Wal-Mart

OpenCalais Metadata: Ticker: 
WMT

Horns Up: Wal-Mart to stock more U.S.-made goods.

In a reversal of American businesses’ shift to cheaper labor markets overseas, discount retailer Wal-Mart has agreed to increase spending on U.S.-made goods by $50 billion over the next 10 years. According to The Wall Street Journal, the retail giant’s U.S. CEO, Bill Simon, told suppliers at a recent meeting in Orlando that Wal-Mart wanted to bring back “good middle-class jobs, [which] is exactly what our country needs.” Although the company’s spending plans will only affect 2 percent of its annual merchandise expenditures in the U.S., the renewed faith in and support for the American worker is an important first step in restoring the manufacturing middle class that has been hollowed out since the 1970s. Now, we just wish they’d extend that generosity to their own employees, who are notoriously underpaid and denied basic workers’ rights.

Horns Down: Postal service leaving UT.

We’ve mentioned before how enamored we are of the United States Postal Service, so you can imagine our disappointment when the USPS announced that it would be closing its office on the UT campus when its contract expires in February. There are still UPS and FedEx offices on the Drag, and the nearest USPS location is now only a few blocks south of campus on 17th Street, but we’ll miss being able to drop off a package in between classes without missing a beat.

Horns Up: Don't swim too close...

According to Politico, at a political fundraiser for a group promoting Social Conservatism in Richmond, Va. last Saturday, Virginia gubernatorial candidate Ken Cuccinelli avoided being photographed with Texas Sen. Ted Cruz. Cuccinelli, who is currently trailing the Democratic frontrunner for the Virginia governorship, Terry McAuliffe, in the polls by about five points, is infamous for asking the Supreme Court to reconsider the constitutionality of bans on oral and anal sex that were overturned in the landmark case Lawrence v. Texas. That’s correct: The guy who didn’t anticipate the campaign fiasco that would result from trying to outlaw oral and anal sex thinks that appearing in a photograph with Cruz is just too much of a political liability. We’re glad that even the “Wacko Bird” wing of the Republican party is starting to feel that Cruz is the odd man out.

Horns Down: We miss "Big John."

U.S. Sen. John Cornyn released a new statewide campaign ad in advance of his 2014 reelection bid, despite the fact that no one has appeared to challenge him for his seat. The 30-second ad touts Cornyn’s conservatism as hard as it can, presumably to compensate for his decision not to support fellow Texas Republican Ted Cruz’s effort to derail the Affordable Care Act by bringing the government to a screeching halt. It’s a fairly well-crafted attempt to shore up Cornyn’s conservative credentials, but we still long for the thrift-shop fringed jacket and melodramatic choir Cornyn used in his infamous “Big John” ad campaign in 2008.

DHAKA, Bangladesh — Wal-Mart says a Bangladesh garment factory that caught fire Saturday killing 112 people had previously produced merchandise for the retailer without its permission.

Wal-Mart said that one of the company’s suppliers had contracted work out to the factory without authorization and in violation of Wal-Mart policies. The company said it terminated its relationship with the supplier Monday.

A Wal-Mart spokesman would not comment on how recently the plant manufactured Wal-Mart clothes. Earlier, the retailer said it could not confirm whether it had an active relationship with the factory.

NEW YORK — Wal-Mart Stores Inc. hushed up a vast bribery campaign that top executives of its Mexican subsidiary carried out to build stores across that country, according to a published report.

The New York Times reported Saturday that Wal-Mart failed to notify law enforcement officials even after its own investigators found evidence of millions of dollars in bribes. The newspaper said the company shut down its internal probe despite a report by its lead investigator that Mexican and U.S. laws likely were violated.

The bribery campaign was reported to have first come to the attention of senior executives at Wal-Mart in 2005, when a former executive of its largest foreign subsidiary, Wal-Mart de Mexico, provided extensive details of a bribery campaign it had orchestrated to win market dominance.

