First-time jobless claims fell by 34,000 to a seasonally adjusted 388,000 in the week ending December 25, the Labor Department reported this morning, the lowest level since July 2008.
Economists had expected claims to have fallen to 415,000 from a revised 422,000 the previous week. Initial jobless claims peaked at 651,000 in March 2009.
The four-week average of new claims, which smooths out weekly volatility, fell by 12,500 to 414,000, which was also the lowest level since July 2008.
The number of people filing for continuing claims rose by 57,000 to a seasonally adjusted 4.13 million in the week ending Dec. 18, but the four-week average fell 37,250 to 4.12 million, the lowest level since November 2008. The continuing claims number does not include people receiving extended benefits under federal programs.
The Labor Department will issue its December jobs report next Friday. Economists expect that about 100,000 new jobs were added to the economy in December.
Thursday, December 30, 2010
Wednesday, December 29, 2010
Blizzard Postpones $1 Billion in Retail Sales
The day-after Christmas blizzard that walloped the East Coast cost retailers about $1 billion in delayed sales, according to ShopperTrak.
Customer traffic at malls and stores in the Northeast fell 6.1% on the day after Christmas from the same day last year, ShopperTrak said, and total U.S. foot traffic was 11.2% below what it would have been had the blizzard not hit.
On Monday, December 27th, shopping traffic across the country was down 13.9%, with foot traffic in the Northeast tumbling 42.9%. Snowfalls totaled up to 30 inches in some New York City suburbs, stranding people at home and causing massive travel and commuting delays. Other regions of the country averaged a 13% gain on the 27th.
“As expected the 2010 blizzard throughout the Northeast halted nearly all retail visits and spending during a period that is fairly crucial for retailers,” ShopperTrak Bill Martin said in a press release. “And at this point the prospect of momentarily pausing a potential $1 billion in sales has the collective industry holding its breath."
Martin expects "some retail strength later this week and into the weekend as folks begin to dig out," but is cautious about whether levels will "recover in time to boost December sales and the overall holiday shopping season.”
ShopperTrak records sales and customer traffic at more than 70,000 stores and malls across the country.
Customer traffic at malls and stores in the Northeast fell 6.1% on the day after Christmas from the same day last year, ShopperTrak said, and total U.S. foot traffic was 11.2% below what it would have been had the blizzard not hit.
On Monday, December 27th, shopping traffic across the country was down 13.9%, with foot traffic in the Northeast tumbling 42.9%. Snowfalls totaled up to 30 inches in some New York City suburbs, stranding people at home and causing massive travel and commuting delays. Other regions of the country averaged a 13% gain on the 27th.
“As expected the 2010 blizzard throughout the Northeast halted nearly all retail visits and spending during a period that is fairly crucial for retailers,” ShopperTrak Bill Martin said in a press release. “And at this point the prospect of momentarily pausing a potential $1 billion in sales has the collective industry holding its breath."
Martin expects "some retail strength later this week and into the weekend as folks begin to dig out," but is cautious about whether levels will "recover in time to boost December sales and the overall holiday shopping season.”
ShopperTrak records sales and customer traffic at more than 70,000 stores and malls across the country.
Tuesday, December 28, 2010
Consumer Confidence Slips
U.S. consumers were feeling glum about the economy in December, according to The Conference Board's monthly gauge.
The Conference Board's index of consumer sentiment fell to a reading of 52.5 this month from an upwardly revised 54.3 in November. Economists had been looking for a reading of 56.
Worries about jobs crept back into consumers' minds this month, with 46.8% of consumers polled saying that jobs are hard to get, up from 46.3% in November, the highest level since February. And 3.9% of those polled said jobs were plentiful, down from 4.3% last month. The unemployment rate rose to 9.8% in November from 9.6% in October.
"Consumers' assessment of the current state of the economy and labor market remains tepid, and their outlook remains cautious," said Lynn Franco, director of the Conference Board's consumer research center. "Thus, all signs continue to suggest that the economic expansion will continue well into 2011, but that the pace of growth will remain moderate."
The index has been below 90, which indicates a healthy economy, since December 2007, when the recession first began.
The Conference Board's index of consumer sentiment fell to a reading of 52.5 this month from an upwardly revised 54.3 in November. Economists had been looking for a reading of 56.
Worries about jobs crept back into consumers' minds this month, with 46.8% of consumers polled saying that jobs are hard to get, up from 46.3% in November, the highest level since February. And 3.9% of those polled said jobs were plentiful, down from 4.3% last month. The unemployment rate rose to 9.8% in November from 9.6% in October.
"Consumers' assessment of the current state of the economy and labor market remains tepid, and their outlook remains cautious," said Lynn Franco, director of the Conference Board's consumer research center. "Thus, all signs continue to suggest that the economic expansion will continue well into 2011, but that the pace of growth will remain moderate."
The index has been below 90, which indicates a healthy economy, since December 2007, when the recession first began.
Monday, December 27, 2010
Copper Closes at Record
Copper for March delivery rose 2.15 cents, or 0.5%, to close at $4.28 a pound today, the highest closing price ever for the commodity. Earlier in the day, copper hit $4.2985 a pound, an all-time record.
