Business Highlights

AP News
Posted: Jul 19, 2011 6:01 PM
Business Highlights


Murdoch rejects blame for hacking scandal at hearing

LONDON (AP) _ Summoned by British lawmakers Tuesday to account for a phone hacking and bribery scandal, Rupert Murdoch said he was humbled and ashamed but accepted no personal responsibility. He insisted that he was at fault only for trusting the wrong people at a now-defunct tabloid that made up a tiny portion of his vast media empire.

The 80-year-old media tycoon endured a three-hour grilling from lawmakers and escaped attempts to tar him with individual blame for the scandal that has rocked his empire and embroiled Britain's top police, politicians and many journalists.

Murdoch appeared confused and flustered at the beginning of the parliamentary committee hearing, turning frequently to his son James for answers. But he regained his trademark cool and confidently told the committee that he wasn't responsible for eavesdropping or bribing police. He also said he had no plans to resign.

He stayed seated when a prankster tried to throw a foam pie, splattering his suit jacket before Murdoch's 42-year-old wife sprang to his aid, slapping the man, who was quickly arrested.


Murdoch says he's staying, and investors like it

LOS ANGELES (AP) _ Rupert Murdoch said he was the best person to clean up News Corp. Investors agreed.

The company's stock had its best day since the phone-hacking scandal broke, rising more than 5 percent Tuesday while Murdoch and his son and deputy, James, testified before a committee of the British Parliament in London.

The gains restored about $2.2 billion of the $8.3 billion in market value the company lost after the scandal broke.

Murdoch, 80, said he was ashamed at revelations that the News of the World, a News Corp. tabloid, had broken into the voicemail of a murdered schoolgirl, potentially interfering with investigators and giving false hope to her family that she was alive.

Murdoch declined to take personal blame in a crisis that has extended to the top levels of the British police and to the prime minister. Asked whether he was considering resigning as head of News Corp., he said: "No."


Lawmakers call for hearings on robo-signing

NEW YORK (AP) _ Lawmakers and enforcement agencies called for hearings and further investigation Tuesday after learning that the illegal practice known as robo-signing has continued in the mortgage industry.

The Associated Press reported on Monday that county officials in at least three states _ Massachusetts, North Carolina and Michigan _ say they have received thousands of mortgage documents with questionable signatures since last fall. That's when forged signatures and false affidavits _ called robo-signing _ led to a temporary halt in foreclosures. Banks and mortgage processers promised to stop the practice. The findings of the county officials indicate that robo-signing is still a widespread problem.

Sen. Sherrod Brown, D-Ohio., chair of the Financial Institutions and Consumer Protection Subcommittee, said the subcommittee will hold a hearing on the robo-signing issue.


Home building jumps in June after dismal spring

WASHINGTON (AP) _ Builders broke ground on more single-family homes and apartments in June, pointing to signs of life in the battered construction industry after a dismal spring.

The Commerce Department said Tuesday that builders began work on a seasonally adjusted 629,000 homes last month, a 14.6 percent increase from May.

That's roughly half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market. Much of the increase in June came from a surge in apartment construction, a volatile part of the industry. That sector jumped more than 30 percent last month.


Apple results strong; record iPhone, iPad sales

NEW YORK (AP) _ Apple Inc.'s results trumped expectations for yet another quarter, with iPhone and iPad sales setting new records.

Its stock surged $20.30, or 5.4 percent, to $397.15 in extended trading when results came out after Tuesday's market close.

Net income in the fiscal third quarter, which ended in June, was $7.31 billion, or $7.79 per share. That's more than double the $3.25 billion, or $3.51 per share, a year ago.

Analysts polled by FactSet expected earnings of $5.82 per share.

Revenue was $28.6 billion, up 82 percent from $15.7 billion a year ago. Analysts forecast $24.8 billion.

The results were lifted by the sale of 20.3 million iPhones, millions more than analysts expected.

IPad sales came in at 9.25 million units, also above analysts' estimates. Last quarter the company was struggling to make enough of the new iPad 2.


BofA reports $9.1 bln 2Q loss; investors worried

NEW YORK (AP) _ Things keep getting worse for Bank of America.

On Tuesday, the nation's largest bank reported a loss of $9.1billion during the second quarter, partly due to an $8.5 billion settlement with investors. That agreement, reached in June, settled claims that the bank had sold the investors poor-quality mortgage bonds. The bank had already announced several other settlements this year. The total so far to settle investor claims: $12.7 billion.

The large settlements and protracted losses related to mortgage loans are causing investors to worry about something bigger: Bank of America's overall financial strength. In a conference call to discuss the earnings report, analysts grilled the bank's executives.

At the top of their list of concerns was whether the bank will need to raise more money to comply with new international requirements that large banks hold more capital. If Bank of America needed to boost its capital reserves, it might look to raise more money by issuing more shares of its stock. That would dilute the value of stock owned by current shareholders.

The stock is already down more than 35 percent for the year, and it is the only large bank whose shares trade below $10 per share.


J&J 2Q profit drops 20 percent, still beats analysts' estimates

Product recalls, flat U.S. sales and litigation and restructuring costs slashed Johnson & Johnson's second-quarter profit by 20 percent, and that's after a big currency exchange benefit buoyed results.

J&J executives said Tuesday that they're making progress on their manufacturing problems and have numerous new drugs, medical devices and toiletries hitting the market or coming soon. But J&J shares fell by 1.4 percent before recovering somewhat, a big drop for the health care giant, which makes everything from Band-Aids and Listerine to biologic medicines and surgical devices.

J&J said its second-quarter profit fell nearly 20 percent due to the one-time costs and higher spending on product launches, manufacturing improvements and research.

While the results topped Wall Street expectations, total U.S. revenue was flat, as consumer health product sales were down 8.5 percent with recalled products remaining off store shelves. Foreign sales were up 16 percent, mostly due to favorable exchange rates.


Yahoo 2Q earnings rise, net revenue sinks 5 pct

SAN FRANCISCO (AP) _ Yahoo Inc. had another sluggish performance in the second quarter.

The disappointing results, released Tuesday, may intensify pressure on Yahoo CEO Carol Bartz, who has spent the past two and a half years trying to turn around the Internet company.

Yahoo earned $237 million, or 18 cents per share, during the three months ending in June. That's an 11 percent increase from $213 million, or 15 cents per share, at the same time last year.

The earnings, bolstered by cost cutting undertaken since Bartz's January 2009 hiring, matched the projections of analysts surveyed by FactSet.

Yahoo's revenue sank at a time when advertisers are pouring more money into the Internet.


By The Associated Press(equals)

The Dow Jones industrial average gained 202.26 points, or 1.6 percent, to close at 12,587.42. That's the Dow's largest one-day jump this year.

The S&P 500 index rose 21.29 points, or 1.6 percent, to 1,326.73. That's the broader index's best day since March 3. The Nasdaq gained 61.41 points, or 2.2 percent, to 2,826.52.

Benchmark West Texas Intermediate crude for August delivery rose $1.57 to settle at $97.50 per barrel on the New York Mercantile Exchange. Brent crude, which is used to price many international oil varieties, gained $1.01 to settle at $117.06 per barrel on the ICE Futures exchange.