Monday morning headlines

Markets holding their own: Considering what's been going on in Georgia, that's saying something. It's especially saying something about the price of oil, which edged over $116 a barrel in early trading and then went back down. For that you can thank the dollar, which continues to strengthen. Oil is around $115, but there's lots of volatility. From Reuters:

Georgia's oil ports of Supsa and Batumi, used to export Azeri crude oil, are operating only partially, while the Georgian port of Poti is not operating, a shipping agent said on Monday. Kazakhstan also stopped shipments of its crude from Georgia's Batumi port. Both Azerbaijan and Kazakhstan also use crude pipelines for export. A major oil pipeline exporting Azeri crude passes through Georgia but was disabled last week on Turkish territory before the conflict erupted.

Weak second half outlook: Economists have been downgrading their forecasts in recent weeks, the result of worries about layoffs, stagnant wages, falling home values and tighter credit. Just so-so retail numbers for July are part of the concern, as are whether export numbers will hold up. The WSJ focuses on the consumer side, while the LAT looks at a slowdown in business spending.

Recently there has been a parade of sobering announcements: JetBlue abandoning markets and delaying aircraft orders, Starbucks closing 600 outlets, retailer Mervyns filing for bankruptcy protection and J.C. Penney scaling back next year's store openings. Total planned capital spending by U.S. business declined on a year-over-year basis for four straight months through June, according to the Conference Board, the New York-based economic research firm. The Commerce Department reported Thursday that investment in software and equipment -- which accounts for two-thirds of business capital spending -- fell again in July.

Drop in auto ads: This has been a real killer across the board - newspapers, magazines, TV and radio. The auto industry spent $414 million less on advertising in the first quarter than a year earlier - and the numbers might be even worse for April-July. In recent earnings reports Viacom and Time Warner cited auto ads as one reason for lagging revenue. From the NYT:

Newspapers were the hardest hit, losing $131 million in auto advertising, much of the decline coming from local dealerships that are having trouble moving cars off their lots. “You’re talking about cars sitting on lots for 90 days,” said Mort Goldstrom, vice president for advertising at the Newspaper Association of America. “The dealers are saying, ‘I have cars that won’t move. And I can’t advertise.’ It’s because of cash flow.” For the year, auto advertising dollars flowing to media outlets could decline by close to $3 billion, according to Sanford C. Bernstein & Company, to about $15 billon for the full year. Auto advertising peaked at close to $24 billion in 2004.

DreamWorks deal near: Under the agreement, one of India's biggest media groups would invest about $500 million in the new movie company being formed by Steven Spielberg and Stacey Snider. Another $500 million in debt would be available through J.P. Morgan. That would give them the financial backing to split from Paramount. Then they must cut a distribution deal (Spielberg is looking at Universal). From the WSJ:

People familiar with the situation say an agreement will likely be reached next week, allowing Mr. Spielberg and his DreamWorks team to leave Paramount as early as November. David Geffen, another co-founder, can trigger his exit from Paramount at the end of this month. Mr. Spielberg and his close collaborator, DreamWorks Chief Executive Stacey Snider, can leave Paramount 60 days after Mr. Geffen's move. It is uncertain whether Mr. Geffen will be part of the new venture.

Fewer producer pacts: Here's another example of how the majors are becoming more focused on distribution and not movie-making: Variety reports that the studios have 180 producer pacts, down 50 over the past three years and the lowest tally in the 11-year history of the survey. Warners has the most at 37 (plus 10 more under its roof with New Line), followed by Universal at 29. Studios say they are trimming financial excesses at a time they are making fewer films.

NBC scores, Web and all: Some viewers might be watching the Olympics online, but TV ratings so far have been huge. More viewers tuned in to watch the first two prime-time telecasts than any Summer Games in a decade - and the vast majority watched the games only on TV. (WSJ)