NEWS AT A GLANCE
Fed-led liquidity effort slow to kick in
Rates on money market funds—a broad indicator of bank borrowing—were flat or slightly higher early today, suggesting that yesterday’s joint effort by central banks to boost bank confidence and lending may not work immediately. The rates had dropped after the U.S. Federal Reserve, European Central Bank, and British, Swiss, and Canadian central banks announced the new mechanisms. “A dose of realism has kicked back in,” said Rabobank strategist Jeremy Stretch. The policies are good, “but people doubt if this is going to stop bad news coming out of banks,” he added. (Reuters) Asian markets closed down sharply today. (MarketWatch)
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Novartis cuts job
Swiss drugmaker Novartis said it is cutting 2,500 jobs, or 2.5 percent of its global workforce, amid slowing sales growth, product delays, and increased competition from generics. Novartis will take a $450 million charge in the fourth quarter, but said the move will save it $1.6 billion a year by 2010. (Reuters) “In general, now is not a good time in big pharma,” said analyst Denise Anderson at Landsbanki Kepler. (Bloomberg) In other pharmaceutical news, Biogen Idic shares fell 27 percent in extended trading after the drugmaker said it hadn’t received “any definitive offers” for a buyout and would stay independent. Biogen put itself up for sale in October. (AP in Yahoo! Finance)
Costco earnings deliver
Costco Wholesale Corp. said its first quarter profits rose 11 percent, to $262 million, meeting analysts’ forecasts. (MarketWatch) The largest U.S. wholesale-retail club, Costco sells everything from toiletries to discount gas, and it said higher gas prices helped push up sales. (Reuters) The profit increase was Costco’s biggest in six quarters. Costco shares are up 33 percent this year, compared with a 15 percent decline in the S&P’s 500 Retailing Index. “They’ve been able to get people to come there regularly,” said Coldstream Capital Management analyst Rachel Wakefield in Portland, Ore. (Bloomberg)
Big TVs, big energy bills
Prices on big-screen TV sets are dropping, but they may cost you in other ways. A few hours watching that 42-inch plasma screen uses more electricity than a full-size refrigerator, and a full entertainment center—TV, video game console, TiVO, DVD player, and sound system—can add almost $200 a year to a family’s electricity bill. Doug Johnson of the Consumer Electronics Association agrees that TV makers could do a better job of disclosing the energy costs of giant TVs, but he chafes at the fridge comparison. “When was the last time the family gathered around the refrigerator to be entertained?” he asks. (The Wall Street Journal)