The Mexican executive, previously the lawyer in charge of obtaining construction permits, said in emails and follow-up conversations that Wal-Mart de Mexico paid bribes to obtain permits throughout the country in its rush to build stores nationwide, the Times reported.

Wal-Mart’s growth in Mexico has been so rapid that one of every five Wal-Mart stores now is in that country. It is Mexico’s largest private employer, with 209,000 employees there.

The newspaper said that only after learning of its investigation did Wal-Mart inform the U.S. Justice Department in December 2011 that it had begun an internal investigation into possible violations of the Foreign Corrupt Practices Act. Under that law, it is illegal for U.S. corporations and their subsidiaries to bribe foreign officials.

Wal-Mart said Saturday that it takes compliance with that law very seriously. It also noted that many of the “alleged activities” in the Times article occurred more than six years ago.

“If these allegations are true, it is not a reflection of who we are or what we stand for,” spokesman David Tovar said. “We are deeply concerned by these allegations and are working aggressively to determine what happened.”

Wal-Mart said its latest, ongoing investigation is being handled by outside lawyers and accountants who are experts with the Foreign Corrupt Practices Act. The company also said it has tightened procedures and expanded training in Mexico to ensure compliance with the law.

The Times said its investigation uncovered a lengthy struggle at the highest levels of Wal-Mart, pitting the company’s commitment to high moral and ethical standards against its relentless pursuit of growth.

Wal-Mart had sent investigators to Mexico City, where the newspaper report said they quickly discovered evidence that included a paper trail of hundreds of suspect payments totaling more than $24 million.

But according to the Times, top Wal-Mart executives kept quiet about the campaign and were more focused on damage control than on exposing the corruption. Then-CEO H. Lee Scott Jr. reportedly rebuked internal investigators at one meeting for being overly aggressive. Shortly thereafter, the newspaper said, the investigation was turned over to the general counsel for Wal-Mart de Mexico, who himself was alleged to have authorized bribes. He swiftly exonerated his fellow executives.

Printed on Monday, April 23, 2012 as: Wal-Mart paid extensive bribes to secure monopoly in Mexico

NEW YORK — It came and went in a flash, a number on a board for seconds at a time, but its symbolic power couldn’t be dismissed.

The Dow Jones industrial average, powered higher all year by optimism that the economic recovery is finally for real, crossed 13,000 on Tuesday for the first time since May 2008.

The last time the Dow occupied such rarefied territory, unemployment was a healthy 5.4 percent, and Lehman Brothers was a solvent investment bank. Financial crises happened in other countries, or the history books.

The milestone Tuesday came about two hours into the trading day. The Dow was above 13,000 for about 30 seconds, and for slightly longer at about noon and 1:30 p.m., but couldn’t hold its gains. It finished up 15.82 points at 12,965.69.

Still, Wall Street took note of the marker.

It was just last summer that the Dow unburdened itself of 2,000 points in three terrifying weeks. S&P downgraded the United States credit rating, Washington was fighting over the federal borrowing limit, and the European debt crisis was raging.

A second recession in the United States was a real fear. But the economy grew faster every quarter last year, and gains in the job market have been impressive, including 243,000 jobs added in January alone.

“Essentially over the last couple of months you’ve taken the two biggest fears off the table, that Europe is going to melt down and that we’re going to have another recession here,” said Scott Brown, chief economist for Raymond James.

The tumult of last summer and fall left the Dow as low as 10,655. Its close Tuesday put it 22 percent above that low. The Dow is 1,199 points from an all-time high, a 9 percent rally from here.

A long-awaited deal to cut the debt of Greece and prevent a potentially catastrophic default, announced before dawn in Europe after 12 hours of talks, helped the Dow clear 13,000.

Under the bailout deal, Greece will get €130 billion, or about $172 billion, from other European nations and the International Monetary Fund. In a separate deal, investors in Greek bonds will forgive €107 billion in debt.

