On Monday July 12, 2010, 6:11 pm EDT
Stocks in narrow range ahead of
earnings season
NEW YORK (AP) -- Stocks closed mixed
Monday as investors grew more cautious while they waited for the start of
second-quarter earnings reports. And they got some good news after trading
ended, when Alcoa Inc. reported better-than-expected results.
The Dow Jones industrial average rose
18 points to 10,216.27, and the other big indexes also had slight gains. But
almost two stocks fell for every one that rose on the New York Stock Exchange,
a sign that investors were wary about earnings.
Investors showed little reaction to
news of several corporate acqusitions.
Hugh Hefner offers to take Playboy
private
CHICAGO (AP) -- Hugh Hefner's offer to
take Playboy Enterprises Inc. private drew the promise of a competing bid on
Monday from the owner of archrival Penthouse magazine. That raises the
possibility that Playboy's 84-year-old founder could lose control of the men's magazine
he started more than half a century ago.
Playboy said Monday that Hefner has
lined up backing from a little-known private equity firm to buy the shares of
the media empire that he doesn't already own and take the company private in a
deal that values the organization at $185 million.
A few hours later, Marc Bell, the CEO
of Penthouse owner FriendFinder, said his company will make a formal bid soon.
Bell had acquired Penthouse as part of a 2003 bankruptcy reorganization that
also saw the resignation of founder Robert Guccione as the company's CEO.
Small companies denied credit as big
firms thrive
WASHINGTON (AP) -- Big companies are
building up cash and are expected to report strong earnings starting this week.
Not so for small businesses that can't get loans -- or hire freely until they
do.
The gap helps explain why the economic
rebound isn't stronger and could even stall. Federal Reserve Chairman Ben
Bernanke stepped up pressure Monday on banks to break the logjam and lend more
to smaller firms, which employ at least half of American workers.
Small business owners are relying on
personal credit cards or raiding retirement accounts to stay afloat, the Fed
chairman said.
FDIC's authority to review banks
expands
WASHINGTON (AP) -- Federal bank
regulators have agreed to give the Federal Deposit Insurance Corp. unlimited
authority to investigate banks, clarifying the agency's power that was in
question during the financial crisis.
The FDIC's board on Monday approved the
agreement between the insurance agency and regulators at the Federal Reserve
and the Treasury Department. It clearly spells out the FDIC's authority to make
special examinations of banks. It was approved 5-0.
Federal bank regulators were widely
criticized during the financial crisis for failing to signal high-risk
practices before the institutions failed.
The FDIC, which takes over failed
banks, has said it lacked access to needed information to evaluate banks' risk.
Aon agrees to buy Hewitt for $4.9
billion
CHICAGO (AP) -- Insurance conglomerate
Aon Corp. said Monday it has agreed to buy human resources specialist Hewitt
Associates for $4.9 billion in a cash-and-stock deal that would nearly triple
the size of its consulting business.
The deal, assuming it is approved by
regulators, is the company's biggest ever and dramatically expands its push
into human resources consulting worldwide. Aon is the world's largest insurance
broker but trails rival Marsh & McLennan Co., whose subsidiaries include
Mercer and Oliver Wyman Group, in the size of its consulting business.
Hewitt, based in Lincolnshire, Ill., is
one of the world's biggest human resources consulting and outsourcing companies
with over $3 billion in annual revenue and 23,000 employees in 32 countries.
Alcoa moves to 2Q profit on improved demand
DENVER (AP) -- Alcoa Inc. said Monday
it posted a second-quarter profit as it sold more aluminum in the commercial
vehicles, packaging and construction markets.
The Pittsburgh manufacturing giant
kicked off earnings season by reporting net income of $136 million, or 13 cents
share, for the quarter ending June 30. That compared with a loss of $454
million, or 47 cents a share, a year ago.
Revenue rose to $5.19 billion from
$4.24 billion.
The second quarter results topped
estimates from analysts surveyed by Thomson Reuters. They expected net income
of 12 cents per share on revenue of $5.05 billion. Shares rose 2.7 percent in
after-hours trading.
CSX 2Q profit jumps with improving
economy
NEW YORK (AP) -- Railroad CSX Corp.
said Monday a "dynamic" U.S. economy, combined with an
across-the-board improvement in shipping volume and higher prices, drove its
second-quarter profit up 36 percent.
CSX, the third-largest railroad in the
country, is the first among its peers to report earnings for the April-to-June
period. Railroads' performance is an important window on the economy because
trains carry so many things that consumers and businesses use every day -- from
clothing to cars.
Shipping volume was up in every CSX
category in the three-month period, except food and consumer shipments, which
were flat.
FDA to review first of 3 new weight
loss drugs
WASHINGTON (AP) -- Dieters, doctors and
investors get their first extensive look at the first of a trio of new weight
loss drugs this week. The hope is that the new drugs can succeed where many
others have failed: delivering significant weight loss without risky side
effects.
With U.S. obesity rates nearing 35
percent of the adult population, expectations are high for the first new
prescription drug therapies to emerge in more than a decade. Even a modestly
effective drug has blockbuster potential.
Avon buys Silpada for $650 million
NEW YORK (AP) -- Avon Products Inc., a
direct seller of beauty products, agreed to buy Silpada Designs for at least
$650 million in an effort to expand its jewelry business, the company said
Monday.
Silpada, based in Lenexa, Kan., is a
direct seller of sterling silver jewelry in the U.S., Canada and the U.K. Avon
said Silpada will continue to operate as a standalone business with its existing
32,000 independent sales representative.
Silpada co-founders Bonnie Kelly and
Teresa Walsh, CEO and co-founder Jerry Kelly and the entire Silpada management
team will stay with the company.
Weyerhaeuser to pay $5.6 billion to
shareholders
NEW YORK (AP) -- Weyerhaeuser plans to
distribute $5.6 billion to shareholders through a special dividend, the company
said Monday, a required step in Weyerhaeuser's path to becoming a real estate
investment trust.
Company shares jumped more than 8
percent, or $3.04, to $38.88 before the market opened.
Weyerhaeuser, one of the world's
largest lumber and wood products companies, has been pressured by investors for
years to lower its income tax rate, about 35 percent, by becoming a REIT.
By The Associated Press
The Dow Jones industrial average rose
18.24, or 0.2 percent, to 10,216.27.
The Standard & Poor's 500 index
rose 0.79, or 0.1 percent, to 1,078.75, while the Nasdaq composite index rose
1.91, or 0.1 percent, to 2,198.36.
Benchmark crude lost $1.14 to settle at
$74.95 a barrel on the New York Mercantile Exchange.
In other Nymex trading, heating oil
fell 3.44 cents to settle at $1.9913 a gallon, gasoline dropped 4.20 cents to
settle at $2.0280 a gallon and natural gas gave up 1.4 cents to settle at
$4.388 per 1,000 cubic feet.
In London, Brent crude fell $1.05 to
settle at $74.37 a barrel on the ICE Futures exchange.