Kmart shares slide on analyst downgrade
Shares of Kmart Corp. fell more than 13 percent Wednesday after an analyst downgraded the stock to "sell," citing disappointing fourth quarter sales and earnings and a "precarious" cash position.
Prudential Securities Inc. said it would not be surprised if Troy, Mich.-based Kmart filed for Chapter 11 bankruptcy protection "if trends do not improve" in the next six months. In a research report released Wednesday, the financial organization downgraded the discount retailer's stock from "hold" to "sell."
The report triggered selling on Wall Street, above. Kmart shares ended the day at $4.74, down 72 cents, or 13.2 percent.
Jack Ferry, a Kmart spokesman, said Prudential's concerns were unfounded: "Kmart is implementing a major corporate revitalization strategy that includes massive cultural and operational changes" that already are showing results.
Kmart has a distribution center in Lawrence.
Aviation
Military awards Raytheon deal worth possible $1 billion
Raytheon Aircraft has won its largest military contract ever, a potential $1.22 billion deal that will solidify its work force in Wichita but add no new jobs, the company said Wednesday.
The one-year contract with four one-year options calls for the production of 234 T-6A Texan II aircraft as well as associated ground-based training devices and technical support.
Defense budgets are allocated and approved on a year-by-year basis, and the options are for anticipated orders in subsequent years.
Raytheon will build 40 aircraft the first year, an order valued at $193 million, spokesman Tim Travis said.
Economy
Manufacturing gauge, business activity on rise
A rise in new orders to factories helped push a key gauge of U.S. manufacturing higher in December, suggesting the end is in sight for the 17-month slump.
Overall manufacturing activity still was contracting in December, but the rate of decline was far less than the previous month and also less than analysts had forecast.
The Institute for Supply Management reported Wednesday that its index of business activity rose in December for a second straight month to 48.2, up from 44.5 in November. Analysts had forecast a reading of 46.
While the number was improved, a figure below 50 still shows contraction. A reading above 50 signifies expansion.
Microsoft
Judge schedules hearing to consider delay in case
Microsoft and lawyers from nine states, including Kansas, will argue in court next week about the company's request for extra time to produce evidence in the antitrust case against the software giant.
Microsoft is arguing that penalties proposed by the states differ significantly from the company's settlement with the Justice Department and therefore the company needs an extra four months to sift through millions of documents.
The states accuse Microsoft of delaying punishments that the company could face. Microsoft also is reviving arguments that U.S. District Judge Colleen Kollar-Kotelly should limit the scope of penalties an idea the judge has rejected in the past.
Kollar-Kotelly set a Monday morning hearing after both sides provided their written arguments.
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