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Stories Report on Business is following today:
What Wal-Mart, Saks earnings show
The quarterly results of two retailers at either end of the U.S. consumer spectrum - Saks Inc. and Wal-Mart Stores Inc. - tell the tale of how some Americans are rebounding from the recession while others remain troubled.
Saks today posted a better-than-expected first-quarter profit of $18.8-million (U.S.) or 11 cents a share, a turnaround from the loss of $5.1-million or 4 cents a year earlier. Revenue rose 7 per cent to $667.4 million while same-store sales, a key retailing measure, rose more than 6 per cent. The upscale retailer benefited from less discounting and signs of a more confident consumer.
In turn, Wal-Mart also posted a hefty jump in first-quarter profit, a 10-per-cent rise to $3.32-billion or 88 cents a share from $3.02-billion or 77 cents a year earlier. Revenue rose about 6 per cent to $99.9-billion but same-store sales, those open at least a year, fell 1.1 per cent, the fourth decline in a row.
What the results show is that Wal-Mart's fortunes in its core U.S. markets remain sluggish, while other retailers are coming back. Wal-Mart sales surged during the recession, and the latest results suggest some shoppers have moved back to higher-end goods from low-priced offerings.
But at the same time, its core shoppers aren't rebounding quickly from the slump. "Our customers, particularly in the United States, are still concerned about their personal finances and unemployment, as well as higher fuel prices," chief executive officer Mike Duke said as the world's biggest retailer unveiled the quarterly results.
SEC to propose new curbs
The Securities and Exchange Commission and major U.S. exchanges are expected later today to unveil a new initiative that would prevent a repeat of the "flash crash" earlier this month. Reports from Washington and New York say SEC Chairman Mary Schapiro will announce new rules for circuit breakers, a response among regulators and exchanges to the May 6 plunge, when the Dow Jones industrial average shed almost 1,000 points in rapid-fire trading. The Wall Street Journal said the market-wide circuit breakers would involve specific stocks at first, and be broadened later. Levels that would trigger the breakers have not been set, the newspaper said, but 10 per cent is likely.
It's not over, Roubini warns
Nouriel Roubini, the New York University professor renowned for calling the financial meltdown, warned in a radio interview today that the troubles in Greece are simply the tip of the iceberg, and that the troubles of the euro zone represent the "second stage of a typical financial crisis." In an interview with the BBC, he pointed out that the $1-trillion rescue of the euro zone unveiled last week has not calmed the nerves of anxious investors, and has left markets wary of the outlook for some of its countries.
Related: My big, fat Greek fiscal calamity
Stocks, euro tumble again
Continuing fears over Europe's debt crisis, exacerbated by Germany's decision today to ban naked short-selling, sent stocks and the euro tumbling again. Oil also fell below $69 (U.S.) a barrel, pulling the Canadian dollar down along with it. Most markets, and the euro, had been faring better today, but the concerns over sovereign debt among countries in southern Europe, which have been raging for weeks, heightened as Germany's finance ministry said it would ban naked short-selling on major financial institutions and credit default swaps on euro government bonds.
"It tends to suggest desperation on the part of the German officials who want to discourage what they consider speculative attacks on euro zone financial markets," one analyst told Reuters. Read the story
Canada launches fight against bank tax
The Canadian government faces something of a daunting task in its opposition to a global bank tax, which is shaping up to be a sticking point at the upcoming G8 and G20 summits. Ottawa is moving on several fronts today as several cabinet ministers plan to speak out against the growing international push for such a levy. Prime Minister Stephen Harper and Finance Minister Jim Flaherty have said repeatedly they oppose such a tax, pointing out that Canada's banks should not be punished given how well they came through the financial crisis.
In Europe, the campaign for a levy is growing. Finance ministers from the 16 countries that share the euro pledged at a meeting late yesterday for a co-ordinated and fast introduction for a tax on financial transactions.
"We have agreed in unison to accelerate and further the work for the introduction of a Europe-wide financial transaction tax," Austria's Finance Minister Josef Proell said in a statement today. "The financial markets must also make a contribution to overcoming the economic crisis. This is a milestone towards the completion of this large project."
Germany's Finance Minister Wolfgang Schaeuble told reporters that such a levy will work only if it is done on a global basis, rather than in hodge-podge fashion in some countries. "This is what the Europeans will probably push for, and so do we," he said. "But there are serious doubts whether this will happen on a global scale."
Canada could benefit from Australia mining tax
Canada could benefit from Australia's proposed new mining tax, UBS Ltd. said today in a research report. Australia has unveiled proposals to boost effective mining taxes to 55 per cent from 38 per cent to become one of the highest global tax brackets, UBS analysts said, adding its surveys show Brazil, Africa and Mongolia could follow suit.
UBS warned that major diversified miners such as BHP Billiton and Rio Tinto could lose 15 per cent to 18 per cent of their value if Australia implements the new taxes, but countries such as Canada, Russia and Kazakhstan could be winners as they "leverage their competitiveness against their traditional rival Australia."
"Several countries see an opportunity to win exploration and mine development market share from Australia, a well established international investment destination," the analysts said. "We see Canada, Kazakhstan and Russia as not likely to follow Australia's lead for this reason."
UBS added that Canada's Barrick Gold and Teck Resources, and Anglo American, "are the direct beneficiaries in terms of relative value with Australian companies exposed to a successful implementation of the tax."
Pfizer to shut plants
Pfizer Inc. is cutting back operations in the wake of last year's takeover of Wyeth. The pharmaceutical giant said today it would close eight plants over the next five years, while trimming operations at several others. The move is part of its previously announced plans to shed more than 19,000 jobs after its deal with Wyeth. Read the story
Google to acquire Global IP
Google Inc. has struck a $68.2-million (U.S.) cash deal to acquire Norway's Global IP Solutions Holding AB, which will allow the Internet search giant to enhance video and audio online.
"The Web is evolving quickly as a development platform, and real-time video and audio communication over the Internet are becoming important new tools for users," Google engineering director Rian Liebenberg said in a statement.
U.S. housing starts surge, but signs are soft
Home construction in the United States jumped 5.8 per cent last month, reaching the highest level since October of 2008, but a slowdown in building permits suggests the market will cool. The increase in housing starts to an annual rate of 672,000 indicates buyers were scurrying in April to get in on a tax credit of up to $8,000 (U.S.) before it expired.
"While housing starts came in above expectations, the drop in permits suggests that this is purely a temporary blip as a result of a rush to break ground and guarantee a sale before the expiration of the home buyer tax credit at the end of April," said Toronto Dominion Bank economist James Marple.
From today's Report on Business