US FINANCIAL MARKET
U.S. Stocks Fluctuate on Earnings amid Portugal Bailout
- U.S. stocks fluctuated, after the biggest weekly loss in two years for the Standard & Poor’s 500 Index, as investors weighed earnings.
- Warren Buffett’s Berkshire Hathaway rose 1.5 percent as results improved at operating businesses including auto insurer Geico, railroad BNSF and the energy unit.
- Michael Kors fell 7 percent after the company said profitability will decline this year.
- The S&P 500 tumbled 2.7 percent last week, the most since June 2012, as companies around the globe including Exxon posted disappointing results, Argentina defaulted and Banco Espirito Santo was ordered to raise capital.
- About $1.2 trillion was wiped from the value of global equities last week amid concern that the crisis at Espirito Santo and the default by Argentina would constrict credit markets as the Federal Reserve debates the timeline for interest-rate increases.
Buffett Waits on Fat Pitch as Cash Hoard Tops $50 Billion
- Cash at Berkshire rose past $50 billion, the first time it finished a quarter above that level since he became chairman and CEO more than four decades ago.
- Berkshire’s cash stake surged to $55.46 billion from $48.95 billion at the end of March.
- Second-quarter net income rose 41 percent to a record $6.4 billion.
GE to invest $2 billion to boost African energy, infrastructure
- GE pledged to invest $2 billion in Africa by 2018 to boost infrastructure.
- CEO Immelt said Africa’s rich natural resources and potential swell in local demand for electricity primed the region for investment.
Amgen blood cancer drug succeeds in late-stage study
- Amgen said a late-stage study found that its blood cancer drug helped patients live significantly longer without the disease worsening.
- The world’s largest biotechnology company’s shares rose after it released interim data for its injectable drug, Kyprolis.
- Kyprolis is the centerpiece of Amgen’s nearly $10 billion acquisition of Onyx Pharmaceuticals last year.
- Patients treated with Kyprolis lived for a median of 26.3 months without disease progression, compared with 17.6 months for those not given the drug, Amgen said.
Loews profit halves hurt by lower Diamond Offshore earnings
- Hotel, energy and financial services conglomerate Loews reported a 57 percent drop in quarterly profit due to lower earnings from Diamond Offshore Drilling, one of the world’s top five offshore rig contractors.
- Net income fell to $116 million from $269 million a year earlier.
- Revenue fell to $3.59 billion from $3.62 billion.
Allergan sues Valeant, Ackman for alleged insider trading
- Allergan on Friday accused rival Valeant and billionaire investor William Ackman of violating securities laws by using insider information as they prepared a takeover bid for the drug company.
- In a civil lawsuit filed in federal court in California, Allergan said Ackman’s Pershing Square Capital Management and Valeant “hatched” an “improper and illicit insider-trading scheme” that allowed the hedge fund to buy Allergan shares, knowing about Valeant’s planned $51 billion takeover bid.
Apple $450 million e-book settlement wins court approval
- Apple on Friday won preliminary court approval for its $450 million settlement of claims it harmed consumers by conspiring with five publishers to raise e-book prices.
- In June, Apple agreed to settle related class-action litigation brought on behalf of consumers and 33 U.S. states.
US ECONOMY & POLITICS
Obama says CEOs should quit complaining: Economist
- President Barack Obama said corporate America has done well under his economic policies, telling the Economist magazine that chief executive officers should stop complaining about regulations and show greater social responsibility.
- Obama had a frosty relationship with business in his first term, famously telling an interviewer: “I did not run for office to be helping out a bunch of fat cat bankers on Wall Street.”
EUROPE & WORLD
Euro near Eight-Month Low as Short Bets Surge before ECB
- The euro traded at almost its lowest level versus the dollar since November.
- Investors held the largest position in two years betting on a drop in the currency before the region’s central bank meets this week.
- The euro was at $1.3421 as of 10:05 a.m. New York time.
- The ECB will probably keep policy unchanged when it meets Aug. 7.
Portugal Rescue Avoids Cyprus-Style Pain in Test of Bank Rules
- The Bank of Portugal yesterday unveiled a 4.9 billion-euro ($6.6 billion) bailout that will leave shareholders and junior bondholders with losses, while sparing senior creditors and unsecured depositors.
- Banco Espirito Santo, once the country’s largest lender by market value, will be split in two.
- Portugal’s public debt ratio won’t be affected by the rescue because it already includes the funds used, which were part of its 2011 bailout package.
China July official services PMI dips to six-month low
- The official Purchasing Managers’ Index (PMI) for the non-manufacturing sector slowed to 54.2 in July from June’s 55.
TODAY in HISTORY
- Thomas Stevens became the first person to bicycle across the United States. He later bicycled around the world (1884)
- Germany invaded Belgium and, in response, Britain declared war on Germany (1914)
- Denmark ceded the Danish West Indies, including the Danish Virgin Islands, to the United States for 25 million (1916)
- President Carter signed a congressional act that established the Department of Energy (1977)
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