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GM Pins Hopes on Cruze; GameStop’s Worried Outlook; New Car-Parts Leader; U.K.’s Retail Sale Surprise; Oil Bounces Back; Is Lehman a Takeover Target?; Jobless Claims on Decline; BK Has Its Way
- General Motors Corp. (GM) announced yesterday (Thursday) it plans to invest $500 million in an Ohio plant that will be retooled to produce the smaller, gas-efficient Chevrolet Cruze. The half-billion dollar project is part of GM’s commitment to focus on smaller models in response to high gas prices. The Lordstown, Ohio plant will begin manufacture of the Cruze in 2010, MarketWatch reported.
- Shares of video-game retailer GameStop Corp. (GME) fell to $41 before recovering to close down just 4 cents yesterday (Thursday) at $43.48. GameStop, the largest global video-game retailer, reported fiscal second quarter net income of $57.2 million, or 34 cents a share, up from $21.8 million, or 13 cents a share, for the same period the year prior. But shares dropped on fears that weakening consumer demand in the United States would hurt future video game sales, The Wall Street Journal reported.
- Schaeffler Group bought a majority stake in Continental AG (OTC ADR: CTTAY) with a $17.9 billion (12.1 billion euros) deal, which will create the world's largest car-parts manufacturer, Bloomberg News reported. Schaeffler raised its offer 7% to win over the German tiremaker.
- U.K. retail stores had a surprising gain in July of 0.8% after a decline of 4.3% the month prior, the London-based Office for National Statistics announced yesterday (Thursday). Sales were highest at bargain retailers. Bank of England Governor Mervyn King said the British economy faces a “difficult and painful adjustment” as the combination of a weak domestic housing market and rising inflation drag on consumer spending, Bloomberg News reported.
- Oil prices shot up more than $5 a barrel yesterday (Thursday), rising to the highest level in over two weeks as tensions in oil-producing regions escalated and the dollar declined. Light, sweet crude for October delivery jumped $5.62 to settle at $121.18 a barrel on the New York Mercantile Exchange after earlier rising as high as $122.04, crude's highest trading level since Aug. 4.
- Lehman Brothers Holdings Inc (LEH) was raised yesterday (Thursday) to "buy" from "neutral" by Ladenburg Thalmann & Co analyst Richard Bove, who said the Wall Street investment bank could become the target of a hostile takeover bid, Reuters reported. "The market is at a stand-off," Bove wrote in a note to investors. "Investors are unwilling to accept any positive view of the company; management is unwilling to sell out at a deeply distressed value. The stage is set for a hostile bid to take over the whole company."
- The number of U.S. workers filing new claims for jobless benefits fell for the second week in a row last week, the Labor Department said yesterday (Thursday). Initial claims for state unemployment insurance benefits dipped by 13,000 to a seasonally adjusted 432,000 in the week ended August 16 after falling a revised 12,000 a week earlier.
- Burger King Holdings Inc (BKC) said yesterday (Thursday) that net income rose to $51 million, or 37 cents per share, in the quarter ended on June 30, up from $36 million, or 26 cents per share, a year earlier. Total revenue rose 9% to $646 million. Sales at stores open at least a year rose 5.3% worldwide.