BizNomic

Orders and shipments for non-military capital goods excluding aircraft climbed in June, signaling investment by U.S. businesses picked up heading into the second half of the year.

Such bookings increased 0.6 percent after jumping 4.6 percent in May, more than previously reported, figures from the Commerce Department showed today in Washington. Total orders for durable goods, those meant to last at least three years, unexpectedly dropped 1 percent, depressed by a decrease in demand for aircraft which is often volatile.

Eaton Corp. is among manufacturers benefiting from a pickup in demand as companies in the U.S. and abroad update equipment that is helping to support the recovery. The gains will partially compensate for a slowdown in consumer spending that is causing the world’s largest economy to cool heading into the second half of the year.

Durable goods orders are a leading indicator of manufacturing, which in turn provides a good measure for overall business health. New orders for long-lasting U.S. manufactured goods unexpectedly fell for a second straight month in June, posting their largest decline since August, according to a government report on Wednesday that was further evidence economic growth cooled in the second quarter.

The Commerce Department said durable goods orders fell 1.0 percent after a revised 0.8 percent drop in May. Analysts polled by Reuters had forecast orders increasing 1.0 percent in June from May’s previously reported 0.6 percent fall. Durable goods orders had been expected to rise based on the fact that Boeing Co received 49 orders for civilian aircraft in June compared to only five in May.

Economists forecast total orders would climb 1 percent, according to the median of 76 projections in a Bloomberg News survey. Estimates ranged from a drop of 1 percent to a 4 percent gain. The Commerce Department revised May orders to show a 0.8 percent drop compared with a previously reported decrease of 0.6 percent.

Bookings for non-defense capital goods excluding aircraft are a proxy for future business investment. Over the past three months, these orders climbed at a 25 percent annual pace, up from a 15 percent gain in the three months to March, signaling companies are ramping up investment.

The Food and Drug Administration (United States) on July 23 approved the first generic version of Lovenox known as enoxaparin sodium injection indicated as an anti-coagulant drug or blood thinner to prevent conditions like deep vein thrombosis. Levenox is made from heparin – a naturally derived mixture of sugar molecules and was approved in 1993.  The generic drug is expected to have the therapeutic effects as Levenox. One common application of this drug is to prevent deep vein thrombosis or DVT, which is a blood clot formed in a vein deep in the body, particularly in the lower leg or thigh. Such a blood clot could otherwise lead to a sudden potentially fatal blockage in a lung artery – a condition known as a pulmonary embolism.

The Food and Drug Administration announced that approval was given to Novartis AG’s (NVS) generic drug unit Sandoz.

Novartis responded quickly, saying it will immediately ship supplies of its copycat verion of Lovenox, known as enoxaparin, to the U.S. market.

IMS data shows enoxaparin sodium injection is the best-selling hospital medicine in the U.S, the Swiss company said. Sales of the blood thinning medicine totaled $2.7 billion last year.

“Sandoz is the first company to launch generic enoxaparin sodium in the U.S., delivering on our strategy of being first-to-market with key products, and underscoring our leadership in differentiated products,” said Jeff George, global head of Sandoz.

“We welcome the FDA decision to approve our enoxaparin application, and are now looking forward to significantly increasing patient and payor access to this vital medicine, by providing a high-quality, more affordable version.”

Investors responded by selling shares in the French drug maker. They closed down 4.7% at EUR45.29. The stock has lost 18% of their value sor far this year.

Concerns over competition from possible generic version of Sanofi’s Lovenox drug have been mounting with for some time. Indeed, the French pharamceutical company’s earnings per share guidance this year excludes the effects of generic competition to Lovenox.

The FDA determined that “current scientific evidence, precedent, and FDA’s legal authority establish a sound basis for the approval of generic enoxaparin sodium injection.”

BP’s evacuation of the Gulf of Mexico was called off Saturday and ships headed back to resume work on plugging the leaky well as remnants of Tropical Storm Bonnie breezed past.

The temporary plug that has mostly contained the oil for eight days held, and the real-time cameras that have given the world a constant view of the ruptured well apparently never stopped rolling. Dozens of ships evacuated the Gulf, but the storm had weakened to a tropical depression by the time it hit the spill site Saturday morning.

