Business News You Need Today: Aug. 20, 2010
Economic Reports Affirm Slowing: Data released Thursday raised further questions about the robustness of the economic recovery, sending stocks lower on Wall Street. The Labor Department reported initial claims for jobless benefits unexpectedly rose 12,000 to 500,000, the highest level since November, while a measure of manufacturing activity, the Philadelphia Federal Reserve Index, fell dramatically into negative territory in August. The Conference Board also revised downward its measure of economic activity for June to a drop of 0.3% from a decline a 0.2%, although it did report a slight 0.1% rise for July, bringing the group's Leading Economic Index to 109.8.
BP Accused Of Hiding Gulf Oil Data: Transocean (RIG), the company that owned the doomed Deepwater Horizon rig in the Gulf of Mexico, has accused BP (BP) of hiding critical evidence needed to investigate the oil disaster. The claim is made in a letter sent to members of President Barack Obama's cabinet from one of Transocean's lawyers. BP has denied the charge, saying the letter contains "misguided and misleading assertions."
More Americans Pull Retirement Funds: Mutual-fund giant Fidelity reports that more Americans are tapping their retirement accounts to make ends meet. The number of workers making hardship withdrawals from 401(k) retirement plans reached a record high in the second quarter as the sagging economy drained household wealth. High unemployment, fewer working hours and reduced overtime prompted workers to make the withdrawals.
August Auto Sales Heat Up: The summer has been a disappointing one for retail sales, but consumers appear to be actively seeking out bargains in the showrooms of the nation's auto dealerships. Edmunds.com reports that August may go down as the best sales month so far this year, topping March. Among automakers expected to see gains from July's tepid results are BMW, Ford Motor (F), Honda Motor (HMC), Mercedes-Benz and Volkswagen. Current-month sales will also be competing against those recorded during last year's government-sponsored "cash-for-clunkers" program, which made August one of the best auto sales months in 2009.
'Lost' Gulf Oil Found: For weeks there has been speculation about what happened to millions of gallons of oil that spilled into the Gulf of Mexico following April's explosion of the BP (BP) Deepwater Horizon rig that killed 11 workers. Much of the oil seemed to have disappeared. But now scientists have discovered a massive 22-mile long plume of oily soup at the bottom of the ocean, according the latest issue of the journal Science, published Thursday. As DailyFinance's Gil Rudawsky reports, the plume of trapped oil sits 3,000 feet below the surface and provides some clues as to where all the oil has gone.
Home Ownership Not So Wise? To many Americans owning a home is one of the smartest investments they can make. But not so fast, says DailyFinance's James Altucher. From transaction costs to the stress caused from carrying huge levels of mortgage debt to weather-related maintenance, owning a home isn't right for everyone. In fact, he says, home ownership is one of the biggest scams ever perpetrated on the American public.
Online Spending Rebounds: Online retail sales in the U.S. rose during the first half of the year after recording their first-ever decline last year. Americans spent $111 billion online for retail products through June, up 7% from a year earlier, with a year-over-year increase of 9% in the second quarter alone, research firm ComScore (SCOR) said Thursday. The increase was attributed more to a change of spending habits than a recovery in consumer spending, as cash-strapped consumers employed the Internet to seek out bargains.
Oil Prices Move Higher: After falling sharply during Thursday trading in New York, crude oil futures rebounded slightly in Asia Friday on expectations that China's energy demand will offset weak economic growth in the U.S. and Europe. The price for light, sweet crude for September delivery rose 14 cents to $74.57. October Brent crude rose 22 cents to $75.52 a barrel in London trading.
Intel Snaps Up McAfee: Intel (INTC) agreed Thursday to buy security giant McAfee (MFE) in a surprise $7.68 billion bid by Intel to move its technology beyond computers. As DailyFinance's Dawn Kawamoto reports, the chipmaker now views security at nearly the same level as its emphasis on Internet connectivity and developing more energy-efficient chips.
Whirlpool Cuts Jobs In Arkansas: Whirlpool (WHR) announced a new round of layoffs at a refrigerator plant in Fort Smith, Ark., on Thursday, citing weaker consumer demand. The world's largest appliance maker wouldn't say how many jobs would be lost. The cuts are set to begin in October. Whirlpool has been steadily shifting work from the plant to Mexico during the last few years. Once home to 4,600 workers, the Fort Smith plant employed about 1,000 workers at the start of the year.
Real Housewife's Home For Sale: The house belonging to Real Housewives of Atlanta star DeShawn Snow and her husband, Eric, has hit the Georgia real-estate market for a cool $4.998 million, Luxist reports. The Snows are divorcing after the former NBA player admitted fathering a child with another woman. The six-bedroom, 10,000-square-foot home in affluent Alpharetta was built by the Snows in 2008. Among its features are an outdoor kitchen with barbecue station and an outdoor fireplace.