Wal-Mart Says Its Market Share Is Rising

Wal-Mart, the giant discount chain and unofficial barometer of consumer spending, posted flat year-over-year earnings in its most recent quarter — an accomplishment in this economy.

Most retailers — even discount stores, which have been faring relatively well — are not expected to report year-over-year sales growth in the first months of their fiscal year.

Several chains, including Bon-Ton, Saks, Sears and Dillard’s, are not even expected to make a profit, according to Retail Metrics, a research firm.

For the three months ended April 30, Wal-Mart, the country’s largest retailer, had a profit of $3.02 billion, or 77 cents a share, compared with $3.02 billion, or 76 cents a share, for the period a year ago. In earlier reports, Wal-Mart had warned that results would be hurt by currency exchange rates. http://www.nytimes.com/2009/05/15/business/15shop.html?ref=business

SEC Poised to Charge Mozilo With Fraud

The Wall Street Journal - The Securities and Exchange Commission staff is readying civil fraud charges against Countrywide Financial Corp. co-founder Angelo Mozilo, in what would be the highest-profile government legal action against a chief executive connected to the financial crisis.

The SEC staff sent a so-called Wells notice to Mr. Mozilo several weeks ago alerting him to the potential charges, people familiar with the matter said. Mr. Mozilo's lawyers could still persuade the SEC's commissioners that there isn't sufficient evidence to bring a case.

David Siegel, a lawyer for the 70-year-old Mr. Mozilo, declined to comment on the investigation and said there is no "fair basis" for any allegations against the former Countrywide chief executive.

The charges the SEC is considering include alleged violations of insider-trading laws and alleged failure to disclose material information to shareholders, according to people familiar with the matter.http://online.wsj.com/article/SB124224647957816523.html

U.S. Moves to Regulate Derivatives Trade

Federal regulators outlined plans to regulate the giant market for derivatives, a move aimed at avoiding a repeat of the turmoil created last year by certain financial institutions whose risk-taking in exotic financial instruments went largely unchecked.

Under a proposed raft of reforms, regulators could be given authority to force many standard over-the-counter derivatives to be traded on regulated exchanges and electronic-trading platforms. That would make it easier to see prices and make markets more transparent.

Firms with large derivative exposures or that trade more-complex derivatives would be subject to new reporting requirements. The proposal also calls for all standardized derivatives to go through clearinghouses that will guarantee trades and help cushion the impact of a collapse of a large financial institution.

The regulatory overhauls are in response to growing concerns of outsize risk and leverage among derivatives that trade directly between pairs of firms. Much trading in this market, estimated to total hundreds of trillions of dollars, now happens privately, and contracts are typically negotiated over the phone.http://online.wsj.com/article/SB124224226775916215.html

Economists See Long Road to Recovery

Economists in the latest Wall Street Journal survey see an end to the recession by autumn, but say it will take years for the economy to fully recover.

"In general, I think it will be a subdued recovery," said Paul Kasriel of The Northern Trust Corp.

On average, the 52 economists who participated in the survey project that the recession will end in August. They expect gross domestic product to contract 1.4% at a seasonally adjusted annualized pace in the current quarter, compared with the 6.1% drop recorded in the first quarter. Slow growth is expected to return by the third quarter, with the economy expanding more than 2% in the first half of 2010.

Kelly Evans and Phil Izzo discuss the findings of the latest WSJ economist survey, which found that while economists have stopped being pessimists, some still see at least one more quarter of negative growth.

The survey was conducted before the Commerce Department's report this week that retail sales fell 0.4% in April from the previous month, which left some economists questioning whether consumer spending is ready to rebound. Initial unemployment claims released Thursday brought more gloomy news: Seasonally adjusted claims in the week ended May 9 increased 32,000 to 637,000 from a revised 605,000 in the preceding week. Most of the losses can be chalked up to Chrysler LLC's 27,000 layoffs following its April 30 bankruptcy filing.http://online.wsj.com/article/SB124223735808916011.html#mod=testMod

Cargo Ships Treading Water Off Singapore, Waiting for Work

Sunrise in the Strait between Indonesia and Singapore, where 735 cargo ships were gathered Tuesday because of a sharp decline in global exports.
The New York Times - SINGAPORE — To go out in a small boat along Singapore’s coast now is to feel like a mouse tiptoeing through an endless herd of slumbering elephants.

One of the largest fleets of ships ever gathered idles here just outside one of the world’s busiest ports, marooned by the receding tide of global trade. There may be tentative signs of economic recovery in spots around the globe, but few here.

Hundreds of cargo ships — some up to 300,000 tons, with many weighing more than the entire 130-ship Spanish Armada — seem to perch on top of the water rather than in it, their red rudders and bulbous noses, submerged when the vessels are loaded, sticking a dozen feet out of the water.

