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Consumer Confidence on the Mend; Q2 Housing Prices Rise From Previous Quarter; Judge Questions BofA/SEC Settlement; Chrysler Sues Former Parent; Toyota to Cut Production Capacity by 1 Million; Sony To Sell Wireless e-Book Reader; Apple's Jobs Leading Tablet Device Development, Says WSJ
The Conference Board Consumer Confidence Index has rebounded to 54.1 in August after last month's decline to 47.4. "Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations," said Lynn Franco, director of The Conference Board Consumer Research Center. "And, as long as earnings continue to weigh heavily on consumers' minds, spending is likely to remain constrained."
Home prices saw a 2.9% increase in the second quarter from the previous quarter, according to the Standard & Poor's/Case Shiller index. "For the second month in a row, we're seeing some positive signs," said David M. Blitzer, chairman of the Index Committee at S&P. "This is the first time we have seen a positive quarter-over-quarter print in three years." Still, prices compared to the second quarter last year fell 14.9%. "It's noteworthy that all indicators are pointing in the same direction," Weiss Research housing analyst Mike Larson told The Washington Post. "But it's not 'Happy days are here again.' We're going to see continued deterioration, but at a slower pace."
The Securities and Exchange Commission (SEC) is being pressed by a federal judge to better explain why it didn't pursue allegations that Bank of America Corp. (NYSE: BAC) lied in its proxy statement about its approval of bonuses for Merrill Lynch employees. U.S. District Judge Jed Rankoff is also questioning why the lender agreed to the $33 million settlement with the SEC if it believed there was nothing false and misleading in the proxy statement, Reuters reported. Rankoff said it is "at war with common sense" for BofA executives to rely on counsel and then not waive attorney-client privilege, adding "the culpability of both the corporate officer and company counsel will remain beyond scrutiny."
Chrysler Group LLCis suing Daimler AG (NYSE: DAI) for an alleged breach of contract that Chrysler says may interrupt manufacturing of its vehicles for the 2010 model year and beyond, Bloomberg News reported. Daimler is refusing to honor contracts transferred after Chrysler's sale to Fiat SpA (OTC ADR: FIATY) and is demanding payments it previously waived for past contracts on engine parts, Chrysler said, adding that its former parent is using the issue as "leverage" to avoid signing new supply contracts for steering columns and torque converters.
Toyota Motor Corp. (NYSE ADR: TM) will cut its global production capacity by 10%, or 1 million vehicles, Reuters reported, citing the Nikkeibusiness daily. The world's largest automaker will make the cut as early as this fiscal year to raise utilization at underused plants. Toyota will initiate the cuts by first shutting down New United Motor Manufacturing Inc. in Fremont, Calif., a joint venture with General Motors Co. (OTC: MTLQQ) and halting production lines at plants in Japan and the United Kingdom. When all is said and done, Toyota's production capacity will be 9 million vehicles.
Sony Corp. (NYSE ADR: SNE) will take Amazon.com Inc.'s (Nasdaq: AMZN) Kindle head-on by developing an e-book reader with the ability to wirelessly download books, daily newspapers and other reading material over AT&T Inc.'s (NYSE: T) network. Previously, Sony's e-book readers required users to hook their devices to their computers to get new content. The new device, dubbed Reader Daily Edition will appear on store shelves in December and sell for $399, $100 more than Amazon's Kindle.
Apple Inc. (Nasdaq: AAPL) Chief Executive Officer Steve Jobs has been devoting almost all of his attention into a new touch-screen tablet device since his return from a liver transplant in late June, The Wall Street Journal reported, citing people familiar with the situation. When asked byThe Journal, Jobs said in an email "much of your information is incorrect," but didn't provide specifics. Jobs, largely considered the driving force behind innovation at Apple, was heavily involved in the development of the now wildly popular iPhone. Shares of Apple have gained 19% since Jobs' return.