NEWS AT A GLANCE
GM takes $39 billion hit
General Motors reported a record $39 billion loss for the third quarter, led by a $38.6 billion non-cash charge. (Bloomberg) The charge is a sign that the automaker doesn’t expect to turn much of a profit anytime soon. It stems from a three-year decline in the value of deferred-tax assets, which could have been used to offset taxes on future profits. (MarketWatch) GM shares dropped almost 3 percent in early trading. (The Wall Street Journal) “It’s a huge charge, but people will take a look and then a second look and then they’ll be less worried,” said Gimme Credit analyst Shelly Lombard. “The real challenge is the difficult part: trying to sell cars.” (Los Angeles Times, free registration required)
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Oil, other commodities hit new highs
Oil futures topped $98 a barrel for the first time this morning, in the first of several records toppled since yesterday. (AP in Yahoo! Finance) Oil and other commodities rose as investors sold U.S. dollars—the greenback hit a new low against the euro after a Chinese official said China should diversify the mix of currencies in its $1.43 trillion foreign-cash reserve. (Bloomberg) The price of gold also hit its highest level in 28 years, at $836.75 an ounce; platinum hit a new high of $1,481 an ounce; and silver topped a 27-year peak of $15.88 an ounce. “It’s crazy. Everybody is coming to buy,” said Ellison Chu at Standard Bank London in Hong Kong. (Reuters)
Facebook makes friends part of the ad
Social networking site Facebook unveiled a new “social advertising” strategy that aims to mine member profiles to create targeted ads and generate “perceived endorsements” of products. Drawing on its extensive data about users, Facebook will also encourage virtual word-of-mouth marketing by broadcasting information about members’ commercial activities to their online friends. (Los Angeles Times, free registration required) Facebook’s larger rival, MySpace, rolled out a similar but less aggressive ad stragetgy Monday. “Yahoo and Google sell ads by keywords,” said Forrester Research analyst Jeremiah Owyang. “Facebook is now selling them based on people and their friends.” (BusinessWeek.com)
The British are coming
After three years of researching American eating habits, the British grocery giant Tesco is hoping to seduce U.S. shoppers with its Fresh & Easy markets starting this week. Guided by its findings, Fresh & Easy will feature ready-to-eat meals, fresh produce, and select staples sold at moderately low prices in compact stores. Along with 11 Los Angeles stores slated to open tomorrow, Tesco is opening shops in Las Vegas, Phoenix, and San Diego this year. And retail consultant Neil Stern says U.S. retailers are nervous. “It is without question the most widely anticipated concept to come into retailing since Wal-Mart opened their supercenters,” he said. (MarketWatch)
