Oil prices inched lower toward $96 a barrel Thursday in Asia after U.S. crude supplies rose to a 22-year high, suggesting demand remains weak.
Benchmark oil for June delivery was up 16 cents to $96.65 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 20 cents to settle at $96.81 in New York on Wednesday.
Brent crude for June delivery was down 44 cents at $112.76 per barrel in London.
On Wednesday, the Energy Information Administration said that increased oil imports and weaker domestic demand for petroleum helped boost U.S. oil inventories last week to 379.5 million barrels, the highest since 1990.
China reported Thursday that its imports and exports in April grew less than analysts expected, sparking investor concern crude demand may be waning in the world’s second largest economy.
Crude has slumped $10, or about 10 percent, from $106 last week amid fears the global economy may grow less than expected this year business card. Political upheaval in France and Greece this week also renewed worries about Europe’s debt crisis and weak economy.
Some analysts expect oil prices to stabilize after the recent sell-off unless the global economy deteriorates significantly further.
“One could perhaps argue that with inventories building and global oil demand conditions softer in the first quarter, prices were on the high side to begin with,” Barclays said in a report. However, “the path of least resistance in prices is likely to be a slow grind higher from here in the coming months.”
In other energy trading, heating oil was down 1 cent at $2.99 per gallon and gasoline futures slid 0.8 cents to $3.02 per gallon. Natural gas added 0.5 cents at $2.47 per 1,000 cubic feet.
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People have been hyping the death of the mall for the last two decades, but it’s not happening anytime soon, said Simon Property Group CEO David Simon.
"Time Magazine 20 years ago had that exact headline," Simon, who has been at the helm of the world’s largest mall operator since 1995, told CNNMoney at the Milken Institute Global Conference in Los Angeles. "If you look at our business and our profitability, it’s never been better."
Investors appear to agree. Simon Property Group’s () shares are up 22% in 2012, compared to an 11.7% increase in the S&P 500 ().
Simon admits growth in the United States is limited, even going so far as to say some lower-end malls around the U.S. could close. Most of Simon Property Group’s malls serve higher-end consumers.
He thinks most of Simon Property Group’s growth will come from driving sales into its existing malls by refurbishing them and adding new stores.
Simon points to Roosevelt Field mall on Long Island in New York as one example. After years of battling local community boards for approval, Simon Property Group recently landed luxury retailer Neiman Marcus as a tenant. Simon hopes such retailers will draw more high-spending customers into his malls.
For much of Simon’s tenure, buying up competing real estate investment trusts, or REITs, has driven growth. He’s spent roughly $27 billion in 17 years buying competitors, most recently paying $2 billion for a 29% stake in Europe’s largest retailer Klepierre.
Simon says to expect fewer big acquisitions going forward, yet there is one new area where he’d consider buying: technology. Simon wants to make his mall more more technologically sophisticated, and he said that buying up a technology startup could help Simon Property compete more effectively with e-commerce sites
"Ideally what I’d love to do is know when our best customers are in the mall. If you show up I want to deliver a free latte to you [and] I know exactly what kind of latte you want," said Simon.
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While aggressively courting new and existing consumers, Simon doesn’t expect to fight battles with shareholders. Last year, Simon’s board awarded him roughly $120 million after he agreed to stay at the company for the next eight years. That makes him one of the most highly paid CEOs in the United States.
Simon said he deserves it. "Nobody has had better performance over 10 years, and I expect that to continue," said Simon. "Our board took a serious look at what I contributed and the prospects for what it means to be part of the company for another eight years."
The REIT’s returns have been exceptional. Since Simon joined as CEO in 1995, Simon Property has generated annual returns of 11.2% compared to roughly 6.7% for the S&P 500.
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Regulators are proposing that food companies that want to use tiny engineered particles in their packaging may have to provide extra testing data to show the products are safe.
The Food and Drug Administration issued tentative guidelines Friday for food and cosmetic companies interested in using nanoparticles, which are measured in billionths of a meter. Nanoscale materials are generally less than 100 nanometers in diameter. A sheet of paper, in comparison, is 100,000 nanometers thick. A human hair is 80,000 nanometers thick.
