BC-Business News Digest


Associated Press

Posted on July 25, 2013 at 8:30 PM

Business News at 5:45 p.m.

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NEW YORK — One of Wall Street's biggest and most successful hedge fund companies was a hotbed of insider trading and its embattled billionaire owner wanted to hear no evil, prosecutors said in an indictment unsealed Thursday that claimed the firm earned hundreds of millions of dollars illegally. The criminal indictment and civil lawsuits brought against SAC Capital Advisors and related companies did not name billionaire Steven A. Cohen as a defendant, referencing him only as the "SAC owner" who "enabled and promoted" insider trading practices. Cohen last week was accused of wrongdoing in a civil case brought by the SEC, which alleged he failed to stop insider trading at his firm. By Larry Neumeister and Tom Hays.

AP photos.



Even in the high-flying hedge fund world, where vast pools of capital dart in and out of markets with billions at stake, SAC Capital has stood out for its audacity, ambition and mammoth returns. And it's impossible to discuss SAC Capital without invoking Steven A. Cohen, the firm's founder and guiding hand. The firm, which was hit with criminal insider trading charges Thursday, bears his initials in its name and his imprint on its business. By Business Writer Marcy Gordon.

AP photos


DETROIT — The Chevrolet Impala, long the standard-bearer for mediocre cars from Detroit, has made an amazing turnaround. A completely reworked version of the full-size car has taken Consumer Reports magazine's top spot for all sedans, deposing German and Japanese cars for the first time in at least 20 years. By Auto Writer Tom Krisher.

AP photo.



DETROIT — Just as General Motors is getting a handle on its troubled European operations, it's facing a new challenge. The automaker says Japanese companies are using the weak yen to cut prices in Southeast Asia and Australia, hurting GM's profits there. That helped knock the company's earnings down 16 percent in the second quarter, offsetting improvements in Europe and a strong performance in North America. By Auto Writer Tom Krisher.

AP photos.


SAN FRANCISCO — Amazon.com is reporting a loss in the second quarter as higher revenue was not enough to make up for rising operating expenses. The world's largest online retailer has been spending heavily on order fulfillment and digital content rights, which continue to weigh on profit margins. By Technology Writer Barbara Ortutay.


LOS GATOS, Calif. — Netflix's Internet video subscription service works around the clock, but it's unusual for more than two dozen of the company's engineers and top managers to be huddled on a midsummer Wednesday evening. This is a special occasion. It's near the end of a grueling day that will culminate in the premiere of "Orange Is The New Black," the fourth exclusive Netflix series to be released in five months. Netflix Inc. invited The Associated Press for an unprecedented glimpse at the technical preparations that go into the release of its original programming. The shows have become the foundation of Netflix's push to build an Internet counterpart to HBO's premium cable channel. By Technology Writer Michael Liedtke.

AP photos.


WASHINGTON — Signing up for President Barack Obama's new health care coverage has been described as like using Travelocity or Amazon, but for some it'll be more mundane — like calling the help desk. Struggling against an Oct. 1 deadline, some states are delaying online tools that could make it easier for consumers to find the right plan. By Ricardo Alonso-Zaldivar.

AP photos.



WASHINGTON — The number of Americans applying for unemployment benefits rose by 7,000 last week to a seasonally adjusted 343,000. The increase follows a drop of 22,000 the previous week. But the broader trend is consistent with an improving job market. The Labor Department says the four-week average, which smooths out weekly fluctuations, fell 1,250 to 345,250. By Economics Writer Paul Wiseman.

AP photo.


WASHINGTON — Orders for long-lasting U.S. factory goods rose in June, bolstered by higher aircraft demand and more spending that signals businesses' growing confidence in the economy. The increase suggests manufacturing could help the economy in the second half of the year. The Commerce Department says orders for durable goods increased 4.2 percent last month. That followed a 5.2 percent gain in May. By Economics Writer Christopher S. Rugaber.

AP photo.

— MORTGAGE RATES — Average rates on U.S. fixed mortgages fall for the second straight week, a welcome sign for homebuyers hoping to lock in lower rates that had spiked earlier this month.


NEW YORK — Higher earnings from energy and chemical companies nudge the stock market up. The modest move extends a pattern seen this week: Even with plenty of earnings news from big companies, the broader market has shuffled between minor gains and minor losses. By Business Writer Matthew Craft.

AP photos.

— OIL PRICES — The price of oil rises slightly to $105.49 a barrel as optimism about the U.S. economy helped erase some early losses.



