Business News You Need Today: Aug. 25, 2010
Stocks Dive On Drop In Home Sales: Weak housing numbers sent stocks tumbling Tuesday in New York, after a report by the National Association of Realtors showed existing-home sales plummeted 27% to their lowest levels in more than a decade. The sharp drop worried investors who pushed the benchmark Dow Jones industrial average ($INDU) to a triple-digit loss, down 136 points, or 1.3%, to 10,039. The broader S&P 500 ($INX) dropped 1.5% and the Nasdaq Composite Index ($COMPX) fell 1.7%. More housing news is due today at 10 a.m. when the Commerce Department releases new-home sales for July. Analysts expect 340,000 newly built homes were sold during the month, up from June's 330,000.
Feds Investigating Jeep Fires: Federal officials have opened a probe into 3 million older models of the popular Jeep Grand Cherokee sports-utility vehicle, which have received reports of fuel-tank fires following a collision. The National Highway Traffic Safety Administration said the investigation covers 1993-2004 model-year vehicles. Records kept by the independent Center for Auto Safety show 254 people died in 172 fatal-fire crashes involving 1994 to 2008 Grand Cherokees. Tuesday's action by NHTSA may or may not lead to a recall of the vehicles.
Tyson Recalling Tainted Meat: A unit of Tyson Foods (TSN) is recalling about 380,000 pounds of deli meat distributed to Wal-Mart Stores (WMT) because the meat may be contaminated with potentially lethal bacteria. The meat, shipped only to Wal-Mart, has "Use By" dates that range from Aug. 20 to Sept. 10, according to the U.S. Department of Agriculture. No reports of illness have been received, USDA said. As WalletPop reports, Buffalo, N.Y.-based Zemco Industries produced the meat, which was used in prepared sandwiches sold nationwide.
Americans Carrying Less Debt: Credit-card debt fell sharply in the second quarter as more consumers paid down debts, TransUnion reported Wednesday. Average credit-card debt fell 13.4% to $4,951 to the lowest level since 2002 as consumers cut back purchases amid the nation's weak job market, the credit-reporting company said.
Toll Brothers Beats Earnings Estimates: Toll Brothers (TOL) swung to a profit in its fiscal third quarter, the luxury homebuilder reported Wednesday. The company said it earned $27.3 million, or 16 cents a share, in the quarter ending July, compared to a loss of $2.93 a share during the same quarter a year ago. The latest results beat analyst estimates of 14 cents a share, according to a Thomson Reuters poll.
Toshiba Developing 'Glasses-Free' 3D TV: Toshiba (TOSBF) reportedly is developing three 3D television models that the electronics maker hopes to bring to market by year's end. As DailyFinance's Dawn Kawamoto explains, if successful, Toshiba would become the first electronics maker in the world to offer 3D TVs that don't require glasses. The novel TVs would sell for about $1,200, given current exchange rates.
3Par Weighing HP Takeover: 3Par (PAR) said late Tuesday it's starting up merger talks with Hewlett-Packard (HPQ). In a regulatory filing, storage-device maker 3Par disclosed that its board had met Monday and determined HP's unsolicited acquisition proposal was "reasonably likely" to lead to a deal that would be "superior" to the one put forward by Dell (DELL) last week.
Medtronic Cuts Earnings Guidance: In reporting its fiscal first quarter earnings Tuesday, medical-device maker Medtronic (MDT) said weaker demand for medical implants has forced the company to slash 2011 earnings expectations. The Minneapolis-based company said it earned $868 million, or 80 cents a share, during the quarter. Revenue fell 4% to $3.77 billion, Medtronic said.
Dell Introduces New Smartphone: Computer-maker Dell (DELL) began selling its Aero smartphone in the U.S. on Tuesday, in a bid to further diversify its business as profit margins for personal computers increasingly grow thin. The new phone, which uses an older version of Google's (GOOG) Android operation system, sells for $99 with a two-year AT&T (T) contract, Dell said.
Recovery Stronger Than Previous Ones: The nation's job market may be in better shape than it seems, according to new report by Challenger, Gray & Christmas. The Chicago-based employment-services firm says the current economic recovery started sooner and is progressing faster than the jobless recoveries that followed previous recessions in the early 1990s and 2001. That suggests the employment market may be recovering remarkably quickly, given the depth of the recent recession.
J. Crew Opens Manhattan Men's Shop: Fashion-retailer J. Crew Group (JCG) has opened its latest men's store, situated on New York's Madison Avenue. As Luxist reports, what's surprising is that it took Manhattan-based J. Crew so long to move to the city's well-heeled Upper East Side, given that the company's collection of classic, preppy clothing fits right in with the neighborhood.