The submicroscopic particles are increasingly showing up in FDA-regulated products like sunscreens, skin lotions and glare-reducing eyeglass coatings. Some scientists believe the technology will one day be used in medicine, but the FDA’s announcement did not address that use.
The draft guidance suggests the FDA may require food companies to provide data establishing the safety of any packaging using nanotechnology.
Under longstanding regulations, companies aren’t required to seek regulatory approval before launching products containing established ingredients and materials, such as caffeine, spices and various preservatives.
But FDA officials said Friday that foods and packaging containing nanoparticles may require more scrutiny.
“At this point, in terms of the science, we think it’s likely the exemption does not apply and we would encourage folks to come in and talk to us,” said Dennis Keefe, director of FDA’s office of food additive safety payday loans for bad credit.
Keefe said companies are studying whether nanoparticles can reduce the risk of bacterial contamination in certain foods. He said the agency is aware of just one food package currently on the market that uses nanoparticles but did not identify it. He said more are expected in coming years.
The FDA has previously stated its position that nanotechnology is not inherently unsafe; however, materials at the nano scale can pose different safety issues than do things that are far larger.
“This is an emerging, evolving technology and we’re trying to get ahead of the curb to ensure the ingredients and substances are safe,” Keefe said.
In a separate guidance, the FDA laid out suggestions for the use of nanotechnology in cosmetics, a practice which has been in use since the 1990s. Nanoparticles are used in skin moisturizer, mineral make up and other cosmetics.
The FDA has less authority over cosmetics than food additives. Generally, the FDA does not review cosmetics before they launch, and companies are responsible for assuring the safety of their products.
The FDA will take comments on both proposals for 90 days. There is no deadline for finalizing the documents.
Swiss food and drinks giant Nestle SA forecast Friday that 2012 will be a challenging year but reported that first-quarter sales rose a healthy 5.6 percent from a year earlier, fueled by strong growth in emerging markets and higher retail prices.
The maker of Purina One, Nescafe and Haagen Dazs and said sales amounted to 21.39 billion Swiss francs ($23.34 billion), though demand in developed markets was subdued amid global financial uncertainty in the United States — its biggest market — and Europe.
Sales in developed countries grew 3.1 percent, compared with a 13 percent rise in emerging markets.
“As anticipated, 2012 is already confirming itself to be a challenging year,” CEO Paul Bulcke said in a sales update statement.
“In many developed markets where consumer confidence is low, the trading environment is subdued whilst in most emerging markets, conditions remain dynamic and rich in growth opportunities,” he said. “Our past and present investments, and continuing innovation, have enabled us to deliver good growth in the first quarter.”
The results of the Vevey, Switzerland-based company generally met or exceeded analysts’ forecasts. No profit figures were disclosed.
Europe’s food makers have been hurt by the continent’s sovereign debt crisis, which has forced governments to cut spending, seen a spike in unemployment and made consumers wary of spending. Meanwhile, higher commodity prices have made retail food prices more expensive.
Nestle results showed it managed the tricky market situation relatively well.
Andrew Wood of the Sanford C. Bernstein research firm said he had anticipated that Nestle would have a “fairly strong top-line start to the year low interest rate personal loans.” However, he does not believe it would be enough to get its stock “moving again, particularly given current lofty valuations.”
Nestle shares were trading 0.5 percent lower at 56.90 francs ($62.10).
Bulcke said a combination of retail price hikes and a predicted drop in the cost of raw materials in the second half of the year has enabled the company to confirm the full-year outlook “of delivering 5 to 6 percent organic growth” and higher earnings for shareholders.
On Thursday, Nestle held its annual general meeting in Lausanne where shareholders approved a dividend of 1.95 francs ($2.13) per share.
Like many Swiss companies, Nestle has had to cope with the strength of the Swiss franc against other currencies, but since last summer Switzerland’s central bank has moved aggressively to weaken the franc and improve the outlook for Swiss exports.
The world’s biggest food and beverage maker said its organic sales growth was a robust 7.2 percent, while real internal growth was 2.8 percent.
Nestle said organic growth was 6.2 percent in the Americas, 2.3 percent in Europe and 11.4 percent in Asia, Oceania and Africa.
The company had posted sales of 22.34 billion francs ($24.38 billion) in the first quarter of 2010.
