Business News You Need Today: Aug. 18, 2010
Here's news from the business world and other money matters to watch out for Wednesday (last updated at 7:59 a.m. Eastern time)
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FCC Bungling Propelled 'Net Neutrality' Deal: Efforts by the Federal Communications Commission in recent years to maintain a level playing field for Internet traffic may have been well-intentioned. But the agency today finds its "open Internet policy" nearly untenable after FCC-sponsored talks between Internet providers broke down. As DailyFinance's Sam Gustin reports, the collapse in negotiations opened the door for Google (GOOG) and Verizon Communications (VZ) to forge their own much-scrutinized deal.
GM IPO Appears On Hold: General Motors' much-anticipated initial public-stock offering has been put on hold, according to news reports. As late as Tuesday morning, New York time, paperwork for the IPO was expected to be filed Tuesday with U.S. regulators. GM has declined to comment on the stock offer. When the deal does go forward, the auto giant will get proceeds from the sale of preferred shares, and won't sell shares itself in the common offering, Bloomberg News reported.
Target Quarterly Earnings Rise: Target (TGT) reported earnings rose 14% in the second quarter to $679 million up from $594 million a year ago. Per-share earnings rose 16.5% to 92 cents a share, the company said in a statement, matching analyst estimates. Target plans to hold a conference call later Wednesday morning to review the quarter. Unknown is whether executives will be willing to discuss the controversy Target finds itself in following a $150,000 political donation last month to a group backing conservative, anti-gay gubernatorial candidate Tom Emmer. Gay-rights advocacy organization Human Rights Campaign has asked Target to make a similar donation to gay causes. But negotiations to move ahead with the proposal were halted Monday, prompting renewed protests.
American Apparel Facing Cash Crisis: Hip fashion retailer American Apparel (APP) may default on loan agreements with lenders, the company said Tuesday, citing weakness in its business. The clothier said it may not have sufficient cash on hand to remain in business for the next 12 months if it can't reach a deal with its creditors to avoid default. The news of a potential loan default came on the same day that the 279-store chain said it expects to lose $5 million to $7 million in the second quarter.
Data Suggest Slow Growth Ahead: Statistics out this week from the Federal Reserve suggest the outlook for the U.S. economy remains bright. But, if you compare the data side-by-side, the numbers paint a less-encouraging picture that could indicate tough times ahead, as DailyFinance contributor Michael Panzner explains.
GM, China Partner Ink Engine Pact: General Motors and Chinese partner SAIC Motor plan to jointly develop small, fuel-efficient engines to be used in vehicles sold in China and eventually worldwide, GM said Wednesday. Utilizing facilities in Detroit and Shanghai, the companies plan to develop 1 liter and 1.5 liter direct-injection, turbocharged gasoline engines to be used by both manufacturers. The project complements plans by GM and SAIC to expand sales in other developing markets, especially India.
Jumping Off The Home-Buying Fence: Americans' unwillingness to buy homes is a primary reason the nation's economy remains in the doldrums. Given record-low interest rates and falling home prices, home sales should be through the roof. So why aren't people buying? WalletPop's Anne Brenoff examines the reason home buyers are sitting on the fence and what they can do to get over it.
Are Marshmallows The New Cupcake? Cupcake fanaticism is an annoying peculiarity of modern life in the U.S. But are the sweet treats following dinner-plate-sized cookies and deep-fried "anything" into the heap of food-fad history? Whether Americans have had their fill of overpriced cupcakes remains unclear, but Luxist's Rigel Celeste has spied what she thinks is the next hot thing in gastronomical delights -- gourmet marshmallows.