So many ships have congregated here — 735, according to AIS Live ship tracking service of Lloyd’s Register-Fairplay in Redhill, Britain — that shipping lines are becoming concerned about near misses and collisions in one of the world’s most congested waterways, the straits that separate Malaysia and Singapore from Indonesia.

The root of the problem lies in an unusually steep slump in global trade, confirmed by trade statistics announced on Tuesday.

China said that its exports nose-dived 22.6 percent in April from a year earlier, while the Philippines said that its exports in March were down 30.9 percent from a year earlier. The United States announced on Tuesday that its exports had declined 2.4 percent in March. http://www.nytimes.com/2009/05/13/business/global/13ship.html

U.S. Median House Price Declines 14%

The median price for a single-family house fell 14% to $169,000 in the first quarter from a year earlier, the National Association of Realtors reported.

The trade group said first-time home buyers accounted for half of all purchases in the quarter, and many of them zeroed in on foreclosed homes. That dragged down the median, the Realtors said.

The median price for the latest quarter is down 26% from a peak of $227,600 in the third quarter of 2005. The latest median price was down from a year earlier in 134 of the 152 metro areas included in the survey.

The biggest increase was in the Cumberland area of Maryland and West Virginia, where the median price climbed 21% to $114,900. Debbie Grimm, manager of the Long & Foster real-estate brokerage in Cumberland, Md., said the area is attracting retirees and second-home buyers, particularly from Washington and Baltimore.http://online.wsj.com/article/SB124217092693512789.html

Retail Sales Post April Decline

The Wall Street Journal - WASHINGTON -- U.S. retail sales fell a second month in a row during April, as job losses and uncertainty about the economy put pressure on spending.

Retail sales decreased by 0.4% compared to the prior month, the Commerce Department said Wednesday. Economists expected an increase of 0.1%.

Sales in March were revised down, decreasing 1.3% instead of 1.2% as previously reported. Sales rose in January and February, after sliding six straight months.

Separately, U.S. import prices jumped last month by their largest amount in almost one year, reflecting a third-straight increase in oil prices. However, excluding oil, prices actually fell for a ninth-straight month, an indication that the global economic recession continues to take pressure off inflation in the U.S.http://online.wsj.com/article/SB124221752934414995.html#mod=testMod

Officials at GM Sell Their Shares

The Wall Street Journal - Seven General Motors officials dumped all of the stock they directly own in the auto maker as it faces scenarios that would either dilute or wipe out common shareholders.

On Monday, the same day Chief Executive Fritz Henderson said the company still could avoid seeking bankruptcy protection, six insiders, but not Mr. Henderson, disclosed selling an aggregate 204,711 shares at prices from $1.45 to $1.61 a share, or $323,657 in total.

In 4 p.m. New York Stock Exchange composite trading Tuesday, GM's shares fell 20%, or 29 cents, to $1.15, its lowest close in 76 years, on April 27, 1933.

Vice Chairman Robert A. Lutz, who moved into an advisory role last month and will retire by the end of the year, had the largest transaction, selling 81,360 shares for $130,990.

The recent sales followed a disclosure last month that an independent fiduciary, citing the possibility of a GM bankruptcy, sold all of the GM shares in two employee-benefit plans. Also last month, Maureen Kempston Darkes, the president of GM Latin America, Africa and Middle East, disposed of 18,471 shares for $33,433.

"These particular executives made the decision to sell their shares in advance of what we know is going to be happening over the next few weeks," GM spokeswoman Julie Gibson said.

GM is facing a June 1 restructuring deadline from the government and could file for Chapter 11 bankruptcy protection if it is unable to complete a debt-for-equity exchange for $27 billion in unsecured bonds.

Stephen J. Lubben, a bankruptcy-law professor at Seton Hall University School of Law in Newark, N.J., said bankruptcy is the likeliest outcome for GM and would render the shares practically worthless. Even if the exchange offer were to succeed, investors would be left with shares that won't be worth much, he said.http://online.wsj.com/article/SB124213933912010873.html

Advertising Losses Put Squeeze on TV News

The New York Times - It is getting so bad for local television stations that some are turning to newspapers for help.

The bankrupt Tribune Company has merged its TV stations and daily newspapers in Miami and Hartford, and it already produces a lighthearted morning show in south Florida with the help of the newspaper’s columnists. Bob Gremillion, the executive vice president for publishing, calls it a “circling the wagons” approach.

No one would dispute that “the two industries are very challenged,” he said. “We’re combining and fighting together.”

The mergers are an example of local TV’s agonizing search for new business models as some balance sheets turn red. Starting Monday in Chicago, four stations’ news departments are combining their camera crews. In other markets, stations are adding newscasts on the cheap even as they lay off people. On the opposite extreme, a handful of stations are closing their news divisions completely.

The news for stations has been grim lately: without election advertisements to defray the losses in automotive ads, a cross section of station owners reported 20 percent to 30 percent quarterly drops in revenue last week, suggesting that the local TV business is almost as weak as its print counterpart.