Nestle did not comment on its bid to buy Pfizer Inc.’s infant-nutrition business for a reported $9 billion, a deal that would help the Swiss-based company to boost growth in China and maintain its position as one of the world’s largest sellers of infant formula.
Federal regulators are softening a plan to oversee companies that trade financial derivatives, the complex investments that played a central role in the 2008 financial crisis.
The rule defines which companies trading derivatives will be subject to a stricter regime created in the 2010 overhaul of financial laws. Most companies that deal derivatives will be exempt.
The Securities and Exchange Commission and Commodity Futures Trading Commission approved the rule unanimously in separate votes Wednesday. The rule says derivatives used by companies to offset their own risk will not attract scrutiny. The higher oversight standard would apply only to companies that sell $8 billion or more of the investment products annually.
Under an earlier proposal, companies that sold $100 million of certain derivatives would have faced tougher oversight.
U.S. government programs designed to stem the financial crisis starting in 2008 will probably break even in the long term, Treasury Department officials said.
So-called financial stability programs include excess earnings from the Federal Reserve and don
While the stock market put up its best first-quarter performance in over a decade, the first three months of 2012 weren’t as hot for Corporate America.
Analysts are forecasting a 0.1% drop in first-quarter earnings for companies in the S&P 500 (), compared with a year earlier, according to FactSet. While that’s not exactly a major decline, it would mark the end of a nine-quarter winning streak.
And excluding Apple (, Fortune 500)’s always-impressive financial performance, the outlook is even more downbeat, with S&P 500 earnings on track for a 1.6% decline.
The materials sector is expected to post the worst performance, with earnings falling 14.5%. The sector will be in the spotlight Tuesday, when aluminum giant Alcoa (, Fortune 500) reports results, marking the unofficial start of the quarterly earnings season.
Google (, Fortune 500), JPMorgan Chase (, Fortune 500) and Wells Fargo (, Fortune 500) are also on tap to report this week.
One reason earnings growth is beginning to stagnate is sheer math.
When company balance sheets were recovering from the depths of the recession, earnings were growing by double-digits. But almost three years into the recovery, year-over-year improvements are more difficult to deliver.
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On top of that, companies are facing some tough headwinds, too.
High energy costs are the biggest factor to blame for the earnings growth slowdown, according to analysts. Oil priced rose more than 4% during the quarter, sparking a 20% spike in gas prices.
While all 10 sectors of the S&P 500 are expected to post sales growth for the first quarter, there are at least seven that may have had trouble converting that to earnings growth, analysts said, reflecting the strain of higher input costs.
In fact, the number of companies projected to deliver higher sales but a decline in profit stands at 104, the highest since the third quarter of 2009, according to FactSet. Consumer discretionary and consumer staples make up a big bulk of those companies, since higher fuel costs typically weigh significantly on those companies cash advance loan no fax.
For example, General Mills (, Fortune 500), which reported earnings for the three-month period ended Feb. 26, said the uptick in input costs is pressuring its profit margins. Cruise line operator Carnival Corp. () has also been expressing concern about higher fuel costs.
Sluggish global economic growth is also expected to have impacted earnings. Europe’s economies are struggling with massive debt and severe austerity measures, while growth out of emerging economies, particularly China, is also slowing.
For the three months ended Jan. 31, Hewlett-Packard (, Fortune 500) said sales out of Brazil, Russia, India and China dropped 13%, compared with a year earlier.
Though first-quarter earnings results are lining up to be unimpressive, investors won’t put much stock into them. Rather, they’ll be tuned more closely into what company executives have to say about future quarters.
"We want to know what executives are seeing from Europe and China, and what their expectations are going forward," said Rex Macey, chief investment officer of Wilmington Trust Investment Management.
Europe’s still a thorn, but ‘out of crisis mode’
In particular, Macey said he’ll be looking at companies like construction equipment maker Caterpillar (, Fortune 500), which has significant exposure to China, as well as multinational consumer giants like Coca-Cola (, Fortune 500).
Analysts are hopeful that earnings will improve over the course of the year, as Europe’s economy stabilizes and China’s easing efforts help spur growth.
Second-quarter earnings are expected to rise by 7%, according to FactSet, while third-quarter profits are expected to grow 4.7%. Double-digit growth is expected to return in the fourth quarter.
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