Trade deficit surprises with a 5.7% increase The gap between what Americans import and export unexpectedly widened in February as domestic demand appeared to increase for automobiles and capital goods. The trade deficit grew 5.7 percent, to $62.3 billion, its highest reading since November and the second consecutive month of increases. The estimate for January was revised up to $59 billion from $58.2 billion, the Commerce Department said on Thursday. The increase came as a surprise to economists who had expected the economic downturn to suppress domestic demand for foreign goods. Instead, import sales jumped 3.1 percent, the biggest gain in almost a year, to $213.7 billion from $206.4 billion in January.
Bank of America changes health care benefits Bank of America Corp. is making major changes to its health care benefits, including giving employees up to $1,200 a year to spend on expenses not covered by insurance. Beginning next year, the Charlotte, N.C.-based bank will consolidate almost all of its health and insurance plans under Aetna Inc. As part of the change, it will put $600 to $1,200 annually into health care accounts for employees who earn less than $100,000. The accounts are in addition to the bank's annual contributions to employees' health care coverage. The new bank-funded accounts can be used to pay for current health care expenses not covered by insurance, such as deductibles and copays, or rolled over from year-to-year and saved. Other revamped benefits include boosting paid maternity, paternity and adoption leave to 12 weeks, and offering additional money for child care.
Financier Soros says credit crisis will worsen The credit crisis is far from over, billionaire financier George Soros warned Thursday, urging regulators to move faster to contain damage from the collapse of the housing finance markets. "I think the situation is more serious than the authorities admit or recognize," Soros told journalists in a conference call. Measures taken to cut interest rates and stimulate the economy were "necessary but not sufficient," he said. "Because of that, I think the situation is going to get worse before it gets better." Soros is promoting a new book, "The New Paradigm for Financial Markets: The Credit Crisis and What It Means."
Bank of England cuts loan rate to 5% The Bank of England, acting to stimulate a slowing economy, cut its base lending rate by a quarter-point to 5 percent on Thursday, the lowest level in 17 months. The widely expected decision came in the face of contrary pressures from rising inflation and fears about growth because of sagging house prices and falling consumer confidence. The bank's key rate rose as high as 5.75 percent in July and held there until December. The rate last was as low as 5 percent in November 2006.
Genentech profit jumps, Wall Street yawns Biotechnology giant Genentech Inc. is reporting a jump in its first-quarter profit of 12 percent compared to last year, but sales of its top-selling cancer drug disappointed Wall Street analysts. For the quarter ended March 31, the company earned $790 million, or 74 cents per share, compared with $706 million, or 66 cents a share, a year ago. Excluding special expenses, Genentech said Thursday it would have earned $895 million, or 84 cents a share. On that basis, the results beat the average per-share estimate among Wall Street analysts by two cents, according to Thomson First Call. Revenue was $3.06 billion in the quarter, an increase of 8 percent from $2.84 billion a year ago but missing analysts' expectations by about $50 million.
