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.
Gold Stretches Record Run; GM CEO Henderson Out; Philly Fed Calls For Interest Rate Hike; U.S. Auto Sales Edge Up in November; Chinese Manufacturing Continues to Expand; U.S. ISM Index Shows Slower Growth; Late Auto Payments in the U.S. Rise; The Clock is Ticking for Saab; Staples' Profit, Revenue Beat the Street
Gold prices continued their record pace, eclipsing the psychologically important $1,200 per-ounce barrier yesterday (Tuesday) to settle at $1,200.20 on the New York Mercantile Exchange (NYMEX). At one point in the day, futures were trading at $1,204 an ounce, an all-time high.
General Motors Co. (NYSE: GRM) Chief Executive Officer and President Fritz Henderson will resign his position effective immediately and Chairman Ed Whitacre Jr. will take over on an interim basis, the company said. Henderson, who has been with GM since 1984, took over as CEO March 31 after U.S. President Barack Obama asked then-CEO Rick Wagoner to step down. More information was not available at press time.
Philadelphia Federal Reserve President Charles Plosser yesterday (Tuesday) called for higher interest rates in this cycle, becoming the highest-ranking central bank official to do so. In a speech in Rochester, N.Y., Plosser said that inflation could become a "serious concern" and the Fed must raise interest rates "sooner rather than later." Plosser, who won't have a vote on policy until 2011, said if the Fed does not act soon, "the inflation rate is likely to rise to levels that most would consider unacceptable."
South Korea's Hyundai Motor Co. (PINK: HYMLF) saw the biggest gain as U.S. auto sales gained in November, the second month in a row. Hyundai's sales grew 46%, Toyota Motor Corp.'s (NYSE ADR: TM) sales rose 3% and Nissan Motor Co. Ltd.'s (OTC ADR: NSANY) sales grew 21%. Honda Motor Co. Ltd. (NYSE ADR: HMC) suffered a small 3% dip in sales, as did General Motors Co.'s (NYSE: GRM) with a 2% drop. Chrysler Group LLCsuffered the biggest decrease at 25%, while Ford Motor Co.'s (NYSE: F) sales were flat. "It appears that the economy and the auto sales have stabilized and that the worst is behind us," Ford U.S. sales chief Ken Czubay said in a conference call.
Manufacturing in China grew for the ninth consecutive month but decelerated in November amid headwinds from weaker trade and employment, the China Federation of Logistics and Purchasing said yesterday (Tuesday). The Red Dragon's purchasing manager's index (PMI) was unchanged from October's 18-month high of 55.2. Any reading above 50 indicates expansion. The flat month-to-month number "indicates the economic outlook has started to stabilize after reaching a high level and the recovery will become more steady," said Zhang Liqun, a researcher at the State Council's Development Research Center who comments on the PMI for the federation.
The manufacturing sector in the United States also grew but decelerated in November, the Institute for Supply Management (ISM) said yesterday (Tuesday). The ISM's index of national factory activity was at 53.6, down from 55.7 in October. "The manufacturing sector grew for the fourth consecutive month in November," said ISM Chairman Norbert Ore. "While the rate of growth slowed when compared to October, the signs are still encouraging for continuing growth as both new orders and production are still at very positive levels."
Delinquent auto loan payments rose 1.25% in the third quarter from the same period last year, credit-reporting agency TransUnion LLCsaid. However, late payment rates fell in Washington D.C. and six states: Colorado, Louisiana, Maryland, Vermont and both of the Dakotas. TransUnion expects delinquencies to rise 0.9% in the current quarter.
General Motors Co. (NYSE: GRM) said it will phase out its Swedish Saab brand if it can't find a buyer by the end of this month. A deal with Sweden's Koenigsegg Automotive AB fell through last week, but GM said new potential buyers have emerged. GM already said it would phase out its Pontiacand Saturn brands after it failed to close those deals.
Staples Inc.'s (Nasdaq: SPLS) third-quarter sales fell 6% but still managed to beat Wall Street's expectations of $6.45 billion. The company did manage to increase its profit to $269.4 million, or 37 cents a share, compared to $156.7 million, or 22 cents a share in the same period a year ago. Excluding one-time charges, the office supplies retailer earned 39 cents per share, beating average analyst estimates of 38 cents. The company's revenue was $6.5 billion in the quarter ended October 31, compared to $7.0 billion a year ago.