LITTLE ROCK — QUOTE OF THE DAY
“There is big-time integration risk here putting together a giant U.S.
pharmaceutical business with a giant U.K. pharmaceutical business.”
Brian Sozzi,
an independent analyst in New York Article, 1D
3-month, 6-month T-bill rates rise
WASHINGTON - Interest rates on short-term Treasury bills rose in Monday’s auction with rates on sixmonth bills going to the highest level in more than a year.
The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.095 percent, up from 0.085 percent last week. A further $27 billion in sixmonth bills was auctioned at a discount rate of 0.150 percent, up from 0.140 percent last week.
The three-month rate was the highest since the bills averaged 0.115 percent on Feb. 27. The six-month rate was the highest since the bills averaged 0.170 percent on March 28, 2011.
The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.60 while a six-month bill sold for $9,992.42.
That would equal an annualized rate of 0.096 percent for the three-month bills and 0.152 percent for the six-month bills.
Separately the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was unchanged at 0.18 percent last week, the same as the previous week.
Arid U.S. sends rice futures surging
Rice futures surged the most this year on speculation that dry weather will curb output in the U.S., the world’s fifth-biggest exporter.
Less than 5 percent of the normal amount of rain fell in the past month in parts of Arkansas, the biggest U.S. producer, National Weather Service data show. U.S. output may fall 1.1 percent in the 12 months that start Aug. 1 from a year earlier, Department of Agriculture data showed June 12.
“The biggest culprit is this lack of moisture,” Jim Daven, chief executive officer at Commercial Grain Inc.
in Conway, said in a telephone interview. “We’re OK now, but we’re drying up pretty fast. I’m not sure there’s one specific place that’s still positive as far as water supply.
You have a scare in all of the grains concerning moisture.”
Rice futures for September delivery, the contract with the highest open interest, gained 3.2 percent to settle at $14.75 per 100 pounds on the Chicago Board of Trade, the biggest gain for a most-active contract since Dec. 29. The commodity earlier rose by the exchange limit of 50 cents.
Futures for July delivery, the contract with the highest volume, climbed 3.2 percent to $14.495.
Thailand is the biggest exporter, followed by Vietnam, India and Pakistan, USDA data show.
Cooper tires from Texarkana recalled
Cooper Tire & Rubber Co. has issued a recall for 10,236 tires produced at its Texarkana plant.
The Findlay, Ohio-based tire manufacturer submitted a letter detailing the problem to the National Highway Traffic Safety Administration on June 5, and the recall began Friday.
“Contaminated rubber may have been used in the tread compound, which could result in tread separation,” the letter said. “Tread separation can result in loss of vehicle control, increasing the risk of a vehicle crash.”
The recalled tires were produced at the Arkansas plant Dec. 11-17 and Jan. 1-7. The company has begun contacting owners of the recalled tires.
The tires affected are: Cooper Discoverer H/T, sizes LT235/85R16 and P265/70R17; Cooper Discoverer LSX, size 265/70R17; Cooper Mastercraft Courser HTR, size LT235/ 85R16; Del-Nat Delta A/S Sierradial, size 265/70R17; Del-Nat National A/S Commando, size 265/70R17; Pep Boys Definity Dakota H/T, size P265/70R17; and TBC Signma Stampede Radial SUV, size P265/70R17.
The company will replace, mount and balance the tires free of charge.
Cooper’s recall number is 156. Concerned tire owners can contact Cooper’s consumer relations department at (800) 854-6288.
Penney’s shares take hit after exit
NEW YORK - J.C. Penney’s shares tumbled a day after the department store chain announced the sudden departure of Michael Francis, a top Target executive brought in last October to help redefine the store’s brand.
In a terse statement issued late Monday, Penney gave no reason for the abrupt departure of Francis, who was president. In that post, Francis was responsible for the marketing of a contentious new pricing plan that aims to get rid of hundreds of sales events. He also oversaw merchandising and product development.
The move comes as Penney is trying to reverse a sharp drop in traffic and plummeting sales after its new pricing strategy spearheaded by new Chief Executive Officer Ron Johnson confused shoppers.
Penney’s shares fell $2.08, or 8.6 percent, to close at $22.25.
FedEx predicts slower growth year
NEW YORK - FedEx Corp. said Tuesday that a combination of higher costs and slow global growth will crimp its earnings results over the next 12 months.
The world’s second-largest package delivery company is closely watched for signs about the health of the economy. It reported lower results for the fiscal fourth quarter that ended in May because of a charge for retiring some planes. It’s getting rid of those aircraft to slim down its express network as more consumers opt for slower shipping services to save money. Operating income in that unit fell 34 percent including the one-time charge, or 3 percent without it.
FedEx earned 6 percent more per package in its U.S.
unit despite a 5 percent decline in total shipments.
Across the business, FedEx earned $550 million, or $1.73 per share, in the latest quarter, compared with $558 million, or $1.75 per share, a year earlier. Revenue rose to $11 billion from $10.55 billion a year ago.
Without the charge to retire planes, FedEx Corp. would have earned $1.99 per share, 4 cents better than Wall Street estimates.
But the Memphis company’s forecast for the first quarter and fiscal year fell below Wall Street’s expectations and its stock fell about 2 percent before the opening bell.
The company said its forecast is based on an assumption of 2.2 percent economic growth in the U.S. and 2.6 percent global growth for the 12 months ending in May 2013.
FedEx shares rose $2.50, or 2.8 percent, to close at $91.01.
Business, Pages 28 on 06/20/2012