“Unfortunately, there was nowhere to hide during the current storm, as declines in both local and national advertising accelerated,” Timothy E. Stautberg, the chief financial officer for the E. W. Scripps Company, which owns newspapers in 14 markets and TV stations in 10 markets, told investors last week.

About two-thirds of Americans say they regularly get news from local TV, according to the Pew Research Center. News is responsible for 40 percent to 50 percent of a station’s revenue on average, and many stations are still profitable. But owners see their audiences splintering and they see their parent networks bypassing them on the Web. What they are struggling to maintain is relevance.http://www.nytimes.com/2009/05/11/business/media/11local.html

Estimate of Budget Deficit Now Tops $1.84 Trillion

WASHINGTON — The economic crisis is already taking a toll on the Obama administration’s new budget projections, adding $90 billion to its already historically high estimates of deficits for both this fiscal year and next.

The changes, reported on Monday by the Office of Management and Budget, brings the deficit for this fiscal year, which ends Sept. 30, to $1.84 trillion from a February projection of $1.75 trillion. For fiscal 2010, the new estimate is $1.26 trillion, up from $1.17 trillion.

As measured against the size of the economy, this year’s shortfall would be 12.9 percent of the overall economy, or gross domestic product. Next year’s deficit would be 8.5 percent of G.D.P. Even before the latest revisions those levels are the highest in more than 60 years, since the end of World War II. http://www.nytimes.com/2009/05/12/business/economy/12budget.html

Home Prices Continue to Crumble

New data shows existing-home sales near a 12-year low, with prices down close to 15%. J.P. Morgan economist Abiel Reinhart says there's evidence of continued pressure on the sector. Kelsey Hubbard reports.

Economists React: Jobs Report Is ‘Less Bad’

The Wall Street Journal - Economists and others weigh in on the smaller-than-expected decline in U.S. payrolls and the increase in the unemployment rate. # We remain cautious on the employment front, as job losses typically continue for 3-6 months after the trough of economic output. That suggests a peak in joblessness towards the end of the fourth quarter 2009, a peak which would cap off two full years of consistent monthly payroll declines… There’s some hope at the end of the rainbow, but the economy will keep busy hunting down the leprechaun for a few more months before we get there. –Guy LeBas, Janney Montgomery Scott

# Many are interpreting the April employment report as yet another sign that the economy is “stabilizing,” but the more accurate interpretation of these signs is that the economy’s pace of contraction is slowing, which is not quite the same as stability and s still a long way from the economy actually improving. –Richard F. Moody, Forward Capital
# This is less bad than the 690,000 average in February and March, and both manufacturing and service losses slowed, but it is hardly a triumph or even a stabilization. It is terrible, as is the rise in the unemployment rate to 8.9% from 8.5%. Soaring unemployment is depressing wage gains… There’s much further to go here; seriously bad news because without wage gains people can’t deleverage unless they cut spending deeply. –Ian Shepherdson, High Frequency Economicshttp://blogs.wsj.com/economics/2009/05/08/economists-react-jobs-report-is-less-bad/?mod=rss_WSJBlog?mod=blogmod

Recent Grads Face Hard Knock Times

Two recent college graduates are scraping by in the toughest job market in years. They're stuck between trying to find jobs that advance their careers and landing jobs that pay the bills. WSJ's Matt Rivera reports.

Jobless Rate Still Rising, But Not As Fast

The New York Times - The American job market remains dreadful and is still worsening, but at a slower pace than before — good news given the stomach-churning events of recent months. The government’s monthly employment report buoyed hopes that the longest, most punishing recession since the Great Depression may be relenting.

The numbers for April looked good only by comparison with recent months, with February’s net job loss revised up to 681,000, from 651,000, and March’s net losses revised up to 699,000, from 663,000. The rise in the unemployment rate, from 8.5 percent in March, was mostly because more people began seeking jobs who had not previously been looking for work

Those holding more optimistic outlooks focus on the government-led initiatives to stimulate the economy. A $787 billion spending and tax cut package is beginning to wash through the economy. The Federal Reserve and the Treasury have been pouring money into mortgage markets and other areas, bringing down the costs of borrowing..http://www.nytimes.com/2009/05/09/business/economy/09jobs.html

U.S. Jobless Rate Hits 8.9%, but Pace of Losses Eases

The New York Times - The United States economy lost 539,000 jobs in April, the government reported on Friday, a sign that the relentless pace of job losses was starting to level off slightly but was still nowhere near ending.

A year ago, the loss of more than half a million jobs in a single month would have seemed like a disaster for the economy. On Friday, experts were calling it an improvement.

The Bureau of Labor Statistics reported that the unemployment rate surged to 8.9 percent in April, its highest point in a generation. But some economists saw glimpses of a bottom in the latest grim accounting of job losses.http://www.nytimes.com/2009/05/09/business/economy/09jobs.html