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)
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