WASHINGTON — A new study says that reversing more than $100 billion in automatic spending cuts hitting the economy this year and next would boost the economy by 0.7 percent and increase employment by 900,000 jobs. By Andrew Taylor.


— OBAMA — President Barack Obama seeks to discredit House Republicans in upcoming fiscal fights by painting them as stubborn deadbeats and roadblocks to a thriving middle class.

— OBAMA-VIETNAM — President Barack Obama says he and Vietnamese President Truong Tan Sang are committed to completing a regional trade pact before the end of the year.

—COAL ASH — The House votes to give states more power to regulate coal ash from power plants after a 2008 spill in Tennessee contaminated nearby waterways, requiring a massive cleanup.



The parent of United Airlines says its profit rose 38 percent even though it flew less in the second quarter, as passengers paid more to fly. The airline's fuel bill also dropped 10 percent. By Airlines Writer Joshua Freed.

AP photo.


— EARNS-SOUTHWEST AIRLINES — Southwest Airlines is getting a small break at the fuel pump, and that's helping it beat Wall Street expectations for profit. Earnings drop 2 percent to $224 million. Travel demand is suffering from the effect of automatic government spending cuts and higher taxes, but the CEO says third-quarter trends are "encouraging." AP photos.


NEW YORK — Starbucks says its profit climbed 25 percent in the latest quarter as caffeine-addicted customers helped boost sales and its coffee costs eased. By Candice Choi.

AP photo.

— EARNS-3M — 3M, which makes Scotch tape, coatings for signs, and roofing shingles, says its net income rose 3 percent as revenue grew across most of its businesses.

— NETHERLANDS-EARNS-UNILEVER — Unilever, the maker of products including Lipton tea, Ben & Jerry's ice cream, and Axe deodorants, says its first-half profit rose 13 percent to $3.58 billion, despite tough market conditions.

— SWITZERLAND-EARNS-ROCHE — Swiss drugmaker Roche's first-half profit rises 11 on strong sales of its blockbuster cancer drugs. AP photo.

— SWITZERLAND-EARNS-CREDIT-SUISSE — Credit Suisse's second-quarter profit rises 33 percent, driven by solid returns from its investment banking division as well as cost-cutting. AP photo.

— GERMANY-EARNS-BASF — Chemicals and oil company BASF warns that it will find it more difficult to achieve its profit target this year as second-quarter earnings drop 4 percent.



NEW ORLEANS — A drilling rig that caught fire after a natural gas blowout in the Gulf of Mexico appears stable now that the fire is out, and there was no sign of any oil sheen on a fly-over Thursday morning, a rig company executive says. By Kevin McGill and Janet McConnaughey.

AP photos, video.

— SPIRIT AEROSYSTEMS-LAYOFFS — Spirit AeroSystems says it is laying off about 360 employees at its Kansas and Oklahoma facilities.

— HALLIBURTON-BAKER HUGHES-DOJ — Halliburton, Baker Hughes receive antitrust inquiries from DOJ about fracking business.



SEOUL, South Korea — The tight grip of Hyundai over the South Korean auto market is being loosened by a rise in foreign competition and labor strife that dented car production. Hyundai's April-June profit fell 1 percent to $2.2 billion even as sales rose 6 percent to $20.8 billion. By Business Writer Youkyung Lee.

AP photos.

— EARNS-MICHELIN — Tire maker Michelin says its first-half profit slumped 45 percent as restructuring costs weighed on earnings amid flat demand in key markets.

— JAPAN-EARNS-NISSAN — Nissan's April-June profit jumps 14 percent to $820 million as a weaker yen gives a big boost. AP photos.



NEWARK, N.J. — In what authorities are calling the largest hacking and data breach scheme ever prosecuted in the U.S., five people have been charged with running a sophisticated organization that penetrated computer networks of more than a dozen major American and international corporations over seven years, stealing and selling at least 160 million credit and debit card numbers, resulting in losses of hundreds of millions of dollars. By Samantha Henry.

AP photo


— CORPORATIONS HACKED-ARRESTS-GLANCE — List of businesses targeted from 2005 to 2012.


NEW YORK — When it comes to technology, we've been trained to expect more for less. Devices get more powerful each year, as prices stay the same or drop. With the new Nexus 7 tablet, Google is counting on people willing to pay more for more. The new tablet comes with a $30 price increase over last year's model, but it's still a bargain. The display is sharper and the sound is richer than the old model. There's now a rear camera for taking snapshots. It's a fine complement to your smartphone if it's running Google's Android operating system. By Technology Writer Anick Jesdanun.