Thad Allen, the retired Coast Guard admiral running the government’s spill response, called it “very good news.” But the setback was still significant. Work came to a standstill Wednesday and will take time to restart. Allen said drill rig workers who spent Thursday and Friday pulling nearly a mile of segmented steel pipe out of the water and stacking the 40-to-50 foot sections on deck would have to reverse the process.

It could be Friday before workers can start blasting in heavy mud and cement through the mechanical cap, the first phase of a two-step process to seal the leaking oil well for good.

Dozens of ships that evacuated BP’s oil spill site ahead of the storm should be back on the scene within 24 hours as Bonnie weakened into barely a tropical depression, Retired Coast Guard Adm. Thad Allen told reporters Saturday. “We’re going to be playing a cat-and-mouse game for the remainder of the hurricane season,” Allen said Saturday morning.

Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration, said waves near the well head could reach eight feet by Saturday evening.

She said no significant storm surge was expected along the coast, and that the wave action could actually help dissipate oil in the water, spreading out the surface slick and breaking up tar balls. “I think the bottom line is it’s better than it might have been,” Lubchenco said.

It could be Monday before BP resumes drilling on the relief well and Wednesday before they finish installing steel casing to fortify the relief shaft, Allen said.

By Friday, workers could start blasting in heavy mud and cement from the top of the well, which could kill it right away. BP will still finish drilling the relief tunnel — which could take up to a week — to pump in more mud and cement from nearly two miles under the sea floor.

The U.S. Coast Guard estimated about 5.4 million barrels of oil has spilled into the Gulf since the April 20 rig explosion and, of that, about 2.6 million barrels have evaporated or biodegraded. That was based on U.S. scientists’ estimates that the Macondo well had spewed up to 60,000 barrels (2.5 million gallons/9.5 million liters) a day before being sealed on July 15.

Consumer Reports magazine said Monday it can’t recommend the iPhone 4 to shoppers, because of persistent reception issues caused by touching the Apple Inc. phone.

The products-review magazine, on its website, also questioned Apple’s explanation for the glitch, saying it tested other smartphones in its labs, including the older iPhone 3GS, and “none of those phones had the signal-loss problems of the iPhone 4.” “Our findings call into question the recent claim by Apple that the iPhone 4’s signal-strength issues were largely an optical illusion caused by faulty software that ‘mistakenly displays 2 more bars than it should for a given signal strength.’ Consumer Reports said.

The comments by the product-reviews publication add to a pile of complaints about the iPhone 4’s ability to handle voice calls. Apple has responded with a promise for a software update that will change how the phone decides how many signal bars to show, but Consumer Reports’ tests cast doubt on whether that will solve the problem.

When the iPhone 4’s reception problem first surfaced, Apple said it was a problem shared by all phones in the “wireless world,” and advised consumers to hold the iPhone differently. Two weeks ago, Apple reversed course by blaming software and promised to deliver a software update.

“The antenna problem and Apple’s screwy software response has become kind of a running joke,” analyst Rob Enderle, of the Enderle Group, told CIO.com. A software problem can be fixed relatively easy, whereas a hardware problem carries the potential of a recall.

“No one wants to face Jobs’ wrath if they had to actually do one,” Enderle says.

Consumer Reports, however, did offer an easy fix: “Cover the antenna gap with a piece of duct tape or another thick, non-conductive material. It may not be pretty, but it works. We also expect that using a case would remedy the problem. We’ll test a few cases this week and report back.”

One can just imagine what the ever-aesthetic Apple chief Steve Jobs thinks of that solution. Consumer Reports gave the iPhone 4 solid ratings on display sharpness and improved battery life over its predecessors. It even said the iPhone 4 has the best video camera of any phone. But the antenna problem looms as a major hurdle toward a Consumer Reports recommendation.

The problem is software-related and involves how the phone displays signal strength, according to the company’s July 2 statement. It has said it will issue a fix. Apple fell $2.11 to $257.51 at 1:15 p.m. New York time on the Nasdaq Stock Market. Before today, the shares had gained 23 percent this year.

Regulators shut down banks in Maryland, Oklahoma and New York on Friday, lifting to 90 the number of bank failures this year. The Federal Deposit Insurance Corporation said it was appointed receiver of Bay National Bank and Ideal Federal Savings Bank, both based in Baltimore. Bay National Bank had $282.2 million in assets and $276.1 million in deposits as of March 31. Ideal Federal Savings Bank had $6.3 million in assets and $5.8 million in deposits. The agency also took over Home National Bank in Blackwell, Okla., with $644.5 million in assets and $560.7 million in deposits, and USA Bank in Port Chester, N.Y., with $193.3 million in assets and $189.9 million in deposits.