Copper climbed despite a surprise move on Saturday by the People’s Bank of China to increase its lending and deposit rates by a quarter of a percentage point. Prices of the red metal have been rising in recent months amid increased demand from emerging markets, including China, which is the world's biggest user.
"Even though China raised rates they're continuing to buy metal," George Gero, vice president with RBC Capital Markets Global Futures, told Dow Jones Newswires.
A supply shortage also helped boost prices today. The world's third biggest copper mine, the Collahuasi mine in Chile, halted sales contracts a week ago after an accident at its port.
Trading was thin, however, due to a massive snowstorm on the East Coast.
Copper climbed despite a surprise move on Saturday by the People’s Bank of China to increase its lending and deposit rates by a quarter of a percentage point. Prices of the red metal have been rising in recent months amid increased demand from emerging markets, including China, which is the world's biggest user.
"Even though China raised rates they're continuing to buy metal," George Gero, vice president with RBC Capital Markets Global Futures, told Dow Jones Newswires.
A supply shortage also helped boost prices today. The world's third biggest copper mine, the Collahuasi mine in Chile, halted sales contracts a week ago after an accident at its port.
Trading was thin, however, due to a massive snowstorm on the East Coast.
Wednesday, December 22, 2010
Existing Home Sales Rise
Sales of previously owned homes rose 5.6% to a 4.68 million annualized rate in November, according to the National Association of Realtors.
While it was the third gain in four months, sales were down 27.9% from year-ago levels, which was the initial deadline for the first-time homebuyer's tax credit.
Distressed homes made up 33% of sales in November, down slightly from 34% in October and the same as November 2009.
Purchases of single-family homes rose 6.7% to a 4.15 million annual rate in November from October, but sales of condominiums and co-ops fell 1.9% to 530,000.
NAR Chief Economist Lawrence Yun was optimistic about 2011. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” he said.
The inventory of homes on the market fell to 3.71 million, or 9.5 months of supply, from 3.86 million, or 10.5 months of supply. The median price of all existing homes sold during November was $170,600, up just 0.4% from a year ago.
While it was the third gain in four months, sales were down 27.9% from year-ago levels, which was the initial deadline for the first-time homebuyer's tax credit.
Distressed homes made up 33% of sales in November, down slightly from 34% in October and the same as November 2009.
Purchases of single-family homes rose 6.7% to a 4.15 million annual rate in November from October, but sales of condominiums and co-ops fell 1.9% to 530,000.
NAR Chief Economist Lawrence Yun was optimistic about 2011. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” he said.
The inventory of homes on the market fell to 3.71 million, or 9.5 months of supply, from 3.86 million, or 10.5 months of supply. The median price of all existing homes sold during November was $170,600, up just 0.4% from a year ago.
Tuesday, December 21, 2010
Nike Tops Expectations, but Future Orders Miss
Nike (NKE) late Tuesday said it earned $457 million, or 94 cents per share, in its fiscal second quarter, up from $375.4 million, or 77 cents per share, in the same quarter a year ago. Analysts had been looking for 88 cents per share.
Sales rose to $4.84 billion from $4.41 billion a year earlier, topping expectations of $4.81 billion.
Future orders slated for delivery from between December 2010 and April 2011 rose 11% from a year ago to $7.7 billion, which was below analysts' expectations.
“As supply and demand find a new normal in the recovering economy, our industry is going to experience margin pressure due to rising input costs,” said CEO Mark Parker.
Shares of Nike fell $5.34, or 5.8%, to $86.96 after the close.
Sales rose to $4.84 billion from $4.41 billion a year earlier, topping expectations of $4.81 billion.
Future orders slated for delivery from between December 2010 and April 2011 rose 11% from a year ago to $7.7 billion, which was below analysts' expectations.
“As supply and demand find a new normal in the recovering economy, our industry is going to experience margin pressure due to rising input costs,” said CEO Mark Parker.
Shares of Nike fell $5.34, or 5.8%, to $86.96 after the close.
Monday, December 20, 2010
Adobe Tops Expectations
Adobe Systems (ADBE) had a good fiscal fourth quarter.
The graphic-design software company late Monday reported earnings excluding items were 56 cents per share, topping analysts' estimates of 52 cents per share. Revenue was $1 billion, also ahead of expectations for $988 million.
Adobe, whose Creative Suite 5 includes Photoshop and Adobe Illustrator, forecast earnings between 54 cents and 59 cents for its current first quarter; the consensus estimate is for 51 cents per share. Adobe also forecast revenue of $1 billion to $1.05 billion, which would top analysts' expectations of $991.9 million.
"We posted our first billion dollar quarter and record annual revenue in 2010, driven by outstanding performance across all of our major businesses," Adobe CEO Shantanu Narayen said.
Shares of the stock rose $1.48, or 5.1%, to $30.66 in after-hours trading.
The graphic-design software company late Monday reported earnings excluding items were 56 cents per share, topping analysts' estimates of 52 cents per share. Revenue was $1 billion, also ahead of expectations for $988 million.
