Lumber Liquidators CEO quits suddenly, the Fed says no interest rate imminent, and jobless claims rise a bit. Here are the top news stories for May 21, 2015.
Jobless Claims Rise Slightly
The Labor Department Thursday said initial claims for state unemployment benefits increased 10,000 to 274,000 for the week ending May 16. That rise was slightly higher than expected, but the total number remains a sign of positive growth in the labor market. The four-week moving average of claims, which is considered a better measure of labor market trends, actually fell 5,500 last week to 266,250. That’s the lowest level since April of 2000.
Lumber Liquidators CEO Quits Suddenly
Robert Lynch, the embattled CEO of Lumber Liquidators, resigned unexpectedly Thursday, less than one month after the company’s chief financial officer also stepped down. Lumber Liquidators has been in trouble since a CBS News report about it selling Chinese laminate flooring containing high levels of formaldehyde, a known carcinogen. The company stopped stepping the flooring but the company is facing dozens of lawsuits over the safety of the products, as well as possible criminal charges.
Staples Profits Fall
Staples Inc., which is awaiting approval of its takeover of rival Office Depot, reported a 39 percent decline in first-quarter profit as sales continue to fall and store traffic drops. Chief Executive Ron Sargent said the report was in line with the company’s expectations, noting the company increased sales in North American delivery business. Earlier this year, Staples agreed to buy Office Depot for $6.3 billion, despite a shift in office supply needs which has seen a decrease in the use of products such as paper folders and print toner.
Reading the Fed Notes
Memos released from the Federal Reserve Open Market Committee meeting in April indicates the Fed sees the economy as growing despite some low numbers in the early months of 2015, but expects no change in interest rates immediately. The notes from the committee indicated the Fed does concern itself with low industrial production numbers, as well as fluctuating statistics from the housing and investment industries. The FOMC changed its language regarding a future increase of the benchmark interest rate, removing any suggestion that an increase is imminent.
Best Buy Numbers High
Best Buy Thursday reported quarterly earnings and revenue that topped analysts’ expectations, with first-quarter earnings of 37 cents a share, up from last year’s earnings of 33 cents per share. Revenue fell to $8.56 billion from $9.04 billion one year ago. Best Buy earlier announced plans to consolidate its Canadian stores known as Future Shop, which caused the company to cut about 500 full-time jobs and almost 1,000 part-time jobs.
CVS To Buy Omnicare
CVS Health Corp. announced Thursday it has agreed to buy pharmacy-benefits provider Omnicare to increase its ability to service the growing senior patient population. The offer of $98 a share in cash includes $2.3 billion in debt. CVS said the deal would allow it to dispense prescription drugs to assisted-living and long-term care facilities easier. The deal is expected to close near the end of the year.