NEWS AT A GLANCE
School spending set for failing grade
Back-to-school time is second only to the Christmas season in terms of consumer spending, and this pre-school season is looking pretty bleak. America’s Research Group projects that total back-to-school spending will fall 2 percent, and only 1.5 percent of consumers say they will pay full price for items. And the National Retail Federation sees a 22 percent drop in school electronics spending. The poor economy and high food and gas prices are mostly to blame, but teenagers’ summer job earnings usually account for 19 percent of school spending, and this was the worst summer in 30 years for teenage employment, says analyst Britt Beemer. That may mean fewer fancy jeans sold. “Fads may not be in much play this year,” said IRI Consulting’s Thom Blischok. (MarketWatch)
Foreclosures rise sharply
U.S. home foreclosure filings rose 14 percent in the second quarter, to almost 740,000 properties, RealtyTrac reported. That is a 121 percent increase over a year ago, and the eighth consecutive quarter of rising foreclosures. One in every 171 households is now in some stage of foreclosure. (Reuters) Separately, Census figures show that 2.2 million houses, or 2.8 percent of U.S. homes (excluding rentals) were vacant and on the market last quarter. That’s down slightly from last quarter’s 2.9 percent. (CNNMoney.com) Perhaps unsurprisingly, sales of forclosed houses is up nationwide. That is a drag on home prices, says Moody’s economist Aaron Smith, “but it’s better to have activity than not.” (BusinessWeek.com)
Samsung profits, up 51 percent, fall short
Samsung Electronics, the world’s No. 1 maker of memory chips, LDC panels, and TVs, reported a 51 percent jump in quarterly profit, to $2.12 billion, on strong flat-screen TV and cell phone sales. The No. 2 cell phone maker, after Nokia, Samsung sold 45.7 million handsets, a 22 percent increase. (AP in Yahoo! Finance) Overall earnings fell short of expectations, however, due to a loss in Samsung’s TV division and an unexpected 18 percent drop in memory-chip profits. “The outlook for chips doesn’t look good for the rest of this year because of sagging demand,” said Kim Woo Sik at SH Asset Management in Seoul, and “there’s persistent concern of oversupply” in LCD panels. (Bloomberg)
Backtracking in the food industry
The food industry has lost at least $250 million from the recent salmonella outbreak, which was originally blamed on tomatoes and now looks to be linked to jalapeno peppers. According to former food safety officials, an electronic tracking system of the source of food items could have sped up the investigation of the salmonella source, thus saving millions of dollars. The food industry spent millions in a successful campaign to strip bioterrorism legislation of a similar electronic tracking requirement in 2003-04, records show. “If the FDA had been given the resources and authority years ago,” said former FDA associate commissioner William Hubbard, “I think we would have solved this already.” (AP in Yahoo! Finance)
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