Prices at the wholesale level plunged in February by the largest amount in seven months as a big drop in energy prices offset higher food costs. The Labor Department said Wednesday that wholesale inflation dropped 0.6 percent in February, much larger than the 0.2 percent decline economists had expected. Excluding food and energy, prices edged up a slight 0.1 percent, in line with expectations. The deep recession and weak economic rebound are keeping inflation at bay and giving the Federal Reserve leeway to maintain record low interest rates in an effort to build momentum from stronger economic growth. While overall wholesale prices have risen 4.4 percent over the past 12 months, core inflation, which excludes energy and food, is up a much more subdued 1 percent over the past year.
Blockbuster shares plunge to 28 cents
Blockbuster Inc. shares plunged further into penny-stock territory Wednesday after the struggling home-video-rental company said in a regulatory filing that it will likely file for bankruptcy if it’s unable to address its debt load. Shares of Blockbuster fell 12 cents, or 29 percent, to 28 cents a share. The company’s market capitalization now totals about $34 million, or just a fraction of its fourth-quarter revenue of $1 billion. The company reported an operating loss of $394 million in the period. Because of its losses and “the increasingly competitive industry conditions,” the company sees “substantial doubt about our ability to continue as a going concern,” according to the company’s filing.
Struggling bank finds new investor
Sterling Financial Corp. of Spokane has reached a tentative deal with the U.S. Treasury and a potential investor in its battle for survival. In a complicated plan months in the making, the Treasury would accept a steep markdown on the $303 million that it invested in Sterling only 15 months ago. The company would raise an additional $650 million in capital from new investment. Sterling would also repurchase $238 million in trust-preferred securities for which it is offering 20 cents per $1 face value.
Ford stock price hits five-year high
Shares of Ford Motor Co. surged to a five-year high Wednesday after a ratings agency upgraded the automaker’s debt and said Ford has the potential to improve its finances even further. The Dearborn-based automaker’s stock hit $14.15 per share in afternoon trading, a 4.9 percent surge to levels not seen since January 2005. It closed at $14.10, up 61 cents, or 4.5 percent. Moody’s Investors Service raised its ratings on Ford’s debt Wednesday, as well as the debt of Ford Motor Credit Co., which makes loans to dealers and customers. Still, Ford shares were already on the rise as it benefits from improved quality rankings and the fact that it didn’t take government aid.
From Herald news services
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.