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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.
Obama Proposes New Stimulus Initiatives; CIT to Exit Bankruptcy Tomorrow; Gold Falls a Third Straight Day; GM Aims to Repay TARP by End of 2010; P&G Chair Lafley to Retire; United Orders 50 New Aircraft from Boeing and Airbus; Strong Europe Sales Keep McDonald's Growth Going; Kuwaiti Sovereign Wealth Fund Sells Citi Stake
- U.S. President Barack Obama formally unveiled his expected initiatives to combat joblessness yesterday (Tuesday), proposing small business tax breaks for new hires as well as equipment purchases, without putting a price tag on these new actions. The president did, however say he wants to spend some $50 billion more on roads, bridges, aviation and water projects. "Even though we have reduced the deluge of job losses to a relative trickle, we are not yet creating jobs at a pace to help all those families who have been swept up in the flood," President Obama said. "And it speaks to an urgent need to accelerate job growth in the short term while laying a new foundation for lasting economic growth." The president is also proposing rebates for consumers who retro-fit their homes to use less energy.
- A federal bankruptcy judge approved commercial lender CIT Group Inc.'s (NYSE: CITGQ) plan to cancel old shares, shed debt and exit bankruptcy protection with new stock worth as much as $11 billion. When the company emerges from bankruptcy tomorrow (Thursday), the United States will recover little – if any – of $2.3 billion in bailout money and shareholders will be wiped out.
- Gold futures for December delivery lost ground for the third-straight session as credit concerns in Dubai and Greece helped the U.S. dollar rise. The yellow metal fell 1.8% to settle at $1.142.80 per ounce on the New York Mercantile Exchange (NYMEX). The dollar gained 0.6% to close at 76.21 against the euro and a basket of major currencies. "The better dollar outlook and lack of inflationary pressure are hurting gold," George Gero, a precious-metals trader for RBC Capital Markets Corp. told MarketWatch.com.. "Gold has gained a lot, and more shorts [selling positions] are pressuring year-end sellers."
- General Motors Corp. (NYSE: GRM) hopes to repay its loans under the U.S. government's Troubled Asset Relief Program (TARP) by the end of 2010, new North American President Mark Reuss said in a conference call with the press yesterday (Tuesday). "We need to repay the money that we borrowed, and I think everybody in this company wants that desperately," Reuss said. "We want to make people in this country proud of General Motors, its employees and its dealers."
- The Procter & Gamble Co. (NYSE: PG) Chairman A.G. Lafley said he will retire on Feb. 25, and named Chief Executive Officer Robert McDonald as his successor. Procter & Gamble more than doubled sales under Lafley, aided by the $61 billion acquisition in 2005 of Gillette Co. Lafley, who stepped down as P&G's CEO this past summer, was also responsible for reviving the Tide laundry business in 1992 by introducing a liquid form of the detergent and a Tide with bleach.
- United Airlines Inc. (Nasdaq: UAUA) has ordered 50 new aircraft, half from The Boeing Co. (NYSE: BA) and the other half from Airbus SAS in one of the largest orders by a U.S. carrier in more than a year. The order is comprised of 25 Boeing 787 Dreamliner jets and 25 Airbus A350-XWB aircraft for delivery from 2016 to 2019. The Chicago-based carrier has the rights to purchase up to 50 more of each plane. Boeing is aiming to test fly its oft-delayed 787 before the end of the year, possibly next week, several reports indicate.
- November same-store sales for fast-food giant McDonald's Corp. (NYSE: MCD) gained 0.7%, as growing demand in Europe offset declining sales in both the United States and Asia. The company's U.S. sales fell 0.6%, while Asia, Middle East and Africa sales declined 1%. Business in Europe gained 2.5%, boosted by strength in the United Kingdom and France, McDonald's said.
- Kuwait Investment Authority (KIA), the nation's sovereign-wealth fund, sold its $4.1 billion stake in Citigroup Inc. (NYSE: C), KIA said in an e-mailed statement obtained by Bloomberg News. The stake was purchased last year for $3 billion, netting KIA a profit of $1.1 billion. KIA's sale "will be a confidence-booster," M.R. Raghu, head of research at Kuwait Financial Center SAKC told Bloomberg. "It looks to be good news, making a profit in these times."