Quick Notes for the Day - August 4

Pending Home Sales Rise in June - Boosted by low interest rates, prices, and a tax credit, pending sales of existing homes rose in June for the fifth straight month. The current streak is the longest since 2003 according to the National Association of Realtors. The pending home sales index rose 3.6% in June after an upwardly revised gain of 0.8% in May, and year over year the index is up 6.7%. More importantly, pending homes sales in June rose in ALL regions. *** Note - Pending Home Sales are home for which there is a contract but it has not yet closed. According to the NAR, these contracts usually close within 6 weeks.

Consumer Spending Rises in June, Personal Income, Savings Fall Slightly - Consumer spending rose more than expected in June according to a Commerce Department report. The report said spending rose 0.4% (versus a 0.3% estimate) boosted by expenditures on nondurable goods after a revised 0.1% increase in May.

Also included in the report was the personal income information. Personal income declined 1.3% in June, but this was easily explainable due to the effects of the stimulus checks wearing off in May.

Spending on nondurable goods rose 1.7% in June after a 0.1% rise in May. Spending on services also was up slightly, but consumption of durable goods, like appliances and cars, fell 0.2%.

Savings fell to an annual rate of $505 billion, with the saving rate slipping to 4.6% versus 6.2 percent in May. A measure of inflation closely watched by the Federal Reserve, the year-on-year personal consumption expenditures index excluding food and energy rose 1.5% after a 1.6% increase in May.

PepsiCo to Buy Bottlers - PepsiCo said Tuesday that it has reached a deal to buy Pepsi Bottling Group for $36.50 a share and PepsiAmericas for $28.50 a share. PepsiCo said that the total value of the shares that it will be acquiring is about $7.8 billion. The companies said they expect the deals to close in late 2009 or early 2010. In April, PepsiCo had offered $29.50 in cash and stock for each share of Pepsi Bottling Group and made a separate offer for PepsiAmericas at $23.27.

Quick Notes for the Day - June 1

General Motors Files for Bankruptcy - GM filed for bankruptcy Monday morning after months of the company and government tried to avoid it. At the same time, GM (and Citigroup) was being removed from the Dow 30. In the bankruptcy filing, the company reported total assets of $82.3 billion on a consolidated basis with total debt of $172.8 billion.

"Today marks a defining moment in the reinvention of GM as a leaner, more customer-focused, and more cost-competitive company that, above all, can quickly generate winning bottom line results," CEO Fritz Henderson said. "The economic crisis has caused enormous disruption in the auto industry, but with it has come the opportunity for us to reinvent our business. We are going to do it once and do it right."

The government's stake in the new GM will be about 60%, and it hopes bankruptcy will be a quick 60-90 day process. The U.S. government will provide $30 billion in bankruptcy financing to allow the company to operate as it restructures $27 billion debt and pension liabilities.

Changes in the Dow 30 Index - What is the most recent change in the financial markets? Changes in the Dow... According to The Wall Street Journal, GM and Citigroup are being removed by Dow Jones. The replacements, which will be effective June 8, will be Cisco Systems for GM and Travelers for Citigroup.

Construction Spending Up Thanks to Home Improvements - Construction spending rose 0.8% in April, the biggest gain since August, as outlays for home improvements grew, the Commerce Department reported Monday. Spending on private-sector residential projects increased 0.7% as home improvements rose 8.9%. Outlays for new construction on single-family homes fell 6.7%, the 38th consecutive decline. Outlays for private-sector non-residential projects rose 1.8%, led by power, manufacturing and communications structures. Outlays for public-sector projects fell 0.6%.

Manufacturing Sees Improvements - The Institute for Supply Management index rose to 42.8% in May from 40.1% in April. The 42.8% is its highest reading since September 2008.

Copper Rises to Seven Month High - Copper futures climbed to their highest level in more than seven months after China, the biggest copper consumer, reported its May manufacturing expanded for a third month. Two competing purchasing-manager indexes released Monday showed Chinese factory activity remained on an uptrend in May.

Personal Savings Rate Increases - The US personal savings rate increased to a 14-year high of 5.7% in April as after-tax incomes were boosted by provisions of the economic stimulus plan the Commerce Department reported Monday.

Court Clears Fiat Deal for Chrysler - Chrysler said Monday that a federal bankruptcy court has approved its request to sell its operations to Chrysler Group LLC, the new company formed in alliance with Italy's Fiat SpA. The revamped Chrysler could exit bankruptcy as soon as Monday after Judge Arthur Gonzalez of the U.S. Bankruptcy Court for the Southern District of New York cleared a $2 billion transaction in connection with the deal.

"With this approval, the new Chrysler Group is created and can prepare to launch as a vibrant new company formed with Fiat," said Robert Nardelli, chairman and chief executive of Chrysler LLC, in a statement.