BusinessBits
News, Reviews, Commentary and More



DJIA 13362.37 chart+150.38
NASDAQ 2553.87 chart+7.60
S&P 500 1465.81 chart+10.54

5/18/2006

Symantec Sues Microsoft Over Storage

Filed under: — 10:34 pm

Symantec sued Microsoft on Thursday, citing a misappropriation of trade secrets and breach of contract. The lawsuit “seeks an injunction that would block the further development, sale or distribution of Vista - the already-delayed next version of Windows - and other products until all Symantec intellectual property is removed.”

“The suit … involves Symantec’s Volume Manager product, software it acquired with its purchase of Veritas Software Corp. Volume Manager allows operating systems to store and manipulate large amounts of data and protect systems from data loss when storage hardware fails.

Symantec alleged that Microsoft, which had licensed the Volume Management technology from Veritas, violated terms of its license agreement by using the technology to develop competing features and products. Microsoft improperly incorporated the technology into its operating system products, including Vista, and then concealed its use of the technology, Symantec said.”

We’ll find out whether this has an effect on the Windows Vista release, considering there was recently a Supreme Court decision that was not in favor of lawsuits seeking injunctions. Though in that instance they were talking about companies that make no products and hold onto patents for the sole purpose of extorting money from other companies.

Sources: WSJ, CNNMoney

disclaimer: I own some Microsoft stock. Though I would probably be better off personally not telling you this news.

5/12/2006

Best Buy Purchases Majority Stake in Chinese Retailer

Filed under: — 10:16 pm

Best Buy Co. agreed to purchase a majority stake in China’s fourth-biggest appliance and electronics retailer, Jiangsu Five Star Appliance Co., for $180 million, securing a foothold in China’s booming consumer-goods landscape.

Best Buy, the largest consumer-electronics retailer by revenue in North America, will use Five Star as part of a broader expansion into China. The Richfield, Minn., company expects consumer-electronics sales in China to reach nearly $100 billion in 2010. In April Best Buy announced a plan to build a store in Shanghai, to open next year, that, at 86,000 square feet, will be about twice the size of its U.S. stores.

Best Buy is hoping that teaming up with Five Star will help it to compete against the country’s dominant electronics retailers, such as GOME Electrical Appliances Holding Ltd. and China Paradise Electronics Retail Ltd.

Source: WSJ

EU Will Cancel Tariff Plan If U.S. Scraps Tax Rule

Filed under: — 6:13 pm

Europe will cancel plans for punitive tariffs on U.S. imports, if Congress repeals legislation that grants tax breaks to U.S. companies such as Boeing Co.

The European Union’s decision could end one of the most contentious and costly trans-Atlantic trade disputes. It also could warm relations strained by stalled global trade talks.

If signed into law, the measure would end a U.S. tax break that the World Trade Organization ruled illegal despite numerous revisions. It also would cut short a lengthy phase-out plan that the WTO also ruled illegal. Sometimes called the foreign sales corporation export subsidy, the rule has been in dispute for decades in various guises.

Source: WSJ

Trade Deficit Narrowed in March

Filed under: — 3:50 pm

The U.S. trade deficit narrowed sharply by surprise during March, but analysts predict mounting oil prices will widen the gap going forward.

The U.S. deficit in international trade of goods and services shrank by 5.6% to $62 billion from $65.64 billion in February, the Commerce Department said Friday. Exports rose, but the value of imports fell as oil prices dipped, Commerce data showed.

The $62 billion gap was the smallest since $58.46 billion in August 2005. A separate report Friday, though, showed petroleum import prices surged last month. That could cause the trade deficit to resume rising.

Friday’s trade report showed U.S. exports increased by 1.9% to a record $114.66 billion in March from $112.52 billion in February.

Exports increased by $510 million for capital goods, including industrial machines and computer accessories. Exports rose by $181 million for consumer goods, like diamonds and toys. Sales of industrial materials like fuel oil were up $1.25 billion. Exports of foods and beverages increased by $213 million. Foreign sales of autos and parts fell $377 million.

