Best Buy holiday sales fall, shares skid
MINNEAPOLIS (AP) — Best Buy said Thursday it had disappointing sales during the holiday shopping season, raising concerns about the consumer electronic retailer’s ability to turn around its business.
The holiday season, which runs from November through December, is a critical period for retailers because it can account for up to 40 per cent of their annual revenue. But this past season was marked by weak consumer spending and heavy sales promotions by retailers.
Best Buy was struggling even before the holiday season because of increased competition from online stores, notably Amazon.com, and discounters like Wal-Mart. But under CEO Hubert Joly, Best Buy started a turnaround strategy that included revamping merchandise, training employees and cutting costs.
Its stock fell almost 29 per cent Thursday.
US weekly unemployment benefit claims drop to 326k
WASHINGTON (AP) — The number of Americans seeking unemployment benefits fell 2,000 last week to a seasonally adjusted 326,000, a sign that layoffs are weighing less on the job market and economic growth.
The Labor Department said Thursday that the less volatile four-week average dropped 13,500 to 335,000.
More than 4.7 million Americans collected benefits at the end of last year. The figure has declined almost 1.2 million over the past 12 months. But that number is poised drop by another 1.35 million in upcoming weeks. That’s because a special federal program expired last month and is starting to affect recipients.
Applications appear to have stabilized near pre-recession levels, a positive sign for hiring going forward.
US consumer prices up 0.3 pct, most in 6 months
WASHINGTON (AP) — U.S. consumer prices rose last month by the most since June, driven up by higher gas prices, but excluding energy, inflation was tame.
The Labor Department said Thursday that the consumer price index rose a seasonally adjusted 0.3 per cent in December, after a flat reading the previous month.
Prices increased 1.5 per cent in 2013, down from 1.7 per cent in 2012. That’s below the Federal Reserve’s target of 2 per cent. Fed officials have said in recent months that they are watching the inflation data closely to ensure it does not fall too far.
US homebuilder confidence dips in January
U.S. homebuilders lost a little confidence in the housing market this month but remain generally upbeat ahead of the spring home-selling next season.
The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday dipped to 56. That’s down from December’s reading of 57, which was revised one point lower from its initial estimate.
Readings above 50 indicate more builders view sales conditions as good, rather than poor.
Builders’ view of current sales conditions for single-family homes, their outlook for sales over the next six months and traffic by prospective buyers each declined since December.
Even so, the overall index is nine points higher than a year ago, reflecting a stronger U.S. housing market.
Foreign holdings of US Treasury debt advance
WASHINGTON (AP) — Foreign buyers of U.S. Treasury securities increased their holdings for a fourth straight month in November with holdings by China and Japan climbing to all-time highs.
The Treasury Department says total foreign holdings rose 1.1 per cent in November to $5.72 trillion after a smaller 0.04 per cent increase in October. Holdings had fallen from April through July but have increased since then. However, the November level of foreign holdings was still 0.1 per cent below the all-time high hit in March.
China, the largest foreign buyer of Treasury debt, boosted its holdings 0.9 per cent to $1.32 billion, a record level. Japan, the second-largest buyer, boosted its holdings 1 per cent to $1.19 trillion, also a record.
Average US rate on 30-year loan at 4.41 pct.
WASHINGTON (AP) — Average U.S. rates for fixed mortgages declined this week, edging closer to historically low levels.
Mortgage buyer Freddie Mac said Thursday that the average for the 30-year loan fell to 4.41 per cent from 4.51 per cent last week. The average for the 15-year loan eased to 3.45 per cent from 3.56 per cent.
Mortgage rates have risen about a full percentage point since hitting record lows a year ago. The increase was driven by speculation that the Federal Reserve would reduce its bond purchases. The Fed determined last month that the economy was strong enough to start trimming those purchases, which have kept long-term interest rates low.
The rise in mortgage rates slowed home sales, which have fallen for three straight months. But overall, 2013 was the best year for housing since the financial crisis. Most economists expect home sales and prices to keep rising this year, but at a slower pace. They forecast sales and prices will likely rise around 5 per cent, down from double-digit gains in 2013.
Carlyle Group makes $4.15B offer for J&J business
TRENTON, N.J. (AP) — Johnson & Johnson said Thursday that it’s been offered $4.15 billion by The Carlyle Group for its Ortho-Clinical Diagnostics business, a year after J&J began reviewing strategic options for the blood-testing unit as part of a routine pruning of its extensive family of businesses.
J&J, based in New Brunswick, N.J., has until March 31 to decide whether to accept the offer. Johnson & Johnson executives plan to discuss the offer Tuesday, when the health giant and consumer products company reports fourth-quarter results. The company said Thursday that it will consult with works councils and trade unions representing the unit’s employees before making a decision.
The Ortho-Clinical business serves hospitals, testing laboratories and blood banks.
Chuck E. Cheese owner agrees to $950M buyout
NEW YORK (AP) — The parent company of the Chuck. E. Cheese restaurant chain has agreed to be acquired by an affiliate of Apollo Global Management for about $950 million.
Founded in 1977, Chuck E. Cheese restaurants are known for their mix of games, play areas and robotic characters that provide musical entertainment. The chain has been struggling to lift sales, even after a makeover for its rodent mascot in 2012 that was intended to refresh its outdated image.
Enter Leon Black’s investment firm Apollo, which buys troubled companies using borrowed money and tries to sell them for more, usually years later, in a transaction known as a leveraged buyout.
The companies say Apollo will pay $54 per share for CEC Entertainment Inc. That’s about a 25 per cent premium over CEC’s closing price on Jan. 7, the last trading day before media speculation regarding a transaction, the companies noted. They put the deal’s value at about $1.3 billion, including debt.
By The Associated Press=
The Dow Jones industrial average fell 64.93 points, or 0.4 per cent, to close at 16,417.01. The Standard & Poor’s 500 index fell 2.49 points, or 0.1 per cent, to 1,845.89. The Nasdaq composite rose 3.8 points, or 0.1 per cent, to 4,218.69.
Benchmark U.S. crude oil for February delivery slipped 21 cents to close at $93.96 a barrel on the New York Mercantile Exchange. In other energy futures trading in New York, natural gas rose 6 cents to $4.38 per 1,000 cubic feet, wholesale gasoline fell 3 cents at $2.60 a gallon and heating oil was flat at $2.98 a gallon. Brent crude, used to set prices for international varieties of crude, fell 52 cents to $105.75.