Manufacturing pace hits two-year high
WASHINGTON – U.S. factories expanded last month at the fastest pace since June 2011 on a jump in orders. The report signals that manufacturing output could strengthen in coming months.
The Institute for Supply Management said its manufacturing index rose to 55.7 in August from 55.4 in July. That topped the index’s 12-month average of 52. A reading above 50 indicates growth. The ISM is a trade group of purchasing managers.
A gauge of new orders rose nearly five points to 63.2, the highest level in more than two years. Production increased but more slowly than in the previous month.
S&P: Lawsuit retaliation for credit downgrade
Standard & Poor’s said the U.S. government sued the rating agency as “retaliation” for its downgrade of the country’s credit rating.
The Department of Justice filed civil charges against the rating agency in February, claiming that S&P refused to warn investors that the housing market was collapsing because it would be bad for business. It also says S&P knowingly inflated ratings of risky mortgage investments that helped trigger an economic crisis. And that S&P gave high marks to the investments because it wanted to earn more business from the banks that issued them.
The government is seeking $5 billion in penalties.
S&P, a unit of McGraw Hill Cos., has repeatedly denied the claims.
The rating agency said in a court filing Tuesday that its opinions were independent and based on a good-faith assessment of the performance of residential mortgages during a tumultuous time in the market.
It also said that, like nearly everyone else at the time, S&P did not anticipate the scope or impact of the collapse of the housing market on the economy as a whole.
S&P says it is being sued in retaliation for a downgrade of the United States’ top-tier credit rating in 2011.
Construction spending up 0.6 percent in July
WASHINGTON – Spending on U.S. construction projects rose in July, led by strong gains in housing and nonresidential projects.
Construction spending increased 0.6 percent in July compared with June when activity was unchanged, the Commerce Department reported Tuesday. The June performance represented an upward revision from an initial estimate that spending had fallen 0.6 percent.
Total construction activity rose to a seasonally adjusted annual rate of $900.8 billion in July, the strongest performance since June 2009.
Kodak says it’s out of bankruptcy
ROCHESTER, N.Y. – Kodak’s trip through bankruptcy is now a memory for the scrapbook.
Kodak said it finished its restructuring and exited Chapter 11 on Tuesday.
The company said it’s now a commercial imaging company serving business markets such as packaging and graphics. Chairman and CEO Antonio Perez said it’s on track for profitable growth.
Kodak filed for bankruptcy protection last year, brought down by increasing competition, digital photography and debt. Since then it has sold off many of its businesses and patents while shutting down the camera manufacturing unit that made it famous.
It spun off its personal imaging and document imaging units to its pension plan.
Kodak said its old stock is canceled as of Tuesday. Creditors are getting shares in the reorganized company.