A cyclone raced toward Australia’s flood-ravaged northeast Sunday, rattling nerves in a region that has already suffered billions of dollars worth of damage from a monthslong crisis.
Cyclone Anthony intensified to a Category 2 storm with winds of 80 mph (130 kph) and was expected to cross the Queensland state coast early Monday morning. The Bureau of Meteorology warned residents in coastal communities to brace for destructive winds and more flooding.
“You just think, can any more cruel blows land on Queensland and the nation? And unfortunately the answer seems to be yes,” Prime Minister Julia Gillard said. “We’re all made of tough stuff and we’ll get through this, but this is another big, cruel blow coming on top of what has been a summer of tragedy already.”
Heavy rains that began in November have caused massive flooding across Australia, killing 35 people and damaging or destroying 30,000 homes and businesses no faxing pay day loans. Brisbane, the country’s third-largest city and the capital of Queensland, was under water for days.
The federal government has estimated the cost of the damage is already at 5.6 billion Australian dollars ($5.6 billion) and likely to rise.
Forecasters are watching another tropical weather system developing in the South Pacific that could hit Queensland later in the week.
Queensland Premier Anna Bligh said disaster management officials throughout the state were on alert and evacuation centers were available if needed.
Shoppers can expect some higher prices as the makers of toothpaste, soap and other everyday household products see their profit margins pinched by rising ingredient costs.
Both Procter & Gamble Co. and rival Colgate-Palmolive Co. reported lower profits Thursday and posted revenue below expectations for the last quarter. They both said commodity costs were rising more than expected. P&G said it was adding $1 billion in costs for the year, double what it anticipated.
P&G, which counts Pampers diapers, Gillette shavers and Crest toothpaste among its brands, said fast-rising costs for materials and fuel would probably mean some price increases, with hikes already planned for its Duracell batteries in March.
Colgate-Palmolive President and CEO Ian Cook said the price increases would run 1 to 2 percent and be “appropriate.”
Consumers can expect to see not only household product makers, but beverage, food and other companies try to pass along increases, said Jack Russo, an Edward Jones analyst. That will test whether they are feeling confident enough about the economy to pay higher prices again for their favorite brands.
“That’s the million-dollar question,” Russo said, adding that P&G and Colgate were better positioned than many because of their solid reputations and relationships with retailers, and presences in emerging markets that are growing more quickly than sluggish developed countries.
However, while some consumers are willing to pay more for whiter teeth or a clean shave, they still appear to be drawn to lower prices for other everyday items. P&G reported ’strong growth” for Charmin Basic, a lower-priced version of its toilet paper brand.
S&P analyst Tom Graves cut Colgate stock from a “Hold” to a “Sell” recommendation, citing the sales shortfall and “a challenging commodity cost environment.” And S&P lowered P&G from “Buy” to “Hold.”
The Dow Jones industrial average broke through 12,000 for the first time in two and half years Wednesday but edged lower in afternoon trading.
Investors were encouraged by President Barack Obama’s call to overhaul taxes on businesses and a jump in new home sales in December. The gains were held back by weak profit forecasts from Boeing Co., Xerox Corp. and other big names.
Obama said in his State of the Union address late Tuesday that he wanted to close corporate tax loopholes and use the additional revenue to lower tax rates on businesses for the first time in 25 years.
That change would be popular with business leaders from both political parties. The U.S. has some of the highest corporate tax rates in the industrialized world.
“If he can take steps to simplify the tax codes, be it for individuals or corporations, I think it would be a lot easier to do business,” said Jack Ablin, chief investment officer at Harris Private Bank.
The Dow Jones industrial average rose 7, or 0.1 percent, to 11,984 in afternoon trading. It went as high as 12,020 earlier. The last time the Dow traded above or closed above 12,000 was in June 2008.
Boeing was the worst performer of the 30 stocks in the Dow average. Boeing fell 3.3 percent after saying its 2011 profit would be hurt by delays to its new 787 aircraft and higher pension expenses.
Xerox fell 8 percent. The company issued a weak earnings forecast and said its longtime chief financial officer, Lawrence A. Zimmerman, was retiring.
Eastman Kodak Co. fell 8.2 percent. The company’s income fell 95 percent on weaker revenue from its camera business and lower royalties from digital imaging.
The Standard & Poor’s 500 index rose 7, or 0.6 percent, to 1,298. The last time the S&P index closed above 1,300 was Aug. 28, 2008.
The Nasdaq composite index rose 22, or 0.8 percent, to 2,742.
The Commerce Department reported that new home purchases rose 17.5 percent in December compared with November. Despite the strong one-month jump, new home sales for all of 2010 fell to the lowest level on records going back 47 years.
