NEW YORK -- Consumers spent generously on back-to-school items in August but were still focused on the bottom line, doing most of their shopping at Wal-Mart Stores Inc., and other low-priced stores.
But many mall-based apparel stores struggled to keep pace, indicating that a consumer spending recovery is spotty. The nation's merchants reported their August sales on Thursday.
Wal-Mart Stores Inc., the world's largest retailer, reported its best same-store results since June 2002. Sears, Roebuck and Co., powered by robust sales in home appliances, posted its first same-store sales increase in two years. Same-store sales are sales at stores open at least a year, and are considered the best indicator of a retailer's health.
Swank retailer Neiman Marcus Group also posted August results that were well above analysts' forecasts. But gains at Gap Inc. were disappointing, while teen retailers Abercrombie &; Fitch and American Eagle Outfitters Inc. suffered sharp declines.
Goldman Sachs settles insider trading case
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NEW YORK -- Goldman Sachs &; Co. made millions in illegal profits with the help of a Wall Street consultant who attended Treasury Department news conferences and then rushed to pass on sensitive, advance information about the bond market to the firm, the government charged Thursday.
Those who attend Treasury Department news conferences on the bond market must agree to abide by an embargo -- meaning they cannot release the information ahead of a set time. The embargoes are designed to make sure all investors get critical market news at the same time, so that no one can gain an edge.
But the consultant, Peter Davis, frantically worked his cell phone to get the information to Goldman senior economist John Youngdahl minutes ahead of its public release on Oct. 31, 2001, according to the federal indictment. The call gave Goldman Sachs an eight-minute edge on the rest of the market -- enough time to turn a $3.8 million profit, the indictment said.
Creditors approve Worldcom reorganization
NEW YORK -- Worldcom Inc.'s bankruptcy reorganization plan received broad approval from its creditors, according to a court filing unsealed on Thursday.
The company, which has renamed itself MCI in the aftermath of a massive accounting fraud exposed last summer, reported that creditors holding about $23.4 billion in WorldCom debt had voted on the plan. Nearly 97 percent of that amount had been cast in favor of the plan.
The filing detailing the vote tally was submitted to the U.S. Bankruptcy Court for the Southern District of New York last week.
A hearing scheduled for Monday to consider whether the judge handling the case should approve the reorganization plan, which would enable Ashburn, Va.-based MCI to emerge from bankruptcy as soon as this year with only about $5 billion of the $41 billion in debt with which it entered bankruptcy.
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Judge throws out suit against McDonald's
NEW YORK -- For a second time this year, a federal judge threw out a class-action lawsuit Thursday that blamed McDonald's for making people fat.
U.S. District Judge Robert Sweet said the plaintiffs failed to show that the fast-food chain misled consumers into believing its food was nutritious and part of a healthy diet.
Sweet tossed out an earlier version of the lawsuit in January that claimed McDonald's food causes health problems in children.
On Thursday he rejected a request that the plaintiffs be permitted to file a new version, which claimed that McDonald's violated New York's consumer protection laws and engaged in deceptive advertising. The Oak Brook, Ill.-based company called the ruling a "total victory" and said its menu options can fit into a healthy, well-balanced diet.
Freddie Mac executives to be fired
WASHINGTON -- Two top executives who resigned from mortgage giant Freddie Mac amid accounting turmoil and federal investigations will be fired for alleged improper conduct, federal regulators said Thursday.
By reclassifying former chairman and CEO Leland Brendsel and ex-chief financial officer Vaughn Clark as terminated, the Office of Federal Housing Enterprise Oversight could reduce the millions of dollars in compensation granted to them.
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The agency has been reviewing the executives' pay packages and accounting and management practices at the government-sponsored company.
