Will the government shutdown impact the country's crediting rating. Read about this and other of the day's top business and economic news stories
Jobs Report the Latest Victim of Government Shutdown
The Bureau of Labor Statistic’s Employment Situation report, regularly scheduled for release on the first Friday of the month, will not be seen at this time so we may bring you the government shutdown, now in its fourth day. The closely scrutinized jobs report is considered to be one of the key economic indicators, but those who produce it are among the 800,000 federal employees who are not considered to be “essential” as are air traffic controllers. Among those impacted by the report’s delay, notes The Associated Press, are the Wall Street analysts who base their buy-and-sell decisions in large part on the report. "The economic data everybody looks at all month long leads up to a day like Friday," Jonathan D. Corpina, senior managing partner at Meridian Equity Partners, told the AP. "Without having that core ingredient to your economic calendar, the dish really isn't going to be done."
S&P: U.S. Rating Safe for Now
The United States’ debt rating with Standard & Poor’s will not be affected
by the current battle over funding the government, or the upcoming need to increase the country’s borrowing limit, according to the S&P managing director. Marie Cavanaugh, the S&P managing director and lead analyst told CNBC expects the debt limit to be raised before the Oct. 17 deadline, and said the current government shutdown could actually help the debt limit problem. "We estimate that the shutdown is probably costing about 0.3 percent off the quarterly growth rate for every week that it's shutdown continues,’’ Cavanaugh said. “So in an odd way it may move the (debt ceiling) date back a little bit." The U.S. lost its AAA credit rating with S&P two years ago over the debt ceiling fight. But Cavanaugh said the country’s reduced deficit has improved the company’s outlook on the country’s debt situation.
Twitter Unseals IPO Documents
Documents unsealed by Twitter in advance of its eagerly-awaited planned initial public offering of stock reveal for the first time how much the social networking company makes. According to the IPO filings, Twitter generated $317 million in revenue in 2012 and had more than 218 million active users in the second quarter, up 44 percent from a year earlier. That compares with nearly 1.2 billion for Facebook and 240 million for LinkedIn. Founded in 2006, Twitter has never turned a profit and has an uninterrupted history of losses totaling $419 million since its inception. Twitter disclosed three weeks ago that it filed confidential papers to start the IPO process. The company was taking advantage of federal legislation passed last year that allows companies with less than $1 billion in revenue in its previous fiscal year to avoid submitting public IPO documents, The Associated Press reports. Twitter is required to unseal its documents at least three weeks before it starts holding events around the country to woo potential investors. At this rate, the company will likely price its IPO by Thanksgiving.
Institute of Supply Management Survey Shows Slight Drop in Non-Manufacturing Growth
The Institute of Supply Management issued its non-manufacturing report and said growth in the U.S. services sector has dropped after nearing an eight-year high in August. The ISM non-manufacturing survey index fell to 54.4 in September after reaching 58.6 in August, the highest pace of growth since December of 2005. Any reading above 50 indicates an expansion in the U.S. services sector. The employment index among non-manufacturing service jobs dropped to 52.7 in September from its 2013 high of 57 in August. The ISM manufacturing sector report on Tuesday showed the goods-producing sector expanded at its fastest pace in nearly 2 ½ years.
Super-Expensive Apartments in New York Selling Fast
Sales of apartments priced at $10 million or more jumped 75 percent in the third quarter, according to New York real estate firm Brown Harris Stevens, pushing the average sales price up 8 percent from the third-quarter of 2012. The median price for apartments in New York has risen just 3 percent from last year, to $870,000, which is still the highest median price in four years. There is also a growth in apartment inventory in New York, and the average selling time is down to 77 days, a 29 percent drop from 2012.
RadioShack Receiving Plugs for New Financing
Reuters is reporting exclusively that RadioShack has received several offers for new financing that could help cut its borrowing costs and assuage vendors and other partners that it has sufficient cash to fund turnaround efforts led by Chief Executive Joe Magnacca. Offers have reportedly come from current lenders Bank of America Corp and Wells Fargo 7 Co, sources told Reuters. General Electric Co. and JPMorgan are also considering making offers. RadioShack reported a wider-than-expected loss in its most recent quarter. Sales have been in plummeting in the face of competition, executive departures and a less than hip image that has failed to connect with younger shoppers.