With our investment news briefs, Money Morning provides investors with a quick overview of the most important global investing news stories from all around the world.
GM to Shutter Saturn; IMF Raises Global Growth Forecast; Private-Sector Job Losses Show September Decline; Red Ink Flows at Neiman Marcus; Cisco Dials Up $2.7 Billion Buyout for Norway's Tandberg; Brazil IPOs Could Double in 2010; European Unemployment Hits 10-Year High; With IPO, Retailer Newegg Hatches China Expansion Strategy
General Motors Corp. (NYSE: GRM) will stop production and close the dealership network of its Saturn brand after plans for Penske Automotive Group Inc.'s (NYSE: PAG) purchase of the brand were derailed by its inability to find another manufacturer, MarketWatch.com reported. "This is very disappointing news and comes after months of hard work by hundreds of dedicated employees and Saturn retailers who tried to make the new Saturn a reality," GM Chief Executive Fritz Henderson said in a statement.
The International Monetary Fund (IMF) raised its forecast for global growth in 2010 to 3.1% from July's forecast of 2.5%, as trillions spent in stimulus packages bear fruit and demand from Asia economies drive exports from around the world, Bloomberg News reported. According to the IMF's forecast, China's economy will grow 9.0% in 2010 and India 6.4% compared to the slow growth of Japan (1.7%), the United States (1.5%) and euro area (0.3%). However, the recovery would be "weak by historic standards," IMF members said in its outlook report, forecasting a global economic decline of 1.1% for 2009.
Although U.S. private-sector firms slashed 254,000 jobs in September, that was the lowest total since July 2008, MarketWatch.com reported, citing an employment report released by Automated Data Processing Inc. (Nasdaq: ADP). The job losses were attributed to two categories: goods-producing jobs (151,000 lost) and service-producing jobs (103,000 lost). The U.S. Bureau of Labor Statistics releases its September nonfarm payroll jobs report Friday, and economists are forecasting a decline of 167,000 jobs.
Fiscal-year sales for Neiman Marcus Inc.dropped across the board, Internet Retailer reported. In its year ended Aug. 31, the high-end department store chain posted a net loss of $668 million, compared with net income of $142.8 million in the prior year. Total sales were $3.64 billion. Neiman attributed much of the earnings reversal to a 20.9% decline in total sales. Chief Executive Officer Burton Tansky said that although Web sales declined 12.1% to $496.0 million, the company's Internet business "continues to significantly outpace catalog and store sales."
Cisco Systems Inc. (NASDAQ: CSCO) agreed to buy Norway's Tandberg ASA, the world's largest maker of teleconferencing equipment, for $2.96 billion (17.2 billion kroner), Reuters reported. The all-cash deal is Cisco's first acquisition outside the United States, and firmly positions he largest maker of networking gear in the videoconferencing market. Tandberg's chief executive, Fredrik Halvorsen, will continue to lead the videoconferencing unit, should the deal gain the needed shareholder and regulatory approvals. "We have the same vision, a vision of how people communicate and collaborate," Halvorsen said on a Webcast on Tandberg's Web site.
The number of initial public offerings in Brazil may double next year, so long as that BRIC country's economy continues to expand and its stock market extends its best rally in six years, Bloomberg reported, citing a Bank of America Corp. (NYSE: BAC) report. According to the report, next year's IPOs will be smaller in size and will likely come from such consumer-driven sectors as banking, retail and consumer goods. Brazil's Bovespa index is up 64% this year.
Despite the euro area's emergence from recession, its unemployment rate in August rose to its highest level in more than 10 years. Unemployment in the 16-nation region rose to 9.6% in August, up from 9.5% in July. Spain's unemployment rate rose to 18.9%, and Ireland's rose to 12.5%, according to the Eurostat statistics office. "The risk of unemployment is still hanging in the air so consumers will continue to retrench on spending," Martin van Vliet, senior economist at ING Groep N.V. (NYSE ADR: ING), told BloombergNews.
Online electronics retailer Newegg Inc. announced plans to raise $175 million in an initial public stocko offering (IPO), and intends to use part of the proceeds to expand its business in China. Online sales in that fast-growing Asia market could surpass the $100 billion mark by 2012, iResearch reported, and Newegg's position in the Red Dragon is crucial to its growth plan. "We believe the Chinese e-commerce market is positioned for tremendous growth, driven by wider availability of broadband access, rising discretionary incomes, increasing preference for consumption relative to savings, and improving payment processing, delivery and fulfillment infrastructures," the company said in its registration filing.