Business NewsBrief
The U.S. trade deficit unexpectedly fell in June as exports advanced to an all-time high, offsetting another big surge in oil imports. The Commerce Department reported Tuesday the trade imbalance dropped to $56.8 billion in June, down by 4.1 percent from a revised May deficit of $59.2 billion. It was the smallest deficit in three months and much better than the $61.5 billion deficit Wall Street had been expecting.
Oil prices fell Tuesday in Asia to a 3-month low as a stronger dollar and weakening crude demand from China weighed on investor sentiment. Light, sweet crude for September delivery fell $1.45 to $113 a barrel in electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. The contract lost 75 cents overnight to settle at $114.45, the lowest close for a floor session since May 1.
Stocks headed for a mixed open Tuesday as investors juggled unease about the financial sector with enthusiasm over weak oil prices. Wall Street’s latest reminder that troubles remain in the financial sector came when JPMorgan Chase & Co. said late Monday it has incurred wider losses in its mortgage holdings so far in the third quarter than in the second quarter.
UBS AG, one of the hardest hit banks in the subprime mortgage crisis, said Tuesday that it had further losses and writedowns of $5.1 billion during the second quarter of 2008. Switzerland’s largest bank, which also announced further management changes, said its net loss attributable to shareholders for the three months ended June 30 was 358 Swiss francs ($331 million), compared with a profit of 5.5 billion francs during the year-earlier period.
The dollar continued to barrel to new multi-month highs against the euro and the pound Tuesday in tandem with oil’s drop. The 15-nation euro traded at $1.4888 early in New York, down from $1.4928 in late New York trading Monday. Earlier, the euro zone currency hit a new six-month low of $1.4813.
Consumer price inflation rate leapt to 4.4 percent in July, the government said Tuesday, making it difficult for the Bank of England to consider lowering interest rates to ward off the risk of recession. The report from the Office for National Statistics showed inflation is now at more than double the government’s target of 2 percent, after rising from 3.8 percent in June.
BP PLC said it shut down an oil pipeline that runs through Georgia on Tuesday as a precautionary measure, but added that it is unaware of any Russian bombings on pipelines in the region. BP said the 90,000-barrel-a-day pipeline to Supsa on Georgia’s Black Sea coast from Baku in Azerbaijan will remain closed indefinitely.
As a global recession looms, what better way to cope than to eat, drink and be merry? Even as consumers face soaring energy costs, rising food prices and higher mortgages or rent, it seems clear they’re not prepared to forgo many of life’s little treats _ alcohol, cigarette and candy makers are all reporting healthy sales amid the gloom.
TJX Cos. says second-quarter profit more than tripled from a year ago as the apparel discount retailer benefits from shoppers looking for cheaper alternatives. The retailer has also raised its earnings outlook. The retailer said Tuesday that it earned $200.2 million, or 45 cents per share, compared with $59 million or 13 cents per share, in the year-ago period. Revenue increased 7 percent to $4.6 billion from $4.3 billion.
Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress. The study by the Government Accountability Office, expected to be released Tuesday, said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period.
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