The news at a glance
Bernanke signals new stimulus; Apple and Samsung battle overseas; Yelp bucks social media slump; Airlines: Merger talks take flight; Autos: Best August sales in five years
Economy: Bernanke signals new stimulus
Federal Reserve Chairman Ben Bernanke last week “left little doubt that the central bank was preparing new stimulus for the economy,” said Don Lee in the Los Angeles Times. In a closely watched speech at the Fed’s annual retreat in Jackson Hole, Wyo., Bernanke offered a “spirited defense” of the central bank’s actions, saying its purchases of more than $2 trillion worth of bonds since 2008 had bolstered the economic recovery. But Bernanke also said that job gains have been “painfully slow,” and signaled that the Fed could undertake another round of stimulus, possibly after its two-day meeting beginning Sept. 12.
But will it do any good? asked Stephen Gandel in Fortune.com. “Everything has a window of opportunity, and Bernanke may have missed his.” If the Fed had acted back in May, when the economy showed signs of slowing, it might have been able to make a difference. But now concerns about the fiscal cliff—the mix of tax increases and spending cuts set to begin in January—could trump any effect another round of Fed bond purchases might have. “Throw in the debt problems in Europe and the looming slowdown in China,” and what Bernanke “can do at this point might not be very much.”
Tech: Apple and Samsung battle overseas
Apple may have won a patent fight with Samsung in the U.S. last month, said Hiroko Tabuchi and Nick Wingfield in The New York Times, but “the two companies remain neck-and-neck in legal disputes in almost a dozen countries.” Last week, a Japanese court rejected Apple’s claims that Samsung’s Galaxy smartphones and tablets violated one of its synchronization patents, and a South Korean court issued a split decision last month, ruling that Apple and Samsung both infringed each other’s designs. Similar cases are underway in Germany, the United Kingdom, and Australia.
Markets: Yelp bucks social media slump
Shares of Yelp got an unexpected bounce last week, said Julianne Pepitone in CNNMoney.com. When early investors got their first chance to sell millions of shares of the reviews site, the market expected the stock to fall like those of Yelp’s social media cousins Facebook and Groupon. Instead, the stock surged 23 percent, with most early investors keeping their holdings and short sellers—traders who bet a stock will fall—having to buy more shares to cover their positions, driving up the price.
Airlines: Merger talks take flight
“American Airlines and US Airways are one step closer to a potential merger,” said Scott Mayerowitz in the Associated Press. The companies announced last week that they would exchange confidential financial and business information in an effort to negotiate a deal. The merger would make the combined company a closer rival to United Continental, currently the world’s largest airline. International Airlines Group, the parent of British Airways, is also considering taking a stake in American, which entered bankruptcy protection in November.
Autos: Best August sales in five years
Automakers just had their best August since before the recession, said Bernie Woodall and Deepa Seetharaman in Reuters.com, selling nearly 1.3 million new cars and trucks, 20 percent more than a year ago. All three Detroit automakers—Chrysler, Ford, and General Motors—reported double-digit sales growth over August 2011. Fuel-efficient vehicles were major draws, but demand for full-size pickups also jumped 16 percent. “Consumers are feeling better about making big-ticket-item purchases,” said TrueCar.com analyst Jesse Toprak.