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Jobless claims sour markets Global markets soured again today after an unexpected increase in initial claims for jobless benefits in the U.S. rose to a six-month high. The troubling numbers signal the U.S. is still mired in a jobs crisis, and are yet another sign that will heighten fears over the state of the economic recovery.
The S&P/TSX composite index slipped at the open, along with the Dow Jones industrial average and the S&P 500 in New York.
The jobless numbers, which put a new face on what otherwise was shaping up to be a calm morning, showed the number of Americans filing new benefit claims climbed by 2,000 to 484,000 last week. A four-week moving average, seen as a smoother measure, showed an increase of 14,250 to 473,500.
"Well, this has certainly been a fine week for those calling for a sharp slowdown (or worse)," said BMO Nesbitt Burns senior economist Jennifer Lee. "There was more evidence of China's economy slowing, the Fed and the [Bank of England]downgraded the outlook on their respective economies, the trade data from Canada and U.S. caused many to revise down their growth forecasts, euro zone production took a slide in June, Cisco disappointed. And now, more news that the U.S. job environment remains weak ... Very disappointing claims results. Very sad picture of the unemployed."
Gross eyes greener Canadian pastures Renowned bond investor Bill Gross doesn't believe the U.S. government is doing enough to spur on the economy, so the founder of Pacific Investment Management Co. is casting his eye about. "We're much more in awe of countries such as Canada, with a decently balanced budget, and with low debt-to-GDP, and with financial institutions that have been solvent and sound and conservative in their lending, and that have something to export," Mr. Gross, the co-chief investment officer of Pimco, told The Globe and Mail's David Parkinson in an exclusive interview published today. "North of the border has become, while not our favourite destination, certainly a preferable destination to what we see in the United States."
India warns on BlackBerry The Indian government today warned it would shut down two BlackBerry services if it does not get access to encrypted data by the end of this month. India's Ministry of Home Affairs said in a statement today that the home secretary met with the country's security and telecom authorities and set the deadline.
"The meeting asked the Telecom Department to convey to service providers that two BlackBerry services, namely Business Enterprises Services and Messenger Services, be made accessible to Law Enforcement Agencies by 31st August, 2010," the statement said. "If a technical solution is not provided by 31st August, 2010, the Government will review the position and take steps to block these two services from the network."
Research In Motion Ltd. has been tussling with several governments over access to such data.
Android operating system surges Research In Motion Ltd. is holding its own in the ultracompetitive and lucrative smart phone market, but Google Inc. is coming on strong with its Android operating system, based on fresh numbers today. RIM sales of the BlackBerry reached 11.2 million units in the second quarter of the year, confirming its standing as the fourth-largest branch with 3.4 per cent of the market for mobile devices, up from 2.7 per cent a year earlier, according to Gartner Inc., the global research and consulting firm. RIM trails the traditional heavyweights of the mobile market, Nokia, Samsung and LG, which command far larger positions.
Here's where it gets interesting, and somewhat more competitive: In the market for smart phone operating systems, RIM is No. 2, its share of the market slipping to 18.2 per cent from 19 per cent, Gartner said. While the iOS from Apple Inc. edged up to 14.2 per cent from 13 per cent, Google's Android surged to grab 17.2 per cent of the market from just 1.8 per cent a year earlier. Noteworthy is that Android overtook RIM in the United States. "A non-exclusive strategy that produces products selling across many communication service providers (CSPs), and the backing of so many device manufacturers, which are bringing more attractive devices to market at several different price points, were among the factors that yielded its growth this quarter," said research vice-president Carolina Milanesi.
RIM recently unveiled its new Torch BlackBerry, which has a touch screen and slide-out keyboard. "We believe the Torch's form factor will still appeal more to business users than to consumers and will stop many loyal BlackBerry users defecting to other platforms, but it won't attract many new users to the brand," Gartner said in its report.
Updated operating systems, Ms. Milanesi said, will help spur growth in smart phones in the second half of the year. "But we believe market share in the OS space will consolidate around a few key OS providers that have the most support from CSPs and developers, and strong brand awareness with consumers and enterprise customers," she said.
GM turnaround continues General Motors Co. is rebounding smartly from the recession and its filing for bankruptcy protection, posting a second-quarter profit today of $1.3-billion, the best showing since 2004. It marks the second consecutive quarterly profit for GM, after earning $865-million in the first three months, as it prepares to file for an initial public offering that would take the auto maker public again. GM sales rose 5.3 per cent from the first quarter to reach $33.2-billion, sales it said were strong everywhere but for Europe. GM is now the third auto maker among the Detroit Three to post better earnings. Reports suggest it will file for an IPO as early as tomorrow or Monday, seeking to raise up to $16.
The A-Team? Not quite Cineplex Galaxy Income Fund had a rare setback in its second quarter, blaming a series of box office flops for an 8.2-per-cent drop in theatre attendance and a 2-per-cent dip in revenue to $243.7-million. Profit slipped to $17.4-million from $19.9-million a year earlier. Cineplex chief executive officer Ellis Jacob didn't name the movies that flopped, saying only that revenue was hurt by "the lack of success of certain highly anticipated movie titles."
The movies may have bombed but popcorn's still doing well. Concession revenue per patron, at $4.36, was up by 6.6 per cent from a year earlier, and the best the company has ever recorded.
Tim Hortons profit climbs Movies may be flopping, but coffee, doughnuts and Iced Capps are still doing well. Tim Hortons Inc. THI-T said today its second-quarter profit climbed to $94.1-million or 54 cents a share from $77.8-million or 43 cents a year earlier. Revenue rose 5.7 per cent to $639.9-million. Same store sales, the key measure, rose 6.4 per cent. "Our quarterly same-store sales performance in Canada was the best in several quarters, and the strength of our same-store sales growth in the U.S. was gratifying given continued economic challenges in that market," said chief executive officer Don Schroeder.
Anheuser-Busch notes decline in Canada How un-Canadian. Anheuser-Busch InBev NV, the biggest brewing company in the world, says it beer volumes in Canada fell 7.1 per cent in the second quarter due to "industry weakness" and a drop in market share. Its Bud Light line, though, continues to do well, the Belgium-based company said today. Overall, the brewer created by the marriage of InBev and Aneuser Busch Cos. in 2008, posted a second-quarter profit of $1.15-billion (U.S.), up from $1.07-billion a year earlier. The World Cup soccer championships helped boost sales, it said.
From today's Report on Business
- China's growth slowing fast
- Maple Leaf chief must walk fine line
- OPTI heads back to the bond markets
- Rob Carrick: CPP's strategy offers useful pointers on playing it safe
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