Adobe, whose Creative Suite 5 includes Photoshop and Adobe Illustrator, forecast earnings between 54 cents and 59 cents for its current first quarter; the consensus estimate is for 51 cents per share. Adobe also forecast revenue of $1 billion to $1.05 billion, which would top analysts' expectations of $991.9 million.
"We posted our first billion dollar quarter and record annual revenue in 2010, driven by outstanding performance across all of our major businesses," Adobe CEO Shantanu Narayen said.
Shares of the stock rose $1.48, or 5.1%, to $30.66 in after-hours trading.
Friday, December 17, 2010
AT&T to Raise Dividend
Blue chip giant AT&T (T) announced late Friday that it will increase its quarterly dividend payment.
The telecom raised its dividend to 43 cents per share, up 2.4% from 42 cents per share, which would be an increase from $1.68 to $1.72 a share on an annualized basis. It marks the 27th straight annual dividend increase by the company. AT&T also said that its board authorized new stock buyback plan of 300 million shares, or about 5% of its shares outstanding.
The dividend will be paid Feb. 1 to shareholders of record as of Jan. 10.
"This dividend increase, combined with the repurchase authorization, reflects the board's confidence in our ability to generate strong cash flows," said AT&T's CEO, Randall Stephenson, in a statement.
Last week, a number of big banks, including BB&T (BBT) and Bank of America (BAC) indicated that they plan to increase their dividends upon passage of the Federal Reserve's second round of stress tests.
The telecom raised its dividend to 43 cents per share, up 2.4% from 42 cents per share, which would be an increase from $1.68 to $1.72 a share on an annualized basis. It marks the 27th straight annual dividend increase by the company. AT&T also said that its board authorized new stock buyback plan of 300 million shares, or about 5% of its shares outstanding.
The dividend will be paid Feb. 1 to shareholders of record as of Jan. 10.
"This dividend increase, combined with the repurchase authorization, reflects the board's confidence in our ability to generate strong cash flows," said AT&T's CEO, Randall Stephenson, in a statement.
Last week, a number of big banks, including BB&T (BBT) and Bank of America (BAC) indicated that they plan to increase their dividends upon passage of the Federal Reserve's second round of stress tests.
Thursday, December 16, 2010
Yahoo to Shut Down Some Services
Just days after Yahoo (YHOO) announced that it was laying off 4% of its workforce, the company announced another restructuring move.
Yahoo said that it plans to shut down some "non-core" Web sites in the next few months as part of its broad restructuring plan. Yahoo Buzz and Traffic APIs were two sites Yahoo named in a statement late Thursday, while All Things Digital reported that MyBlogLog, Yahoo Picks, AltaVista, Yahoo Bookmarks and Delicious were also on the chopping block.
"Part of our organizational streamlining involves cutting our investment in underperforming or off-strategy products to put better focus on our core strengths and fund new innovation in the next year and beyond," Yahoo said in a statement.
On Tuesday, Yahoo said it was eliminating about 560 employees. It was the fourth layoff announcement in three years.
Yahoo said that it plans to shut down some "non-core" Web sites in the next few months as part of its broad restructuring plan. Yahoo Buzz and Traffic APIs were two sites Yahoo named in a statement late Thursday, while All Things Digital reported that MyBlogLog, Yahoo Picks, AltaVista, Yahoo Bookmarks and Delicious were also on the chopping block.
"Part of our organizational streamlining involves cutting our investment in underperforming or off-strategy products to put better focus on our core strengths and fund new innovation in the next year and beyond," Yahoo said in a statement.
On Tuesday, Yahoo said it was eliminating about 560 employees. It was the fourth layoff announcement in three years.
Wednesday, December 15, 2010
Time Names Mark Zuckerberg Person of the Year
Mark Zuckerberg, founder of social networking site Facebook, was named Time magazine's 2010 "Person of the Year" today.
Time named the 26-year-old Zuckerberg "for connecting more than half a billion people and mapping the social relations among them; for creating a new system of exchanging information; and for changing how we all live our lives."
Zuckerberg started the Web site in 2004, when he was a sophomore at Harvard University. Facebook became the top social networking site in 2008, surpassing MySpace. The company boasts more than 500 million users, with 1 million new users signing up for the service every day. "The Social Network," a movie about Facebook's creation was released on Oct. 1, and has been a hit at the box office and among critics.
Time first started choosing its "Person of the Year" in 1927, with Charles Lindbergh as its pick; Lindbergh was chosen for the first successful solo flight across the Atlantic Ocean.
Time named the 26-year-old Zuckerberg "for connecting more than half a billion people and mapping the social relations among them; for creating a new system of exchanging information; and for changing how we all live our lives."
Zuckerberg started the Web site in 2004, when he was a sophomore at Harvard University. Facebook became the top social networking site in 2008, surpassing MySpace. The company boasts more than 500 million users, with 1 million new users signing up for the service every day. "The Social Network," a movie about Facebook's creation was released on Oct. 1, and has been a hit at the box office and among critics.
Some people were disappointed with Time's choice of Zuckerberg, believing that WikiLeaks founder Julian Assange, who was the magazine's No. 3 runner-up, should have been this year's No. 1 pick. The Tea Party movement was the magazine's second choice, with Afghanistan President Hamid Karzai and the Chilean miners other runners-up.
