Bernanke resists plan for consumer-products agency
WASHINGTON (AP) -- Ben
Bernanke put himself at odds with the Obama administration Wednesday by
resisting its plan to create a consumer protection agency for risky financial
products. The Federal Reserve chief said those responsibilities should stay
with the central bank.
Bernanke's pushback on the
White House plan comes at a politically delicate time for the Fed chairman. His
term expires early next year, and President Barack Obama will have to decide
whether to reappoint him.
In his second straight day
on Capitol Hill, Bernanke argued that the Fed has expertise that would be
difficult to replicate at a new agency. Consumer oversight, he said, coincides
with the Fed's mission to oversee the safety and soundness of banks.
Morgan Stanley posts 2Q loss
of more than $1.2B
NEW YORK (AP) -- Morgan
Stanley said Wednesday it lost more than $1.2 billion in the second quarter as
it took charges to cover continuing losses in its real estate investments and
its repayment of government bailout money.
The investment bank said
Wednesday it was also hurt for a second straight quarter by an accounting
charge related to the rising value of its own debt.
Analysts said that while
Morgan Stanley's investment banking revenue was strong, its conservative
approach to trading hindered its ability to offset the special charges.
Mixed earnings put brakes on
stock market rally
NEW YORK (AP) -- Investors
aren't giving up on the stock market's rally, but they're not making big bets
either.
Stocks ended a quiet day
mixed Wednesday as traders remained hesitant to push further into the market
following a weeklong surge on strong earnings reports.
Wednesday's modest moves
left the market's recent climb intact. The Dow Jones industrial average and the
Standard & Poor's 500 index slipped less than 0.5 percent, while the Nasdaq
composite index advanced.
Investors responded to
uneven corporate results. Apple Inc. and Starbucks Inc. jumped after beating
analysts' estimates, but chip maker Advanced Micro Devices Inc. and major bank
Wells Fargo & Co. fell after reporting disappointing numbers.
Delta posts 2Q loss, while
AirTran reports profit
ATLANTA (AP) -- Delta Air
Lines Inc. and AirTran Airways posted contrasting financial results, but had a
similar message Wednesday about the state of the airline industry: A near-term
revenue recovery is unlikely.
It remains to be seen
whether that will mean fewer jobs for airline employees and higher fees and
fares for passengers.
Discount carrier AirTran has
been able to find ways to stay in the black. Its parent posted a $78.4 million
profit for the April-June quarter, while Delta, the world's biggest airline
operator, continues to rack up the red ink, as it recorded a $257 million loss
for the quarter.
Lilly, Pfizer raise
full-year profit forecasts
Drugmakers Eli Lilly and
Pfizer both topped Wall Street expectations for second-quarter earnings and
raised their profit outlooks for the full year, while British counterpart
GlaxoSmithKline bucked the tough economy with an 11 percent rise in quarterly
profit.
But a strong dollar hurt
overseas sales for both Indianapolis-based Lilly, which reported a 21 percent
profit increase, and New York-based Pfizer, which saw earnings plunge 19
percent on unfavorable exchange and tax rates.
London-based Glaxo reported
a 15 percent revenue increase. But the maker of antidepressants Wellbutrin XL
and Paxil CR said U.S. sales fell by the same amount, and it was hurt by
generic competition.
Wells Fargo posts 2Q profit,
surpasses Street
CHARLOTTE, N.C. (AP) --
Wells Fargo & Co. joined other big banks in announcing a big second-quarter
profit and tempering the news by reporting it is still contending with losses
from failed loans.
The bank also followed its
rivals Wednesday in forecasting loan losses would continue in the coming
quarters as more consumers are unemployed and can't make their payments. The
company said some of its second-quarter loan losses came from the continuing
cleanup of the loan portfolio acquired along with struggling Wachovia Corp. in December.
Wells Fargo said its
earnings after payment of preferred dividends came to $2.58 billion, or 57
cents per share, up from $1.75 billion, or 53 cents per share, a year earlier.
Boeing's 2Q profit climbs;
787 plans still pending
Boeing Co. on Wednesday
reported a 17 percent rise in second-quarter profit to beat Wall Street
expectations, but the airplane maker said it was still assessing the financial
impact of the latest delay of its new 787 jetliner.
The Chicago-based company
expects to reevaluate its earnings forecast and announce a revised schedule for
the eagerly anticipated 787, which is nearly two years behind schedule, in the
third quarter. Boeing's credibility suffered a blow last month when the company
postponed the plane's first test flight and deliveries for the fifth time,
saying part of the aircraft needed to be reinforced.
GM 2Q global sales fall 15
pct amid weak economy
DETROIT (AP) -- Although
General Motors' North American sales dropped sharply last quarter as it headed
into U.S. bankruptcy protection, strong growth in its Asia-Pacific region
offset much of the decline, and the automaker ended up with global sales down
15 percent for the quarter.
General Motors Co., which
has received $50 billion in U.S. government aid and emerged from bankruptcy
protection on July 10, said Wednesday that it sold 1.94 million vehicles
worldwide in the April-to-June period, despite a 32 percent decline in North
America.
PepsiCo 2Q profit falls 2
pct on sales drop
MILWAUKEE (AP) --
Soft-drinks and snack maker PepsiCo's second-quarter profit and sales dropped
slightly as consumers continued limiting their purchases of soft drinks but
bought more snacks as the company promoted larger bags of chips.
The Purchase, N.Y.-based
maker of Pepsi and Gatorade has been cutting costs as it navigates through a
weak economy. Consumers are limiting their purchases of soft drinks and
switching to healthier juices and teas. PepsiCo said Wednesday its
second-quarter profit fell 2 percent while sales dropped 3 percent, to beat analyst
expectations.
Goldman buys back TARP
warrants for $1.1 billion
NEW YORK (AP) -- Goldman
Sachs Group Inc. said Wednesday it has repurchased warrants given to the U.S.
Treasury under the Troubled Asset Relief Program for $1.1 billion.
The investment bank said it
believes the value of the warrants, as determined by the Treasury, was fair.
As part of the Treasury's
$10 billion preferred stock investment in the bank last fall, the government
received warrants that would have enabled it to buy Goldman shares at a set
price in 10 years.
Goldman has already paid
back the $10 billion loan, as well as paying $318 million in preferred
dividends on the investment.
By The Associated Press
The Dow fell 34.68, or 0.4
percent, to 8,881.26.
The broader S&P 500
index slipped 0.51, or 0.1 percent, to 954.07, and the Nasdaq rose 10.18, or
0.5 percent, to 1,926.38.
Benchmark crude for
September delivery dropped 21 cents to settle at $65.40 a barrel on the New
York Mercantile Exchange after falling as low as $63.76.
In London, Brent prices
added 34 cents to settle at $67.21 a barrel on the ICE Futures exchange.
In other Nymex trading,
gasoline futures for August delivery rose 2.63 cents to settle at $1.8383 a
gallon and heating oil rose 1.28 cents to settle at $1.7112 per gallon. Natural
gas for August delivery added 8.8 cents to settle at $3.793 per 1,000 cubic
feet.