Red Cross sees flurry of donations

NEW YORK (CNNMoney) -- In the days since Superstorm Sandy pummeled much of the Northeast with severe winds and torrential flooding, donations to the American Red Cross have been pouring in.

The agency received nearly $35 million through early Friday morning, said Karen Stecher, a Red Cross spokesperson. "The public has been generous," she said.

The Red Cross has been operating shelters and offering food, water and relief supplies to areas struck hard by Sandy. On Thursday night, it housed almost 6,800 people in nearly 100 Red Cross shelters across 8 states. The agency has delivered more than 852,000 ready-to-eat meals and snacks so far, and served more than 215,000 meals.

Donations for Sandy have already exceeded the $8 million given over the entire recovery period for Hurricane Isaac, which struck the Gulf Coast earlier this year, according to Neal Litvack, chief development officer at the Red Cross.

While the initial outpouring has been strong, the destruction has been huge. Helping the millions left without power and thousands temporarily lacking homes or food is likely to cost the agency "tens of millions" of dollars, said Litvack.

Related: Sandy's economic cost up to $50 billion

The Red Cross has received some big corporate donations in the wake of the storm. Companies that have pledged to give $1 million or more include: JPMorgan Chase (JPM, Fortune 500), Walt Disney (DIS, Fortune 500), News Corp (NWS)., Kohl's (KSS, Fortune 500), Morgan Stanley (MS, Fortune 500), Mercedes-Benz USA, and Enterprise Holdings Foundation.

As of midday Friday, businesses had contributed more than $38 million in cash and employee-matching or customer-matching programs to the Red Cross and other relief agencies, according to a tally from the U.S. Chamber of Commerce.

Meanwhile, performers including Bruce Springsteen, Jon Bon Jovi, Christina Aguilera and Billy Joel will use their star power to solicit Red Cross donations at a benefit concert hosted by NBC, airing Friday at 8 p.m. ET.

How to help

If you'd like to donate to the Red Cross online, go to www.redcross.org. You can also mail a check to: the American Red Cross, P.O. Box 37243, Washington, D.C., 20013. To donate by phone, call 1-800-RED-CROSS or give up to $10 by texting the word "REDCROSS" to 90999.

Visit CNN's Impact Your World for more information about the best ways to help hurricane victims, as well as how to volunteer for cleanup efforts.

First Published: November 2, 2012: 4:08 PM ET

14.44 | 0 komentar | Read More

Sandy victims can get unemployment help

Workers left jobless by Hurricane Sandy may qualify for disaster relief payments.

NEW YORK (CNNMoney) -- Residents of three states pummeled by Hurricane Sandy could be eligible for disaster assistance payments if they lost their job due to the storm.

To qualify for the funds, people must be unemployed as a direct result of the storm and be ineligible for traditional unemployment benefits, according to the National Employment Law Project, an advocacy group. Residents of New York City and 14 counties in New York, New Jersey and Connecticut that were declared federal disaster areas are eligible.

One of the costliest disasters in the nation's history, Sandy could generate nearly $50 billion in losses, both from physical damage and lost business revenue, according to estimates.

Payments, which can last up to 26 weeks, range from $405 a week in New York to $648 in Connecticut. Recipients must show that for every week they collect DUA, their unemployment continues to be the direct result of the disaster, not other factors.

Hurricane Sandy could hit jobs in November

According to NELP, those who may be eligible for disaster relief and typically could not collect regular state unemployment benefits include:

--Self-employed people who lost their business or suffered a substantial interruption of activities as a direct result of a major disaster;

--Unemployed workers who have become the major supporter of their household due to the death of the head of their household directly related to the disaster;

--Workers unemployed due to an injury caused by the disaster;

--Workers who cannot reach their employment as a result of the disaster;

--People who were scheduled to start work but became unemployed because they no longer have a job due to the disaster.

First Published: November 2, 2012: 6:16 PM ET

14.44 | 0 komentar | Read More

Earnings at Buffett's Berkshire jump 70%

Click the chart for more info.

NEW YORK (CNNMoney) -- Warren Buffett's Berkshire Hathaway reported third-quarter earnings Friday that surged more than 70% versus a year ago.

