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ECONOMY

Wednesday, August 16, 2006

ECONOMY

July Producer Prices Up Slightly

Producer prices rose 0.1 percent in July, compared with a 0.5 percent increase in June, the Labor Department reported.

Food prices fell 0.3 percent in July, after increasing 1.4 percent in June. Excluding food and energy, the producer price index fell 0.3 percent in July.

Home Sales Down in 29 States

The housing-market slowdown is spreading, with sales down in 29 states, the National Association of Realtors said. Nationally, sales were down 7 percent in the second quarter compared with the second quarter last year.

The biggest declines were in states that had especially strong sales during the five-year housing boom. The five biggest declines this spring were in Arizona, 26.9 percent; Florida, 26.7 percent; California, 25.3 percent; Virginia, 23.9 percent; and Nevada, 23.5 percent.

Home Builders' Confidence Falls

Confidence among U.S. home builders plunged to the lowest level in 15 years this month, falling to 32 from 39 in July, as buyers canceled orders and inventories of unsold houses piled up, a survey by the National Association of Home Builders/Wells Fargo indicated. It was the seventh consecutive monthly decline in the index of builder confidence. Readings below 50 mean more builders consider conditions to be poor.

AUTOMOTIVE

Toyota Tops Satisfaction Index

Toyota scored an 87 on a 100-point scale for the second year in a row on the University of Michigan's American Customer Satisfaction Index. Hyundai's rating climbed to 84. General Motors' Buick, with an 86, was the top-rated U.S. brand.

The overall index rose 1.3 percent, to 81. Enhanced quality, not the big sales incentives of 2005, was credited for the increased satisfaction.

LEGAL

Grasso to Appeal Trial Plan

Former New York Stock Exchange chairman Dick Grasso plans to try to stop a judge from holding a trial without a jury on part of New York state's challenge to his $190 million pay package.

The appeal would be the second in the state's lawsuit over Grasso's pay package. Earlier, Grasso asked the appeals court to throw out four of six claims. That appeal, raising the issue of state Attorney General Eliot L. Spitzer's standing to sue, is pending.

Former CEO Declared a Fugitive

Former Comverse Technology chief executive Jacob "Kobi" Alexander was declared a fugitive by the FBI, which issued an alert calling for his arrest. An international manhunt was launched late last month, shortly before authorities unsealed a criminal complaint accusing Alexander and two other former top executives of secretly manipulating stock options for personal profit, the FBI said.

Alexander, a native of Israel, has dual U.S. and Israeli citizenship. Before he disappeared, he transferred $57 million to Israel, fueling speculation he may have fled there, authorities said. Alexander's lawyer, Robert Morvillo, said he had not had any contact with his client and did not know his whereabouts.

Lay's Estate Becomes Defendant

The estate of Enron founder Kenneth L. Lay, who died six weeks after being found guilty of spearheading a fraud that destroyed the company, will take his place as defendant in the criminal prosecution, U.S. District Judge Simeon T. Lake III ruled. Lay's widow, Linda, is expected to ask the court to vacate Lay's conviction.

TAXES

H&R Block Loans Challenged

H&R Block directors have agreed to talk about the company's loan policies with officials from three powerful state pension funds that own 1.6 million shares in the tax-preparation company.

Officials from North Carolina, New York and Connecticut say the loans -- which H&R Block makes to customers expecting federal tax refunds -- are abusive because they say they are targeted to low-income filers and carry excessively high interest rates that, on an annual basis, are as high as 700 percent. A company spokeswoman said she did not know why the states were targeting H&R Block.

MERGERS & ACQUISITIONS

Monsanto to Buy Delta & Pine

Monsanto agreed to buy cottonseed producer Delta & Pine Land for $1.5 billion, ending a six-year dispute that began when their previous merger agreement fell through.

Delta & Pine Land stockholders will get $42 a share. Shares closed at $40.43, up $4.10.

EARNINGS

Delphi said it lost $2.6 billion in the first half of 2006, mostly from the cost of employee buyout and early retirement packages that are key to the company's bankruptcy reorganization. The loss included $1.9 billion in buyout and retirement costs. Revenue rose slightly, to $14 billion.

Staples said second-quarter profit rose 19 percent from the second quarter of 2005, to $161.2 million, as it picked up customers of newly closed OfficeMax stores. Revenue rose 12 percent, to $3.88 billion.

Home Depot said second-quarter profit rose 5 percent, to $1.86 billion. Revenue for the quarter ended July 30 rose 17 percent, to $26.03 billion.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.

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