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Automakers are expected to post a 10th consecutive month of U.S. sales declines on Wednesday as incentives on slow-selling trucks and SUVs and General Motors Corp’s employee pricing promotion failed to ignite demand from struggling consumers in August.

Analysts see automakers posting double-digit declines in U.S. auto sales for August — adding to the longest monthly losing streak for the industry since the domestic recession of 2001.

U.S. auto sales may have been down anywhere from 14 to 19 percent industrywide in August from a year earlier, according to analysts, but should have been up slightly from the 16-year low reported in July.

August sales are expected to reflect the continued shift toward smaller, more economical passenger cars and away from large pickup trucks and SUVs, as well as some difficulty supplying fuel efficient vehicles customers want.

U.S.-based GM, Ford Motor Co and Chrysler LLC — which have a much higher percentage of sales linked to the larger vehicles than transplant carmakers — are expected to have felt the most impact from the continued shift.

Toyota Motor Corp, the No bad credit payday loan. 2 auto seller in the United States, is also expected to report sales declines. Analysts see Honda Motor Co Ltd’s sales ranging from a slight gain to a big decline and Nissan Motor Co Ltd posting sales growth of about 2 percent.

“Light vehicle sales in the U.S. appear to have continued at depressed levels through August, despite the very generous incentive programs that several major manufacturers have launched in recent weeks,” Lehman Brothers analyst Brian Johnson said in a note to clients.

Auto sales are a closely watched and early key indicator of consumer demand in the United States for big ticket items, with investors focused on whether the second-quarter economic growth will be sustained through the rest of 2008. 

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Several major U.S. refiners said early checks on Monday showed their facilities were unharmed by Hurricane Gustav, but at least two others were said to be considering dipping into the U.S. Strategic Petroleum Reserve to keep operations going after the storm shut down key waterways.

Gustav weakened to Category 2 before roaring ashore near Port Fourchon, Louisiana, on Monday, potentially sparing the kind of damage that the region’s platforms, rigs and refineries suffered at the hands of more powerful Katrina three years ago.

Offshore operators said remote sensors indicated that major platforms remained where they were moored before the storm, although Shell, the region’s largest producer, said it may take three to five days to restore production.

Energy companies had to shut in all 1.3 million barrels of U.S. offshore oil production — a quarter of U.S. output — as well as 7.06 billion cubic feet per day in natural gas supply, or nearly all of the 15 percent of national production the Gulf provides, as Gustav ploughed through the region.

By late Monday night, Gustav had subsided to a tropical storm, with winds of 60 miles per hour (96.5 kph), as it moved inland across Louisiana.

U.S fast cash advance loan. crude stood at $111.07 a barrel by 12:15 a.m. EDT, about 33 cents below trading levels late on Monday, when prices slumped $4 on easing concerns about Gustav, which had been called the biggest threat to the sector since 2005’s devastation.

Thirteen refineries with a combined capacity of 2.67 million barrels per day (bpd) — 15 percent of the country’s total — were shut by late Monday, but early signs suggested many had been spared.

Valero Energy Corp said an initial check of its 250,000 barrels per day (bpd) refinery at St Charles, Louisiana, refinery showed no significant structural damage from Gustav, and that the plant had electrical power. 

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Malaysia's central bank kept its benchmark interest rate unchanged to avoid exacerbating an economic slowdown, breaking with its neighbors in betting inflation won't spread beyond food and fuel.

Bank Negara Malaysia maintained its overnight policy rate at 3.5 percent for a 19th straight meeting today, it said in a statement in Kuala Lumpur. The decision was predicted by 12 of the 20 economists surveyed by Bloomberg News. The other eight expected an increase to 3.75 percent.

Malaysia has avoided following Thailand, Indonesia, India, Vietnam and the Philippines in raising borrowing costs this year as a deepening global slowdown threatens Asian growth. Central Bank Governor Zeti Akhtar Aziz has said she expects commodity prices, which drove inflation to a 26-year high last month, to ease next year as expansion cools around the world.

“Inflation in June and July showed no strong secondary effect beyond food and fuel,'' said Suhaimi Ilias, an economist at Aseambankers Malaysia Bhd. “The risk of secondary inflation is also being kept in check by the risks of a slowing economy and a softening job market, with extra relief from the retreat in commodity prices.''