Bay National Bank, Baltimore : Bay National Bank, Baltimore, Md., was closed by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corp. as receiver. The FDIC entered into a purchase and assumption agreement with Bay Bank, FSB, Lutherville, Maryland, to assume all deposits of Bay National Bank.

Bay National Bank had approximately $282.2 million in assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $17.4 million.

Ideal Federal Savings Bank, Baltimore : The bank was established to help black families purchase homes in the Baltimore area. It opened its doors for the first time one Thursday evening in August 1920. The bank was located in the same community for 88 years, owning and occupying the same building in Baltimore since its founding. The FDIC has approved the payout of the insured deposits of Ideal Federal Savings Bank. The bank was closed by the Office of Thrift Supervision, which appointed the FDIC as receiver. Ideal Federal Savings Bank had approximately $6.3 million in assets. The FDIC estimates that the cost to the DIF will be $2.1million.

USA Bank, Port Chester, N.Y.: USA Bank, Port Chester, N.Y., was closed by the New York State Banking Department, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with New Century Bank (doing business as Customer’s 1st Bank), Phoenixville, Pa., to assume all of the deposits of USA Bank.

Home National Bank, Blackwell, Okla. :Home National Bank, Blackwell, Okla, was closed by the Office of the Comptroller of the Currency, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with RCB Bank, Claremore, Okla., to assume all of the deposits of Home National Bank.

The U.K. Treasury appointed Martin Weale to serve on the Bank of England’s nine-member interest rate-setting Monetary Policy Committee as it begins to split over how soon to exit its emergency stimulus measures.

Weale, who is currently director of the National Institute for Economic and Social Research in London, replaces Kate Barker, whose term on the panel ended May 31. The appointment will take effect in time for Weale to participate in the August rate decision, the Treasury said in an e-mailed statement.

NIESR is most familiar to investors and traders through its monthly estimates of the quarter-on-quarter rate of GDP growth, which Mr. Weale produces. In June, NIESR estimated that in the three months to May, output was up 0.7% from the three months of February.

“Obviously we hope that the rate of growth will improve further but there are a number of factors which will impede growth in the coming months,” Mr. Weale wrote. “One is that the euro area may be adversely affected by the spill-over from Greece’s debt crisis. Secondly, the United Kingdom has recently lost competitiveness against the euro area as sterling has risen. Thirdly, there are risks of renewed weakness to domestic demand as the UK’s fiscal deficit is corrected.”

As a member of The Times newspaper’s shadow Monetary Policy Committee, Weale voted last month for no change in rates or the 200 billion-pound ($302 billion) limit on quantitative easing, the newspaper said June 10. He said that although inflation was a concern, it was offset by the risks to economic growth from the weaker euro and the Greek crisis, according to The Times.

“Obviously I’m looking forward to the opportunity but I’m not in a position to comment on the state of the economy,” said Weale in a telephone interview today.

Weale has run the London-based institute since 1995 and also worked as an adviser to the Office for National Statistics. NIESR’s clients include the Bank of England and the Treasury. A graduate of Cambridge University, he was a fellow at the Bank of England for a year in the mid-1980s and has also been a visiting scholar at the Federal Reserve Bank of Minneapolis.

Weale’s experience “of economic forecasting and data analysis derived from 15 years as director of the National Institute for Economic and Social Research will be extremely valuable to the committee,” said Chancellor of the Exchequer George Osborne, in a statement.

Wal-Mart Stores Inc. (WMT) Chief Merchandising Officer John Fleming is resigning, in what is the retailer’s third upper-level executive change in less than a week.

Fleming spent 10 years with Wal-Mart and played a notable role in overseeing product selection and relationships with vendors at the company, which had more than $400 billion in sales last year. He is leaving Aug. 1 for what Wal-Mart said are personal reasons.

Fleming, who joined the company in 2000 as chief merchant of Walmart.com, had a rocky track record, including a failed attempt to take the Wal-Mart’s brand upscale in 2005, said Deborah Weinswig, retail analyst at Citigroup. Fleming’s departure gives newly appointed Chief Executive Bill Simon “the opportunity to set a new course for Wal-Mart’s merchandising organization, which, in turn, could lead to improvement in apparel and home,” Weinswig said.

