NEWS AT A GLANCE
The fragile Corn Belt boom
While the rest of the U.S. has been mired in gloomy financial news, the Plains states have been enjoying a surge of prosperity. Buoyed by high corn and soy prices, the housing market is holding up well, banks are lending, and employers keep hiring. That means that federal moves to stimulate the economy are unnecessary there, at best, and possibly helping to inflate regional bubbles. (The Washington Post) There are also signs the prosperity may not last. “Investors have been stung of late in farm equipment and fertilizer stocks, but more pain could be coming,” says Citigroup strategist Tobias Levkovich, as inflated prices in “what has been dubbed the ‘dot-corn’ stocks” look due for a correction. (Bloomberg)
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EBay moves away from auction model
Online auction pioneer eBay is changing its selling-fee structure to emphasize fixed-price sales over bidding, in an acknowledgment that many online buyers are losing interest in auctions. The change is aimed at making eBay more competitive with online retailers such as Amazon. (The New York Times) The new cost for placing “Buy It Now” listings, effective Sept. 16, will be 35 cents for a 30-day run, from between 35 cents and $4 for a seven-day listing. (The San Jose Mercury-News) The move to fixed pricing is “very opportunistic, but also in line with what their customers are telling them they want,” said Patti Freeman Evans at Jupiter Research. (Reuters)
HP beats expectations
Hewlett-Packard, the world’s largest technology company, reported a 14 percent rise in quarterly profit, to $2 billion, beating Wall Street expectations. The company’s printer division, which brings in a quarter of its revenue, had weak results, with a drop in printer sales barely offset by rising revenue from printer supplies. (The New York Times) Laptop sales rose 25 percent, though, and HP also had strong overseas sales, benefiting from the weak dollar. (AP in Yahoo! Finance) Including earnings reports from IBM and Cisco, “the latest round of results means big-cap information technology companies are going to make it through the rest of the year,” said Cowen & Co. analyst Louis Miscioscia. (Reuters)
The price of the gold medal
Olympic gold medals contain only about 0.19 ounces of gold, used to coat a silver disc underneath. That means that at gold’s current price of $803 an ounce, Michael Phleps could sell his eight gold medals for about $1,728 in scrap metal. But of course, the medals are worth more than their face value. In 2004, for example, Polish swimmer Otylia Jedrzejczak sold her gold medal at auction for $82,599. And since then, gold prices have more than doubled. “I wish these hard-working athletes got ‘the real thing,’” said analyst Jon Nadler at Kitco Bullion Dealers. “But the medals are worth more than their weight in gold anyway.” (MarketWatch)
