A lower dollar appears to be boosting the U.S. economy only gradually, with higher prices on imported oil helping outweigh the benefit of cheaper American exports. The latest evidence was a government report Friday that the U.S. trade deficit jumped in September by the largest percentage amount in more than a decade. A big culprit was foreign oil, whose prices hit their highest point in nearly a year. That helped eclipse a fifth straight gain in U.S. exports. Economists think a rebounding global economy will keep raising demand for U.S. exports. The dollar’s value has dropped about 12 percent against a basket of major currencies since last spring. A lower dollar can help boost U.S. exports because it make them cheaper for foreigners to buy. The question is how fast a lower dollar can narrow the trade gap and invigorate the U.S. economy.
J.C. Penney profits drop 78 percent
Department store chain J.C. Penney Co. reported a 78 percent drop in its third-quarter earnings because of a big expense for its pension plan, and its revenue slipped from a year earlier. The moderate-price retailer upgraded its annual profit and sales outlook for the year because it is selling more items at full price or on planned promotions, but the outlook for holiday shopping remains uncertain. The company expects sales at stores open at least a year, a key measure of a retailer’s health, to fall between 4 percent and 6 percent in the quarter that includes the holidays, less than the 10.8 percent drop it suffered in the period in 2008. The retialer said it earned $27 million, or 11 cents per share in the third quarter. That compares with $124 million, or 56 cents per share, a year earlier.
Preppy retailer posts weak sales
Clothing seller Abercrombie &Fitch Co.’s third-quarter profit fell 39 percent, as weak domestic sales offset cost cuts and stronger international performance. Still, results were better than expected and shares rose 6 percent in morning trading. Abercrombie &Fitch has seen sales slump and lost market share to lower-priced competitors such as Aeropostale Inc. It has kept prices high and kept investing internationally amid the recession.
Giant cruise ship nears first voyage
The world’s largest cruise ship has arrived in South Florida. The 16-deck Oasis of the Seas docked Friday at Port Everglades in Fort Lauderdale. It set sail from Finland to Florida in late October. The massive $1.5 billion vessel is nearly 40 percent larger than the industry’s next-biggest ship and five times larger than the Titanic. It has 2,700 cabins and can accommodate 6,300 passengers and 2,100 crew members. The ship also features various “neighborhoods” — parks, squares and arenas with special themes. One of them will be a tropical environment that will include palm trees. The Oasis of the Seas offers its first cruise on Dec. 5.
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