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Sources: GM May Drop Pontiac, GMC Brands; Rosetta Stone IPO Soars; Turkey Benchmark Rate at Record Low; Zurich Financial Buys AIG’s Auto Insurance Unit; NYT Will Cut Content; Canadian Factory Orders Rise; Copper Falls on China GDP; Falling U.S. Homestarts; Bankruptcy “Cram Down” Bill Falters in Senate
- General Motors Corp. (GM) may drop its Pontiac and GMC brands, as it tries to cut costs before its June 1 deadline to prove profitable or enter bankruptcy protection, sources told Bloomberg. The brands of Chevrolet, Cadillac and Buick are likely safe, the sources said.
- Shares of rose 42% on their first day of trading, as the language-training company’s initial public offering netted $112.5 million, Reuters reported. Rosetta Chief Executive Tom Adams told Reuters it was hard to pick the right share price. "We are a long-term oriented group and we deliberated,” he said.
- Turkey’s central bank lowered its benchmark interest rate by 75 basis points to a record 9.75%, Bloomberg reported. In the past six months, the central bank has chopped seven percentage points from the benchmark rate.
- Zurich Financial Services AG (OTC: ZFSVY) yesterday (Thursday) agreed to buy American International Group Inc.’s (AIG) auto insurance unit for $1.9 billion. The deal marks the biggest divestment by AIG since the U.S. government rescued the insurance company in September, Reuters reported.
- The New York Times Co. (NYT) is cutting several weekly sections and will reduce freelance spending to save millions of dollars in annual costs, according to a memo obtained by Reuters. The paper is cutting pay for non-unionized employees at The Times and other papers and is seeking similar concessions from unionized employees. It also has threatened to shutter The Boston Globe if it cannot find ways to cut millions of dollars in costs at the money-losing paper.
- Canadian factory sales rose 2.2% in February the first time since July, according to a report yesterday (Thursday) that contained other small signs of economic recovery, Reuters reported. Excluding autos, sales slipped 0.2% but the decline was less steep than in the previous six months when the U.S. recession dampened appetite for Canadian goods.
- A pullback in new home construction in the U.S. combined with slower-than-expected economic growth in China pulled the price of copper down yesterday (Thursday). Copper for three months delivery on the London Metal Exchange closed at $4,729 per metric ton – down $90 from Wednesday's close, Reuters reported.
- Without enough votes for passage, Senate Democrats are scaling back legislation that would let bankruptcy judges alter mortgages, a spokesman for Senate Majority Leader Richard Durbin (D-IL), told Bloomberg. The main problem is whether the “cram down” provisions in the bill should be limited to certain loans or a specific timeframe, a spokesman for Durbin said. The bill passed the House of Representatives in March.