Bond prices fell, sending their yields higher. The yield on the 10-year Treasury note rose to 3.40 percent from 3.34 percent late Tuesday.
Later in the day, the Federal Reserve will release a statement from its latest policy meeting. It’s not expected to announce any changes to interest rates or the Fed’s $600 billion bond-buying program.
A large batch of earnings reports out Tuesday are likely to determine if indexes clear levels last seen more than two years ago.
The Dow Jones industrial average closed 20 points shy of 12,000 on Monday. The last time the Dow closed above 12,000 was June 19, 2008.
Four of the Dow’s 30 companies were scheduled to release results before the market opens Tuesday: DuPont, 3M Co., Verizon Communications Inc. and Johnson & Johnson.
Health care giant Johnson & Johnson said profit dropped 12 percent in the fourth quarter. The maker of Tylenol, medical devices and biologic drugs was hammered by recalls that pulled its products from shelves. Excluding one-time items, its earnings would have been $1.03 per share, matching analysts’ expectations.
DuPont said net income fell but the company still beat expectations. Profits surged at Verizon but fell a penny short of estimates.
Another Dow member, American Express Co., reported results after the market closed Monday. The credit card issuer said quarterly profits jumped 49 percent. But its adjusted earnings fell just short of expectations.
Later Tuesday morning, the Conference Board will release its Consumer Confidence Index for January. The index is expected to hit 54.6, after dropping to 52.5 in December. A reading of 90 signals a healthy economy, a level not seen since the recession began in December 2007.
The economy is also expected to be the focus of President Barack Obama’s State of the Union speech Tuesday night.
Stocks appear headed for a lower open. Dow Jones industrial average futures are down 31 points, or 0.3 percent, at 11,898. S&P 500 index futures are down 5, or 0.5 percent, at 1,282. Nasdaq 100 futures are down 11, or 0.5 percent, at 2,287.
Companies across the market rose on Monday. The S&P 500 index ended the day just 10 points below 1,300.
Technology stocks made big gains after Intel Corp. increased its dividend. Materials companies rose after a report from the National Association for Business Economics showed that economists are more positive about economic growth and the job market than at any time since the start of the Great Recession in December 2007.
Our Fame & Fortune series continues with Toronto actor Allen Altman, 45, who followed his instincts in buying a first home, even though he thought he was spending too much.
How did your childhood influence your attitude toward money?
Both my parents worked very hard and growing up we were taught about heart and generosity. My parents were always the ones who helped neighbours or lent relatives money in time of need. I am thankful for this upbringing. It
Schlumberger’s fourth-quarter net income jumped 31 percent, the company reported Friday, as demand for oilfield services surged around the world along with the price of energy.
Oil prices have moved consistently higher since last summer. A barrel of oil now costs more than $90.
The energy industry, after slumping during the recession, is aggressively bumping up production to meet demand and major oil producers need companies Schlumberger to manage drill sites across the globe.
The company’s shares have been climbing since last summer as well, and before the market opened Friday, the stock rose nearly 2 percent to $86.80.
Schlumberger has had to grow with major producers and last year spent $11 billion to acquire Smith International Inc.
It was the time that Smith’s operations were reflected over an entire quarter and during the past three months, the company contributed revenue of $2.49 billion and pretax operating income of $275 million.
Schlumberger Ltd., based in Houston, earned $1.04 billion, or 76 cents per share, for the final three months of the year. That compares with $795 million, or 65 cents per share, in the year-ago period payday loan lenders. Revenue increased 58 percent at $9.07 billion.
Excluding special charges, Schlumberger said it would have earned $1.16 billion, or 85 cents per share, in the quarter.
Analysts typically exclude special charges and had predicted earnings of 78 cents per share on revenue of $10.1 billion.
Oilfield services revenue climbed 16 percent to $6.01 billion.
Schlumberger said that 2010 was the second-biggest demand increase in the past 30 years and most forecasts call for that trend to continue.
The Paris-based International Energy Agency expects oil demand this year will rise to 89.1 million barrels a day, up from 87.7 million barrels a day in 2010.
For the full year, Schlumberger said it earned $4.27 billion, or $3.38 per share, compared with $3.13 billion, or $2.59 per share in 2009.
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The AP’s Michelle Chapman contributed to this report in New York.
Richard Fleming plans to leave his post as chief executive of the Regional Chamber and Growth Association by year’s end, the organization announced today.
Fleming has led the RCGA, the St. Louis area’s chamber of commerce, since 1994.