Imports fell by 0.8% to $176.66 billion.

Source: WSJ

Stocks Slide amid Inflation Concerns

Filed under: — 3:04 pm

Stocks moved down Friday afternoon, as a surprising jump in import prices drove up Treasury yields and kept inflation fears in focus. Sustained dollar weakness contributed to these worries.

Source: BusinessWeek

5/11/2006

Stocks Slip

Filed under: — 11:30 am

April retail sales rose less than expected, sparking hopes the Fed may pause its tightening cycle. Crude futures surged near $74

Stocks were trading modestly lower early Thursday, as investors weighed a tame retail sales report and surging oil prices. A lower-than-expected increase in April retail sales is being taken as a sign of less pressure for the Federal Reserve to keep raising interest rates, but concern is growing that the stock market is due for a correction.

Source: BusinessWeek

5/10/2006

Fed Raises Rates

Filed under: — 2:23 pm

The Fed has raised rates 1/4 pt. to 5.00%. They also said that some further policy firming may yet be needed. Timing of future firming depends on data.

Dell Burns Itself with Low Prices

Filed under: — 1:30 pm

By all accounts Dell has not been doing well. In recent weeks they have been offering many PCS at rock-bottom prices. They often discount machines before a fiscal quarter ends, in hopes of meeting expectations. “On May 8, Dell said it would post fiscal first-quarter revenue of $14.2 billion, at the low end of its earlier projection of $14.2 billion to $14.6 billion. Worse, Dell said it expects earnings of about 33 cents a share, falling short of a projected range of 36 cents to 38 cents, including an estimated three cents of stock-based compensation. The announcement sent shares down by almost 6% in extended trading.”

“The trouble for Dell is that unit volumes aren’t compensating for price reductions. Besides hurting Dell’s sales and profit, sluggish unit growth is also eroding market share, another key measure of overall health. In the calendar first quarter, Dell’s share slipped for the first time in memory, analysts said. According to market researcher IDC, Dell’s worldwide share of the PC market fell to 18.1% from 18.6%, and in the U.S., share fell to 32.3% from 33.9%.”

While dell is selling mid-range and high-end machines, those sales aren’t sufficient adn Dell is still being forced to cut prices. Dell also recently announced the acquisition of high-end computer manufacturer Alienware. Alienware always held a special place in my heart, and I hope that Dell doesn’t take them down with the ship.

Source: BusinessWeek

Wachovia to Merge with Golden West

Filed under: — 9:30 am

On Sunday, Wachovia announced it has signed a definitive agreement to acquire Golden West, one of the last major savings and loans in California, for about $25.5 billion in stock and cash. The transaction is expected to close in the fourth quarter of 2006, pending approvals.

Analysts seemed optimistic about Wachovia’s intended acquisition of Golden West Financials, though they admitted the deal would be expensive and risky. Analyst Mark Hebeka believes the deal would give Wachovia a national presence with significant branch additions in the key markets of California, Florida and Texas, and would also add higher returning assets to Wachovia’s balance sheet with minimal risk exposure.

Source: Forbes

News is also being reported that two top Wachovia Corp. executives sold shares of the bank valued at $5.8 million around the same time that it began talks to buy Golden West Financial Corp. Wachovia said the executives, Benjamin Jenkins III, Wachovia’s vice chairman and head of consumer banking, and investor-relations chief Alice Lehman, weren’t aware of the discussions when they sold the shares on April 27 and 28.

Does that mean they don’t have much faith in a combined company? Wachovia said the stock sales were consistent with its internal policies and procedures for executives who buy or sell company stock. But it still seems fishy.

Source: Wall Street Journal

BitTorrent Goes to Hollywood

Filed under: — 4:29 am

BitTorrent has inked a deal with Warner Brothers to distribute and sell over 200 WB movies and TV programs through the BitTorrent file-sharing program. Titles range from movies like Harry Potter and the Goblet of Fire to TV shows Dukes of Hazzard and Babylon 5.

