BUSINESS BRIEFS
Trade deficit rose 5.7% in February
Associated Press
WASHINGTON — The U.S. trade deficit unexpectedly increased for a second straight month in February, raising concerns that the economy's one standout performer could be starting to flag.
The Commerce Department reported yesterday that the deficit between what the U.S. imports and what it sells abroad rose 5.7 percent to $62.3 billion in February, the highest level since November.
Imports of goods and services shot up 3.1 percent to an all-time high of $213.7 billion, reflecting a big surge in imports of foreign cars. Exports also set a record, rising by 2 percent to $151.4 billion, reflecting strong gains in the sale of American-made heavy machinery, computers and farm goods.
Critics claimed that the sharp rise in the trade deficit showed the continued failure of President Bush's policies emphasizing negotiating free trade agreements as a way to promote U.S. jobs by boosting exports.
ANALYSTS STILL SEE YAHOO-MICROSOFT
Many Wall Street analysts remain confident that Microsoft fully intends to consummate the merger with Yahoo — even after a flurry of reports that AOL and News Corp. have once again entered the fray.
Late Wednesday, a person briefed on the discussions said Yahoo is in serious talks to combine some of its operations with Time Warner's AOL unit. The person requested anonymity because talks are ongoing.
The development emerged just a few hours after Yahoo had announced a new advertising test with arch rival Google.
Meanwhile, The New York Times, relying on an unnamed source, reported Wednesday that Microsoft has instigated talks with one-time Yahoo suitor, News Corp., exploring the possibility of combining News Corp.'s MySpace with Yahoo's online services.
LENDERS FLEEING STUDENT LOANS
WASHINGTON — Lenders are dropping out of the federally backed student loan business in droves, fleeing an environment squeezed of cash because of the credit crunch.
The call for government action is getting louder, just as the pile of loan applications gets higher on the desks and kitchen tables of students headed to college next year.
Forty-six student lenders have stopped making federally guaranteed student loans, either temporarily or permanently.
Distress in the $330 billion market for auction-rate securities in recent months has rippled into the student loan market, and several states have suspended their college loan programs. The 46 lenders accounted for 12 percent of the federally backed student loan market, according to FinAid.org, a Web site focused on student lending.
Companies including Washington Mutual Inc., Sovereign Bancorp Inc., College Loan Corp., CIT Group Inc., NorthStar Education Finance Inc., HSBC Bank USA and Zions Bancorp have stopped issuing federally guaranteed student loans in recent weeks. And state agencies in Iowa, Michigan, Montana and Pennsylvania have suspended college loan programs.
BERNANKE LOOKS AT TIGHTER REGULATION
WASHINGTON — Federal Reserve Chairman Ben Bernanke said yesterday that regulators must move ahead on ways to prevent a future financial crisis from occurring even as they battle one that threatens to plunge the country into recession.
Last month Bernanke, Treasury Secretary Henry Paulson and other top economic policymakers called for stricter regulation of mortgage lenders as part of a broad effort to prevent a repeat of the credit and financial problems that have hurt the economy.
SHARPER IMAGE CHAIRMAN RESIGNS
SAN JOSE, Calif. — The chairman of Sharper Image Corp. has resigned, a departure triggered by his notice that he wants to buy all or part of the bankrupt specialty retailer, the company said yesterday.
Jerry Levin's exit comes just two months after the beleaguered San Francisco-based company named a new chief executive and filed for bankruptcy protection as it tries to survive a worsening sales slump.
Sharper Image said in a statement that Levin agreed to resign from the board of directors after notifying top executives that he's interested in teaming with other investors in an attempt to buy the company.