Malaysia's economic expansion probably slowed in the second quarter, a Bloomberg survey of economists shows ahead of an Aug. 29 central bank release. The U.S., Malaysia's largest export market, is close to a recession and Japan's economy contracted in the second quarter.

`Avoid' Downturn

Crude oil in New York has fallen by more than a fifth since reaching a record $147.27 a barrel on July 11, allowing Malaysia's government last week to reverse some of the fuel price increases it announced in June.

“With the expected moderation in inflation in the medium term, the greater priority is to avoid a fundamental downturn in economic activity,'' the central bank said in today's statement.

Malaysia's inflation accelerated to 8.5 percent in July after the government increased retail gasoline prices 41 percent and diesel rates 63 percent in June to prevent subsidies that keep pump costs artificially low from spiraling amid soaring oil prices. Electricity rates also rose in July.

Prime Minister Abdullah Ahmad Badawi, who is trying to prevent opposition leader Anwar Ibrahim from winning a by- election tomorrow, announced a 5.6 percent cut in gasoline prices and a 3.1 percent reduction in diesel costs last week, saying he wants to ease the burden of consumers and reduce inflationary pressure payday loan.

`Tricky' Decision

Today's decision may reduce the chances of rate increases in the remaining months of 2008, said Wan Suhaimi Saidi, an economist at Kenanga Investment Bank Bhd. in Kuala Lumpur, who had expected the central bank to raise the benchmark today to prevent inflation from further outpacing savings rates.

“They might raise rates but the propensity to do so is less as growth concerns could overtake inflationary risk,'' he said. “The decision was tricky because the negative real rates have widened a lot. It is made trickier by the fact that the Permatang Pauh by-election is tomorrow. The powers that be don't want to be seen to be making unpopular policy decisions.''

Voter anger over rising prices contributed to opposition gains in March elections that deprived Prime Minister Abdullah's ruling coalition of its two-thirds majority in parliament. Anwar, a former deputy premier, would return to the legislature for the first time in a decade should he win tomorrow's vote.

By-Election

Anwar, 61, is now the leader of an alliance of opposition parties and has said he plans to lure enough lawmakers from the ruling coalition to form a new government next month. He has promised to reduce fuel prices should he seize power.

Bank Negara, which hasn't raised borrowing costs since April 2006, last month increased this year's inflation forecast to between 5.5 percent and 6 percent. Slowing growth will cause inflation to ease in the second half of 2009, the central bank said today.

“The weaker economic conditions will reduce the likelihood of second-round effects that will generate persistent inflationary trends,'' today's statement said.

Still, failure to increase interest rates may add downward pressure on the ringgit, after other Asian central banks raised their benchmarks, said Kenanga's Wan Suhaimi.

“The currency will have a weakening bias after this decision,'' he said. A weaker currency would cause import costs to rise and hurt consumer demand, he added.

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U.S. builders probably broke ground in July on the fewest houses in 17 years, signaling the residential-construction slump will continue to hurt growth, economists said before a government report today.

Housing starts plunged 9.9 percent to an annual rate of 960,000 after a 1.066 million pace the prior month, according to the median forecast of 77 economists in a Bloomberg News survey. A separate report may show wholesale prices probably rose at a slower pace in July as fuel expenses peaked.

Stricter lending rules, rising borrowing costs, falling property values and record foreclosures will further depress home sales and cause builders to keep retrenching. Inflation pressures are likely to ease as the downturn in housing, loss of jobs and credit crisis weaken the economy this year and into 2009.

“The supply of housing continues to be cut in response to the still relatively high inventories of unsold homes,'' said Brian Bethune, an economist at Global Insight Inc. in Lexington, Massachusetts. “This will continue to generate a large negative drag on overall growth in the second half of 2008.''

The Commerce Department will release starts figures at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from 875,000 to 1.09 million.

Also at 8:30 a.m., the Labor Department may report the producer price index climbed 0.6 percent in July after jumping 1.8 percent in June, according to the survey median. Prices excluding food and fuel probably rose 0.2 percent for a third month.