Net earnings came in at $3.9 billion, buoyed by investment gains and larger profits from the company's railroad business.

Operating earnings, which exclude some investment and derivative gains, were $3.4 billion, or $2,057 per Class A share, short of the $2,062 estimate from analysts at Thomson Reuters. Berkshire (BRKB) shares were flat in after-hours trading.

Much of Berkshire's derivatives are bets on the value of global stock indexes like the S&P 500. Berkshire's position improves when these index values rally, as they did in the third quarter. The company also booked nearly $600 million in investment gains from sales of securities and loan repayments.

Berkshire is a broad-based investment conglomerate whose holdings include everything from Geico insurance to Burlington Northern Santa Fe railroad to Dairy Queen. It also has stakes in a variety of other large firms.

Earlier Friday, Berkshire announced that it was buying Oriental Trading Company, a leading maker of party favors and novelties based in Omaha, Neb.

The price of the transaction was not disclosed, though The Wall Street Journal reported that it was a $500 million deal.

Buffett said in a recent television interview that Berkshire was interested in making acquisitions, but was finding prices for companies too high. He said low interest rates are driving up prices because other companies are more willing to use leverage to make purchases.

Berkshire uses equity or cash rather than borrowed money to buy companies, so the prices it's willing to pay don't change with interest rates.

The aging Buffett has not publicly revealed a succession plan, but says he has informed Berkshire's board about his preferred candidates. Earlier this year, he underwent radiation treatment for prostate cancer, though he said the illness was "not remotely life-threatening."

First Published: November 2, 2012: 6:33 PM ET

14.44 | 0 komentar | Read More

19 bags of rotting food, and a business at risk

NEW YORK (CNNMoney) -- There are only so many disasters a business owner can prepare for, and Superstorm Sandy wasn't one of them.

Wednesday marked the first time employees at Jerry's Cafe in lower Manhattan were able to return check out the damage. The floods hadn't reached it, and as far as they could tell, wind hadn't broken anything. But the restaurant, like thousands of other businesses in the area, had lost power.

To homeowners, that's an inconvenience. To restaurant owner Frits de Knegt, it means losing money. Lots of money.

The pitch black basement smelled of stale feta cheese as de Knegt's restaurant managers, armed with flashlights, filled 19 garbage bags with rotting food.

Meanwhile, 73-year-old de Kneght sat in his powerless apartment a mile north in SoHo and did the math: If power comes back by week's end, he'll lose $50,000.

Compared the utter destruction seen along the New Jersey coast, ruined food sounds minor. But small businesses often run on thin profit margins.

It's almost too much for de Kneght to bear.

Related: Insurance may not pay for Sandy shutdowns

He has decided to pay his workers at least partially, even though Jerry's remains closed. While on the phone hearing about the damage, he considers simply closing or selling the place instead. Then he pauses.

"These people have families to feed," he said of his 26 workers. "A week out of work is devastating to these people. I think about when I was in their shoes, when I was a young man working for somebody."

He's reminded of that moment in 1958, when he was cut from a New York restaurant's waiting staff. It was the last time he worked for someone else.

"I still remember that feeling of abandonment, fear," he recalled. "I said to myself, 'If I'm ever in that position, I will not do this.'"

Also on Chambers Street, just a few steps away from Jerry's Cafe, Quiznos franchise owner Erfan Mia has similar struggles. His last delivery came in the day before the storm, and when the power went off, he lost it all. Mia sat in the shadows inside his tiny restaurant as workers cleaned out smeared containers behind the counter.

Mia's loss won't stop at the $10,000 of rotting meats, cheeses and ingredients. Power is expected to come back on Saturday, but Mia will have to wait until then to order a new shipment from vendors. The problem is, so will everyone else. And even when the food does eventually arrive, it'll be a few more days before regular customers realize he's open again. The end tab might be closer to $25,000, he guessed.

"We'll have to go into debt," Mia said. "We cannot even keep up with the rent."

Mia and other small business owners perched along Chambers Street don't expect insurance to be much help either. They all bought run-of-the-mill business insurance, but none of them invested in a plan that covers hurricanes.

