Earnings reports extend market's big July rally
Stocks added to an already impressive run Thursday as another
round of earnings reports gave investors new reasons to be optimistic about the
economy. The Dow Jones industrial average rose its
highest level in nearly nine months with a gain of 84 points and the Nasdaq composite index traded above 2,000 for the first
time since October.
The latest reports struck a theme that has played out for weeks:
Times are tough but companies aren't doing as badly as feared. Many have
chopped costs to produce profits well beyond the market's modest expectations.
NY AG details big bonuses at bailed-out banks
NEW YORK (AP) -- Citigroup Inc., one of the biggest recipients of
government bailout money, gave employees $5.33 billion in bonuses for 2008, New
York's attorney general said Thursday in a report detailing the payouts by nine
big banks.
The report from Attorney General Andrew Cuomo's office focused on
2008 bonuses paid to the initial nine banks that received loans under the
government's Troubled Asset Relief Program last fall. Cuomo has joined other
government officials in criticizing the banks for paying out big bonuses while
accepting taxpayer money.
Citigroup, which is now one-third owned by the government as a
result of the bailout, gave 738 of its employees
bonuses of at least $1 million, even after it lost $18.7 billion during the
year, Cuomo's office said.
Bank of America Corp., which also received $45 billion in TARP
money, paid $3.3 billion in bonuses, with 172 employees receiving at least $1
million. Merrill Lynch, which Charlotte, N.C.-based Bank of
Exxon, Shell extend rough streak for oil sector
Oil giants Exxon Mobil and Royal Dutch Shell on Thursday added to
the industry's worst midyear showing in years, stung by slumping global energy
demand that threatens to further slow exploration and production.
For Exxon, the world's biggest publicly traded oil company, a 66
percent profit plunge for the second quarter marked its lowest result in nearly
six years. The Irving, Texas-based company vowed to maintain its aggressive
spending plans but acknowledged the tough economic environment has made that
difficult.
Its quarterly production fell too -- bad news considering it
generates more than two-thirds of its earnings from oil and gas output.
Decline in unemployment claims lifts hopes on jobs
WASHINGTON (AP) -- Fewer people are claiming jobless benefits,
leading economists to project that next week's employment report will show a
sharp drop in job losses for July compared with June.
Claims for jobless aid, which track layoffs and firings, are trending
downward in a modest sign of improvement in the labor market, economists note.
That helps explain why analysts are forecasting that a net total
of about 340,000 jobs will be lost in July. This would compare with a net total
of 467,000 jobs lost in June and the staggering 741,000 that were lost in
January -- the most for any month since 1949.
The slowdown in job cuts is a positive sign for the labor market,
though most economists still expect the unemployment rate to keep rising into
next year. The jobless rate, which reached 9.5 percent in June, is widely
expected to top 10 percent by year's end.
Motorola posts unexpected 2Q profit
NEW YORK (AP) -- Helped by deep cost cuts, Motorola Inc. on
Thursday posted an unexpected profit for the second quarter after several
quarters of losses, and said it expected things to keep improving this year.
While sales continued to decline from last year, Motorola said
the cost cuts, including 8,000 layoffs so far this year, set the stage for a
comeback from its long-suffering cell phone unit. Its shares surged on news of
the outlook.
Co-CEO Greg Brown said the "overwhelming majority" of
the cost-cutting has now been completed.
The
The latest results were boosted 2 cents per share by various
one-time effects, but even so, Motorola exceeded its own forecast, which called
for a loss of 3 cents to 5 cents per share, excluding the cost of its
restructuring initiatives.
Investors boost insurers despite economy's impact
Share prices of several companies have climbed around 10 percent
since Minnetonka, Minn.-based UnitedHealth Group Inc. became the first insurer
to report earnings July 21.
Analysts say they see many positives in insurance stocks when
they look beyond factors like slumping enrollment. Investors also are becoming
less concerned about how the health care overhaul debate in
UnitedHealth, WellPoint Inc. and Cigna Corp. all saw their
enrollments fall during the quarter largely due to employer job cuts. WellPoint
and Aetna Inc. also pointed to rising expenses spurred by the economy as an
additional detriment.
World's automakers cut costs, wait for turnaround
PARIS (AP) -- Car and truck manufacturers around the globe are
conserving cash by running down inventories and cutting everything from pay to
travel, especially in
All have been ruthless about saving money as they endure a
recession-led sales slump and hang on until a turnaround finally comes. For
now, that seems the best investors can hope for as the companies report very
mixed financial results this week.
German automaker Volkswagen AG on Thursday posted an actual
profit, like Japan's Honda Motor Co. the day before. But
French carmaker Renault SA, and Japan's Mitsubishi Motors Corp. and Mazda Motor
Corp., lost millions, even billions of dollars.
Oil surges close to $67 a barrel in volatile week
With regulators meeting in Washington to consider new limits on
speculators that some blame for wild swings in oil and gas prices, crude fell 6
percent Wednesday only to rebound by almost that much Thursday.
Benchmark crude for September delivery rose $3.59, or 5.6
percent, to settle at $66.94 a barrel on the
Crude prices have recently tracked stock markets and that trend
continued Thursday.
Cablevision to spin off Madison Square Garden
Cablevision Systems Corp. said Thursday that its board has
approved a plan to spin off as a separate company its
In a widely anticipated move, the
Investors liked the move, driving up shares of Cablevision $1.66,
or 8.8 percent, to $20.59.
The diversified company that owns cable systems and channels and
the newspaper Newsday in addition to its sports and entertainment properties
also reported an 8 percent drop in second-quarter earnings despite climbing
revenue.
By The Associated Press
The Dow Jones industrial average rose 83.74, or 0.9 percent, to
9,154.46 after being up as much as 176 points. The Standard & Poor's 500
index rose 11.60, or 1.2 percent, to 986.75. It rose to nearly 997 during the
day. It hasn't traded above 1,000 since November.
It was the highest close for the Dow and the S&P 500 index
since Nov. 4.
The Nasdaq
advanced 16.54, or 0.9 percent, to 1,984.30. It rose to nearly 2,010 in morning
trading, its first move above 2,000 since Oct. 3. The index is up 56 percent
from its low of 1,269 in March. It was the highest finish for the index since
Oct. 1.
Benchmark crude for September delivery rose $3.59, or 5.6
percent, to settle at $66.94 a barrel on the
In other Nymex trading, gasoline for
August delivery jumped 13.61 cents, or 7.3 percent, to settle at $1.9911 a
gallon and heating oil added 9.72 cents to settle at $1.7685 a gallon. Natural
gas for September delivery surged 19.5 cents to settle at $3.743 per 1,000
cubic feet.
In