AP Business
Highlights
On Thursday July 22, 2010, 5:15 pm EDT
Recovery mixed on strong
earnings, weak home sales
WASHINGTON (AP) -- A flurry
of strong earnings reports renewed Wall Street's optimism in the economic
recovery, even as new data Thursday showed homes sales sinking and claims for
unemployment benefits rising.
Sales of previously
occupied homes fell 5.1 percent in June to a seasonally adjusted annual rate of
5.37 million, the National Association of Realtors said.
Meanwhile, new claims for
unemployment insurance jumped by 37,000 to a seasonally adjusted 464,000, the
Labor Department said. Separately, the Conference board, a private research
group, said its gauge of future economic activity dropped in June. It was the
second decline in three months.
Stocks surge on upbeat
earnings and forecasts
NEW YORK (AP) -- Stocks
have surged after strong earnings from Caterpillar, UPS and other companies
revived optimism about the economic recovery. A better than expected report on
housing and ncouraging signs of growth in Europe added to the market's upbeat
mood.
The Dow Jones industrial
average rose more than 200 points in afternoon trading. Broader indexes also
rose more than 2 percent. Interest rates surged in the Treasury market as
investors felt less need to put their money into the safety of government
securities.
GM to pay $3.5B for auto
financing company
DETROIT (AP) -- General
Motors Co. will buy AmeriCredit Corp. for $3.5 billion, a deal that allows the
automaker to expand loans to customers with poor credit and offer more leases,
key areas where GM must grow to accelerate its car sales.
But the acquisition of the
independent auto financing company also means that GM, which is 61 percent
owned by the U.S. government, is getting back into the business of making risky
loans. GM said it advised the U.S. Treasury Department of the acquisition,
although government approval was not required.
Fed chief to Congress:
Don't end stimulus spending
WASHINGTON (AP) -- Federal
Reserve Chairman Ben Bernanke told Congress Thursday that the fragile economy
needs government stimulus spending to strengthen the recovery and help reduce
unemployment.
Testifying before the House
Financial Services Committee, Bernanke urged lawmakers to come up with a
credible plan to reduce the government's record-high budget deficits in the
long run. But he said they shouldn't move now to slash spending or boost taxes
in the near future.
Bernanke again said the Fed
is prepared to take new steps to bolster the recovery if needed.
Refinancings rise as
mortgage rates hit 4.56 percent
NEW YORK (AP) -- The lowest
mortgage rates in decades are just too good for some people to pass up.
Brokers are reporting
rising interest in home refinancings as rates on a 30-year fixed loans have hit
record lows in four of the past five weeks. This week the average rate fell to
4.56 percent, the lowest since mortgage company Freddie Mac began tracking
rates in 1971.
Weekly applications to
refinance home loans have nearly doubled in July from April, according to the
Mortgage Bankers Association.
AT&T 2Q earnings up 26
percent, raises forecast
NEW YORK (AP) -- AT&T
Inc. said Thursday that its earnings rose 26 percent in the latest quarter and
raised its forecast for the year, helped by its iPhone-fueled wireless arm and
cost-cutting.
The country's largest
telecommunications provider said it now expects a "strong" increase
in earnings over last year, compared to its previous forecast of
"stable-to-improved" results.
The company, based in
Dallas, also posted its first-ever decline in wired broadband subscribers,
capping a decade of growth.
Its shares rose 77 cents,
or 3.1 percent, to $25.69 in midday trading.
Caterpillar 2Q profit
soars; raises outlook
Caterpillar's second-quarter
earnings shot up 91 percent with the heavy machinery manufacturer reporting
robust sales of equipment for industries that range from mining and
infrastructure to energy.
The company boosted its
2010 profit outlook as well on Thursday, saying it is trying to keep up with
new orders and will ramp up production of its signature black-and-yellow
equipment in the second half of the year.
The results and
Caterpillar's own forecast reflect an uneven recovery and some anxiety about
what kind of rebound to expect. Emerging markets like China and Brazil, not
U.S. or Europe, still lead the way.
Microsoft 4Q net income
surges 48 percent
REDMOND, Wash. (AP) --
Microsoft Corp. said Thursday that its net income surged 48 percent in the most
recent quarter, the latest sign that businesses are again spending money on
technology.
Microsoft's results were
stronger than Wall Street had expected.
Big businesses stopped
replacing aging computers, servers and software during the worst of the
recession. Microsoft makes the majority of its money from selling Windows
software for PCs and servers, plus Office and other business software.
Dell paying $100 million in
SEC deal
WASHINGTON (AP) -- Computer
maker Dell Inc. is paying $100 million to settle federal regulators' charges of
using fraudulent accounting to meet Wall Street earnings targets.
Under the settlement
announced Thursday by the Securities and Exchange Commission, company Chairman
and CEO Michael Dell agreed to pay a $4 million civil penalty.
The SEC said the company
also failed to disclose to investors large payments it received from Intel
Corp. in exchange for not using equipment made by an Intel rival.
Amazon 2Q profit jumps 45
pct; misses Wall Street
SAN FRANCISCO (AP) --
Amazon.com Inc. said Thursday that its second-quarter income jumped, bolstered
by shoppers who spent more with the online retailer even as consumer confidence
fell overall.
But the Seattle-based
company's earnings fell below analyst expectations, and its stock dove in
after-hours trading.
For the April-June quarter,
Amazon.com Inc. earned $207 million, or 45 cents per share. That is a 45
percent increase from $142 million, or 32 cents per share, in the same quarter
last year.
By The Associated Press
The Dow Jones industrial
average rose 206.54, or 2 percent, to 10,327.37.
The Standard & Poor's
500 index rose 23.66, or 2.2 percent, to 1,093.25, while the Nasdaq composite
index rose 52.55, or 2.4 percent, to 2,239.88.
Benchmark crude surged
$2.74, or 3.6 percent, to settle at $79.30 a gallon on the New York Mercantile
Exchange.
Natural gas gained 13 cents
at to settle at $4.643 per 1,000 cubic feet; heating oil rose 7.32 cents to
settle at $2.0624 a gallon and gasoline added 7.88 cents to settle at $2.1466 a
gallon.
Brent crude rose $2.45 to
settle at $77.82 on the ICE futures exchange