Wal-Mart 2Q profit rises 5.7 percent raises outlook
NEW YORK (AP) — Wal-Mart Stores Inc. reported a 5.7 percent increase in second-quarter net income and raised its outlook for the full year as the world's largest retailer continues to woo back frugal shoppers by trumpeting the lowest prices on everything from clothes to electronics.
But Wal-Mart is seeing its momentum slow down amid a tough economic climate in the U.S. and abroad. Its total revenue came in short of Wall Street estimates, and the discounter is delaying store expansion plans in Mexico, its largest international division, as it deals with bribery charges there. It's also scaling back store growth plans in China and Brazil to boost profitability in those operations.
Investors, who had sent the stock up 25 percent since mid-May, pushed shares down more than 3 percent on Thursday.
Facebook hits new low as IPO lock-up ends
SAN FRANCISCO (AP) — Facebook's stock plunged to a new low Thursday as some of the social networking leader's early backers got their first chance to sell their shares since the company's initial public offering went awry.
Analysts interpreted the unusually high trading volume as a clear sign that at least a few of the insiders were seizing on a fresh selling opportunity. That is stirring a debate over whether they're simply locking in long-awaited gains on investments made many years ago or bailing out of a company that has lost its luster.
A breakdown of just how many major Facebook Inc. shareholders sold their stock probably won't be available until next week at the earliest. Securities regulations give them at least three days before they have to disclose such transactions.
Justice Dept. approves Verizon cable deals
WASHINGTON (AP) — The Justice Department on Thursday approved Verizon Wireless' $3.9 billion purchase of wireless spectrum from four of the nation's largest cable companies but applied conditions to the deal to protect consumers from reduced competition and higher prices.
Most significantly the agency said it will not allow Verizon Wireless stores to sell TV and broadband services from the cable companies — Comcast, Time Warner Cable, Bright House Networks and Cox — in areas where Verizon sells its own TV and broadband service.
When it comes to home broadband, Verizon Communication Inc.'s FiOS provides the only significant competition to cable in many areas. Yet FiOS is costly to build out, and Verizon's commitment to the technology has faltered. Consumer groups who opposed the deal between the cable companies and Verizon said it showed that Verizon was further giving up on FiOS and yielding the home broadband market to cable.
US unemployment aid applications up by only 2,000
WASHINGTON (AP) — The number of Americans applying for unemployment benefits edged up slightly last week but remained at a level consistent with modest gains in hiring.
Unemployment benefit applications rose by 2,000 to a seasonally adjusted 366,000, the Labor Department said. The less volatile four-week average fell by 5,500 to 363,750. That was the lowest level since late March.
Applications have trended lower in the past two months, indicating companies are laying off fewer workers and hiring is picking up. When applications fall consistently below 375,000, it generally suggests hiring is strong enough to lower the unemployment rate.
US home construction dips, but signs point up
WASHINGTON (AP) — U.S. builders broke ground on slightly fewer homes in July than June. But in a hopeful sign for future construction, applications for building permits rose to their highest level since August 2008.
The Commerce Department said Thursday that single-family homes and apartments started in July dipped 1.1 percent to a seasonally adjusted annual rate of 746,000. That's down from June's rate of 754,000, the fastest since October 2008.
The weakness in July came from a 6.5 percent drop in the building of single-family homes, which represent about 70 percent of the market. They fell to an annual rate of 502,000, down from a two-year high reached in June. By contrast, construction of apartments rose 12.4 percent to an annual rate of 244,000 units.
Ford Europe sales fall as economy struggles
DETROIT (AP) — Ford Motor Co.'s problems in Europe are worsening thanks to the region's faltering economy.
The Dearborn, Mich., company said Thursday that auto industry sales in the region through July were the lowest in 17 years as automakers battled for sales in a declining market.
Ford sold 83,100 vehicles last month in 19 European countries, down 12.3 percent from a year earlier. For the first seven months of the year, sales were down 10.6 percent. Total industry sales fell 7.1 percent through July, the lowest level since 1995, Ford said in a statement.
Gap's 2Q profit up 29 percent
NEW YORK (AP) — Gap Inc. reported a 29 percent increase in second-quarter net income as the fashion retailer's moves to liven up its clothing attracted shoppers back to its stores.
Gap, which operates stores under its namesake, Old Navy, Banana Republic and Athleta, also raised its full-year profit guidance on Thursday, though it was below what analysts had expected.
The company, based in San Francisco, has struggled for years to reclaim its fashion status. But the latest results offer more confidence that a comeback, started in the first quarter, is taking hold. The company has stepped up its marketing and this spring and summer pushed trendy clothing like brightly colored jeans.
Sears narrows loss on cost cuts; sales decline
Sears Holding Corp.'s push to turn around its ailing business is showing early signs of paying off, even as the retailer failed to stem declining sales.
The Hoffman Estates, Ill.-based company said Thursday that aggressive cost-cutting and reduced inventory levels helped narrow its loss in the second quarter from a year ago, with results in line with Wall Street expectations.
Schulze presses Best Buy in quest for takeover
NEW YORK (AP) — Best Buy Co. co-founder Richard Schulze said Thursday that he is committed to his offer for the electronics retailer and has heard from a number of private equity firms prepared to make "significant commitments."
Ten days after he made a public bid to take the business private, Schulze told Best Buy's board in a letter that he'd like to put forth a fully financed plan.
Schulze made an offer of $24 to $26 per share for Best Buy Co., which the Minneapolis company called "highly conditional." The offer values the company at as much as $8.84 billion. Schulze already owns 20.1 percent of the company's stock, so buying the rest of shares would mean coming up with about $6.9 billion.
Groupon stock hits another low after 2Q results
SAN FRANCISCO (AP) — Groupon's stock hit another low, days after the online deals company issued a lackluster quarterly report.
Groupon Inc. fell 32 cents, or 6 percent, to close Thursday at $5. Earlier it hit $4.97, its lowest level since its initial public offering in November. The stock's IPO price was $20, so it has lost 75 percent of its value.
On Monday, Groupon reported its first-ever quarter-to-quarter decline in gross billings. That's a closely watched number because it measures how much money is collected from merchants.
By The Associated Press(equals)
The Dow Jones industrial average rose 85.33 points to 13,250.11, up 0.6 percent. The Standard & Poor's 500 index gained 9.98 points to close at 1,415.51, up 0.7 percent. The Nasdaq composite index rose 31.46 points, or 1.04 percent, to 3,062.39.
Benchmark oil for September delivery rose $1.27 to finish at $95.60 per barrel in New York. Brent crude rose 96 cents to end at $115.27 on the ICE Futures exchange in London.
Natural gas lost 2.4 cents to finish at $2.72 per 1,000 cubic feet. Heating oil rose 4 cents to end at $3.12 a gallon and wholesale gasoline fell less than a cent to finish at $3.08 a gallon.