With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
GM Names Post-Bankruptcy Chairman; Eddie Bauer Going Bust?; Consumer Confidence Climbs; U.S. Bankruptcy Filings Soar; Wells Fargo Lags On Applying for TARP Repayment; Crude Oil Tops $70
- Edward E. Whitacre Jr., who built AT&T Inc. (NYSE: T) into the largest U.S. provider of telephone services, will become chairman of General Motors Corp. (NYSE: GM) when the company leaves bankruptcy, the nation's biggest automaker announced yesterday (Tuesday). Whitacre will lead a 13-member board that includes interim Chairman Kent Kresa, and Chief Executive Officer Fritz Henderson. Whitacre was chairman and CEO at Dallas-based AT&T and predecessor SBC Communications Inc. from 1990 until 2007. The appointment moves GM closer to its goal of completing a restructuring in August after filing for bankruptcy on June 1.
- Sporting good retailer Eddie Bauer Holdings Inc. (Nasdaq: EBHI) may seek bankruptcy protection as soon as this week, Bloomberg Newsreported, citing people with knowledge of the discussions. The Bellevue, Wash.-based company, which operates about 370 stores in the United States and Canada, has reported annual losses for three straight years. However, the company has not made a final decision about a bankruptcy filing, according to people familiar with the matter.
- U.S. consumer confidence rose in June, marking its highest reading since November 2008, according to a survey released yesterday (Tuesday). Reflecting strong gains the stock market has made since early March, The Investor's Business Daily and TechnoMetrica Market Intelligence Index climbed to 50.8 in June from 48.6 in May. A figure above 50 indicates optimism, while below 50 points to pessimism. "Consumer confidence is building on the momentum that it picked up in April, reflecting the strength we are seeing in the stock market," Raghavan Mayur, president of TIPP, a unit of TechnoMetrica Market U.S. IBD's polling partner told Reuters. "Across the board, there is an optimistic feeling that the economy is recovering," he added.
- Bankruptcy filings soared to the highest levels since 2005 in the first quarter, the Administrative Office of the U.S. Courts said yesterday (Tuesday), as rising unemployment, falling home prices and tight credit made it harder for people to hold off their creditors, Reutersreported. The records showed that there were 330,477 filings in the January-to-March period, up 10% from the previous quarter and 35% higher than last year. Consumer bankruptcy filings rose 33% from a year earlier, while business filings rose 64%. For the year ended March 31, bankruptcy filings rose 33% to 1,202,503. Experts expect further increases as the unemployment rate heads toward 10% and the economy struggles.
- Wells Fargo & Co. (NYSE: WFC) has yet to apply to pay back funds it has borrowed from the U.S. Treasury's Troubled Asset Relief Program (TARP) and instead will focus on integrating Wachovia Corp., according to Bloomberg News. "We want to pay back the government's investment on behalf of the U.S. taxpayer at the earliest practical date," a Wells Fargo spokesperson said. "We will work closely with our regulators to determine the appropriate time to repay the TARP funds while maintaining strong capital levels." Ten other lenders won Treasury approvalyesterday (Tuesday) to buy back $68 billion in government shares. Wells Fargo opposed TARP when it was introduced last fall.
- Crude oil yesterday (Tuesday) topped $70 a barrel for the first time in seven months, thanks to a falling dollar and the Department of Energy's forecast of higher fuel prices. July delivery for oil settled at $70.01 on the New York Mercantile Exchange.