Morning Market Roundup: McDonalds’ Sales Down for First Time in 9 Years, Whats Going on With Oil?
Here’s what’s important in the business world this morning:
McDonald’s: McDonald’s Corp. is having trouble stomaching the competition.
The world’s biggest hamburger chain said Thursday that a key sales figure fell for the first time in nearly a decade in October, as it faced intensifying competition and a challenging economy. The company, based in Oak Brook, Ill., says global revenue at restaurants open at least 13 months fell 1.8 percent for the month. The last time it dropped was in March 2003.
The figure is a key metric because it strips out the impact of newly opened and closed locations. It’s a snapshot of money spent on food at both company-owned and franchised restaurants and does not reflect corporate revenue.
McDonald’s says the figure fell 2.2 percent in both the U.S. and Europe in October. In the region encompassing Asia, the Middle East and Africa, it dropped 2.4 percent. CEO Don Thompson cited the “pervasive challenges of today’s global marketplace” for the declines.
Unemployment Benefits: The number of people seeking unemployment benefits fell last week by 8,000 to a seasonally adjusted 355,000. But officials cautioned that the figures were distorted by Superstorm Sandy.
The Labor Department said Thursday that the four-week average of applications, a less volatile measure, rose by 3,250 to 370,500.
The storm could affect weekly applications for up to four weeks, a Labor spokesman said.
Applications declined in one state last week because its unemployment office lost power during the storm and wasn’t able to receive applications. The spokesman wouldn’t identify the state. The storm also pushed up applications in other states because those temporarily out of work sought benefits.
U.S. Trade Deficit: The U.S. trade deficit declined to the lowest level in almost two years as exports rose to a record high, a gain that is not expected to last given the global economic slowdown.
The trade deficit narrowed to $41.5 billion in September, the Commerce Department said Thursday. That is 5.1 percent below the August deficit and the smallest imbalance since December 2010.
Exports climbed 3.1 percent to an all-time high of $187 billion, reflecting stronger sales of commercial aircraft, heavy machinery and farm goods. Imports were also up, rising 1.5 percent to $228.5 billion, reflecting a jump in shipments of consumer goods from cell phones to clothing and toys.
So far this year, the U.S. deficit is running at an annual rate of $554 billion, slightly below last year’s $559.9 billion imbalance, which had been 13.2 percent higher than 2010.
Oil: The price of oil rose above $85 a barrel Thursday, recovering only a fraction of the previous day’s losses, which were the biggest of the year.
By early afternoon in Europe, benchmark crude for December delivery was up 86 cents to $85.30 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $4.27, or 5 percent, to finish at $84.44 per barrel in New York. It was the lowest price since July 10.
In London, Brent crude was up 76 cents to $107.58 a barrel on the ICE Futures exchange.
The Associated Press contributed to this report.
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