Morning Business Memo

Jan 12, 2012 7:37am

Mixed signals on the cost of energy. Gasoline prices are heading higher, and the global price of oil is up because of tensions over Iran and a general strike in Nigeria. Crude futures are close to $102 a barrel. But natural gas is cheaper this winter than it’s been in a decade. Prices have dropped by more than 10 percent in the past week, as mild temperatures cut into heating demand and a production boom pumps up supplies. Homeowners should eventually benefit from lower heating and electric bills. Natural gas demand usually soars in the winter as homeowners and businesses crank up the heat. But in many parts of the U.S., thermostats haven’t been turned up as much this year.

The European financial crisis has been putting the brakes on US stocks. Many analysts agree share prices would be higher if Europe’s problems ease. This morning US futures rose after bond sales in Italy and Spain went well. Italy’s borrowing costs dropped sharply as it sold short term bonds. Investors bought 12-month bonds at a yield of 2.735 percent, sharply down from last month’s rate of 5.95 percent. Spain successfully raised more than $12.5 billion with lower yields and stronger demand for its bonds.

More controversy involving workers who make the gadgets we love. In Wuhan, China, dozens of workers assembling Xbox video game consoles climbed to a factory dormitory roof, and some threatened to jump to their deaths. The dispute boiled over last week after contract manufacturer Foxconn Technology Group said it would close the production line for Microsoft Corp.’s Xbox 360 consoles, and transfer some workers to other jobs. The workers climbed to the top of the six-story dormitory on Jan. 3 and threatened to jump before Wuhan city officials persuaded them to desist and return to work, according to the workers and accounts online.

In a separate case, sports equipment maker Nike agreed to give workers in Indonesia $1 million in unpaid overtime. A national trade union representing nearly 4,500 employees in Banten province said Nike had failed to pay close to 600,000 hours over a two-year period. After 11 months of negotiations, the Seattle-based company reached a $1 million settlement, said the union’s chairman.

Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc

You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus