Sears shares plunge on surprise 2Q loss
CHICAGO (AP) -- Once a
mainstay in American shopping culture, the parent of Sears and Kmart stores
took another step backward Thursday, announcing a surprising second-quarter
loss that dimmed hopes about the ailing merchant's future.
Although Sears Holdings
Corp. is paying down debt and has a $1.3 billion cash war chest -- enough to
give investors confidence in its financial footing for now -- experts say it
desperately needs to end years of declining sales if it wants to stay viable.
Led by Chairman Edward
Lampert and an interim CEO who's been at the helm for more than 18 months,
Sears continues to struggle to attract shoppers who, even before the recession,
were taking their wallets to competitors that offered more products at cheaper
prices with more appealing store atmospheres.
Obama admin. to end cash for
clunkers on Monday
WASHINGTON (AP) -- The Obama
administration will bring to an end the popular $3 billion Cash for Clunkers
program on Monday, giving car shoppers a few more days to take advantage of big
government incentives.
The Transportation
Department said Thursday that the government will wind down the program on
Monday at 8 p.m. EDT. Car buyers can receive rebates of $3,500 or $4,500 for
trading in older vehicles for new, more fuel-efficient models.
Through Thursday, auto
dealers have made deals worth $1.9 billion and are on pace to exhaust the
program's $3 billion in early September. The incentives have generated more
than 457,000 vehicle sales. Administration officials said they have reviewed
nearly 40 percent of the transactions and have already paid out $145 million to
dealers.
Stocks advance on more signs
of economic pickup
NEW YORK (AP) -- More signs
that the economy is creeping toward recovery encouraged investors to move
further into stocks -- but at a cautious pace.
Stocks rose moderately
Thursday in very light volume. There were no dramatic economic reports, but a
smattering of more upbeat data convinced more investors to move some money out
of the safety of Treasury bonds and into stocks. Financials were particularly
in demand after a report quoting American International Group Inc.'s CEO as
saying the company will repay its bailout loans from the government.
News from the Philadelphia
Federal Reserve of a pickup in mid-Atlantic manufacturing also lifted the
market, having offset a weaker-than-expected report on first-time claims for
unemployment.
Traders keep buying old GM
stock, despite warnings
DETROIT (AP) -- Whether it's
a matter of ignorance or greed, people are still buying General Motors stock,
even though the company and the government have warned that the shares will
someday be worthless.
Investors are picking up
millions of shares every day, thinking they'll profit from what is really a hodgepodge
of outdated factories and a pile of debt left behind when the new General
Motors Co. exited bankruptcy court protection.
Instead, they could end up
losing money very quickly. The price of the shares, currently under $1, has
ratcheted up or down as much as 50 cents in one day.
Bernanke's tough task:
Withdrawing emergency aid
WASHINGTON (AP) -- When the
financial system was teetering, Federal Reserve Chairman Ben Bernanke flooded
it with trillions of dollars to save the banks and free up credit for consumers
and businesses.
Looming in the future is a
high-risk challenge for the economy's rescuer-in-chief: He will have to mop up
that money without disrupting a nascent recovery.
And timing is vital. Act too
fast, and Bernanke risks choking off lending to businesses and everyday
Americans. Wait too long, and he risks setting off crippling inflation.
Assuming he manages to help
usher in a sustained recovery, Bernanke, like his predecessors, will eventually
face still another challenge: He will be under enormous political pressure to
keep interest rates low, even though that could speed inflation.
Weak job market could hamper
economic recovery
WASHINGTON (AP) -- The job
market is thawing at a snail's pace, raising doubts about whether consumer
spending will become vigorous enough to sustain an economic recovery anytime
soon.
An index of economic
indicators and a regional manufacturing report released Thursday raised some
optimism. But an unexpected rise in first-time claims for unemployment aid
signaled that jobless Americans are still having a hard time finding work.
Many analysts expect the
economy to grow between 2 and 3 percent in the second half of this year, as
businesses restock their shrunken stocks of goods. But spending is likely to
remain subdued. And as a result, many of the same economists expect growth to
slow in 2010.
Mortgage delinquencies hit
record high in Q2
WASHINGTON (AP) -- With the
recession throwing thousands of people out of work daily, more than 13 percent
of American homeowners with a mortgage have fallen behind on their payments or
are in foreclosure.
The record-high numbers
released Thursday by the Mortgage Bankers Association are being driven by
borrowers with traditional fixed-rate mortgages, rather than the shady subprime
loans with adjustable rates that kicked off the mortgage crisis. As of June,
more than 4 percent of all borrowers were in foreclosure, while about 9 percent
had missed at least one payment.
And the layoffs keep coming.
Lockheed Martin Corp. said this week it's handing out about 800 pink slips in
its space systems division, and audio conferencing company Polycom Inc. said it
will cut about 80 positions.
Heinz 1Q profit drops but
tops analysts' estimates
PORTLAND, Ore. (AP) -- H.J.
Heinz Co. said Thursday that its fiscal first-quarter profit fell 7 percent
largely due to the stronger dollar, but the results topped analysts' estimates.
Heinz earned $212.6 million,
or 67 cents per share for the quarter ended July 29, compared with $229
million, or 72 cents per share, a year earlier.
Analysts predicted profit of
62 cents per share for the Pittsburgh-based company, according to a Thomson
Reuters survey. Analysts' estimates normally exclude one-time items
Gap reports slightly higher
2Q profit
NEW YORK (AP) -- Gap Inc.
reported that second-quarter earnings rose slightly from a year earlier,
slightly beating Wall Street expectations despite a 7 percent decline in sales,
as the apparel chain cut costs.
The San Francisco-based
operator of Old Navy, Banana Republic and its namesake stores said Thursday
that it earned $228 million, or 33 cents per share, in the quarter ended Aug.
1.
That compares with $229
million, or 32 cents per share, in the year-ago period. Sales fell to $3.25
billion from $3.50 billion in the year-ago period. Analysts surveyed by Thomson
Reuters were projecting 32 cents per share on revenue of $3.23 billion.
News CEO Murdoch
compensation drops to $18 mln
LOS ANGELES (AP) -- Rupert
Murdoch, the chief executive and controlling shareholder of News Corp., saw his
compensation drop 40 percent in fiscal 2009 as weak earnings reduced his
incentive pay, according to an Associated Press review of regulatory filings.
Murdoch, 78, was awarded a
compensation package valued at $18 million, down from $30 million a year ago,
according to the review of News Corp.'s proxy filed Thursday with the
Securities and Exchange Commission.
His base salary of $8.1
million was unchanged, but his performance-based incentive pay fell 69 percent
to $5.4 million from $17.5 million a year ago.
By The Associated Press
The Dow Jones industrials
rose 70.89, or 0.8 percent, to 9,350.05.
The Standard & Poor's
500 index rose 10.91, or 1.1 percent, to 1,007.37, while the Nasdaq composite
index gained 19.98, or 1.0 percent, to 1,989.22.
Benchmark crude for October
delivery gave up 92 cents to settle at $72.91 on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for September delivery fell 5.24 cents to settle at $1.9822 a gallon,
and heating oil for September delivery gave up 3.35 cents to settle at $1.8852
a gallon. Natural gas for September delivery lost 17.4 cents to settle at
$2.945 per 1,000 cubic feet.
In London, Brent prices fell
$1.26 to settle at $73.33 a barrel on the ICE Futures exchange.