BUSINESS BRIEFS
Fannie, Freddie shares climb on rosier outlooks
Associated Press
WASHINGTON — Shares of Fannie Mae and Freddie Mac climbed for a second day yesterday amid expectations in some Wall Street quarters that the mortgage finance giants will be able to weather the housing storm without a government rescue.
Fannie shares rose 43 cents, or 8.3 percent, to $5.62, while Freddie advanced 68 cents, or 20.7 percent, to $3.97.
McLean, Va.-based Freddie Mac completed a $2 billion debt sale on Monday, and a Wall Street analyst said the two government-sponsored companies have an adequate capital cushion to absorb billions of dollars in losses from soured mortgages in the near term, meaning a federal bailout could be avoided.
MATTEL AWARDED $40M IN LAWSUIT
RIVERSIDE, Calif. — A federal jury awarded Mattel Inc. $40 million in damages yesterday in a federal copyright lawsuit that pitted the house of Barbie against MGA Entertainment Inc., the maker of Bratz dolls.
Damages were awarded for contract interference and copyright infringement. No punitive damages were ordered against MGA.
STORM'S THREAT RAISES OIL PRICES
NEW YORK — Oil prices swung higher yesterday as Hurricane Gustav struck Haiti, raising concerns that the storm could slam into major oil operations in the Gulf of Mexico.
However, the price rise was tempered by a stronger dollar and a report from the Energy Department showing even slower fuel demand than many traders thought.
CITIGROUP TO PAY CUSTOMERS $18M
NEW YORK — Citigroup Inc. will pay nearly $18 million in refunds and settlement charges for taking $14 million from customers' credit card accounts, California's attorney general said yesterday.
Citigroup will make refunds to the 53,000 customers affected, and pay $3.5 million in damages and civil penalties to the state of California, which had been investigating the questionable practices for three years, the attorney general said.
The bank will also pay 10 percent interest to California customers, who accounted for $1.6 million of the cash "swept" out of accounts and into a Citi fund between 1992 and 2003.
PORK PRODUCER REPORTS 1Q LOSS
MILWAUKEE — Smithfield Foods Inc. swung to a loss in its fiscal first quarter as high commodity costs hurt the nation's largest pork producer and processor. The commodities market is so volatile, its chief executive said yesterday, the company doesn't even want to try to predict future earnings.
Costs for key ingredients like corn and soybean meal were up more than 33 percent in the quarter and the price it took to raise hogs soared 25 percent. The hog production sector lost $38.8 million on the higher costs.
Smithfield said it lost $12.6 million, or 9 cents per share, in the period, down from a profit of $54.6 million, or 41 cents per share, a year earlier. The company said the loss was due in part to a $20.1 million write-down in the value of commodity contracts, which hurt earnings by 15 cents a share.
FORD SET TO MAKE MORE SMALL CARS
WAYNE, Mich. — Demand for Ford Motor Co.'s Focus and other small cars has been superheated ever since gas prices headed toward $4 per gallon in May, and since then, Ford hasn't been able to build the Focus quickly enough.
Yesterday, though, the automaker took two steps toward further cranking up Focus production, announcing that it would sink $75 million into the body-making part of an SUV factory next door to the Wayne Assembly Plant, where the Focus is built.
If demand stays strong, the SUV plant will quickly start producing Focus bodies, eliminating what is now a bottleneck that is slowing production.