And a bitter surprise awaits those who bought yet another layer of protection for unexpected shutdowns, business interruption insurance. It probably won't apply, because policies only kick in if a business property is physically damaged. No money is offered to those who can't serve customers without power. The same applies to businesses along New York's 57th Street, where a massive crane dangles precariously above a road that remains closed off to workers and customers.

"If you claim $15,000, they'll maybe give you $5,000," Mia said.

"In six months," chimed in Alam Khan, owner of a nearby Tasti D-Lite ice cream shop.

Do you have a small business that was slammed by superstorm Sandy? Email Jose Pagliery to share your story.

First Published: November 1, 2012: 3:06 PM ET

14.44 | 0 komentar | Read More

Starbucks shares rise on strong sales

NEW YORK (CNNMoney) -- Starbucks served up some encouragement to investors Thursday with quarterly results that showed strong sales growth.

The Seattle-based chain posted earnings close to analyst estimates. More reassuring was news that same-store sales rose 6%, and that the company increased its dividend from 17 cents to 21 cents a share.

Shares jumped 7% in after-hours trading, a different story from three months ago, when the company reported lackluster results that it attributed in part to global economic challenges.

"I think the market overreacted last quarter to a mild slowdown in U.S. stores that obscured the long-term potential of this business," said R.J. Hottovy, an analyst with Morningstar.

Starbucks (SBUX, Fortune 500) is expanding aggressively internationally, with plans to open 600 new stores in the Asia-Pacific region during its 2013 fiscal year, including more than 300 in China. Last month, the company opened its first location in India as well.

In a conference call with analysts Thursday afternoon, Starbucks executives also touted expected holiday revenue from sales of the Verismo, the company's single-cup home-brewing machine, which could eat into sales of Keurig machines from competitor Green Mountain Coffee Roasters (GMCR).

First Published: November 1, 2012: 5:50 PM ET

14.44 | 0 komentar | Read More

Europe is 'main drag' on global recovery

The U.S. and Chinese economies have started to show signs of growth but Europe will continue to be the main headwind to a sustained recovery.

NEW YORK (CNNMoney) -- The world's two largest economies have been showing signs of improvement, but experts say the recession in Europe remains the biggest challenge to sustained global growth.

In the United States, reports released Thursday showed gains in manufacturing, consumer confidence and private sector payrolls. Also on Thursday, U.S. automakers reported another month of improved car sales in October, even as Superstorm Sandy may have dampened month-end results.

Factoring in a boost from construction spending and lower imports, the latest indicators suggest the U.S. economy may have grown at a slightly faster rate in the third quarter, according to Michael Englund, an economist at Action Economics. He expects third-quarter GDP to come in at 2.3%, higher than the Commerce Department's recent reading of 2% growth.

The upbeat data comes just ahead of the Labor Department's all-important monthly jobs report. Economists surveyed by CNNMoney expect employers added 125,000 jobs in October, while the unemployment rate is forecast to drop to 7.8%.

Meanwhile, in China, factories have been ramping up activity, suggesting that the slowdown in the world's second largest economy may not be as sharp as feared.

Despite the recent green shoots, economists say weakness in Europe will continue to weigh on the global recovery.

Related: Complete coverage of Europe's debt crisis

"The eurozone is not out of the woods yet," said Kevin Dunning, a member of the Economist Intelligence Unit in London. "The recession looks like it will be long and dragged out, even if financial conditions are not quite as tense as they were."

The European Central Bank has taken steps to calm volatile financial markets, but economists still expect the 17-nation currency union to remain hobbled well into 2013.

Unemployment in the eurozone rose to a record high of 11.6% in September. And preliminary data released earlier this month showed the weakest reading for eurozone manufacturing and service activity in 40 months, suggesting the region could fall deeper into recession in the fourth quarter.

"The eurozone situation is still unresolved," said Sara Johnson, research director of global economics at IHS Global Insight. "It's taking a long time to put in place the framework for banking and fiscal union to support the monetary union."

The Japanese economy, the third largest in the world, remains stagnant, she added. And the global economy faces geopolitical risks from the unsettled situation in the Middle East and North Africa.

