Delta Raises Chapter 11 Possibility
Delta Air Lines, the nation's third-largest carrier, said for the second time in a regulatory filing that it might file for Chapter 11 bankruptcy protection. The company further said restructuring would be "particularly difficult" because most of its assets are pledged as collateral for various transactions, which would hamper its ability to raise new financing.
Northwest Testing Fare Increase
Northwest Airlines said it is trying another fare increase to offset high fuel prices, adding $50 each way to fares that had been capped at $499 and $5 each way to fares that match those of discount carriers. Whether it lasts may depend on other airlines. In the past, such increases have been reversed if competitors didn't match them.
GDP Up 3.8% in First Quarter
The U.S. economy grew at a 3.8 percent annual rate from January through March, matching the pace in the previous three months and suggesting Federal Reserve policymakers will keep raising interest rates. The final figure for gross domestic product compares with the 3.5 percent rate the government estimated on May 26, the Commerce Department said.
Inflation rose at a slower pace than the department reported last month. The report also confirms rising oil prices did little to slow growth.
Carmakers Boost Dependability
Almost every automaker made significant strides in vehicle dependability in a new survey by J.D. Power and Associates. The survey, which queried 50,635 owners of 2002 model-year cars and trucks, showed an average of 237 problems per 100 vehicles, compared with 269 problems per 100 vehicles in 2004.
Lexus, Toyota's luxury nameplate, was the top brand with 139 problems per 100 vehicles; Kia was the worst with 397. Hyundai showed the most improvement. The Chevrolet Prizm was the top-performing compact, the Buick LeSabre was the top full-size car and the Chevrolet S-10 was the top mid-size pickup.
Panel Readies Pension Overhaul
The House Committee on Education and the Workforce neared approval of a broad overhaul of the traditional pension system. The measure tightens funding rules for employers operating such plans, raises premiums that they pay to the government's insurance agency and includes a provision that would free most hybrid "cash-balance" plans from charges in the future that they violate federal age-discrimination laws.
20 Traders Settle With NASD
J.P. Morgan Chase, Goldman Sachs and 18 other firms will pay a total of $1.65 million to the NASD for violating reporting rules for municipal bond trades, a record fine for such lapses. The firms made late or inaccurate reports to the Municipal Securities Rulemaking Board from January 2003 to October 2004, the NASD said in a statement. Piper Jaffray paid $280,000, the highest fine, followed by ABN Amro, which paid $220,000.
Calpine to Sell U.S. Energy Assets
Power producer Calpine said it plans to sell all of its domestic oil and gas exploration and production assets to a newly formed indirect subsidiary, Rosetta Resources, for $1.05 billion. This is the latest asset sale for Calpine, which is trying to shore up its finances and stock price after the collapse of domestic electricity prices following Enron's fall in 2001. The sale is scheduled to close on July 7.
Boeing Accused of Discrimination
A former Boeing unit was sued by the U.S. Equal Employment Opportunity Commission over allegations that Boeing Electron Dynamic Devices refused to hire a black woman because of her race.
Electron Dynamic Devices makes satellite and military components. It repeatedly passed over the woman for positions for which she was qualified, the EEOC said. Attempts to settle the case before filing a lawsuit failed, the commission said.
General Mills said profit in its fiscal fourth quarter rose 65 percent to $460 million, driven largely by asset sales. Revenue fell by 2.5 percent to $2.72 billion, as higher cereal prices sent consumers to store brands. For the year, the No. 2 U.S. cereal maker said profit rose 18 percent, to $1.24 billion, on $11.24 billion in sales.
Monsanto's third-quarter profit fell 81 percent, to $47 million, from the corresponding quarter a year earlier as it wrote off $248 million in research and development related to acquisitions. Sales for the three months ended May 31 rose 22 percent, to $2.04 billion.
Compiled from staff and news service reports