Permits May Drop

Commerce's housing figures may also show building permits, a sign of future construction, fell 15 percent to a 970,000 annual pace, economists forecast online payday loan.

A change in New York City's building code that took effect July 1 caused housing starts and permits to unexpectedly surge in June as builders hurried to break ground ahead of the new regulations. The magnitude of the July drop may reflect, in part, a payback.

Underneath the gyrations, demand is weakening. Sales of existing homes fell to a 10-year low in the second quarter, according to the National Association of Realtors. A third of all sales were foreclosures or “short sales,'' in which lenders take a loss on a property.

Financing has also become scarce, a quarterly survey of banks by the Federal Reserve showed. Three-fourths of the loan officers polled reported they tightened standards on prime mortgage loans, up from the April survey. Lending rules on non- traditional loans were also toughened.

Mounting Losses

The five largest U.S. homebuilders reported a combined $1.08 billion in losses in their most recent quarters.

Builders are pessimistic as losses mount. The National Association of Home Builders/Wells Fargo's sentiment index yesterday showed optimism held at a record low in August for a second month.

Still, construction companies are making some headway in reducing the supply glut. The number of new homes for sale dropped in June by the most in four decades.

Some housing-related firms are faring better. Lowe's Cos., the world's second-largest home-improvement retailer, yesterday said full-year profit may fall less than it had anticipated.

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The economy, boosted by $90 billion in stimulus checks, grew at a faster pace in the spring but not as strongly as expected, the government reported Thursday.

The Commerce Department also lowered its readings on growth in the two previous quarters, resulting in the first contraction in the economy since the 2001 recession. The report is likely to spur further debate over whether the economy has fallen into a recession.

The gross domestic product, the broadest measure of the nation’s economic activity, grew at an annual rate of 1.9% in the three months ended in June. That’s up from a revised 0.9% growth rate in the first quarter.

Still, the reading was weaker than expected, as economists surveyed by Briefing.com had forecast growth of 2.3%.

The first-quarter reading was revised lower from a 1% growth estimate a month ago.

The Commerce Department revised the fourth-quarter 2007 reading to a decline of 0.2%. The previous fourth-quarter reading was 0.6% growth.

Key to second-quarter growth was the economic stimulus program, which boosted consumer spending in the face of higher prices. Also adding to growth were strong exports, which were helped by a weak dollar that made U.S. goods and services more competitive overseas.

"This shows that the stimulus package is clearly working," Commerce Secretary Carlos Gutierrez told CNNMoney Thursday.
"Trade was great. If I could find a stronger word than great, I would use that."

An advisor to Republican presidential candidate John McCain said the GDP report shows the importance of free trade agreements.

"While growth continues to be disappointing, trade provides one of the few bright spots in an otherwise gloomy economic picture, raising questions about Barack Obama’s policy of economic isolationism," said Doug Holtz-Eakin, McCain’s senior policy advisor on the economy.

Gutierrez conceded that growth is still weaker than the administration would prefer. But he said he’s hopeful the stimulus checks will continue to support spending in the second half of the year. He dismissed calls by Democrats, including Democratic presidential candidate Obama, for a new stimulus package.

"This stimulus package is just barely starting," he said. "Let’s see how this works before we throw any more short-term money [at the economy.]"

But Jason Furman, Obama’s economic policy director, pointed out that a separate report issued Thursday showed that worker pay, when adjusted for inflation, posted the largest drop on record in the second quarter.

"Nothing in today’s GDP numbers was positive for families trying to find a job or pay to fill up their tank," he said. "That is why we need a second $50 billion stimulus package that both relieves the burden on middle-class families and helps to jump-start job creation."

Despite Gutierrez’s optimism about the second half of this year, some economists, most notably Federal Reserve Chairman Ben Bernanke, have expressed worries that with those checks already cashed, spending and economic activity could slow even further.

Gross domestic purchases, a measure of how much American consumers, businesses and governments are buying, fell 0.5%, after a 0.1% rise in the first quarter and a 1% drop in the fourth quarter, a sign of underlying weakness in the economy.

Robert Brusca of FAO Economics described the report as weaker than the 1.9% growth rate would suggest, saying that if it weren’t for changes in imports and exports GDP would have declined in the quarter free instant credit score estimator.