In addition, the U.S. economy is in danger of falling back into recession if policymakers in Congress cannot come to an agreement on the so-called fiscal cliff, a potentially disastrous combination of automatic tax hikes and spending cuts set to take effect next year.

Related: A snapshot of Obama's economy

"All of these factors are keeping businesses sidelined in terms of investment and employment," said Johnson, who expects global GDP to grow between 2.5% and 2.6% next year.

Even if growth in China picks up in the current quarter, Europe will be "the main drag" on global growth next year as the "deleveraging" by businesses and households continues, said Dunning. Europe is China's main trading partner, and weak demand in many euro area economies will keep a lid on China's export-driven economy.

The situation in other emerging nations is not much better. The Brazilian economy, for example, has slowed sharply as global demand for natural resources has waned.

First Published: November 1, 2012: 9:47 PM ET

14.44 | 0 komentar | Read More

Netflix shares surge as Icahn takes 10% stake

Famed activist investor Carl Icahn has set his sights on Netflix.

NEW YORK (CNNMoney) -- Netflix's stock surged Wednesday afternoon as billionaire investor Carl Icahn revealed that his funds have acquired a 10% stake in the streaming media and rentals business.

Netflix (NFLX) shares tripped two circuit breakers in their rapid rise, triggering a temporary halt in the stock. When shares resumed trading, they cooled off slightly but still finished the day up around 14%.

Icahn said in a regulatory filing that his funds have directly acquired or taken out options on 5.5 million shares -- and he's got some ideas about how Netflix (NFLX) can lift its stock's value.

Icahn, a famed activist shareholder, thinks Netflix has "significant strategic value" for "a variety of significantly larger companies that are engaging in more direct competition with one another due to the evolution of the internet, mobile, and traditional industry."

Translation: He thinks someone like Microsoft (MSFT, Fortune 500), Amazon (AMZN, Fortune 500), Verizon (VZ, Fortune 500) or Comcast (CMCSA) -- all of which are building their own streaming video services -- should buy Netflix instead, and he's ready to do some dealmaking.

Icahn amassed most of his stake through "call options," which confer the right but not the obligation to buy shares at a certain price.  It's a way for investors to place a bet on stocks they believe will rise. He has until September 2014 to exercise the option, for which he shelled out $169 million.  

Icahn is famous for pushing his agenda for change at the companies in which he invests.

It's no stretch for him to argue that Netflix needs shaking up. Just last week, Netflix shares plunged 16% on a third-quarter earnings report full of bad news: The company offered weak guidance for the current quarter, and reported figures for new streaming subscriptions that fell well short of expectations.

Over the first three quarters of 2012, Netflix added just 3.4 million new U.S. streaming subscribers, far short of its previously announced goal of signing up 7 million new U.S. subscribers this year. CEO Reed Hastings recently called the projection "a forecasting error," and said a target of 5 million was more realistic.

Meanwhile, studios are demanding a lot more cash for the streaming content they're providing to Netflix, while subscriptions to the company's DVD service are declining.

Netflix's rivals, which include Hulu and an upcoming Verizon-Redbox (owned by Coinstar (CSTR)) partnership, are making headway into the super-hot streaming video space. Many of them are tech or media titans that have other revenue streams to finance their growth and content acquisition costs. Netflix, on the other hand, is dependent solely on its core product.

It's a long list of obstacles, and investors don't seem convinced Netflix can navigate them. Before Wednesday's runup, Netflix shares were close to flat year-to-date.

First Published: October 31, 2012: 4:08 PM ET

14.44 | 0 komentar | Read More

FEMA may not have enough for flood damages

The National Flood Insurance Program is already $18 billion in debt and may need more from Congress to pay flood claims caused by Sandy.

WASHINGTON (CNNMoney) -- The Federal Emergency Management Agency, also known as FEMA, has said it has enough funds for disaster aid from Superstorm Sandy.

But the key question is does it have enough for flood damage?

Sandy has flooded thousands of homes in its devastating path, and estimates are that damages will be in the billions of dollars. FEMA, which runs the federal flood insurance program, has to pick up the tab.