Time first started choosing its "Person of the Year" in 1927, with Charles Lindbergh as its pick; Lindbergh was chosen for the first successful solo flight across the Atlantic Ocean.
Tuesday, December 14, 2010
Best Buy Shares Skid on Weak Results, Gloomy Guidance
Shares of electronics retailer Best Buy (BBY) tumbled more than $6, or 15%, the biggest drop in the company's stock price in more than eight years after announcing disappointing earnings for its fiscal third quarter. The company also slashed its profit forecast for the year.
Best Buy said net profit for its fiscal third quarter was $217 million, or 54 cents per share, compared with $227 million, or 53 cents per share, in the same period a year ago. Analysts had been looking for 61 cents per share, according to Thomson Reuters. The quarter included "Black Friday," the busy shopping day after Thanksgiving, but consumers turned to other retailers like Wal-Mart Stores (WMT) and Target (TGT) for their purchases. In fact, Best Buy said domestic market share fell 1.1 percentage points in the quarter compared with a year earlier.
Revenue at the retailer was $11.89 billion, down from $12 billion a year ago and missing expectations of $12.45 billion. Sales at U.S. stores open at least one year fell 5%, with total same-store sales down 3% in the quarter.
Best Buy also said it expects full-year earnings to be between $3.20 and $3.40 per share, down from previous guidance of $3.55 to $3.70 per share. The consensus estimate is $3.59 per share.
"Based on lower than expected sales and earnings in the fiscal third quarter, and given our current visibility to potential outcomes in the fiscal fourth quarter, we now expect annual earnings to be below our previous fiscal 2011 EPS guidance," said Jim Muehlbauer, Best Buy's executive vice president of finance and CFO, in a press release. "There remains a significant amount of business still ahead of us in the holiday selling season and we don't have complete visibility to how customers will behave over the next several weeks."
The rest of the retail world seemed to fare better in November, the Commerce Department reported today. U.S. retail sales rose 0.8% last month, topping expectations for a 0.5% increase. Excluding autos, retail sales jumped 1.2%, double what economists had expected.
Best Buy said net profit for its fiscal third quarter was $217 million, or 54 cents per share, compared with $227 million, or 53 cents per share, in the same period a year ago. Analysts had been looking for 61 cents per share, according to Thomson Reuters. The quarter included "Black Friday," the busy shopping day after Thanksgiving, but consumers turned to other retailers like Wal-Mart Stores (WMT) and Target (TGT) for their purchases. In fact, Best Buy said domestic market share fell 1.1 percentage points in the quarter compared with a year earlier.
Revenue at the retailer was $11.89 billion, down from $12 billion a year ago and missing expectations of $12.45 billion. Sales at U.S. stores open at least one year fell 5%, with total same-store sales down 3% in the quarter.
Best Buy also said it expects full-year earnings to be between $3.20 and $3.40 per share, down from previous guidance of $3.55 to $3.70 per share. The consensus estimate is $3.59 per share.
"Based on lower than expected sales and earnings in the fiscal third quarter, and given our current visibility to potential outcomes in the fiscal fourth quarter, we now expect annual earnings to be below our previous fiscal 2011 EPS guidance," said Jim Muehlbauer, Best Buy's executive vice president of finance and CFO, in a press release. "There remains a significant amount of business still ahead of us in the holiday selling season and we don't have complete visibility to how customers will behave over the next several weeks."
The rest of the retail world seemed to fare better in November, the Commerce Department reported today. U.S. retail sales rose 0.8% last month, topping expectations for a 0.5% increase. Excluding autos, retail sales jumped 1.2%, double what economists had expected.
Monday, December 13, 2010
Judge: ObamaCare Individual Mandate Unconstitutional
A federal judge delivered a significant blow to President Barack Obama's healthcare law today, ruling that the law's central provision is unconstitutional.
Judge Henry E. Hudson of the Eastern District of Virginia said that the mandate requiring individuals to buy insurance or pay a federal fine exceeded "constitutional boundaries."
In a 42-page opinion, Judge Hudson said that the Constitution's Commerce Clause has never been extended "to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market."
Virginia’s challenge to the law was led by Republican attorney general, Ken Cuccinelli. More than 20 federal lawsuits have been filed against the healthcare bill. Another big challenge is scheduled to be heard in Florida on Thursday, when Federal District Judge Roger Vinson will hear arguments in a suit joined by 20 states.
Two separate rulings have determined that the individual mandate provision is constitutional.
President Obama signed the sweeping bill into law on March 23, but the individual mandate does not go into effect until 2014.
Judge Henry E. Hudson of the Eastern District of Virginia said that the mandate requiring individuals to buy insurance or pay a federal fine exceeded "constitutional boundaries."
In a 42-page opinion, Judge Hudson said that the Constitution's Commerce Clause has never been extended "to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market."
Virginia’s challenge to the law was led by Republican attorney general, Ken Cuccinelli. More than 20 federal lawsuits have been filed against the healthcare bill. Another big challenge is scheduled to be heard in Florida on Thursday, when Federal District Judge Roger Vinson will hear arguments in a suit joined by 20 states.
