Wednesday, December 24, 2008

Toshiba to Make New Lithium-Ion Battery; Retail Group Asks Obama for Sales Tax Free Holidays; Wal-Mart Settles 63 Class Action Suits; Oil Drops on Demand - Natural Gas Rises on Putin Remarks; Wells Fargo - Wachovia Merger Approved; Holiday Notes

With the Christmas holiday on Thursday, Wednesday will be a shortened trading day with the stock market closing at 2:00 EST. Today's post covers many subjects to bring you up-to-date on the latest happenings.

Toshiba to Make New Lithium-Ion Battery

Toshiba plans to invest about 30 billion yen ($330 million) to build a new plant to produce rechargeable lithium ion batteries, Kyodo News reported Wednesday, citing people familiar with the matter. Although Toshiba has scaled down production in its core semiconductor business amid the global economic slowdown, they have decided to boost investment in the promising rechargeable battery business, as demand for such products is expected to grow for use in electric vehicles and industrial machines, the report said. The battery, known as the "Super Charge Ion Battery," can recharge to 90% of full capacity in less than five minutes and has a life cycle of over 10 years, Kyodo reported. The construction of the new plant will begin next year.

Retail Group Asks Obama for Sales Tax Free Holidays

The National Retail Federation on Tuesday said it has asked President-elect Obama to include sales tax-exempt shopping days in March, July and October 2009 as part of his economic-stimulus program. The trade group said the proposed tax-holiday periods, which would last 10 days including two weekends, would help boost consumer confidence and spending.

Tax-free treatment would apply to all tangible goods subject to a state sales tax ranging from apparel and home furnishings to restaurant dining and automobiles but would exclude tobacco and alcohol. The federal government would reimburse the 45 states that have sales taxes for the lost revenue, and would provide the five states without a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon) with revenue approximating the sales tax reimbursement that would be received by states with similar population.

State sales tax rates range from 2.9% to 7.25% and add $236 billion a year to the amount U.S. consumers pay for goods and services, according to the U.S. Census Bureau. By temporarily lifting the sales tax for the three 10-day periods, NRF estimates that consumers could save nearly $20 billion. Based on the 112.4 million households in the United States, the figure would amount to almost $175 for the average family.

Wal-Mart Settles 63 Class Action Suits

Wal-Mart said late Tuesday it will settle 63 wage and hour class action lawsuits against the company, some of which have been pending over the last several years. The world's largest retailer said it will pay out a settlement of $352 million to $640 million, and use "various electronic systems and other measures" to ensure compliance with applicable wage laws. Wal-Mart said it will take a fourth-quarter after-tax charge of about 6 cents a share as a result.

Oil Drops on Demand - Natural Gas Rises on Putin Remarks

Crude-oil futures fell Tuesday, following a 6% slump in the previous session, on weaker demand. Crude for February delivery closed down 93 cents, or 2.3%, at $38.98 a barrel on the NYMex. Gasoline and heating-oil futures also moved lower. Natural-gas, however, surged as much as 9% as Russia and other major producers gathered in Moscow to seek closer ties. Russia Prime Minister Vladimir Putin said that the era of cheap gas is coming to an end, and gas producers will cooperate more closely to try and make the gas market more predictable, according to media reports.

Wells Fargo - Wachovia Merger Approved

Wachovia announced today that its shareholders approved the Wells Fargo merger at its special meeting of shareholders. The merger was approved by approximately 76% of the votes entitled to be cast by the holders of Wachovia's outstanding shares of common stock and Series M preferred stock, including a majority of the outstanding shares of Wachovia's common stock.

"We are pleased that Wachovia's shareholders agree that the Wells Fargo/Wachovia combination will provide superior growth and long-term value to shareholders, customers, employees and our communities," said Robert K. Steel, CEO of Wachovia. "We received overwhelming support from Wachovia's shareholders today, with approximately 96% of the votes cast by Wachovia shareholders approving the transaction."

"We believe our combined company will be a compelling value for Wachovia shareholders - and today's vote shows they agree," said Wells Fargo President and CEO John Stumpf. "Shareholders' approval is a major step toward completing the merger and we now look forward to the official merger of our two companies a week from tomorrow. The actual merger integration of our companies' systems, operations, products and services will be done very thoughtfully and deliberately over the next two to three years. I want to assure all customers of both companies that we'll approach every discussion on the integration and conversion from the standpoint of what's best for our customers."

Wells Fargo and Wachovia Corporation announced their intention to merge on Oct. 3, 2008. The transaction is expected to close by the end of the year.

Holiday Notes

Rollins Financial Counseling, Inc. and Rollins & Associates, P.C. will be closed on Thursday, December 25 and Friday, December 26 for Christmas. The firm will also be closed on Thursday, January 1 for New Years Day.

We wish all of our clients, friends, and families a happy and safe holiday season.

Sources: MarketWatch, National Retail Federation, Wal-Mart, Wachovia, Wells Fargo

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