Fleming will remain in the post until his successor is selected, and will help in the selection, said Bob Reynolds, RCGA board chairman, and chairman of electrical supplier Graybar.
In a press release, Reynolds said that Fleming “wants a new challenge in his career. He has our full support.
OTTAWA
Former European Commission President Romano Prodi said Germany will ultimately ensure the survival of the euro, amid concern within Chancellor Angela Merkel’s coalition about the cost of rescue measures.
“At the end of the story there will be some basic agreement,” Prodi, also a former prime minister of Italy, said in an interview in Beijing today. “They go to the brink and they take a decision,” he said, referring to Germany.
Germany, with an unemployment rate at its lowest in 18 years, has been reluctant to bail out underperforming neighbors. At the same time, Merkel has indicated she may be easing her opposition to expanded measures as European finance chiefs start work on a revamped strategy for fighting the region’s debt woes.
The single currency weakened against 15 of 16 major counterparts today, declining to $1.3292 as of 8:21 a.m. in London.
The euro enables Germany to accumulate trade surpluses because other EU nations can’t devalue their currencies as they did before the euro’s creation, according to Prodi.
Germany reported a 12.9 billion euro ($17 billion) surplus in November, the most recent month for which figures are available. China’s excess of exports over imports in December was $13.1 billion.
Hindering efforts to resolve the crisis would be “masochistic” or like committing “suicide,” said Prodi, chair professor of Sino-European dialog at the China Europe International Business School in Shanghai. Corporate Germany will “never permit” scrapping the euro, he added.
Greek Rescue
During the crisis, Merkel has held out against some rescue measures, stalling on an aid package for Greece to win stiffer budget-cutting conditions.
With elections this year in seven of Germany’s 16 states, she risks further alienating voters if she agrees to revamped rescue funds to fulfill her pledge to do “whatever is needed” to save the euro. Some coalition lawmakers have expressed concern at any attempt to bolster the EU’s bailout tools at the expense of German taxpayers.
Germany, as Europe’s biggest economy, is already the largest contributor to the EU’s 440 billion-euro bailout fund.
Oregon has sued Johnson & Johnson for allegedly selling defective Motrin drugs to consumers in the state for more than a year, and for trying to secretly remove the faulty drugs from stores.
"Companies that break the rules and put consumers at risk will be held accountable," Oregon Attorney General John Kroger said in a statement.
The state filed the lawsuit Wednesday against J&J (JNJ, Fortune 500) and its two subsidiaries, McNeil PPC Inc. and McNeil Healthcare Inc. The company’s McNeil division makes over-the-counter cold and pain drugs such as Tylenol, Motrin and Benadryl.
The suit claims that J&J discovered in late 2008 that some supplies of Motrin sold in gas stations and convenience stores nationwide were defective because they were not properly dissolving.
Instead of issuing a public recall of the defective Motrin products, the suit alleges that J&J hired contractors to go into stores in early 2009 and secretly buy the faulty products without telling wholesalers, retailers or consumers about the problem.
Food and Drug Administration officials learned of this "phantom" Motrin recall mid-2009, but the suit alleges that J&J’s McNeil division did not publicly announce a recall until February 2010.
The public first learned of the phantom recall when details of it emerged in June during a Congressional hearing addressing a series of other Johnson & Johnson recalls. That’s when company executives as well as the FDA were questioned about an attempt to surreptitiously take Motrin off the shelves.
After months of maintaining that the company did not engage in any deceptive practices in the Motrin recall, J&J CEO William Weldon finally admitted to lawmakers in December that J&J secretly bought up defective drugs without informing regulators and consumers of its actions.
The Oregon lawsuit said that despite the secret Motrin removal, more than 787 eight-count containers of the allegedly defective Motrin remained in stores for sale in the state.
Additionally, the lawsuit alleges J&J’s activities reflected multiple violations of Oregon’s Unlawful Trade Practices Act (UTPA), which prohibits companies from "employing unconscionable tactics, making certain false or misleading representations, or failing to disclose a fact."
The state is suing J&J for civil penalties of up to $25,000 for each violation of the UTPA, which could amount to millions of dollars.
Oregon Attorney General’s spokesman Tony Green said the state had offered a proposed settlement to J&J prior to the lawsuit, which included a payment of $725,000 by J&J to the Justice Department to settle the dispute.
Green said J&J rejected the settlement offer which then resulted in the suit.
McNeil said in a statement that the company’s actions with regard to the Motrin removal were "consistent with applicable law and there was no health or safety risk to consumers associated with this limited recall."
"As there is no legal basis for the claims advanced by Oregon, we intend to seek dismissal of the Complaint," the company said.
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