The announcement came just days after Wal-Mart said it would move the head of its U.S. operations, Eduardo Castro-Wright, to oversee its international e-commerce group and global buying operations, and promote Simon to fill his place. Simon announced Fleming’s departure Friday in a memo to staff. “Our leadership team will focus on picking up our pace to meet our challenges,” Simon said.

Until Wal-Mart names a replacement, John Westling, executive vice president of planning, pricing and replenishment, will lead the general merchandise and replenishment teams. Jack Sinclair, currently general manager for grocery, will lead Wal-Mart’s food and health and wellness merchandising teams. Both Sinclair and Westling will report directly to Simon.

“John has been thinking about how he could spend more time with his family,” Walmart spokesman David Tovar said. “The changes announced earlier this week presented him with an opportunity and he decided it was the right time for him to leave the company.”

Simon gave credit to Fleming as “the architect of groundbreaking efforts to grow our e-commerce business, creative marketing programs to communicate with customers and inventive merchandising initiatives.” Wal-Mart is taking steps to improve U.S. operations, with its high-profile move to open a second store in Chicago seen as a potential door-opener to other urban markets. The company also is opening smaller stores as it boosts its presence as a grocer.

In a note to staffers, Simon said Wal-Mart’s mandate is to “increase customer traffic, make sure our products are relevant to our customer and never give an inch on price leadership.

Shares were recently down 0.7% to $48.01. The stock is off 10% this year.

Boeing announced it will buy combat engineering firm Argon ST for about $775 million Wednesday, reflecting a shift by defense contractors seeking to accommodate a Pentagon that now wants high-tech intelligence tools as much or more than big guns and heavy armor.

The Pentagon is cutting some big weapons meant for conventional wars out of the budget while it shops for technology better suited to fight against shadowy insurgent groups in places like Iraq and Afghanistan.

Argon ST Inc. is a Fairfax, Va., company that develops a variety of systems used in surveillance, reconnaissance and combat. Boeing’s defense unit CEO Dennis Muilenburg said Argon will “significantly accelerate our capabilities in sensors, communications technologies and information management.”

Boeing Co. seems to have been doing pretty well these past few years. The company has been posting solid profits and increases in earnings. They have been working on a next-generation aircraft, the 787 Dreamliner, which is highly anticipated and has taken many orders already; although its timeline has been delayed approximately two years, it will hopefully be released by the end of this year. The company has a serious competitor in Airbus, but in 2006 Boeing took the lead in terms of number of orders. All of these things are very strong indicators of good performance.

The deal, which is expected to have an immaterial impact on Boeing’s earnings, would be funded with the company’s existing cash.

Following the acquisition, Argon will be a stand-alone unit of Boeing and a new division of Boeing Network & Space Systems, a business within the Boeing Defense, Space & Security operating unit. Terry Collins, chairman and chief executive officer of Argon, along with his management team, will continue to lead the company.

Founded in 1997, Argon develops sensors and networks designed for C5ISR (Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance) markets. The products helps to exploit, analyze and deliver information for real-time situational awareness. The company, with about 1,000 employees, operates in Virginia, California, Michigan, Pennsylvania, Florida, Maryland and Texas.

The acquisition is expected to be completed by the end of the third quarter 2010 and is subject to regulatory approval.

While inflation remains subdued, financial market conditions have become less supportive of economic growth, Federal Reserve Governor Kevin Warsh said Monday. Speaking to the Atlanta Rotary Club in Atlanta, Warsh urged the U.S. central bank to be cautious in further expanding its already-ballooned balance sheet. The Fed’s balance sheet has doubled in size during the financial crisis, and its asset holdings stood at more than $2.3 trillion in the latest week.

“Any judgment to expand the balance sheet further should be subject to strict scrutiny,” he said in prepared remarks released ahead of his speech. “I would want to be convinced that the incremental macroeconomic benefits outweighed any costs owing to erosion of market functioning, perceptions of monetizing indebtedness, crowding-out of private buyers, or loss of central bank credibility.”

Warsh described the Fed’s institutional credibility as its most valuable asset. “That credibility could be meaningfully undermined if we were to take actions that were unlikely to yield clear and significant benefits,” he said.