According, to the article Warner Brothers is attempting to convert the BitTorrent audience over to legitimate buyers of their products. This further validates BitTorrent as a valid distribution venue, and further legitimizes the technology.

“The digital episodes of shows and movies from Warner Brothers will be loaded with special digital rights management software, keeping the files from being distributed illegally. That means that while BitTorrent will take advantage of users’ bandwidth to redistribute the bits and pieces of the movie files to other paying customers, it will be impossible for users to share files with their friends, unless those friends pay up.”

Source: BusinessWeek

Fed Announcement Coming and More

Filed under: — 2:28 am

The Federal Reserve’s Federal Open Market Committee meets to discuss monetary policy. An announcement by the Fed will come Wednesday at 2:15 p.m. Economists polled by Action Economics unanimously believe the central bank will raise the federal funds rate by 25 basis points. The current funds rate is 4.75%. Following Chairman Bernanke’s Apr. 28 testimony before Congress, economists now believe the Fed will not make a move in June.

Today is a big week for numbers. Wednesday sees the numbers on mortgage application volume and the federal budget. Thursday brings the latest figures on jobless claims, retail sales, and business inventories. And Friday the University of Michigan’s Survey Research Center will report its initial reading of consumer sentiment for May.

Source: BusinessWeek

5/9/2006

Oil Rises on Iran Worries

Filed under: — 8:00 pm

Crude-oil futures rose more than $1 a barrel Tuesday amid persistent concerns over Iran’s nuclear ambitions.

Oil prices have risen in recent weeks on anxiety that Iran, the No. 2 producer in the Organization of Petroleum Exporting Countries, could cut supplies because of international pressure to modify its nuclear program.

Other factors pushing up oil prices are unrest in Nigeria, violence in Iraq and rising resource nationalism in South America. Some 500,000 barrels per day of Nigerian production, most of it operated by Royal Dutch Shell PLC, remain off-line because of violence there, and more than 300,000 barrels per day remain shut down in the Gulf of Mexico since Hurricane Katrina battered offshore platforms in August.

Saudi Arabia’s oil minister suggested relief - though still far off - was nonetheless in sight, saying prices will stabilize by 2010.

Unfortunately that doesn’t help consumers now. But at least they will only pay out the nose for four more years.

Source: Forbes

Gold Hits 26 Year High

Filed under: — 5:00 pm

Gold prices surged to a new quarter-century high of $700 an ounce Tuesday as funds bought into the market, driven by tension between the United States and Iran and expectations of a pause in interest rate hikes.

June gold futures on the New York Mercantile Exchange rose to $700 an ounce in late-morning trading, a level not seen since late 1980. That’s up more than $20 from Monday’s closing price of $679.90.

Source: Forbes

AOL Fires 1300

Filed under: — 1:59 pm

Today AOL announced that it would lay off some 7% of its global labor force, cutting some 1,300 employees. The company will close its call center in Jacksonville, Fla. and cut jobs from call centers in Ogden, Utah, and Tucson, Ariz.

An AOL spokesman attributed the call-center cuts to wiser users and to better tools that AOL had developed allowing users to help themselves. Call volume has “dropped by some 50% since 2004.”

While the article downplays the effect of a decline in AOL subscriptions, these cuts are a step in the right direction for the ailing company.

Source: Forbes

Breathing New Life Into BusinessBits

Filed under: — 1:40 pm

As you can see the BusinessBits blog has fallen behind in the past few months. I, Jason Schramm, plan to infuse life into this blog again. I plan to bring the focus to market conditions, and general economy news. Of course I will also report on everything else business related, but I feel there is a need for this blog to have a greater focus on the state of the economy.

You may also notice some slight reorganizations in the layout of this site, but the general layout will remain the same though I may widen the reading area a bit. I am excited to get this blog going again, and I am itching to start posting.

Read the Disclaimer before acting on any information found here.
All content and materials Copyright ©2006, Blog News Channel - Powered by WordPress