Two separate rulings have determined that the individual mandate provision is constitutional.
President Obama signed the sweeping bill into law on March 23, but the individual mandate does not go into effect until 2014.
Friday, December 10, 2010
U.S. Trade Gap Narrows More than Expected
The U.S. trade deficit narrowed more than forecast in October as exports grew and imports declined.
The trade gap shrank by 13% to $38.7 billion from a revised $44.6 billion for September, the Commerce Department reported this morning, the smallest gap in nine months. Economists had expected a deficit of $44.5 billion. September's trade gap was originally reported as $44 billion.
Exports rose 3.2% to $158.7 billion, the highest since August 2008, thanks to strong demand for agricultural products and autos. Imports, on the other hand, fell 0.5% to $197.4 billion, amid weaker demand for oil.
The U.S. trade deficit with China fell 8.3% to $25.52 billion in October from the $27.83 billion deficit in September. Still, the trade gap with the country's biggest trading partner was up sharply from the $22.68 billion gap in October 2009.
China, meanwhile, said that its monthly trade surplus was $22.9 billion in November, down from $27.2 billion in October.
The trade gap shrank by 13% to $38.7 billion from a revised $44.6 billion for September, the Commerce Department reported this morning, the smallest gap in nine months. Economists had expected a deficit of $44.5 billion. September's trade gap was originally reported as $44 billion.
Exports rose 3.2% to $158.7 billion, the highest since August 2008, thanks to strong demand for agricultural products and autos. Imports, on the other hand, fell 0.5% to $197.4 billion, amid weaker demand for oil.
The U.S. trade deficit with China fell 8.3% to $25.52 billion in October from the $27.83 billion deficit in September. Still, the trade gap with the country's biggest trading partner was up sharply from the $22.68 billion gap in October 2009.
China, meanwhile, said that its monthly trade surplus was $22.9 billion in November, down from $27.2 billion in October.
Thursday, December 9, 2010
Home Values to Fall by $1.7 Trillion
There was some more discouraging news about the housing market today: 2010 will likely end up being worse for home values than 2009.
Real estate Web site Zillow released a report that said the value of American homes is expected to drop by $1.7 trillion this year, a 63% bigger drop than the $1.05 trillion decline seen in 2009. The report cited the expiration of the government's homebuyer tax credits, as well as higher foreclosure rates.
Home values have plummeted more than $9 trillion since the housing market peaked in June 2006. That's nearly 12 times the $750.8 billion cost of the war in Iraq from 2001 to the end of September 2010, Zillow said, citing a report from the Congressional Research Service.
"Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief," Zillow Chief Economist Stan Humphries said in a statement.
Not all of the 129 metropolitan areas that Zillow tracks saw home values fall this year -- Boston, San Diego and 29 other metropolitan areas showed gains. Still, that means more than 75% of the metro areas suffered declines, and the report added to concerns that more homeowners are underwater in their mortgages, which means they owe more than their homes are worth. In the third quarter of 2010, 23.2% of single-family homeowners with mortgages were underwater, a higher percentage than the 21.8% at the end of 2009.
"The hope is that the market will reach a bottom sometime next year, and that average rates of appreciation will return sometime in the next three to five years," Zillow's report said.
Real estate Web site Zillow released a report that said the value of American homes is expected to drop by $1.7 trillion this year, a 63% bigger drop than the $1.05 trillion decline seen in 2009. The report cited the expiration of the government's homebuyer tax credits, as well as higher foreclosure rates.
Home values have plummeted more than $9 trillion since the housing market peaked in June 2006. That's nearly 12 times the $750.8 billion cost of the war in Iraq from 2001 to the end of September 2010, Zillow said, citing a report from the Congressional Research Service.
"Unfortunately, with foreclosures near an all-time high in late 2010 and high rates of negative equity persisting, it does not appear that the first part of 2011 will bring much relief," Zillow Chief Economist Stan Humphries said in a statement.
Not all of the 129 metropolitan areas that Zillow tracks saw home values fall this year -- Boston, San Diego and 29 other metropolitan areas showed gains. Still, that means more than 75% of the metro areas suffered declines, and the report added to concerns that more homeowners are underwater in their mortgages, which means they owe more than their homes are worth. In the third quarter of 2010, 23.2% of single-family homeowners with mortgages were underwater, a higher percentage than the 21.8% at the end of 2009.
"The hope is that the market will reach a bottom sometime next year, and that average rates of appreciation will return sometime in the next three to five years," Zillow's report said.
Wednesday, December 8, 2010
BB&T Wants to be First Bank to Raise Dividends
Bank investors will likely get a dividend boost in 2011, and BB&T (BBT) wants to be one of the first banks to do so.
"We hope to be in the early group with a dividend increase," said CEO Kelly King on Wednesday, speaking at the Goldman Sachs U.S. Financial Services Conference, according to Reuters.
In May 2009, BB&T cut its quarterly dividend to 15 cents per share from 47 cents as a result of the financial crisis that hammered both the banking industry and the country in the fall of 2008. Prior to that, BB&T had raised its dividend for 37 straight years.
