Market update: Strong results by GM and Sun Microsystems helped boost the Dow over 100 points in early trading, though stocks are starting to retreat a bit. It’s still pretty volatile out there. One not-so-wonderful indicator: consumer spending increased in June at the slowest pace in nine months as near-record gasoline prices and falling home values forced Americans to cut back. (Bloomberg)
Dow Jones sale: It's happening. Just enough members of the Bancroft family have agreed to sell their shares to News Corp. Rupert Murdoch will own the WSJ, for better or worse. The logjam might have been broken by an unusual agreement in which Dow Jones agreed to cover $30 million in advisory fees for the Bancrofts in exchange for some holdout family members supporting the deal. Both DJ and News Corp. were working to clinch a deal before board meetings both companies have scheduled for later today. One hint that the deal was close to being done: DJ shares are up 11 percent this morning. (NYT)
Another mortgage victim: This time, it's Pasadena-based IndyMac Bancorp Inc., which this morning reported a 57 percent drop in second-quarter earnings. IndyMac cited the slowdown in the housing market and rising delinquencies among borrowers. "We anticipate that the second half of 2007 and 2008 will continue to be challenging for the mortgage and housing markets and for IndyMac," said CEO Michael Perry, echoing the recent projection by Countrywide Financial. Perry wouldn't offer earnings forecasts because of the "current uncertainties in the housing and mortgage markets and, in particular, in the secondary market." (AP)
Gas prices keep dropping: The average gallon of self-serve regular in the L.A. area was an even three bucks for the week ended yesterday, according to the government's latest survey. That's down from $3.07 the week before. Nationally, pump prices are the lowest since mid-April, as more oil refineries come back online from maintenance. That boosts production and increases inventories. Prices are expected to pick up around Labor Day. (EIA, LAT)
Rights to Simpson's book: Now this one is truly strange. "If I Did It," a hypothetical account of how O.J. Simpson could have killed his ex-wife, has passed to relatives of Ron Goldman, who was murdered along with Nicole Brown Simpson in 1994. Lawyers for the Goldmans said they would seek to capitalize on the book by arranging new publishing, film or TV deals. Why? Because Simpson has not satisfied a $33.5 million wrongful death judgment won by the family against Simpson in 1997 (you might remember that HarperCollins scrapped the book before its planned release). They've apparently received several inquiries from literary agents, and the Goldmans were considering changing the title to "I Did It," or possibly "Confessions of a Double Murderer."(Reuters)
Cavemen cut rates: Geico auto insurance and California Insurance Commissioner Steve Poizner are expected to announce today a rate reduction for all 436,000 Geico General Insurance Co. customers, about one-fourth of them in Southern California. The average rate cut amounts to about 11 percent - or $150 per policyholder - and reflects new state regulations that require rates to be based primarily on a motorist's driving record, not where he or she lives. The premium cut by Geico, a unit of Berkshire Hathaway Inc. that's best known for those strange commercials featuring contemporary cavemen, is the latest of close to 150 rate reductions by California-licensed insurance companies in the last year. (LAT)
Amgen gets break: The government's Medicare program has eased up on some of its proposed restrictions on the use of anemia drugs made by the Thousand Oaks drug company (as well as Johnson & Johnson). Federal regulators received more than 2,600 comments that said the proposed went too far and would possibly harm patients. Interestingly, Amgen shares are down more than 3 percent this morning - perhaps in response to news of big job cuts at J&J. From the NYT:
Medicare’s final “national coverage determination” still retains some significant restrictions. For instance, the program will not cover the use of the drugs to treat the anemia caused by cancer itself, as opposed to anemia caused by chemotherapy. The drugs are approved only for the anemia from chemotherapy but had been widely used by patients not getting chemotherapy. But other proposed restrictions have been lifted, like ones that would have barred reimbursement for the drugs’ use during chemotherapy for certain types of cancer or for patients being treated with the cancer drugs Avastin and Erbitux.
Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the performance of local stocks during the last few days of market jitters, borrowing problems for Tribune, and the sale of Seven for All Mankind.