But FEMA already owes $18 billion to the Treasury Department, thanks to Hurricane Katrina. Currently, insurance experts say FEMA's flood insurance program has access to funds totaling $3.8 billion, much of it in loans.

If flood claims exhaust the fund, Congress may have to step in with additional taxpayer money. That will add to the already bloated national deficit, and anger fiscally-conservative members of Congress.

Private insurers don't cover flooding. Sandy's storm surge pushed water from the Atlantic Ocean into basements and first floors in coastal Virginia, New Jersey, Connecticut and New York, where subway tunnels remain flooded.

By Wednesday, FEMA was still concentrating its efforts on coordinating search and rescues and aid to those without power.

It hasn't released an estimate on flood damages, but experts are raising serious doubts on whether FEMA's funds will be enough to cover the costs for its National Flood Insurance Program.

In 2011, the federal flood insurance program paid out $1.8 billion in claims, after Hurricane Irene flooded parts of the Northeast. Sandy's devastation is expected to be worse.

"The key issue will be how many people actually purchased the product, and what kind of demand that's going to put on the program's cash and borrowing authority," said Donald L. Griffin, vice president of personal lines for Property Casualty Insurers Association of America, an insurance trade group.

Related: Filing insurance claims after Sandy: What to expect

The costs could be kept in check if fewer people bought federal flood insurance.

In general, residents in Northeastern states buy fewer flood insurance policies than hurricane-prone states like Florida and Texas.

But last year's Hurricane Irene scared Northeasterners to buying flood insurance. A market survey by the Insurance Information Institute reported that some 14% of homeowners living in the Northeast said they bought flood insurance in 2012, up from 5% in 2011. Compared to that, 21% of Southern homeowners said they bought a flood insurance policy in 2012.

How did we get here?

Nationwide, homeowners have taken out more than 5.6 million flood insurance policies covering $1.2 trillion in property, according to the Congressional Research Service. Premiums collected in 2011 were $3.35 billion.

The program was self sufficient until 2004, and able to cover claims from the pool of premiums collected over the years. That ended with Hurricane Katrina.

Even though less than half of homeowners flooded by Katrina had insurance policies, the program still paid out claims totaling $17.7 billion in 2005, according to the Congressional Research Service.

To bridge the gap, Congress gave the flood insurance program a line of credit from the U.S. Treasury.

The debt limit on that line today stands at $20.8 billion.

The National Flood Insurance Program tapped the credit line to pay out Irene claims last year. Now it has $2.9 billion it can borrow and $900 million in cash.

Lawmakers passed a law in July allowing the flood insurance program to raise rates on its policies. The new rates are only just starting to take effect.

FEMA didn't immediately respond to questions about the solvency of its flood insurance program.

In a conference call with reporters on Monday, FEMA Director Craig Fugate said the agency is still in disaster response mode and hasn't begun to look at flood insurance claims. He said he doesn't know yet whether the agency will need a bigger loan.

First Published: October 31, 2012: 4:31 PM ET

14.44 | 0 komentar | Read More

China's factories show growth

HONG KONG (CNNMoney) -- The pace of factory activity in China picked up in October for the first time in three months, according to data released Thursday by the National Bureau of Statistics.

China's official purchasing manager's index jumped to 50.2 in October from 49.8 the previous month, the government said. Any reading above 50 indicates that factory conditions are improving in the manufacturing sector.

Zhiwei Zhang, an economist at Nomura, said in a research note that the rise above 50 "confirms that economic momentum has indeed picked up."

Another measure of manufacturing activity released last week, HSBC's initial purchasing manager's index, also indicated improvement in the sector. At 49.1, the index suggested factory growth was slowing, but that activity was contracting at the slowest pace in months. The bank said Thursday its final full-month index hit 49.5, an eight-month high.

"We expect a continuation of policy easing to further boost domestic demand and counterbalance the external weakness, leading to a gradual growth recovery in the coming quarters," said Hongbin Qu, an HSBC economist.

The fate of manufacturing in China is considered a barometer of the global economy because of the country's role as a powerhouse exporter. And because it makes up a large part of China's economy, manufacturing strength plays an important role shaping domestic policy.

China's National Bureau of Statistics said last month that GDP slowed to 7.4% in the third quarter.