After months in which talks crawled along and vague headlines yanked the market up and down, the conclusion was almost anticlimactic because the markets were already expecting an agreement.

European markets didn’t take the news as well. Stocks closed down 3.5 percent in Greece, where stocks have lost 80 percent of their value since 2007. Stocks declined less than 1 percent Tuesday in Germany, France and Britain.

Investors noted that Greece remains in deep recession. Its bond investors will take a 53.5 percent loss on the face value of their bonds, which could discourage future investment.

In the U.S., investors were cheered by earnings from Home Depot, watched closely as a barometer of American spending on homes, and Macy’s. Wal-Mart missed Wall Street expectations, and its stock lost 4 percent, worst among the 30 stocks in the Dow.

The Dow has climbed 6 percent this year and has not lost 100 points on any day. The Greek debt crisis may be receding, but high gasoline prices are emerging as a threat to the economic recovery, and thus the stock market.

A gallon of regular gas costs $3.57 on average, the highest on record for this time of year. With tension building over Iran’s nuclear ambitions, Iran has halted oil exports to Britain and France and threatened to stop shipping to other European countries.

The price of oil settled at $106.25, up $2.65 for the day and its highest level since last May. The price jumped more than $1 in about 20 minutes after Iran’s foreign ministry spokesman told reporters that a U.N. team visiting Iran has no plans to inspect the country’s nuclear facilities and will only hold talks with Iranian officials.

“That was the olive branch the market was holding onto,” said Phil Flynn, an analyst for the brokerage PFGBest. “If they’re not going to discuss the nuclear program, then we’re a lot closer to a conflict than further away,” he said.

Airline stocks got clobbered. United Continental lost 9 percent, Delta Air Lines 7 percent. The Dow transportation average lost 1.5 percent.

Materials, telecommunications and energy companies led the industries gaining ground. Health care companies, makers of consumer staples and utilities, traditionally stocks to own in more cautious times, were lower.

The Standard & Poor’s 500 index surpassed 1,363, its peak from April 2011, but closed at 1,362.21, up 0.98 point. The Nasdaq composite, which is heavy with technology stocks and trading at levels not seen since December 2000, closed down 3.21 points at 2,948.57.

Metals prices jumped because of expectations that demand may improve after the Greek bailout package was approved and China took another step to stimulate economic growth. Silver finished up 3.7 percent, and platinum, copper and palladium all rose 3 percent or more. Gold ended up 1.9 percent.

The Dow industrials last closed above 13,000 on May 19, 2008. The next day, they crossed under 13,000, not to return for almost four years. They fell as low as 6,547 on March 9, 2009. A reading of 13,094 would double that.

Dan McMahon, director of equity trading at Raymond James, called the 13,000 mark “just a big round number” as a matter of market fundamentals. But he added: “Psychologically, it matters.”

The milestone could motivate cautious investors to pump more money back into the stock market. The yield on the government’s benchmark 10-year Treasury note rose to 2.06 percent from 2.01 percent Friday, a sign that fewer investors wanted the bonds and were instead willing to buy riskier stocks.

“You need notches along the way to measure things,” and Dow 13,000 is as good as any, said John Manley, chief equity strategist for Wells Fargo’s funds group. “Is 50 older than 49 and a half? Yes, by six months. Do those six months really make a difference? Probably not. But it does give us a fixed point, something we can look at.”

The Dow is also an imperfect measure of the economy’s health. It is made up of just 30 companies, and it’s weighted so that the few with the highest stock prices carry the most heft.

A tiny percentage change in the stock of IBM, which is trading around $193, sways the index much more than a giant change in the stock of Bank of America, which is trading around $8.

Last year, the Dow rose 5.5 percent. But strip out IBM and McDonald’s, the two stocks with the highest prices last year, and it rose just 1.8 percent, according to calculations by Birinyi Associates.

