Analyst lowers Boeing rating

Pacific Northwest

Aerospace

Boeing stock fell 6.3 percent Thursday after Cowen & Co. analyst Cai von Rumohr lowered the stock's rating to "neutral" from "outperform."

Boeing declined $4.19 to $62.53 after dropping 3.7 percent Wednesday when Boeing posted second-quarter earnings that trailed analysts' estimates. The shares have lost 29 percent this year.

"About $75 million to $100 million of the second-quarter's commercial profit 'miss' resulted from the latest 787 schedule slip," which may cut into margins through 2010, von Rumohr wrote Thursday in a note to investors. The jet is at least 14 months behind schedule because of production problems.

Von Rumohr also cited a risk that Boeing's defense programs may be cut next year and concerns over upcoming labor negotiations.

Biotech

Cell Therapeutics acts to raise cash

Cell Therapeutics said it will sell $22.25 million in new convertible notes bearing 18.33 percent interest to a single institutional investor this week, and another $22.25 million next month, as part of a complex agreement to raise sorely needed cash.

The unidentified buyer of the debt, which is convertible at 79 cents a share, also gets a warrant to purchase about 28.2 million shares at that same price.

Some of the funds will be used to buy back from that investor $17.5 million of outstanding 13.5 percent convertible senior notes, the company said in a statement.

Cell Therapeutics stock closed Thursday at 36 cents, up a fraction of a cent.

Semiconductors

Hynix will close Eugene chip plant

Hynix Semiconductor, the world's second-largest memory-chip manufacturer, said Thursday it will close its only U.S. factory — in Eugene, Ore. — amid changes in production standards and steep price declines buffeting the industry.

Hynix said that production at the Eugene facility would cease by the end of September.

Park Seong-ae, a Hynix spokeswoman, said the manufacturing plant was established in 1998 and employs about 1,200 people, including 150 Koreans.

Nation and World

Employment

Newly laid-off filings increase

The number of newly laid-off people filing claims for unemployment benefits bolted past 400,000 last week as companies trimmed their work forces to cope with a slowing economy.

The Labor Department reported Thursday that the number of new applications filed for these benefits rose by a seasonally adjusted 34,000 to 406,000 for the week ending July 19.

That matched the level seen in late March. The last time claims were higher was after the devastation of the Gulf Coast hurricanes in mid-September 2005. Then, they spiked to 425,000.

The new snapshot of layoffs was worse than economists were forecasting. They were expecting claims to rise to 375,000, according to the consensus estimate of Wall Street economists surveyed by Thomson/IFR.

A year ago, new claims were much lower — at 308,000. The rise in claims underscores the deterioration in employment conditions.

Transportation

Ford reports its worst quarter

Ford posted its worst quarterly loss ever Thursday in a roiling global auto market that also saw profits fall at Daimler, Hyundai and AutoNation Renault reported a profit increase in the first half of the year but still plans to cut jobs and scale back production.

In the U.S., auto sales dropped 10 percent in the first half of the year as consumers were stunned by high gas prices and falling home values. Sales in Europe dropped 8 percent in June and threaten to continue their slide.

Communications

Satellite-radio merger advances

A merger of the nation's only two satellite-radio companies moved closer to fruition Thursday after the pair agreed to pay $19.7 million to settle a case alleging violation of federal rules.

Federal Communications Commission Chairman Kevin Martin said the agency had reached an agreement late Wednesday night where XM Satellite Radio will pay $17.5 million and Sirius Satellite Radio will pay $2.2 million to resolve that issue.

The agreement, which still requires a full vote of the commission, is expected to lead to approval of Sirius's $3.9 billion buyout of XM, which has been under regulatory review for more than a year.

Compiled from Bloomberg News, Seattle Times staff and The Associated Press