Factory orders are down, but that's OK. Home prices are up, but not as much as expected. Here are the top news stories of the day for Oct. 28, 2014.
Factory Orders Down, Not Out
The Commerce Department Tuesday said new orders for capital goods from U.S. businesses suffered their biggest drop in eight months in September, but industry experts believe the drop is only temporary. Non-defense capital goods orders, excluding aircraft, fell 1.7 percent in September, and that was the largest drop since January of 2014. A revision of August orders for the core capital goods showed a 0.3 percent gain in sales instead of the previously reported 0.4 percent gain. The drop in core capital goods also affected orders for durable goods, as the purchase of items that are supposed to last at least three years dropped 1.3 percent. In September, transportation orders dropped 3.7 percent, including a 16.1 percent drop in aircraft orders. Automobile orders dropped slightly.
Pfizer Tops Earnings Expectations
Drug maker Pfizer, the nation’s largest pharmaceutical company, Tuesday announced third quarter earnings slightly below last year’s numbers but above Wall Street analysts’ predictions. A high demand for its cancer drugs and medicines in emerging markets allowed Pfizer to post third-quarter earnings of 57 cents per share, down from 58 cents a share one year ago. Revenue decreased to $12.36 billion from $12.58 billion in 2013. Wall Street predicted the drug company’s quarterly earnings would reach only 55 cents a share on $12.24 billion in revenue.
Boy Free From Ebola
A 5-year-old boy who arrived in New York Friday from the West African nation of Guinea has tested negative for the Ebola virus, New York City health officials said Monday afternoon. The boy showed signs of illness on Sunday in the Bronx apartment where he lives, raising fears of Ebola that caused him to be rushed to Bellevue Hospital in Manhattan for testing. Bellevue is where a doctor who recently returned from Guinea is being kept in isolation after testing positive for Ebola. “Out of an abundance of caution, further negative tests are required on subsequent days to ensure that the patient is cleared,’’ the hospital said in a statement. “The patient will remain in isolation until all test results have returned.”
Breaking Up Madison Square Garden
The Madison Square Garden Company board of directors has approved a plan to explore the possibility of separating its entertainment business from its media and sports businesses. MSG owns both the New York Knicks of the National Basketball Association and the New York Rangers of the National Hockey League. The company said the spin-off would create two distinct publicly traded companies, which would provide better clarity of its business prospects to shareholders, who would be allowed to own shares in both new companies. “Investors favor companies with greater strategic focus on their core businesses,’’ said MSG president and CEO Tad Smith. “"The [live entertainment company] would capitalize on significant opportunities to grow rapidly within the changing entertainment landscape. The [sports and media company] would enjoy steady growth and high cash flow that we expect will result in capital returns to shareholders."
Wal-Mart Set To Resell Video Games
Earlier this year, Wal-Mart offered store credit to shoppers who turned in used video games. On Tuesday the company said it is now ready to launch a program to resell those games, in a direct competitive stance against game reseller GameStop. GameStop’s profits from the resale of video games are roughly 25 percent higher than what the company earns from new titles. The used game market is estimated to generate more than $2 billion a year in sales. “Our goal is to buy used video games for more and ultimately to sell used video games for less," said Laura Phillips, senior vice president of entertainment at Wal-Mart. The company said preowned games will have an average cost of between $12 and $30.
Home Prices Up, But Down
A 5.6 percent gain in home prices in August was reported by S&P/Case Shiller Tuesday, and the rise fell just short of economists’ expectations of a 5.8 percent increase in prices. The study of single-family home prices occurs in 20 metropolitan areas and compares prices today to those one year ago. The 5.6 percent increase was the slowest year-to-year increase since November of 2012. On a seasonally adjusted monthly basis, prices in the 20 cities dipped 0.1 percent for the month, below expectations of a 0.1 percent rise. The same was true of non-seasonally adjusted prices, which rose 0.2 percent but below expectation of a 0.5 percent increase. "The deceleration in home prices continues," David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said in a statement. "Despite the weaker year-over-year numbers, home prices are still showing an overall increase, as the National Index increased for its eighth consecutive month."