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AZCentral.com - Wall Street heads into another turbulent week with investors set to pore over a government report on retail sales and earnings from Wal-Mart Stores Inc. to get a better reading on the consumer.
There are growing signs that the deepening economic slowdown has caused Americans to tighten their purse strings. There was fresh evidence of this past week when retailers posted the worst October same-store sales in 35 years - and analysts believe the upcoming holiday shopping season could be among the slowest in decades.
With consumer spending driving more than two-thirds of the U.S. economy, investors will be paying close attention to earnings outlooks for some of the nation’s biggest retailers. Wal-Mart, the nation’s biggest retail chain, will post results on Thursday. Kohl’s Corp., JCPenney Co., Macy’s Inc., and Abercrombie & Fitch Co. are scheduled to release reports as well.
Reuters - General Motors Corp (GM.N) and Ford Motor Co (F.N) posted more than $27 billion of net losses in the first half of 2008 — and that was before a deepening economic slowdown pushed industry sales beyond 15-year lows.
What either automaker will report for an encore in the third quarter could be overwhelmed by the potential merger of Chrysler LLC into GM or various other scenarios of some or all of the Auburn Hills, Michigan automaker being sold.
Both are expected to post dismal third-quarter results on Friday, capping off a disastrous week that started with reports that U.S. auto sales plunged to the lowest annualized rate in a quarter century in the first month of the fourth quarter.
Analysts on average expect GM and Ford to post losses of roughly $2 billion each for the third quarter excluding one time items, according to Reuters Estimates.
Times of Malta - The situation in the international financial markets, although still displaying signs of uncertainty, seems to be settling down. Governments in the major economies, US, UK, Germany, France and Italy, no longer seem to be chasing fairies (or bad witches!), but appear to have got ahead of the situation.
The money markets (which were a major issue) are getting unblocked and as such even interbank lending rates are going down. However, this does not mean that the world has solved all its economic problems. We have simply gone back to the situation of a few months ago, when there was already fear of an international economic slowdown resulting from the increases in the price of oil and the consequent rise in inflation.
The recapitalisation of financial institutions by different governments, the partial or full re-nationalisation of such institutions and the continued provision of liquidity by governments to the financial system have restored a level of confidence that at last allows the system to function, even if not at an optimum, at least to an acceptable level.
West Palm Beach (HedgeCo.Net) - Hedge fund Bay Harbour Management is poised to take over bankrupt clothing retailer Steve & Barry’s.
The company announced on Monday it has filed a "stalking horse" purchase agreement with the hedge fund in which Bay Harbour will acquire the bulk of the chain’s assets for the bargain price of $163 million. Bay Harbour is creating a subsidiary, BH S&B Holdings, which plans to continue to operate Steve & Barry’s stores with their current staff and key facilities.
Should the court approve the agreement, Bay Harbour will be able to perform due diligence to determine which stores it will take over. Hilco Merchant Resources will act as stalking horse bidder looking to conduct a final sale of anything that remains. The proposal will act as an opening bid during an auction of the company scheduled for August.
Bay Harbour could still be outbid if another investor comes up with a better offer. Steve & Barry’s had been foundering in the economic slowdown, however, and had to file for Chapter 11 bankruptcy last month.
Douglas Teitelbaum, managing partner of Bay Harbour, has often been labeled as a "bottom feeder" for his fund’s focus on distressed debt and companies sorely in trouble. The New York-based fund has more than a billion dollars in assets under management.
In a statement, Steve & Barry’s noted that Bay Harbour participated in "the rebranding and turnaround of the former Aladdin Casino, now operating on the Las Vegas strip as the Planet Hollywood Resort and Casino." Other past holdings of the fund include Barney’s New York and telecom company TelCove, now owned by Level 3 Communications.
New York-based Steve & Barry’s operates 276 clothing stores specializing in apparel lines created by such celebrities as Sarah Jessica Parker, Amanda Bynes and Venus Williams. The company got its start back in 1985.
Forbes - The dollar edged up towards a one-month high against the euro on Friday before monthly U.S. jobs data later in the day, with investors viewing the report as a key hurdle for whether the U.S. currency can sustain its rebound.
A mixed bag of U.S. data released the previous day showing the economy expanding less than expected in the second quarter, a spike in jobless claims but a pick-up in Midwest business activity did not prove decisive for the dollar. [ID:nN31399964]
Investors are still looking for the Federal Reserve to raise interest rates later in the year, just as mounting signs of economic slowdown from the euro zone to Australia have started to take a toll on other major currencies.