Warsh continued to tout the federal funds rate as the central bank’s primary tool for monetary policy. “It is far and away the most powerful, its effects on the economy and financial markets most clearly understood, and it is the most effective in communicating our intentions,” he said.

In a speech in Atlanta, Warsh set a high bar for his support of further asset purchases, saying he would need to be convinced the benefits of the purchases would outweigh the costs of “erosion of market functioning, perceptions of monetizing indebtedness, crowding-out of private buyers, or loss of central bank credibility.”

The Fed has bought over $1 trillion in housing-related assets to keep long-term market interest rates low and support the recovery. The purchases ended in March.

Some economists want the Fed to buy more assets given the sense that the economy has lost some momentum recently.

The Fed’s balance sheet has grown to around $2.3 trillion from about $900 billion before the financial turmoil as the central bank snapped up around $1.4 trillion worth of mortgage-related debt. The Fed launched its vast purchase program as a way to continue to stimulate economic growth after it had exhausted its conventional tool, the fed funds rate, by slashing it to near zero in December 2008.

No Fed officials have called publicly for an expansion of the Fed’s purchases to support the recovery, which has looked shaky in recent weeks, although some analysts have recommended such a move.

In a statement following its meeting last week, the Fed said that the European debt crisis was undermining the pace of recovery. Most analysts expect the Fed’s next moves will be to raise rates and shrink its balance sheet as the rebound strengthens.

Stefan Jacoby, president and chief executive of Herndon-based Volkswagen Group of America, has been replaced as his contract talks with the company continue — and after a report that he has been hired to run Volvo.

The duties of Jacoby, the public face of the German automaker’s ambitious U.S. expansion plans, will be handled by Michael Lohscheller, the U.S. unit’s executive vice president and chief financial officer, and Mark Barnes, its chief operating officer, until his contract is “clarified,” Volkswagen said in a statement Thursday.

Jacoby has been Volkswagen’s top U.S. executive since September 2007. He has cut costs, designed the first models for the U.S. market, added an assembly plant in Tennessee and moved the headquarters to Virginia from Michigan. Zhejiang Geely Holding, a Chinese automaker, is taking over Volvo from Ford Motor.

Jacoby’s leaving could result in a drain of production know-how to Volvo, said Aleksej Wunrau, an analyst at ING BHF-Bank in Frankfurt.

“Jacoby’s departure would be bad news for VW” and may cause frictions within VW’s U.S. operations at a time when the Chattanooga plant is about to be opened, Wunrau said.

Volvo’s current CEO is Stephen Odell, but China’s Zhejiang Geely Holding is buying Volvo from Ford.

Geely is buying Volvo from Ford for $1.8 billion in the biggest overseas purchase by a Chinese automaker. Volvo has to stop bleeding sales to get back in the black and become a presence in China, which surpassed the U.S. as the world’s largest auto market in 2009. Volvo reported it sold 334,808 cars worldwide last year, a decline of 11% from 2008 and 27% from a peak of about 460,000 in 2007. VW sold about 214,000 cars in the U.S. alone last year, excluding its luxury Audi brand and aims to raise VW brand sales to 450,000 by 2012-13, Jacoby said in January.

Geely and Ford both declined to comment. “The future management of Volvo cars will be a decision for the new owner once the deal is completed, which we still expect in the third quarter”, said John Gardiner, a Ford spokesman.

Mr Jacoby’s departure would come as a blow to VW’s ambition to overtake Japan’s Toyota as the world’s largest carmaker by 2018.

VW is the top-selling carmaker in Europe and China, but had a minuscule 2.05 per cent of the US. market in 2009. “Without having significant market share in the US, we cannot become number one globally”, Mr Jacoby told the Financial Times in March. Since becoming head of VW’s US operations in September 2007, Mr Jacoby has slashed costs and developed its first models specifically for the world’s second-largest vehicle market.

VW is placing its hopes on a mid-size sedan that will be assembled from 2011 in Chattanooga, TN, where the German carmaker is currently building its first US plant in several decades.

Mr Jacoby’s possible departure would come as VW braces itself for a broader management reshuffle to address the planned integration of sports car maker Porsche and the delicate overhaul of the group’s truck operations.

Jacoby started working for Volkswagen in 1985 and has held VW jobs in the U.S. and Asia. He left to run Mitsubishi’s Euro-operations from 2001-04 before returning to become Volkswagen’s global sales chief.