Morning Business Memo
Here's the news every driver wants to read. Gas prices appear to have peaked and are likely to head lower in the coming weeks. Gasoline futures have dropped four days in a row, falling more than 6 percent from their peak late last month. The U.S. Energy Department reported a slight decline in pump prices in the past couple of weeks, but deeper price cuts are probably coming. When futures fall, retail prices often take a few weeks to drop.
The response to Spain's bond auction this morning was swift. U.S. stock futures and global market averages rose after the sale went fairly well. There was solid demand from investors as Spain sold more than $3 billion of 10-year bonds. The yield of more than 5.7 percent was higher than the previous auction earlier this month, but below the 6 percent mark reached late last month. The higher the yield, the greater the perceived risk of non-payment. The rate on German 10-year bonds is less than 1.8 percent. Markets are still nervous about Spain and the possibility of another European bailout.
Just when things were going so well for the car industry, two serious problems could force production cuts. There's a shortage of a plastic resin used to make fuel lines and other parts. An explosion last month knocked out a plant in Germany that makes the substance. That could cause auto assembly plants to slow down in a few weeks. And if sales of cars and trucks continue to grow, the industry could run short of parts later this year because there aren't enough factories to make them
It was another dreadful quarter for cellphone manufacturer Nokia. The Finnish company reported a 1st quarter loss of $1.2 billion. Nokia is facing strong competition from Apple's iPhone and a range of Android smartphones.
American Airlines is moving ahead with plans to slash its workforce and cut costs. AMR Corp. announced plans to eliminated 1,200 nonunion jobs as it cuts costs while under bankruptcy protection. The airline said in February it aimed to cut 13,000 union pilots, flight attendants and ground workers.