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Lagging dollar sparks decline in trade deficit

By Times Wires
Published October 12, 2007

WASHINGTON

The falling dollar led more foreigners to buy American in August, helping to push the trade deficit down to the lowest point in seven months. That was welcome news for the Bush administration as it tries to deal with a Congress unhappy over huge trade imbalances and 3-million lost manufacturing jobs. President Bush also got good news Thursday on his other deficit headache. The budget deficit declined in 2007 to the lowest level in five years, dropping to $162.8-billion, an $85-billion improvement over 2006. The Commerce Department reported that the trade deficit declined to $57.6-billion in August, down 2.4 percent from the July imbalance. It was the lowest gap between exports and imports since January. The politically sensitive trade deficit with China fell by 5.3 percent to $22.5-billion but is on track to surpass last year's record figure.

NEW YORK

Lender's fundings drop 44 percent

Countrywide Financial Corp. said Thursday its mortgage fundings for September fell 44 percent from the same period a year ago. The nation's largest mortgage lender said total mortgage fundings last month fell to $21.2-billion from $38.1-billion a year ago. The steep decline comes as the company makes a shift to originate traditional, conforming loans instead of more risky, nontraditional loans like subprime mortgages. Countrywide previously packaged most of its loans as securities and sold them to investors.

Many retailers cut earnings forecasts

Several of the largest U.S. retailers cut earnings forecasts Thursday after lingering summer weather and an uncertain economy kept consumers from shopping last month and left the big merchants with disappointing sales. As store owners reported September sales figures Thursday, the biggest losers were apparel sellers including Limited Brands Inc. and Gap Inc. Target Corp., J.C. Penney Co., Limited Brands Inc. and Nordstrom Inc. were among those lowering their earnings outlooks. Wal-Mart Stores Inc. posted a modest sales gain that was slightly below analysts' expectations but raised its third-quarter profit outlook because of cost-cutting.

TALLAHASSEE

Largo company sued by state

Florida Attorney General Bill McCollum sued a Largo company, alleging deceptive and misleading advertising practices. Registered Agent Division manager Nick Congleton sent letters to Florida businesses saying they had failed to have a "registered agent" and offering to provide the service for $149. Outside registered agents are not required by law, as claimed by Congleton's company. The state is seeking a temporary injunction against the company. Congleton could not be reached for comment.

REDWOOD CITY, Calif.

EA to pay $860M for game studios

Electronic Arts Inc., the video game developer known for titles such as Madden NFL and The Sims, said Thursday it will acquire two software studios from Elevation Partners in a deal worth up to $860-million. The studios, BioWare Corp. and Pandemic Studios, are developing 10 games.

[Last modified October 12, 2007, 01:12:49]