BB&T won't be alone. Bank of New York Mellon (BK) CEO Robert Kelly also said he expects to pay a higher dividend next year. Kelly spoke at the same conference. In April 2009, Bank of New York Mellon cut its dividend to 9 cents from 24 cents.
Bank of America (BAC) CEO Brian Moynihan on Tuesday told investors at the conference that the bank wants to increase its dividend "as soon as we can." According to Dow Jones Newswires, he also said that the the dividend rate will be closer to 30% of earnings. B of A slashed its quarterly dividend to a penny from 32 cents per share in the first quarter of 2009.
The 19 biggest U.S. banks are currently undergoing a second round of stress tests by the Federal Reserve to determine if they will be able to withstand another financial crisis. The banks have to submit financial plans to the Fed by mid-January; banks that pass the tests will then be able to increase dividend payments.
The Fed subjected the same banks to a first round of stress tests in 2009.
"We hope to be in the early group with a dividend increase," said CEO Kelly King on Wednesday, speaking at the Goldman Sachs U.S. Financial Services Conference, according to Reuters.
In May 2009, BB&T cut its quarterly dividend to 15 cents per share from 47 cents as a result of the financial crisis that hammered both the banking industry and the country in the fall of 2008. Prior to that, BB&T had raised its dividend for 37 straight years.
BB&T won't be alone. Bank of New York Mellon (BK) CEO Robert Kelly also said he expects to pay a higher dividend next year. Kelly spoke at the same conference. In April 2009, Bank of New York Mellon cut its dividend to 9 cents from 24 cents.
Bank of America (BAC) CEO Brian Moynihan on Tuesday told investors at the conference that the bank wants to increase its dividend "as soon as we can." According to Dow Jones Newswires, he also said that the the dividend rate will be closer to 30% of earnings. B of A slashed its quarterly dividend to a penny from 32 cents per share in the first quarter of 2009.
The 19 biggest U.S. banks are currently undergoing a second round of stress tests by the Federal Reserve to determine if they will be able to withstand another financial crisis. The banks have to submit financial plans to the Fed by mid-January; banks that pass the tests will then be able to increase dividend payments.
The Fed subjected the same banks to a first round of stress tests in 2009.
Tuesday, December 7, 2010
All About the Benjamins
The Treasury Department has a billion dollar problem on its hands. No, it's not Citigroup, inflation or the Troubled Asset Relief Program. It's the $100 bill.
About 1.1 billion new $100 bills have been quarantined by the Treasury Department's Bureau of Engraving and Printing because of a creasing problem. The billions of bills -- a whopping $110 billion -- will be held in vaults across the country where workers will sort the good bills from the bad. Because the flaw was difficult to detect, inspections of the quarantined bills will be done by hand.
About 1.1 billion new $100 bills have been quarantined by the Treasury Department's Bureau of Engraving and Printing because of a creasing problem. The billions of bills -- a whopping $110 billion -- will be held in vaults across the country where workers will sort the good bills from the bad. Because the flaw was difficult to detect, inspections of the quarantined bills will be done by hand.
The jazzy new bills were scheduled to go into circulation on Feb. 10, although the government announced on Oct. 1 that the currency was being delayed.
The new $100 note is the last U.S. bill to be redesigned with enhanced security features. It will have a 3-D security strip and a disappearing Liberty Bell. The government first started redesigning U.S. bills in 2003, in an effort to prevent counterfeiting. The $100 is the most counterfeited U.S. bill, according to the Federal Reserve.
Monday, December 6, 2010
Obama Hints at Extension of Tax Cuts
President Barack Obama made some encouraging comments about an extension of the Bush-era tax cuts.
In a speech today at Forsyth Technical Community College in Winston-Salem, N.C., the president said that a deal between Democrats and Republicans to extend the tax cuts is needed "even if it's not 100% of what I want."
Obama also said that any deal should include an extension of unemployment benefits. Long-term unemployment benefits, which had already been extended by Congress for up to 99 weeks from 26 weeks, began to expire for about 2 million Americans last week.
Democrats wanted an extension of tax cuts only for the "middle class" -- couples making up to $250,000 a year and individuals making up to $200,000 a year, but the Senate on Saturday rejected that measure. Democrats also want to make tax cuts for that middle class permanent, while Republicans want to make tax cuts permanent for everyone. The GOP had resisted an extension of unemployment benefits without a plan by Congress to pay for it.
A compromise is expected to come in the next few days, however, and a deal will likely keep current tax rates the same for all income levels, as well as include an extension of unemployment benefits.
Without a deal, nearly every American taxpayer will see higher tax rates beginning on Jan. 1.
"The recovery is simply not happening fast enough," President Barack Obama said.
In a speech today at Forsyth Technical Community College in Winston-Salem, N.C., the president said that a deal between Democrats and Republicans to extend the tax cuts is needed "even if it's not 100% of what I want."
Obama also said that any deal should include an extension of unemployment benefits. Long-term unemployment benefits, which had already been extended by Congress for up to 99 weeks from 26 weeks, began to expire for about 2 million Americans last week.
