US home construction in slow but steady comeback
WASHINGTON (AP) — Home construction is making a long-awaited recovery that could help energize the U.S. economy.
From areas like Phoenix that are finally arising from the housing bust to cities like Chicago and Minneapolis where strong economies have lifted demand, residential construction is healthier than at any time since sales and prices collapsed five years ago.
The improvement has been gradual. But builders are responding to interest from buyers drawn by reduced prices, record-low mortgage rates and rising rents, which have made home purchases comparatively appealing. And the supply of new homes has shrunk to near record lows. That's pushing developers to build more.
Capital One to pay $210 million over marketing tactics
WASHINGTON (AP) — The Obama administration's consumer watchdog agency flexed its enforcement muscles for the first time Wednesday and ordered Capital One Bank to repay millions of credit card customers allegedly tricked into buying costly add-on services.
Capital One will pay $210 million in refunds and regulatory fines. Most of the money will go directly to customers.
The bank's phone-sales operators told customers that services like payment protection and credit monitoring were free or mandatory or offered more benefits than they did, federal officials said. The hard selling targeted people with poor credit, they said.
Chinese companies see profits plunge amid slowdown
BEIJING (AP) — Some of China's biggest companies, from tech giants to airlines and retailers, are warning of unexpectedly sharp drops in profit of up to 80 percent, adding to pressure on Beijing to reverse a painful economic slump.
On Wednesday, Air China Ltd., one of three main government-owned airlines, warned first-half profit will fall by at least half from a year earlier. State-owned ZTE Corp., one of the world's biggest producers of telecommunications equipment, is projecting a decline of up to 80 percent.
The woes facing even politically favored companies that benefit from monopolies, low-cost bank loans and other government aid highlight the challenges for the authoritarian country's leaders who are trying to pull China out of its deepest slowdown since the 2008 crisis.
Fed survey: Growth, hiring slowed in parts of US
WASHINGTON (AP) — The U.S. economy expanded modestly in June and early July, but growth and hiring slowed in several parts of the country. The key findings of the Federal Reserve survey echoed the gloomier outlook that Chairman Ben Bernanke offered to Congress this week.
Three of the Fed's 12 banking districts — New York, Philadelphia and Cleveland — reported weaker growth, according to the Beige Book survey released Wednesday. A fourth, Richmond, said economic activity was mixed.
The report was a shift from the Fed's previous survey, which noted that growth had picked up or held steady in 11 districts from mid-April through May.
Bernanke: Fed's efforts have helped the economy
WASHINGTON (AP) — Chairman Ben Bernanke told lawmakers Wednesday that the Federal Reserve's efforts to bolster growth have helped lift the U.S. economy out of the Great Recession. But he acknowledged that growth remains weak and the Fed can only do so much.
Bernanke was on the Hill to deliver his twice-a-year report to Congress on the state of the economy. But he spent part of the hearing defending the Fed's previous two rounds of large-scale bond purchases against Republican criticism.
The economy has weakened since the start of the year, and Bernanke said the Fed is prepared to take further action if unemployment stays high. He didn't specify what steps the Fed might take or whether any action was imminent.
BofA swings to profit; mortgages cast long shadow
Bank of America can't shake its mortgage headache.
In a reminder that the consequences from the financial crisis are far from over, the bank said Wednesday that investor disputes over bad mortgages and mortgage-backed bonds have more than doubled from a year ago.
The bank beat Wall Street's profit expectations for April through June, and executives emphasized that the bank is setting aside less money for bad loans overall, a sign that more customers are paying back loans on time.
But the growing investor claims suggest the mortgage problem, which has already cost the bank more than $13 billion, is growing.
Yum posts rare profit decline in China
LOUISVILLE, Ky. (AP) — The owner of the Taco Bell, Pizza Hut and KFC chains says its second-quarter net income rose 5 percent on strong sales in its U.S. business. But the restaurant company reported a rare profit decline in its key China market.
Yum Brands Inc. said Wednesday that high inflation caused a 4 percent profit decline in China, adjusted for currency fluctuations.
U.S. operating profit was up 26 percent amid strong sales at Taco Bell.
IBM's 2Q earnings rise despite revenue decline
ARMONK, N.Y. (AP) — IBM's second-quarter earnings rose 6 percent despite a downturn in revenue amid Europe's economic jitters.
Churning out higher earnings has become routine for IBM Corp., one of the technology industry's bellwethers. Wednesday's report marks the company's 38th consecutive quarter that its earnings have climbed from the previous year.
IBM has been able to boost its earnings even in periods when revenue has been falling by focusing more on sales of software and technology services, two businesses with higher profit margins than the computer equipment that had provided the company's financial backbone through most of its 101-year history.
EBay more than doubles 2Q earnings, revenue up
NEW YORK (AP) — EBay Inc. more than doubled its second-quarter net income thanks to higher revenue from its PayPal online payments business and its e-commerce websites. The results sent its stock up in after-hours trading.
EBay Inc. earned $692 million, or 53 cents per share, in the April-June period. That's up from $283 million, or 22 cents per share, in the same period a year earlier.
Adjusted earnings were $730 million, or 56 cents per share, in the latest quarter — a penny above analysts' expectations.
Amex earns grow 1 percent, beating Wall Street
NEW YORK (AP) — American Express says its second-quarter profit rose one percent, beating Wall Street's expectations, after its well-heeled customers slowed down their spending a little.
The credit card issuer earned $1.34 billion, or $1.15 per share, in the April-to-June period. Revenue jumped 5 percent to $8 billion.
Wall Street was expecting a profit of $1.10 per share and revenue of $8 billion.
By The Associated Press(equals)
The Dow Jones industrial average rose 103.16 points, or 0.8 percent, to 12,908.70. The Nasdaq composite climbed 32.56 points, or 1.1 percent, to 2,942.60. The Standard & Poor's 500 index rose 9.11 points, or 0.7 percent, to 1,372.78.
Benchmark U.S. crude rose by 65 cents to end the day at $89.87 per barrel in New York. Brent crude, which sets the price for oil imported into the U.S., rose by $1.16 to end at $105.16 per barrel in London.
In other futures trading, heating oil rose by 3.54 cents to end at $2.8776 per gallon, while wholesale gasoline increased by 3.84 cents to finish at $2.8834 per gallon. Natural gas rose by 17.7 cents to end at $2.9730 per 1,000 cubic feet.
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