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US FINANCIAL MARKET

U.S. Stocks Rise on Inflation, Home Data amid Earnings

  • Chipotle jumped 12 % after reporting earnings and sales that beat projections.
  • Comcast added 1.8 % after profit topped estimates on higher revenue from Internet customers.
  • DuPont slid 1 % after the U.S. chemicals producer posted lower-than-estimated revenue after some farmers switched to genetically modified soybeans from corn.
  • McDonald’s fell 2.4 % after profit fell short of analysts’ estimates.
  • Coca-Cola dropped 3 % after the world’s largest beverage company reported second-quarter sales that missed analysts’ estimates amid sluggish demand for drinks such as juice and Diet Coke in North America.
  • Travelers dropped 4.3 % as earnings slid 26 %.
  • Data today showed the consumer price index (CPI) increased 0.3 % in June, paced by a jump in gasoline that is now reversing.
  • The S&P 500 advanced almost 6.8 % this year through yesterday amid better-than-estimated corporate earnings and central bank stimulus.

Comcast Profit Tops Estimates with Web Customer Sign-Ups

  • Comcast’s second-quarter net income rose 15 % to $1.99 billion, up from $1.73 billion a year ago.
  • Revenue increased 3.5 % to $16.8 billion, while analysts estimated almost $17 billion.
  • The average customer bill rose to $137.24 a month. More than a third of Comcast’s customers subscribe to all three services: Internet, voice and video.
  • The Philadelphia-based company added 203,000 broadband customers, more than the 159,000 analysts estimated.
  • The company lost 144,000 TV subscribers in a seasonally weak period when college students typically disconnect their TV service for summer vacation.
  • Sales at Comcast’s NBCUniversal group were little changed at about $6 billion, as NBC became the most-watched broadcast network in prime time among 18- to 49-year-olds.

Verizon Beats Earnings Estimates on Stronger User Gains

  • The largest U.S. wireless carrier exceeded profit estimates on stronger customer gains even as T-Mobile brought more promotions and price cuts to the industry.
  • Sales climbed 5.7 % to $31.5 billion, the New York-based company said. Analysts had estimated $31.1 billion in sales.
  • Verizon added 1.4 million contract customers, an improvement from 941,000 a year earlier.
  • The company said it added 100,000 FiOS video customers and 139,000 net new FiOS Internet connections in the quarter.
  • Tablet sales and a shift to phone-financing offers that give customers quicker device-upgrade and trade-in options have helped offset increased competition.
  • The average size of customers’ monthly bills grew 4.7 % to $159.73.
  • Verizon’s wireless service margins expanded to 50.3 %.

DuPont Sees Profit up at Most Units amid Peltz Pressure

  • Second-quarter net income roseto $1.07 billion from $1.03 billion a year earlier.
  • Sales dropped 1.4 % to $9.71 billion, missing the $9.77 billion average prediction.
  • DuPont plans to eliminate $1 billion in annual costs by 2019.
  • DuPont reiterated its full-year operating earnings forecast of $4 to $4.10 a share. The company lowered its guidance in June, citing disappointing agriculture sales.

Lockheed’s Second-Quarter Profit Beats Analyst Estimates

  • The largest U.S. government contractor topped analysts’ estimates for second-quarter profit and sales on the strength of its aircraft division.
  • Net income rose 3.5 % to $889 million from $859 million a year earlier, in part due to lower pension costs.
  • Lockheed also boosted its full-year profit outlook.
  • The maker of the F-35 jet said that sales declined less than 1 % in the quarter to $11.3 billion, but beat the average $11.1 billion estimate of 17 analysts surveyed by Bloomberg.
  • Federal budget reductions contributed to the fourth consecutive annual decline in U.S. government contracting last year, the longest stretch since Ronald Reagan was president.
  • The performance of Lockheed’s largest division, aeronautics, provided a buffer in the second quarter. The unit’s sales jumped 13 % to $3.86 billion, helped by the F-35.

Altria Profit Trails Estimates on Lower Cigarette Shipments

  • The largest seller of tobacco in the U.S. reported second-quarter net income of $1.26 billion, down from $1.27 billion a year earlier.
  • Revenue rose about 1 % to $4.57 billion. Analysts projected $4.59 billion on average.

Coca-Cola Misses Sales Estimates amid Juice and Diet Coke Slide

  • Revenue fell 1.4 % to $12.6 billion. Analysts had estimated $12.8 billion on average.
  • Global juice sales volume declined 1 %, hurt by price increases in North America to offset higher ingredient costs.
  • Gross margin in the quarter rose to 61.7 % from 60.9 % a year ago.
  • Net income fell 3 % to $2.6 billion from $2.68 billion a year earlier.