Democrats wanted an extension of tax cuts only for the "middle class" -- couples making up to $250,000 a year and individuals making up to $200,000 a year, but the Senate on Saturday rejected that measure. Democrats also want to make tax cuts for that middle class permanent, while Republicans want to make tax cuts permanent for everyone. The GOP had resisted an extension of unemployment benefits without a plan by Congress to pay for it.
A compromise is expected to come in the next few days, however, and a deal will likely keep current tax rates the same for all income levels, as well as include an extension of unemployment benefits.
Without a deal, nearly every American taxpayer will see higher tax rates beginning on Jan. 1.
"The recovery is simply not happening fast enough," President Barack Obama said.
Friday, December 3, 2010
A Disappointing Jobs Report
So much for that optimism about an economic recovery.
Today's jobs report from the Labor Department was a bust. The U.S. economy added far fewer jobs in November than economists had expected, and the unemployment rate rose to the highest level since April. Nonfarm payrolls rose by 39,000 last month, way below the 150,000 gain that had been expected. The unemployment rate rose to 9.8% from 9.6%. Economists had expected the rate to hold steady at 9.6%.
October's number was revised higher to a gain of 172,000 jobs from an originally reported 151,000 increase.
The number of unemployed Americans rose to 15.1 million last month, and 6.3 million people, or 41.9% of unemployed Americans, have been out of work for 27 weeks or longer. The so-called underemployment rate, which includes people who have given up looking for a job and those who have been forced to work part-time but want a full-time job, held steady at 17%.
Average hourly earnings were $22.75 last month, up a penny from October. The average work week held steady at 34.3 hours.
Meanwhile, Republicans are using today's report to bolster their calls to extend the Bush tax cuts. "Today's heartbreaking unemployment report should be yet another wake-up call to Democrats that raising taxes in the middle of the worst economy in 25 years is a mistake," said Rep. Mike Pence (R-IN) in a statement. Democrats, on the other hand, say that today's report supports the extension of jobless benefits.
So what does this mean for a job-based recovery? It doesn't look good. The jobless rate has been above 9% for 19 months, the longest stretch of time since the Labor Department started tracking data in 1949, and many experts believe it will stay at such levels. The labor market needs about 120,000 to 150,000 new jobs each month to keep up with the population alone, economists say, and gains of about 300,000 to make any dent in the jobless rate. So far, the economy hasn't come close -- it has added more than 300,000 jobs in only two months this year.
Today's jobs report from the Labor Department was a bust. The U.S. economy added far fewer jobs in November than economists had expected, and the unemployment rate rose to the highest level since April. Nonfarm payrolls rose by 39,000 last month, way below the 150,000 gain that had been expected. The unemployment rate rose to 9.8% from 9.6%. Economists had expected the rate to hold steady at 9.6%.
October's number was revised higher to a gain of 172,000 jobs from an originally reported 151,000 increase.
The number of unemployed Americans rose to 15.1 million last month, and 6.3 million people, or 41.9% of unemployed Americans, have been out of work for 27 weeks or longer. The so-called underemployment rate, which includes people who have given up looking for a job and those who have been forced to work part-time but want a full-time job, held steady at 17%.
Average hourly earnings were $22.75 last month, up a penny from October. The average work week held steady at 34.3 hours.
Meanwhile, Republicans are using today's report to bolster their calls to extend the Bush tax cuts. "Today's heartbreaking unemployment report should be yet another wake-up call to Democrats that raising taxes in the middle of the worst economy in 25 years is a mistake," said Rep. Mike Pence (R-IN) in a statement. Democrats, on the other hand, say that today's report supports the extension of jobless benefits.
So what does this mean for a job-based recovery? It doesn't look good. The jobless rate has been above 9% for 19 months, the longest stretch of time since the Labor Department started tracking data in 1949, and many experts believe it will stay at such levels. The labor market needs about 120,000 to 150,000 new jobs each month to keep up with the population alone, economists say, and gains of about 300,000 to make any dent in the jobless rate. So far, the economy hasn't come close -- it has added more than 300,000 jobs in only two months this year.
Thursday, December 2, 2010
Retail Sales Jump, Thanks to 'Black Friday'
There was more evidence that U.S. consumers are back in action today. Many retailers saw better-than-expected sales in November, thanks to strong "Black Friday" and "Cyber Monday" results.
Sales at stores open at least one year jumped 6% in November, well above expectations for a 3.6% gain, according to the Thomson Reuters Same-Store Sales Index. The increase was also a big jump from last November's 0.6% gain.
Many retailers, including Macy's (M), started their holiday promotions before "Black Friday," the day after Thanksgiving that unofficially kicks off the holiday shopping season. Macy's saw sales rise 6.1%, above expectations for a 5% gain, while fellow department store chain J.C. Penney's (JCP) sales jumped 9.2%, topping the consensus estimate for a 3.1% increase. Kohl's (KSS) also fared well, with a 6.1% increase in November sales, above expectations for a 2.8% gain.
Teen retailer Abercrombie & Fitch had a fantastic November, with sales soaring 22%, far better than the 6.8% estimate, but rival Aeropostale (ARO) had a disappointing month, with sales down 1%, worse than expectations for a 0.6% gain.
