Consumer spending tops forecasts

NEW YORK - Consumer spending stayed strong in August, despite the problems in mortgage and real estate markets that some feared would put a brake on Americans' willingness to open their wallets, according to a government report issued Friday. Spending by consumers rose 0.6 % in August, an improvement from the 0.4 % rise in July. Economists surveyed by Briefing.com had forecast another 0.4 % rise in August. The solid gain in spending came even as individuals' incomes rose by only 0.3 % in August, down from the 0.5 % rise in July. That was a bit weaker than economists' forecast of a 0.4 % rise in income in the period.

3Com board approves $2.2B sale

MARLBORO - 3Com Corp, a maker of networking hardware and software, will be sold to affiliates of private equity firm Bain Capital Partners LLC for $2.2 billion in cash, 3Com said Friday. Shareholders will receive $5.30 in cash for each share of 3Com stock, or a premium of about 44 % over the stock's $3.68 closing price on Thursday. 3Com's board and senior managers "have thoroughly reviewed our strategic alternatives and have determined that the agreement with Bain Capital provides the best value for 3Com shareholders," said Edgar Masri, president and chief executive of Marlboro-based 3Com. "We believe that this agreement better positions 3Com to establish itself as a global networking leader, which will benefit our employees, our customers and our partners". Although Boston-based Bain Capital is the buyer, affiliates of China-based Huawei Technologies will acquire a minority interest in 3Com and become a commercial and strategic partner, 3Com said.

3Com seen selling itself for $2B

NEW YORK - The telecommunications equipment company 3Com Corp. is planning to sell itself to a pair of private equity firms for more than $2 billion. 3Com (Charts) shares surged nearly 33 % in pre-market trading on the news. Citing a person familiar with the matter, the Wall Street Journal reported that Bain Capital and Huawei Technologies will acquire the Marlborough, Mass.-based company at more than $5 a share. 3Com is expected to make the announcement sometime later in the day, the paper reported.

China's Central Bank News

SHANGHAI, China - China has raised mortgage interest rates and increased the downpayment needed for loans to finance purchases of second homes in a move aimed at countering property speculation that is driving up prices. Property prices jumped 8.2 % in August from a year earlier after gaining 7.5 % in July. The rate of increase in China's major cities, such as Shanghai and Beijing, has been even steeper. The mortgage lending rate for both commercial purchases and for second residential properties was raised to 1.1 times benchmark lending rates. China's benchmark one-year lending rate is now 7.29 %, so the new rate would be 8.019 %.

Economy shows growth, but misses forecasts

WASHINGTON - The economy rebounded with a good head of steam in the spring before a credit crisis raised new fears about longer-term business health. The Commerce Department reported Thursday that the economy grew at a 3.8 % annual rate in the April-to-June quarter. Although the new reading for the second quarter was slightly less robust than a previous estimate of a 4 % growth rate, it nonetheless marked a substantial improvement over the feeble 0.6 percent growth rate registered in the prior quarter.

Wal-Mart expands $4 generic drugs program

NEW YORK - Wal-Mart announced Thursday that it has extended its year-long $4 generic prescription drugs program to include 24 new prescriptions. The company said the program will now cover more categories to include glaucoma, attention deficit disorder/attention deficit hyperactivity disorder (ADD/ADHD), fungal infections and acne. Fertility and prescription birth control will also be included at $9. The retailer said that its prices for these medications will save women an estimated $15 to $21 a month, or $180 to $250 annually. Wal-Mart, the world's largest retailer, launched its $4 generic drugs initiative a year ago in all its Wal-Mart and Sam's Club locations. During that period, Wal-Mart claims that it has saved customers a total of $613 million. The first phase of the program covered about 337 generic prescriptions. Wal-Mart said the program now will cover 361 products, or 24 new $4 prescriptions.

Consumer confidence hits a near 2-year low

NEW YORK - Worries about jobs and the overall economy flared in September, driving a key barometer of consumer sentiment to its lowest level in nearly two years, a private research group said Tuesday. The New York-based Conference Board said its Consumer Confidence Index fell to 99.8, an almost 6-point drop from the revised 105.6 in August. The reading was below the 104.5 that analysts had expected. It marked its lowest level since a 98.3 reading in November 2005, when gas and oil prices soared after hurricanes Katrina and Rita devastated the Gulf Coast. The Present Situation Index, which measures how shoppers feel now about the economy, declined to 121.7 from 130.1 in August. The Expectations Index, which measures shoppers' outlook over the next six months, declined to 85.2 from 89.2.

