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US FINANCIAL MARKET

U.S. Stocks Gain at the Open on Higher Earnings; Phone Shares Soar

  • U.S. stocks rose for the fifth time in six days as corporate profits beat estimates.
  • Windstream surged 21 % after announcing plans to spin off certain assets into a publicly traded real estate investment trust.
  • United Parcel Service slipped 3.1 % after cutting its full-year forecast.
  • About 78 % of those that have posted results this season have beaten analysts’ estimates for profit, while 65 % exceeded sales projections.
  • Profits probably rose 8.2 % in the second quarter, while sales gained 3.5 %.
  • The Fed will reduce its monthly purchases for the sixth time to $25 billion from $35 billion after a two-day policy meeting starting today.
  • Consumer confidence index rose to 90.9 the highest since October 2007.
  • Residential real-estate prices rose in the 12 months ended May at the slowest pace in more than a year as a lull in the U.S. housing market limits appreciation.
  • The U.S. and the European Union may move as soon as today to impose tougher sanctions on Russia.
  • Phone companies in the S&P 500 jumped 4.2 % as a group.

Corning Misses Profit Estimates on Low Prices for LCD Screens

  • Core net sales rose 28 % to $2.58 billion. Analysts had estimated $2.53 billion.
  • Corning said the LCD glass price declines are moderating in the third quarter and expected to return to 2013 levels.
  • The volume of glass sold rose more than the company anticipated because of retail TV sales in Europe and South America.

UPS Cuts Profit Outlook on Costs for Holiday Shipments

  • The company now forecasts earnings per share to be $4.90 to $5. That’s lower than the outlook it gave in April of $5.05 to $5.30 a share.
  • UPS has also been battling a shift to cheaper two-day and deferred shipping for more than a year. Executives today said the movement is hurting profit margins.
  • In the second quarter, domestic daily package volume rose 7.4 %, led by gains in ground and deferred shipments.
  • Revenue per package declined, as customers increasingly sent items via its more economical SurePost service which relies on the post office for the last mile of delivery.
  • UPS cited growth in U.S. e-commerce shipments and international export business for helping to boost global package shipments by 7.2 %.
  • Revenue across all of its business segments rose 5.6 % to $14.3 billion from $13.5 billion a year earlier.
  • Total operating expenses rose 15 % to $13.5 billion as the company bought additional capacity at a premium from local service partners in Europe to address growth in shipments.

Pfizer Beats Estimates on Income as Drug Sales Decline

  • Revenue declined 2 % to $12.8 billion, with the erectile dysfunction pill Viagra recording a 28 % drop outside the U.S.
  • Revenue for the quarter also beat analyst estimates of $12.5 billion as for the company’s biggest products grew, partially offsetting its other losses.
  • The pain pill Lyrica, Pfizer’s top seller last year, had revenue of $1.32 billion, up 16 % from a year earlier.
  • Prevnar, a vaccine for pneumococcal diseases, grew 13 % to $969 million.
  • Pfizer now projects full-year sales of $48.7 billion to $50.7 billion, a $500 million decrease.

Bristol-Myers Tops Earnings Estimates on Drug Sales

  • Net income for the quarter fell 37 % to $333 million from $536 million a year earlier.
  • Company revenue slipped 4 % to $3.90 billion, but topped Wall Street expectations of $3.85 billion.
  • Bristol-Myers also stuck to its prior full-year earnings view of $1.70 to $1.80 per share.

Merck’s Second-Quarter Profit Beats Estimates on Cost Cuts

  • Net income more than doubled to $2 billion from $906 million a year earlier.
  • The drugmaker cut research and development costs by 21 % to $1.7 billion, and reduced marketing and administrative expenses by 5 % to $3 billion.
  • Merck also raised the bottom end of its 2014 adjusted earnings forecast.
  • Global revenue slipped 1 % to $10.93 billion, but exceeded expectations of $10.6 billion.

Reynolds American profit rises 6.7% on higher pricing

  • Net income rose to $492 million from $461 million a year earlier.
  • Net sales fell 0.7 % to $2.16 billion.

Apple updates MacBook Pro laptops, cuts price of older model

  • Apple said it updated its MacBook Pro line of laptops with a high-resolution Retina display, faster processors and higher memory for a starting price of $1,299.
  • The world’s largest technology company also lowered the price of its older 13-inch MacBook Pro by $100 to $1,099.

Panasonic to initially invest $200-300 million in Tesla battery plant

  • The Japanese company, which already supplies batteries for the electric vehicle maker, will ultimately invest about $1 billion in the planned $5 billion battery “Gigafactory“, the person said.
  • Tesla is looking at three sites in the United States to build the Gigafactory plants which by 2020 would be able to make more lithium-ion batteries in a year than were produced worldwide in 2013.

 

US ECONOMY & POLITICS

U.S. seasonally adjusted home prices fall in May: S&P/Case-Shiller

  • The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.3 % in May on a seasonally adjusted basis.
  • Economists forecast a gain of 0.2 %.
  • Non-seasonally adjusted prices rose 1.1 % in the 20 cities.
  • Prices in the 20 cities rose 9.3 % year over year, the slowest year-over-year gain since February 2013 and shy of expectations for a 10 % climb.

Consumer Confidence in U.S. Jumps to Highest Since 2007

  • The Conference Board’s consumer confidence index rose to 90.9, the highest since October 2007, from a revised 86.4 in June.
  • Estimates of the 75 economists in the Bloomberg survey ranged from 82.8 to 88.5 after a previously reported 85.2 reading in June.
  • The Conference Board’s gauge of present conditions rose to 88.3, the strongest reading since March 2008, from 86.3 in June.
  • The barometer of consumer expectations for the next six months increased to 92.7, the highest since February 2011, from 86.4 a month earlier.
  • The share of Americans who said jobs were currently plentiful advanced to 15.9 % in July, the highest since May 2008, from 14.6 %.
  • More consumers than a month earlier said they expected greater employment opportunities and better business conditions in the six months ahead.
  • A gallon of unleaded gasoline at the pump fell to $3.52 yesterday, the lowest since mid-March, after a high in April of $3.70.
  • Food costs showed signs of stabilizing in June after surging in prior months as a drought in the West and a deadly hog virus pushed up prices for beef, pork and some vegetables and fruits.
  • Food prices rose 0.1 % in June after a 1.1 % surge a month earlier. They were up 2.4 % from June 2013.

 

EUROPE & WORLD

BP profit jumps but warns of Russia sanctions impact

  • BP, by far the largest foreign investor in Russia through its 19.75 % stake in Russian state oil company Rosneft, has repeatedly said it will stand by its investments in Russia.
  • Overall, second-quarter production fell 3 % to 3.1 million barrels of oil equivalent a day.

 

TODAY in HISTORY

  • President Eisenhower signed the congressional act that created the National Aeronautics and Space Administration (NASA) was authorized by Congress (1958)
  • Prince Charles, heir to the British throne, married Lady Diana Spencer (1981)

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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