China's economy has grown at an average of around 10% a year for the past three decades, allowing the country to rocket past international competition to become the world's second largest economy.

While GDP growth was slower last quarter than many economists expected, recent data on manufacturing and exports suggest growth is beginning to rebound.

The improvement comes at a crucial juncture for Beijing.

Related: Is China a friend or foe?

China's once-in-a-decade leadership transition is scheduled to start Nov. 8. The timing of the event, which will reshape the ranks of China's Communist Party, could complicated an policy changes in the near term.

The government has already made relatively modest efforts to encourage growth this year. The People's Bank of China twice lowered interest rates, and the central bank has also cut the amount of money banks are required to hold in reserves.

Policymakers confirmed more action in September, finalizing the details on a $157.7 billion investment in 55 new infrastructure products.

First Published: October 31, 2012: 10:31 PM ET

14.44 | 0 komentar | Read More

Wall Street bracing for volume surge

U.S. financial markets will reopen Wednesday, after being shuttered for two days to deal with the devastating impact of Superstorm Sandy.

NEW YORK (CNNMoney) -- Trading volume is expected to surge when U.S. financial markets reopen Wednesday, two days after Superstorm Sandy prompted an unexpected shutdown on Wall Street.

Throughout much of the month, an average of 3.5 billion shares have been exchanging hands each day, but experts say that could double on Wednesday.

"It's hard to say which direction stocks will move, but we're expecting to see a whole lot of trading volume -- three days worth of trading all in one," said Fred Dickson, chief market strategist at D.A. Davidson & Co.

Wednesday will be particularly busy for investors since it also happens to be the last day of the month, a time when traders, hedge funds and mutual funds often square up their positions.

And for some, the day also marks the last day of the fiscal year. It's a day when many mutual fund managers will try to offset their capital gains with their losses to minimize the distributions paid out to shareholders, said Dickson.

Related: U.S. stock markets to reopen Wednesday

Home improvement stocks like Home Depot (HD, Fortune 500) and Lowe's (LOW, Fortune 500) will likely be big movers, as well as insurance stocks, such as Allstate (ALL, Fortune 500), AIG (AIG, Fortune 500) and Hartford Financial (HIG, Fortune 500). Retailers, airlines and hotels that have been affected by the storm will also be in focus.

Wednesday also marks the first day investors have to react to non-storm related news.

Apple (AAPL, Fortune 500) kicked off the week with a management shake-up, announcing that two of its top executives had been shown the door. Scott Forstall -- responsible for the iOS software running iPhones and iPads, and often considered an heir-in-waiting to CEO Tim Cook -- is the most prominent executive departing Apple.

Late Tuesday, the Walt Disney Company (DIS, Fortune 500) agreed to buy Lucasfilm in a stock-and-cash deal valued at $4 billion, gaining control of the blockbuster Star Wars franchise.

Related: NYC flights still grounded

Also, many Facebook (FB) employees will finally get a chance to sell their shares for the first time, after a lock-up on their so called "restricted stock units" expired. With the market finally open, a total of 234 million Faebook shares will be newly eligible for sale Wednesday.

The storm also prompted many companies to postpone their quarterly earnings reports, but others, including Ford (F, Fortune 500), Archer Daniels Midland (ADM, Fortune 500) and TD Ameritrade Holding Corp (AMTD) still issued their results so those stocks may be active Wednesday.

Hertz (HTZ, Fortune 500), Mastercard (MA, Fortune 500), Visa (V, Fortune 500), First Solar (FSLR) and Metlife (MET, Fortune 500) are among the firms on tap to post results Wednesday.

While investors will have quite a bit of corporate news to get through, economic data that has come out over the last two days in the United States or abroad hasn't been "earth-shattering," said Peter Tuz, president of Chase Investment Counsel.

But investors will also be gearing up for the crucial October jobs report, which is scheduled to come out Friday. It will be the final reading on the health of the job market before the presidential election next week. While there has been some concern about the report being delayed, the Bureau of Labor Statistics says it is working hard to stay on schedule.

First Published: October 30, 2012: 5:05 PM ET

14.44 | 0 komentar | Read More