Home sales thud to 5-year low point

NEW YORK - Housing markets continued to slump across the nation in August as the number of existing homes sold dropped for the sixth straight month to their lowest level in 5 years, according to the latest report from the National Association of Realtors. Sales fell 4.3 %t from July to a seasonally adjusted annualized rate of 5.50 million. Sales have fallen 12.8 % since last August's pace of 6.31 million homes. The slump pushed up the inventory glut to 4.58 million existing homes, an all-time high. There is now a 10-month supply of homes on the market at the present rate of sales. Some positive news from NAR was that prices broke a 12-month decline. The national median existing-home price for all housing types rose 0.2 percent to $224,500 in August from a year ago, when the median was $224,000.

By Les Christie

73,000 workers walk in nationwide GM strike

NEW YORK - The United Auto Workers union launched a nationwide strike against General Motors on Monday as 73,000 UAW members walked off the job and hit the picket lines at the nation's largest automaker. Company officials did not respond to Gettelfinger's comments, other than to say they were disappointed that the first national strike against the company in more than 37 years had been called, and that they hoped that an agreement to end the walkout could be reached soon. Gettelfinger said at the midday press conference that the union is ready to discuss the company's key bargaining goal of shifting an estimated $51 billion in healthcare expenses for retirees and their family members to union-controlled trust funds. But he said that other issues had derailed hopes of an agreement.

By Chris Isidore

General Motors hit by nationwide strike

NEW YORK - The United Auto Workers union launched a nationwide strike against General Motors on Monday as 73,000 UAW members. Gettelfinger said the union was ready to discuss the company's key bargaining goal of shifting an estimated $51 billion in health care expenses for retirees and their family members to union-controlled trust funds. But he said that other issues had derailed hopes of an agreement. Most GM dealers won't start to see shortages of vehicles for two to three weeks, even though the strike will immediately halt production of 12,200 vehicles per day or 760 vehicles per hour, said Michael Robinet, vice president of global vehicle forecasts for CSM Worldwide.

Nike Inc News

PORTLAND - Nike Inc. reported a 51% increase in fiscal first-quarter net income Thursday, boosted by higher revenue and favorable exchange rates for the world's largest athletic shoe and clothing company. Net income reached $569.7 million, or $1.12 per share, for the quarter ended Aug. 31, up from $377.2 million, or 74 cents per share, for the same period a year earlier. Earnings per share grew 24 % excluding a one-time tax benefit, and 51 % including it.

Bank of England News

LONDON - The Bank of England has lent about £3 billion ($6 billion) to troubled British mortgage lender Northern Rock, Analysis of the Bank of England's weekly balance sheet showed that Northern Rock PLC had been forced to borrow about £3 billion ($6 billion) in publicly funded loans. A Bank of England spokeswoman confirmed that its weekly balance sheet had expanded, but said the £3 billion ($6 billion) figure was speculative.

China Inflation rate rises to 6.5% in August

BEIJING - China's inflation rate rose to 6.5% in August. Driven in part by a 49% surge in the politically sensitive price of pork and other meat from the same month a year ago. The spike in food prices, which hit China's poor majority especially hard, has prompted urgent government action to increase supplies. Among other food items, cooking oil was up 34.6%, eggs 23.6% and fresh vegetables 22.5%, the statistics agency reported.

Report - Working group

WASHINGTON - President Bush in July established a working group to study import safety in response to growing concerns about a spate of recalls from China that included recalls of toothpaste, dog food and toys. The group said that the emphasis should be on ensuring that products are safe before they reach the nation's borders. However, the report provided no specifics on what additional resources would be needed. Recommendations on spending will come in the next 60 days.

HSBC news

LONDON - Knight Vinke Asset Management, the fund management firm that has previously forced structural changes at oil producer Royal Dutch Shell PLC and Dutch publisher VNU NV, said late Thursday it had asked the chairman and the board of HSBC to conduct a "fundamental review" of its strategy and management structure.

Deadline Nonprofit workers

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