"The consumer adds only 1.1 percentage point to overall growth, and this is with a rebate check in hand," he said. "GDP was net negative on the domestic front. As we look to the second half of the year foreign growth is fading so U.S. exports are sure to slow. Also the rebate checks no longer are a factor. Meanwhile the housing sector is still a negative."

Mark Vitner, senior economist for Wachovia, said the report indicates growth is just narrowly above what would be seen in a recession and that domestic demand is at the weakest level seen since the 1991-92 recession.

He said that while stimulus checks helped support spending, most was apparently spent on items such as food and gasoline, rather than big-ticket items. Spending on services by consumers also was weak due to a pullback in travel, Vitner said.

"We have long held that the best measure of the economy most consumers interact with on a daily basis is final sales to domestic purchasers," said Vitner. "On this basis the economy has actually been weaker than it was in the last recession."

Investment in housing fell for the 10th straight quarter, down 15.6% in the second quarter. Housing subtracted 0.6 percentage points from GDP. A weak auto sector subtracted nearly 1.1 percentage points, as spending on autos and parts plunged 9.4% in the face of record high gas prices.

But the report did include some good news on a closely watched inflation measure, the so called core PCE deflator, which reflects prices paid by consumers on items other than food and energy. The core PCE deflator rose 2.1% annually, down from a 2.3% increase in the first quarter.

Experts say the Fed likes to see that measure rise between 1% and 2%.

The rate of overall price increases also slowed. Overall prices rose 1.1% in the quarter, well below forecasts. Prices increased 2.6% in the first quarter. But other price measures in the report that include food and energy prices showed a jump in overall inflation.

Nonetheless, the Fed is widely expected to leave a key short-term interest rate unchanged at its next meeting on Tuesday. It also held rates steady in May after cutting them seven times between September 2007 and April this year in an effort to spur the economy and help jittery financial markets.

The Fed has a dual mandate to support sustainable economic growth and fight inflation. The central bank typically raises rates when it is more worried about inflation and lowers them when an economic slowdown is the predominant concern. 

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The Federal Reserve will not allow inflation to get out of control and is aware of the danger that a weaker dollar could feed into higher prices, one of its top policy-makers said on Tuesday.

“We want to make sure the message is clear … that we will not countenance building inflationary expectations,” said Federal Reserve Bank of Dallas President Richard Fisher.

“We are witnessing a negative feedback loop … which is that a weaker dollar can lead to further inflationary pressures which in turn leads to a weaker dollar, et cetera, and to dampened economic activity,” he said in response to questions after a speech at the Council on Foreign Relations.

Fisher, a voting member of the Fed’s interest rate-setting committee this year, has dissented at the last three policy gatherings in favor of either smaller rate cuts than were agreed, or because he wanted no cut at all.

He said he had drawn the line at 3.5 percent, whereas the Fed has gone on to lower its benchmark overnight funds rate to 2 percent to shield the U.S americashadvance. economy from a housing crisis, and made plain he was uncomfortable with inflation expectations.

“The anecdotal evidence, the headlines that we’re reading in the newspapers, and the survey data, is not encouraging,” he told the audience.

“That worries me a great deal. It’s beginning to work its way into expectations, and when you begin to work your way into expectations, business and consumers behave accordingly and then you have a problem.

“So you want to make sure that is not encouraged and we will do the level best we can to do so,” he said. 

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Orders for manufactured goods posted a surprisingly strong increase in April as demand rose across a number of industries.

The Commerce Department reported that orders were up 1.1% in April following a 1.5% increase in March. Orders had fallen in January and March as a spreading slowdown in the overall economy depressed activity in manufacturing.

The April increase came as a surprise. Analysts had been forecasting a small decline faxless cash advance. Orders in the battered auto industry and in the volatile commercial aircraft sector did fall sharply but other areas showed strength, from rising demand for iron and steel to appliances and heavy machinery. Demand for petroleum was also up sharply, reflecting sharply higher prices. 

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Oil prices will likely take on more importance for the stock market next week as the summer driving season officially kicks off and as more companies are seen feeling the pinch of higher energy prices on their profit margins.