— EARNS-ZYNGA — Zynga relied on mass layoffs and other cost-cutting to trim its second-quarter losses as the troubled company struggled to come up with compelling games to play on smartphones and tablet computers.


NEW YORK — Maps are where it's at. Just ask Google, which bought maps app Waze for more than $1 billion, or Apple, which snapped up two small mapping startups earlier this month. Enter Citymaps, which bills itself as a social map that helps people discover new places rather than simply get directions to a destination. By Technology Writer Barbara Ortutay.

— FACEBOOK-STOCK — Facebook shares soar after the social media giant pushed aggressively into mobile advertising and reported much-improved second-quarter revenue and profit. The stock trades at levels not seen since shortly after its IPO last year.

— MOBILE APPS-PRIVACY — Industry groups and privacy advocates are nearing an agreement on new guidelines for mobile apps. The voluntary standard should make it easier for consumers to know what personal information is getting sucked from their smartphone or tablet and passed along to marketers.

— TIME WARNER CABLE-CEO — Time Warner Cable CEO Britt will retire at the end of 2013; gets $4B share buyback authority.

— EARNS-MCCLATCHY — McClatchy says its second-quarter net income tumbled from the year-ago quarter when the results were boosted by a large tax gain.

— RUSSIA-SEARCH ENGINE FOUNDER — Russia's largest search engine, Yandex, says its co-founder Ilya Segalovich is on life support in a coma, after initially reporting he had died.

— GERMANY-NEWSPAPER SALE — Axel Springer, one of Germany's most prominent publishers, is selling two regional newspapers as well as its television and women's magazines in a $1.2 billion deal.

— CHINA-EARNS-BAIDU — China's biggest search engine operator reports a rare drop in profit on higher costs as it expands into mobile services. AP photo.

— CHINA-IMAX — Imax and a Chinese partner plan to open up to 120 giant-screen cinemas in China's fast-growing film market.

— NETHERLANDS-EARNS-TOMTOM — TomTom, Europe's largest maker of navigation devices, says its second-quarter profit fell 14 percent to $10.6 million on weaker sales to car makers.



LONDON — The British economy grew by 0.6 percent in the second quarter compared with the previous three month period, official figures show in the latest sign that Europe's third largest economy is on a firmer footing. By Danica Kirka.

AP photos.


— IMF-EUROPE — The International Monetary Fund is warning the 17 eurozone countries that their economies face a possible severe downturn unless more is done to improve growth and ease political tensions.

— GERMANY-ECONOMY — German business optimism rises slightly more than expected in July, the latest in a series of signals indicating moderate growth ahead for Europe's biggest economy.

— SPAIN-FINANCIAL CRISIS — Spain's jobless rate drops by 0.9 percentage point to 26.26 percent in the second quarter, sorely needed good news for an economy mired in recession for most of the past four years.

— CHINA-POLLUTION — China will spend $275 billion to tackle air pollution over the next five years, a state newspaper reported, highlighting how the issue has become a priority for the leadership.

— IMF-CHINA — The International Monetary fund welcomes China's deregulation of interest rates and other changes to improve the business climate and encourage small enterprises.

— SKOREA-ECONOMY — South Korea's economy expands at the fastest pace in a year in the second quarter as government stimulus helps offset cash hoarding by companies. AP photos.



Not all emerging-market stocks are the same. A wide menu is available, from copper miners in Latin America to natural-gas giants in Russia to casinos in Cambodia. Unfortunately for investors in emerging-market index mutual funds and exchange-traded funds, some managers say the menu is tilted toward the stocks that are less desirable. That's one reason investors have been turning to actively managed mutual funds this summer. By Stan Choe.


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All-time anxiety

If it feels like the stock market has been setting a record high every few days recently, that's because it has. The Standard & Poor's 500 index has closed at a new all-time high more than 20 times since March 28. That's when the index closed for the first time above its prior record set on Oct. 9, 2007, before the Great Recession. Such record-breaking performance can trigger a fear of heights for investors: Is it a sign that stocks have become too hot and are destined for a downturn? History says the market can keep going, says Sam Stovall, chief equity strategist at S&P Capital IQ.


Hershey lifts outlook

The maker of Kit Kats, Twizzlers and Hershey's Kisses raised its outlook for the year and increased its dividend Thursday.