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Dow Jones News Top Stories Of The Day – August 31, 2006 August 31, 2006

Posted by notapundit in Economic News, Main.
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RETAILERS’ SALES MIXED AMID WEAKENING HOME MARKET

Retailers deliver mixed sales for August, stoking worries that a slowing U.S. housing market is poised to put a damper on the fall and holiday shopping seasons. Wal-Mart, which reported its results Saturday, projects September sales to rise 1%-3%. Target’s August sales rise less-than-expected 2.8% and sees growth this month of 3%-5%. Federated posts 3.8% increase while J.C. Penney reports 0.5% decline.

US SPENDING UP; FACTORY ORDERS DROP
Personal income rises 0.5% in July and consumption increases by 0.8%, after rising 0.4% in June. Also, factory orders fall 0.6% in July on transportation weakness. Chicago PMI slips, while weekly jobless claims drop 2,000 to 316,000.

BERNANKE WANTS TO CONTROL INFLATION
Fed chairman says, “In the long run, what we would like to control is headline inflation.” He adds “a case can be made” for continued strong productivity growth in the longer-term. Poole says price stability is central bank’s main focus.

H&R BLOCK POSTS WIDER 1Q LOSS
H&R Block reports a 1Q net loss of $131.4 million, or 41c a share, compared with a year-ago loss of $28 million, as revenue declines 12% to $540.8 million.

NASA TAPS LOCKHEED FOR SPACE CAPSULE
NASA picks Lockheed Martin to build the Orion capsule aimed at reviving U.S. manned space exploration. NASA is due to announce the winner this afternoon.

GOLDCORP DOWN AS GLAMIS DEAL ANGERS HOLDERS
Goldcorp shares fall 10%, following its offer to buy rival Glamis Gold for $8.6 billion in an all-share deal on concerns the deal will dilute earnings and cash flow.

GM EXPECTED TO CUT 4Q PRODUCTION
Auto experts anticipate the company making fewer cars in the quarter, following Ford’s plan to cut production 21% from a year earlier. GM will announce its 4Q production plan tomorrow, when auto makers release August sales data.

FORD CONSIDERING SALE OF ASTON MARTIN
CEO Ford says potential sale of some or all of the luxury brand “may be an attractive opportunity to raise capital and generate value.” Ford has launched formal sale negotiations that are open to all interested parties. Shares add 1%.

NO TIMELINE FOR FURTHER RESTART OF PRUDHOE BAY
BP has “no target date” to restore production out of the eastern half of Alaska’s Prudhoe Bay, says a spokesman. BP also hasn’t notified the Dept. of Transportation, which would need about two weeks to grant permission to use any pipelines in east Prudhoe Bay.

SALES OF BRISTOL PLAVIX FALL AS JUDGE MULLS ORDER
As a federal judge mulls whether to halt the distribution of a cheaper generic version of the blockbuster heart drug Plavix, weekly sales fall 77% for the week ended Aug. 4, the last full week before the Aug. 8 launch of generic Plavix.

HEINZ 1Q NET SOARS ON GROWTH AT CORE BRANDS
Ketchup maker reports net income of $194.1 million, or 58c a share, on sales of $2.06 billion. Analysts expected EPS of 54c on sales of $2.05 billion. Heinz expects results of recent proxy vote to be certified by mid-Sept. Shares edge lower.

UPS PILOTS APPROVE NEW CONTRACT
Pilots at UPS approve a new contract, concluding nearly four years of battle that included a strike threat and derailed negotiations as recently as May. Pilots will receive raises and signing bonuses up to $60,000. Shares edge lower.

SCIENTISTS USE GENE THERAPY TO FIGHT TUMORS
Government scientists save two men dying of melanoma by genetically altering their own white blood cells to attack their tumors — deemed the first major success in battling cancer with gene therapy.

AIRLINES LOOKING LESS FRAGILE
International Air Transport Association cuts its forecast for how much money the airline industry will lose this year by nearly half despite higher jet-fuel estimates. Group says strong economic growth is boosting airline revenue.

ECB DOESN’T CHANGE INTEREST RATES
Amid a welter of indicators suggesting economic recovery in Europe has peaked and persistent inflation pressure, the European Central Bank keeps interest rates steady at 3% but signals a rise to come in October.

ACTAVIS TOPS BARR’S PLIVA BID
Icelandic generic-drug firm exceeds Barr Pharmaceuticals’ $2.43 billion bid for Croatia’s Pliva with a $2.5 billion offer. Barr’s proposal received Pliva board approval last week. Board to give opinion on offer within two weeks.

JDS UNIPHASE SLUMPS AMID FORECAST
Shares tumble 15% a day after the maker of fiber-optic networks posts weak fiscal 4Q gross margins and issues a disappointing 1Q revenue forecast. Analysts cautious on the stock.

DOW CHEMICAL TO CLOSE 3 PLANTS
Dow Chemical plans to close three plants in an effort to trim $160 million in annual structural costs by 2009. Move is expected to eliminate about 750 jobs and result in a 3Q charge of $550 million to $650 million. Shares gain 1%.

CANADIAN ECONOMY SLOWS SHARPLY
Canada’s gross domestic product expands 0.5% on a quarterly basis or an annualized 2.0%, the slowest pace since a 1.7% annualized growth in the third quarter of 2003, as the housing market cools and exports shrink.

ERNESTO COULD BECOME HURRICANE
Tropical storm’s top sustained winds now reach 70 mph, just shy of minimal hurricane strength, as some continues to approach Carolinas. Storm center about 90 miles southeast of Charleston, S.C.

======= DOW JONES NEWSWIRES ANALYSIS AND COMMENTARIES =======

SMALL CAPS
Shares End Flat; Retailers In Focus
Small stocks end little changed as trading volumes are light and retailers’ sales reports get a mixed response from investors. Jos. A. Bank Clothiers loses 16% after reporting a drop in same-store sales. Hot Topic falls 11%.

TIP SHEET
McMahon Steers New Global Fund
Portfolio manager Brian McMahon has a new challenge: steering the newest addition to Thornburg Investment Management’s stock mutual funds — the Thornburg Global Opportunities Fund.

============ U.S. MARKETS ACTION ===========
DJIA down 1.76 points to 11381.15
NASDAQ down 1.98 points to 2183.75
S&P 500 down 0.45 points to 1303.82
10-year T-note up 5/32 at 101 04/32 yield 4.732
NYMEX Spot Crude up $0.23 at $70.26/bbl at close
Dollar/Euro down 0.0017 at 1.2812

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