The Commerce Department released its consumer spending report this morning, saying Americans saved more in the month of March.Consumer spending climbed a seasonally adjusted 0.3%, while income rose slightly faster at 0.4% mainly because of higher government-benefit payments. This makes the savings rate at 3.8%, a little higher from the rate in February of 3.7%, which was the lowest since the recession. According to some economists, income will have to rise faster if we want consumers to start spending more for goods and services. Because consumer spending accounts for up to 70% of U.S. economic activity, if Americans aren’t buying then the economy will not be growing.
This is what’s in the news for Tuesday April 10, 2012. The Wall Street Journal reports Federal Reserve Chairman Bernanke said more regulatory action may be needed to safeguard the $2.7T money-market mutual fund industry. The Wall Street Journal also reports Toyota Motor (NYSE:TM) said it reorganized its vehicle-development system to speed decision making, lower costs and better appeal to car buyers. Bloomberg reports gold gained for a fourth day in London on speculation that U.S. and China central banks may take additional steps to spur growth after data missed estimates. Reuters reports Honda Motor (NYSE:HMC) will launch 10 additional car models in China by 2015 and expects sales in the country to double from last year’s level over the same period. Finally, Reuters also reports Sharp Corp. (PINK:SHCAY) is seeking more partners to buy stakes in its main Sakai plant in a bid to spin off the LCD production subsidiary.
Canadian Pacific (NYSE:CP) shares catch a bid premarket after Bill Ackman showed his face on CNBC and discusses his proxy fight against the company.Ackman said 75% of the shareholders support Hunter Harrison for the top job and the company could double in 3 years with a new Chief Executive Officer.
The fight for tax equality on the internet may be a thing of the past. Amazon (NASDAQ:AMZN) has just struck a deal with the state of Texas to start collecting sales taxes on items it has in stock.Starting July 1 of this year, the agreement with state finance authorities will go in effect which will require some facilities to be built and will create 2,500 jobs.The deal comes after the state of Texas sought to collect $269 million in uncollected sales tax from the online retailer. Amazon settled with the state, saying it will build more distribution centers and start collecting the tax.More states will follow Texas’s example. There are already five states in which Amazon collects sales tax and by 2016 there will be seven more to follow suit. However, Amazon has be a proponent of a federal law that would require sales tax collection under a nationwide system.
A stock falling currently this morning is that of Sohu.com. The company is down more than 8% in early trading because of a negative announcement.Sohu.com said its first quarter brand advertising business fell 22% from the previous quarter, effecting its overall business.The Internet gaming firm has first quarter revenue increase 30% to $227 million over the year-ago period but has fallen 8% from the previous quarter.Currently, the company’s stock is down over $4.40 to $51.30
Humana released its earnings this morning before the opening bell, posting an EPS of $1.49, below analyst estimates of $1.53 a share.Revenues for the quarter increased 11% year over year to $10.22 billion, just above estimates of $10.12 billion. Even though revenues rose, the healthcare company’s profit did not. Humana’s first quarter profit fell 21% reporting net income of $248 million. This was well below the income from the prior year of $315 million.This news brought the stock down in early trading this morning. Humana fell over 6% to $82.57.