McDonald’s Profit Trails Estimates as Sales Slump Persists

  • The largest restaurant chain by sales posted second-quarter net income that fell less than 1 % to $1.39 billion from $1.4 billion a year earlier.
  • Revenue rose 1.4 % to $7.18 billion, trailing the estimate for $7.29 billion.
  • McDonald’s U.S. business faces a crowded field and last year it added many new items, slowing down its kitchens.
  • Competitors such as Taco Bell, Wendy’s, and Burger King also are selling more new fare that’s attracting Americans.
  • McDonald’s U.S. same-store sales fell 1.5 %.
  • McDonald’s has more than 35,400 restaurants worldwide and about 19 % are owned by the company. By 2016, the chain is seeking to franchise as many as 1,500 of its company-owned stores, primarily overseas.

Chipotle traffic jumps even after price increase

  • Chipotle Mexican Grill reported a nearly 26 % jump in quarterly profit after traffic to the burrito chain surged despite a menu price increase.
  • Net income grew to $110.3 million from $87.9 million a year earlier.
  • Revenue increased almost 29 % to $1.05 billion during the quarter.
  • Sales at restaurants open at least 13 months, a closely watched gauge of industry performance, increased 17.3 % for the quarter, blowing past 23 analysts’ average estimate for a gain of 10.5 %.
  • Chipotle reported a 13.4 % same-restaurant sales rise for the first quarter.
  • Chipotle has more than 1,600 stores with 45,000 employees.

Netflix profit more than doubles

  • The company’s profit rose to $71 million for the second quarter from $29.5 million a year earlier.
  • Revenue rose 25 % to $1.34 billion from $1.07 billion.
  • Netflix added 570,000 new domestic streaming customers in the quarter and brought the U.S. total to 36.2 million.
  • International customers rose by 1.12 million to 13.8 million.
  • It now exceeds 50 million subscribers.
  • Viewers have reacted positively to shows like “House of Cards” and “Orange is the New Black”.
  • Last year, the company’s original programming was nominated for 14 Emmy TV awards, winning three, and this year its programming garnered a record 31 nominations.
  • Netflix has sought to upend the television industry by commissioning original content for its streaming-video platform and taking on established brands like HBO.
  • At the end of 2013, HBO and its sister channel Cinemax had about 127 million subscribers globally, including 43 million in the U.S. and 84 million overseas, parent Time Warner said in Feb. 26 regulatory filing.

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Apple asks suppliers to produce up to 80 million large-screen iPhones: WSJ

  • Apple has asked suppliers to manufacture between 70 million and 80 million of its two forthcoming large-screen iPhones by the end of the year.
  • Foxconn and Pegatron plan to start mass producing the 4.7-inch iPhone model next month, and Hon Hai Precision Industry, whose parent is Foxconn, will begin making the 5.5-inch version exclusively in September, the people said.

 

US ECONOMY & POLITICS

Consumer Prices in U.S. Climb on Jump in Gasoline Costs

  • The consumer price index (CPI) increased 0.3 %.
  • The core measure, which excludes volatile food and fuel costs, increased 0.1 %, less than projected.
  • Consumer prices rose 2.1 % in the 12 months ended June.
  • The core measure climbed 1.9 %.
  • Gasoline costs jumped 3.3 %, the biggest gain since June 2013, accounting for two-thirds of the increase in total prices, today’s report showed.
  • The average cost of regular gasoline has been falling, reaching $3.57 a gallon on July 20 after being as high as $3.68 on June 25.

Previously Owned U.S. Home Sales Rise to Eight-Month High

  • Sales increased 2.6 % to a 5.04 million annual rate last month.
  • The median forecast of 78 economists surveyed by Bloomberg projected sales would rise to a 4.99 million rate.
  • The median price of an existing home increased 4.3 % to $223,300 in June from $214,000 a year before.
  • The number of existing properties on the market rose 6.5 % to 2.3 million in June from a month earlier, the most since August 2012.
  • First-time buyers accounted for 28 % of all purchases in June, up from 27 % a month earlier.

 

EUROPE & WORLD

Saudi to Open $531 Billion Stock Market to Foreigners

  • The oil-producing kingdom whose stock market has been off-limits to outsiders will allow foreign investors to buy and sell shares next year as it seeks to lure capital to the $745 billion economy.
  • The government pursues a $130 billion spending plan to boost non-energy industries.
  • Saudi Arabia is the biggest stock market outside China, where domestic shares are excluded from MSCI’s global gauges because of limits on foreign investors.

 

TODAY in HISTORY

  • Cleveland, Ohio, was founded by Gen. Moses Cleaveland (1796)
  • Wiley Post became the first person to fly solo around the world (1933)
  • Prince George of Cambridge is born. He is the first child of Prince William, Duke of Cambridge, and Catherine, Duchess of Cambridge (2013)

This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S & P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg.

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