Discount stores also had a good month, with Target (TGT), Costco Wholesale (COST) and TJX (TJX), the parent of TJMaxx, beating expectations. Target's sales were up 5.5%, above the 3.7% estimate, Costco's sales rose 9%, above analysts' 6.2% estimate, and TJX's sales rose 3%, beating the 2.9% estimate.
While retailers are hoping the momentum will continue through Christmas, UBS analyst Roxanne Meyer told MarketWatch to be cautious. "It’s too soon to call holiday overall,” she said. “It was “a decent November, but will Black Friday-type promotions continue?”
Ken Perkins, president of Retail Metrics, thinks so. "Across the board, there was widespread strength,” Perkins told Bloomberg. “The consumer is feeling better about their situation and is more inclined to spend on discretionary purchases. It bodes well for what will come over the next three and a half weeks.”
Sales at stores open at least one year jumped 6% in November, well above expectations for a 3.6% gain, according to the Thomson Reuters Same-Store Sales Index. The increase was also a big jump from last November's 0.6% gain.
Many retailers, including Macy's (M), started their holiday promotions before "Black Friday," the day after Thanksgiving that unofficially kicks off the holiday shopping season. Macy's saw sales rise 6.1%, above expectations for a 5% gain, while fellow department store chain J.C. Penney's (JCP) sales jumped 9.2%, topping the consensus estimate for a 3.1% increase. Kohl's (KSS) also fared well, with a 6.1% increase in November sales, above expectations for a 2.8% gain.
Teen retailer Abercrombie & Fitch had a fantastic November, with sales soaring 22%, far better than the 6.8% estimate, but rival Aeropostale (ARO) had a disappointing month, with sales down 1%, worse than expectations for a 0.6% gain.
Discount stores also had a good month, with Target (TGT), Costco Wholesale (COST) and TJX (TJX), the parent of TJMaxx, beating expectations. Target's sales were up 5.5%, above the 3.7% estimate, Costco's sales rose 9%, above analysts' 6.2% estimate, and TJX's sales rose 3%, beating the 2.9% estimate.
While retailers are hoping the momentum will continue through Christmas, UBS analyst Roxanne Meyer told MarketWatch to be cautious. "It’s too soon to call holiday overall,” she said. “It was “a decent November, but will Black Friday-type promotions continue?”
Ken Perkins, president of Retail Metrics, thinks so. "Across the board, there was widespread strength,” Perkins told Bloomberg. “The consumer is feeling better about their situation and is more inclined to spend on discretionary purchases. It bodes well for what will come over the next three and a half weeks.”
Wednesday, December 1, 2010
"The Moment of Truth"
President Barack Obama's nonpartisan debt-reduction commission released its final plan today, called "The Moment of Truth," with a goal to achieve nearly $4 trillion in deficit spending by 2020. The president organized the commission in February to deal with the ballooning deficit, which is expected to top $1.3 trillion this year.
"America cannot be great if we go broke," co-chairmen Erskine Bowles and Alan Simpson said in the final report.
The plan takes direct aim at the nation's tax code, proposing sweeping changes across the board in an effort to both simplify it and avoid losing billions in "backdoor" taxes. The commission proposes taxing capital gains and dividends at normal income rates (they are currently taxed at 15%), eliminating the Alternative Minimum Tax and increasing gasoline taxes by 15 cents a gallon. The plan calls for capping mortgage-interest deductions and offering no credit for mortgage interest from a second home.
It also calls for lowering corporate taxes.
Read the official report here
The plan also calls for the elimination of 200,000 federal jobs by 2020, as well as cuts to Medicare and increasing the normal retirement age to 68 by 2050.
Sen. Jedd Gregg (R-NH) and Sen. Kent Conrad (D-ND) today expressed their support for the plan, but the proposal has generated a firestorm of criticism from Democrats and Republicans alike, as well as from a growing number of special interest groups.
A vote on the plan was originally set for today; it has been rescheduled for Friday. At least 14 of the 18 panel members need to approve the plan in order for it to move to Congress.
"America cannot be great if we go broke," co-chairmen Erskine Bowles and Alan Simpson said in the final report.
The plan takes direct aim at the nation's tax code, proposing sweeping changes across the board in an effort to both simplify it and avoid losing billions in "backdoor" taxes. The commission proposes taxing capital gains and dividends at normal income rates (they are currently taxed at 15%), eliminating the Alternative Minimum Tax and increasing gasoline taxes by 15 cents a gallon. The plan calls for capping mortgage-interest deductions and offering no credit for mortgage interest from a second home.
It also calls for lowering corporate taxes.
Read the official report here
The plan also calls for the elimination of 200,000 federal jobs by 2020, as well as cuts to Medicare and increasing the normal retirement age to 68 by 2050.
Sen. Jedd Gregg (R-NH) and Sen. Kent Conrad (D-ND) today expressed their support for the plan, but the proposal has generated a firestorm of criticism from Democrats and Republicans alike, as well as from a growing number of special interest groups.
A vote on the plan was originally set for today; it has been rescheduled for Friday. At least 14 of the 18 panel members need to approve the plan in order for it to move to Congress.
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