For the week, the Dow fell 3.9 percent, the S&P 500 shed 3.5 percent and the Nasdaq dropped 3.3 percent. For all three indexes, it was their worst weekly percentage drop in three months.

Pressure from higher energy costs is already being felt, with Kimberly-Clark (KMB.N: Quote, Profile, Research) announcing it intends to hike prices on its consumer goods products by 6 to 8 percent in the third quarter. The maker of Kleenex tissues and Huggies diapers said higher energy and raw materials costs were to blame for the price hikes.

Earlier in the week, Ford Motor Co (F.N: Quote, Profile, Research) said it no longer expected to return to profitability in 2009, with analysts saying the automaker’s recent gains have been overrun by a weak U.S. economy and spiraling oil prices.

With the earnings agenda nearly empty, investors will pay close attention for any other intermittent announcements about energy prices and their impact on profitability.

The industries most likely to downgrade their earnings outlooks are those “which have less elasticity of demand, such as the consumer discretionary sector, restaurants in particular,” said Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama payday loan. “All they can do it make portions smaller or raise their prices, neither which are popular.”

The Dow Jones U.S. Restaurants & Bars index .DJUSRU fell 4.5 percent this week, its worst five-day percentage decline since the first trading week of the year.

More price hikes are likely to come from staples producers, which could help the individual shares, but may stoke overall inflation fears, said Brandon Thomas, chief investment officer with Portfolio Management Consultants in Chicago, a unit of Envestnet Asset Management. 

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Apparel retailer Gap Inc. said Thursday its same-store sales fell 6% in April, widely missing analyst expectations, hurt by weak results at Old Navy and international stores.

Analysts surveyed by Thomson Financial expected combined same-store sales to fall just 1.9%.

Same-store sales, or sales at stores open at least a year, is a key measure of retailer performance, because it measures growth at existing stores rather than from newly opened ones.

For the four-week period ended May 3, same-store sales were flat at namesake Gap (GPS, Fortune 500) stores and Banana Republic, down 12% at Old Navy and down 7% at international stores.

Analysts had predicted declines of just 4.5% and 2.7% at Old Navy and overseas, respectively, while expecting Banana Republic stores to post a 2.8% increase. Gap’s North America same-store sales were slightly better than Wall Street’s projection for a 1% decline.

Total sales rose 1% to $1.1 billion from $1.09 billion last year.

For the fiscal first quarter ended May 3, same-store sales fell 11%, while total sales fell 5% to $3.38 billion credit report. Analysts expected higher sales of $3.45 billion.

Gap said though traffic patterns and sales continue to be challenging, it reaffirmed its earnings outlook for the year.

The company continues to expect earnings between $1.20 and $1.27 per share, while analysts polled by Thomson Financial, on average, expect a profit of $1.23 per share.

The San Francisco-based company said it expects first quarter net of 30 cents to 32 cents per share, including a $15 million tax benefit.

Analysts expect earnings of 27 cents per share. Analyst estimates usually exclude one-time items. 

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Citigroup Inc will present plans to sell as much as $400 billion of extraneous assets when it meets with investors and analysts on Friday, a person familiar with the situation said.

Newly-installed Chief Executive Vikram Pandit, scrambling to slash Citi’s costs and assets that have been hard hit by the global credit crunch, also intends to reaffirm his promise to cut annual expenses at the largest U.S. bank by roughly 20 percent, the source told Reuters on Thursday.

Citigroup declined to comment.

The sales could amount to nearly 20 percent of Citi’s current assets, and according to the Financial Times, which first reported the story on Thursday, would take place over several years.

Although Citi has said previously that it plans to shed assets to improve its capital position, the magnitude of the potential sales struck some analysts as worrisome free credit report online.

“The only reason you’d sell off that many assets is you have a lot more losses coming than you originally thought,” said Jim Huguet, co-chief executive at fund manager Great Companies LLC, which does not own Citi shares.

Since late last year, Citi has recorded more than $45 billion of writedowns and credit losses, raised more than $40 billion of new capital including $2 billion of preferred shares this week, and slashed its dividend 41 percent.

Precisely which non-core assets are for sale is unclear, but analysts speculated that consumer finance businesses in the United States, Japan, Mexico, and Germany are possible. 

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