Business News You Need Today: Aug. 11, 2010
Wal-Mart Quietly Raises Prices: Consumers who think prices at their local Walmart have been on the rise lately may not be imagining things. A JPMorgan Chase (JPM) study of a Walmart Supercenter in Virginia found that the retail giant (WMT) has raised prices by nearly 6% on average during the past six weeks, reports DailyFinance's Jonathan Berr. The increase is the largest recorded by JPMorgan, which began its study in January 2009.
Fed To Buy Government Debt: Following its one-day meeting Tuesday, the Federal Reserve said it will begin small-scale purchases of government debt to bolster the flagging economic recovery. The move could help nudge down long-term rates on mortgages and corporate debt. But economists say it won't likely have a dramatic impact on stimulating growth. Citing "subdued" inflation, Fed governors also agreed to keep a key interest rate at near zero for an "extended period."
Financial Reforms Hurt Democrats: In the lead up to the fall elections, Republicans are benefiting from a shift in campaign contributions away from Democrats. The trend is outlined in a preliminary analysis of federal-level campaign contributions by the Center for Responsive Politics, a nonpartisan public research group. As DailyFinance's Gil Rudawsky reports, the swing to Republican candidates during the second quarter coincides with the passage of financial reform legislation pushed through by President Obama.
Adecco Swings To Profit: Adecco (AHEXY) reversed a year-ago loss in the second quarter as global demand for temporary staff surged, the temporary-staffing company said Wednesday. Zurich-based Adecco reported net earnings of €97 million ($126 million) compared to last year's €147 net loss, affected in part by restructuring costs. The company followed nearest rivals Randstad Holding of the Netherlands and U.S.-based Manpower (MAN) in reporting better profits, The Wall Street Journal reported. In a statement, Adecco said it expects continued growth, adding "there is no evidence of a slowdown of business in the third quarter."
Trade Gap Little Changed: The U.S. trade deficit likely changed very little in June, the government is expected to report today. Analysts polled by Bloomberg News expect the gap between imports and exports reached $42.1 billion in June, compared with a $42.3 billion shortfall in May. Data are due at 8:30 a.m. Eastern time. Looking forward, analysts expect Americans to spend less amid the slowdown in economic recovery, reducing imports. Exports, meanwhile, may also fall as demand for U.S.-made products cools in key markets, such as China.
China's Economy Slows Further: Economic activity in China continued to cool in July, according to data released Wednesday by the Chinese government. A push by regulators to ratchet down growth and limit the fallout from an overheated economy is working, an official said, according to The Wall Street Journal. Industrial output rose 13.4% in July compared to last year, a drop from June's 13.7% gain. China's measure of capital spending also slowed, gaining 22.3% last month compared to July 2009, but off the 25% pace seen in recent months.
Oil Prices Down, Demand Up: News of slowing economic growth in China caused oil prices to fall below $80 a barrel Wednesday in Asian trading. Benchmark crude for September delivery was down 64 cents to $79.61 a barrel in late afternoon. Separately, the International Energy Agency said it expects global oil demand will rise 2.2% this year and continue to grow in 2011 as economic conditions in Europe and developing countries improve.
Nintendo Wii Hits Sales Milestone: Video-game maker Nintendo (NTDOY) reports it has sold more than 30 million Wii gaming consoles in less than four years, an achievement the Japanese company said can be credited to the popularity of its multi-player games and the unit's reasonable price. Nintendo plans to introduce more new games in coming months to boost sales. But as DailyFinance's Douglas Mcintyre explains, sales of the aging Wii may have peaked compared to rival products from Microsoft (MSFT) and Sony (SNE).
Sweet Meat: For those not keen on watching their waistlines, the Wisconsin State Fair has just the treat (err, meal?): the Krispy Kreme Cheeseburger. As WalletPop's Sarah Coffey reports, the 1,000-calorie burger features a beef patty with melted cheese between two Krispy Kreme (KKD) doughnuts -- all for a mere $5. No word yet whether sales have been brisk enough for the North Carolina-based company to consider making the burger a permanent menu item.
Trump Opens Haughty New Bar: This may be economically a precarious time to open a swanky new bar, but don't tell real-estate mogul Donald Trump. Just as summer winds down, the Donald has unveiled a high-concept nightspot within his SoHo condominium complex in lower Manhattan, reports Luxist's Deidre Woollard. In addition to novel cocktails, the tony watering hole, known as Bar d'Eau, features an outdoor pool, cascading waterfall, as well as three private cabanas and a bocce court.