The president’s aides
have insisted the upfront costs for Social Security reform will be
worthwhile in the long run because the private accounts will eventually
improve the long-term solvency of the program as workers reap
potentially higher returns in stock and bond investments, the newswire
reported.
Southwest to Formally Bid for ATA Assets
Southwest Airlines on Friday said it will formally submit its bid for
certain assets of bankrupt ATA Airlines, including six gates at
Chicago’s Midway International Airport and a code share agreement
with ATA, Reuters reported. The six gates would increase
Southwest’s capacity by 32 percent, and the code sharing could add
$25 million to $50 million to each airline’s annual revenue,
Southwest said in a statement.
Athlete’s Foot Seeks Bankruptcy Protection
Sneaker retailer Athlete’s Foot Stores LLC filed a voluntary
chapter 11 petition on Thursday in the U.S. Bankruptcy Court in
Manhattan, the Associated Press reported. The Kennesaw, Ga.–based
sports shoe chain listed assets of $33.6 million and liabilities of
$39.4 million. Athlete’s Foot’s largest unsecured creditors
are New Balance Athletic Shoe Inc., which holds a trade claim of $1.4
million, and K-Swiss Inc., another sneaker maker with a trade claim of
$1.3 million.
SEC Drops Winnick Charges from Global Crossing Pact, People Say
U.S. Securities and Exchange Commission Chairman William Donaldson
rejected a staff proposal to sanction Gary Winnick as part of a
settlement with Global Crossing Ltd., Bloomberg News reported. Winnick
won’t be fined or accused of any wrongdoing, Howard Rubenstein, a
spokesman for Winnick, said yesterday. Donaldson sided with two members
of the five-person commission in opposing the staff recommendation at a
Dec. 9 meeting in Washington, D.C., according to people familiar with
the matter. SEC officials had sought to fine Winnick for failing to
monitor the accuracy of the Hamilton, Bermuda–based
company’s disclosures, the newswire reported.
Enron’s Skilling Is Denied Request to Expose Names
A federal judge largely denied a request by former Enron Corp.
President Jeffrey Skilling to make public a list of 114 alleged
co-conspirators in his criminal case, which stems from the collapse of
the Houston energy giant, the Wall Street Journal reported.
Judge Sim Lake ruled that Skilling and his co-defendants, former Enron
Chairman Kenneth Lay and former Chief Accounting Officer Richard Causey,
could disclose only the names of people who already have been publicly
identified as alleged co-conspirators in other Enron prosecutions or who
have been convicted or charged with Enron-related crimes, the online
newspaper reported.
Legal Fight Menaces Aircraft Debt Ratings
Standard & Poor’s (S&P) on Friday said ratings on about
$30 billion of aircraft-backed debt could be threatened if creditors
lost a legal dispute with bankrupt UAL Corp. unit United Airlines over
the right to repossess aircraft, Reuters reported. Virtually all U.S.
airline aircraft-backed debt would be reevaluated and possibly put on
review for downgrade if courts permanently limited the rights of
creditors to repossess collateral, S&P said in a statement. An
adverse ruling for creditors also could make it harder for airlines to
finance planes because investors would be less willing to buy
aircraft-backed debt, S&P said, the newswire reported.