Dow Jones, which decides which 30 companies are the best barometer, says the index can accurately represent the economy because the Dow 30 make up 25 to 30 percent of the market value of all U.S. public companies.

Among the big movers:

— Barnes & Noble fell 4 percent after missing expectations. Rising costs offset higher sales of both traditional books and digital books. Investors seemed encouraged that the bookstore chain, a survivor in an era that has felled competitors like Borders and Waldenbooks, plans to introduce a cheaper Nook to compete with Amazon’s Kindle Fire.

— J.C. Penney, which is trying to reinvent itself and just brought in an Apple veteran as CEO and changed its logo, fell 3 percent after Fitch Ratings dropped its credit grade to junk status.

— Wal-Mart fell 4 percent after missing analysts’ expectations for revenue and per-share earnings.

— High-end department store Saks rose 3 percent after beating analysts’ expectations.

In this Feb. 22, 2010, file photo, a store associate helps a customer at the Sears store in Burbank, Calif. A week before Halloween and two months before Christmas, stores are trying to outdo each other.

NEW YORK — Forget style, quality and customer service. This holiday season, all that matters is price.

A week before Halloween and two full months before Christmas, stores are desperately trying to outdo each other in hopes of drawing in customers worn down by the economy.

Wal-Mart, the biggest store in the nation, joined the price wars Monday by announcing that it would give gift cards to shoppers if they buy something there and find it somewhere else cheaper.

Staples and Bed Bath & Beyond have already said they will match the lowest prices of Amazon.com and other big Internet retailers. Sears is going a step further, offering to beat a competitor’s best price by 10 percent.

Almost four years after the onset of the Great Recession, customers have learned to expect a deal. In better times, retailers could afford to keep prices higher and use promises of higher quality and better service to lure people into stores.

Those days are over. In a recent poll of 1,000 shoppers by America’s Research Group, 78 percent said they were more driven by sales than they were a year ago. During the financial meltdown in 2008, that figure was only 68 percent.

Wal-Mart last year went back to its “everyday low prices” roots, a bedrock philosophy of founder Sam Walton, rather than slashing prices only on certain items to draw in customers. Now everyday low prices might not be low enough. So it’s trying something it is calling the Christmas Price Guarantee: if you buy something at Wal-Mart from Nov. 1 to Dec. 25 and find the identical product elsewhere for less, you get a gift card in the amount of the difference.

The deal excludes online prices and some categories of merchandise.

But it is good even if weeks pass between your purchase and spotting the better deal. And it applies even to big items like TVs, for which prices can drop steeply as Christmas approaches.

Duncan MacNaughton, chief merchandising officer for Wal-Mart’s U.S. stores, told reporters Monday that he has noticed “much more promotional intensity and gimmicks”
among competitors.

“This gives customers peace of mind that we are an advocate for them,” he said.

Retailers are responding to a customer base that is better informed and more comfortable shopping online than ever. In a survey of roughly 1,000 customers by Citi Investment Research & Analysis, shoppers also indicated it would take deeper discounts to get them to buy. Two-thirds said it would take 30 to 50 percent off to entice them to buy, compared with a little more than half last year.

Jenna Wahl, a cardiac nurse from Bloomington, Ind., said she expects to spend about as much on holiday gifts this year as last — roughly $500 — but will try to get more for her money.

She’ll be asking stores to do more price-matching and plans to use her iPhone to check prices and coupons.

The holiday price wars mark an acceleration of a trend that has already swept the retail industry. Lowe’s, the nation’s No. 2 home improvement store, said in August it was starting to focus on everyday low prices for items that customers can easily comparison-shop at rivals such as Home Depot and Sears.

Amazon, which typically beats its competitors on prices does not appear to be backing down either.

“We will have our hands on every Black Friday circular we can find so that we can meet or beat advertised deals on the products we carry,” said Sally Fouts, an
Amazon spokeswoman.