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.
Senate Debates Housing Tax Credit Extension; Washington Considers Freezing Credit Card Interest Rates; Readers Flock to Internet at Faster Pace for News; AOL Names Board; Rising Gas Prices Could Clamp Holiday Spending; Verizon Profit Falls Less Than Expected; Manufacturing Propels South Korea's Q3 GDP Growth; Corning Beats the Street; Mobile Business Helps RadioShack Beat Sales Estimates
A possible extension of the $8,000 tax credit for first-time homebuyers is being debated in the Senate this week, U.S. Sen. Bill Nelson D-FL told reporters yesterday (Monday). "We should be able to extend that later this week," Nelson said. One proposal on the floor is to extend the credit through the end of next year, but gradually reduce it by $2,000 starting in April. The current credit is due to expire on Nov. 30.
New legislation that would temporarily freeze credit card interest rates was introduced in the Senate yesterday (Monday). The new bill comes just months after Congress passed a law protects consumers from hidden fees and sudden shifts in interest rates. "No sooner had it been signed into law, credit card companies were looking for ways to get around the protections this Congress and the American people demanded," said Senate Banking Committee Chairman U.S. Sen. Christopher Dodd, D-CT, who introduced the legislation. "This bill would end those abuses and further protect consumers today."
Consumers are turning to the Internet for news at a faster pace than before, as circulation at U.S. newspapers dropped more than 10% in the last six months, the Los Angeles Times reported, citing data from the Audit Bureau of Circulations. The average weekday circulation of nearly 400 daily papers shrank 10.6% between April and September, compared to a 7.1% drop in the previous six months. The Wall Street Journal was the only paper out of the top five to increase its circulation, albeit slightly at 0.6%. The gain, coupled with a 17% drop in USA Today's circulation, enabled The Journal to become the nation's largest daily. Rounding out the top five were The New York Times with a 7.3% decline, the LA Times with an 11.1% drop and The Washington Postsuffered a 6.4% dip in circulation.
AOL LLC took one step closer to being spun off from parent Time Warner Inc. (NYSE: TWX) after it named its new board of directors. AOL Chief Executive Officer Tim Armstrong will serve as chairman of a board that includes former Federal Communications Commission Chairman Michael Powell and venture capitalist Bill Hambrecht. The other directors are Richard Dalzell, former chief information officer at Amazon.com Inc. (Nasdaq: AMZN); Karen Dykstra, a partner at Plainfield Asset Management LLC; Patricia Mitchell, president of the Paley Center for Media; Fredric Reynolds, a former CBS Corp. (NYSE: CBS) executive; James Stengel, president of a consulting firm; and Jim Wiatt, CEO at the William Morris Agency Inc.
Retail gas prices, which tend to drop after the summer, are rising back to those levels and pose a threat to holiday spending if they don't correct, The Associated Press reported. The average price for a gallon of regular unleaded gas rose for the 13th straight day Sunday night to $2.671, according to the American Automobile Association (AAA), Wright Express Corp. (NYSE: WXS) and Oil Price Information Service. "If [consumers are] spending more money at the pump, they're going to be less willing to go out to the malls to spend frivolously," Ryan Sweet, a senior economist with Moody's Economy.com told The AP. Crude oil prices for December delivery have dropped slightly to $78.78 per barrel on the New York Mercantile Exchange (NYMEX) after hovering around $80 last week.
Wireless phone subscriptions helped Verizon Communications Inc.'s (NYSE: VZ) third quarter profit fall less than expected, despite disappointing growth in its FiOS television service. Verizon added 1.2 million mobile subscribers, beating an average estimate of 1 million from five analysts polled by Reuters. Still, the No. 1 wireless carrier is losing market share to iPhone carrier AT&T Inc. (NYSE: T), which added 2 million subscribers in the third quarter. Verizon added 191,000 FiOS TV subscribers in the quarter, short of the estimate of 250,000 by Stifel Nicolas analyst Chris King. Verizon's profit was $2.89 billion, or 60 cents per share excluding a one-time charge, compared to analyst estimates of 59 cents per share. Revenue grew 10.2% to $27.27 billion, beating average analyst estimates of $27.17 billion.
South Korea's economy grew 2.9% in the third quarter, its fastest pace in seven years, The Economic Times reported, citing the nation's central bank. The increase represents the third-straight quarter in which Korea's gross domestic product (GDP) grew. Manufacturing in the export-driven country grew 8.7% sequentially, led by automakers and the technology sector.
Strong sales of flat-panel televisions helped glassmaker Corning Inc. (NYSE: GLW) post stronger-than-expected results yesterday (Monday). Corning's net income fell to $643 million, or 42 cents per share excluding special items, beating estimates of 39 cents in a Reuters poll. The company's revenue fell 5% to $1.48 billion, but still better than average estimates of $1.42 billion. "We have heard comments that corporations are raising IT (information technology) spending a little," Chief Financial Officer Jim Flaws told Reuters in an interview.
Electronics retailer RadioShack Corp.'s (NYSE: RSH) sales bested Wall Street estimates in the third quarter thanks to strong sales of mobile phones and calling plans, sending its shares up 15.90% to close at $18.15 yesterday (Monday). The company reported revenue of $990 million, which soundly beat average analyst estimates of $961.7 million, according to Thomson Reuters. Profit was slightly below analyst estimates, coming in at $37.4 million, or 30 cents per share versus average estimates of 30 cents per share.