Morgan Stanley closes a bleak bank earnings season
NEW YORK (AP) — It's tough being a big bank these days.
Morgan Stanley, the storied investment house, reported Thursday that its revenue was down sharply from April through June and its profit missed Wall Street expectations. Its stock was clobbered — closing down more than 5 percent.
The report capped a dismal season for the banking industry. This spring was marked by choppy financial markets, concern about the world economy, awkward adjustments to new regulations and one scandal after another.
Of the country's six megabanks only Wells Fargo, which brags about relying on plain-vanilla ways of making money, like taking deposits and making loans, was able to pull in more revenue than it did a year ago.
Middle East turmoil pushing oil price higher again
NEW YORK (AP) — Rising tensions in the Middle East have pushed oil prices up 19 percent over the past three weeks and are resulting in a rise in gasoline pump prices.
Since the start of July, average gasoline prices in the U.S. have climbed 11 cents to $3.44 per gallon. Pump prices are expected to creep higher in the coming weeks, and they aren't likely to fall back to their June low of $3.33 for the rest of the summer, analysts say.
Crude rose $2.79, about 3 percent, to $92.66 per barrel Thursday, its highest level since mid-May. The price has risen $15 per barrel since June 28, when oil hit a low of $77.69.
US jobless claims rise to 386,000 on seasonal factors
WASHINGTON (AP) — The number of Americans seeking unemployment benefits rose by 34,000 last week, a figure that may have been skewed higher by seasonal factors.
Applications for benefits increased to a seasonally adjusted 386,000, the Labor Department said Thursday. The gain followed a drop of 24,000 the previous week and was the biggest jump since April 2011.
Economists view the recent numbers with skepticism. The government struggles to adjust the data to reflect temporary summertime layoffs in the auto industry, they note. And this year, many automakers skipped those typical shutdowns to keep up with demand. That led to fewer layoffs two weeks ago, which the Labor Department didn't anticipate.
Google's 2Q earnings rise 11 percent, ad prices fall
Google's second-quarter earnings rose 11 percent despite a deepening decline in the prices paid for its Internet search advertising.
The results announced Thursday included for the first time Google's $12.5 billion acquisition of cellphone maker Motorola Mobility Holdings Inc. Google Inc. owned Motorola for the last 39 days of the quarter ending in June.
Google Inc. earned $2.8 billion, or $8.42 per share, during the three months ending in June. That compared with net income of $2.5 billion, or $7.68 per share, last year.
Microsoft reports first loss as public company
LOS ANGELES (AP) — Microsoft said Thursday that an accounting adjustment to reflect a weak online ad business led to its first quarterly loss in its 26 years as a public company.
The software company had warned that it was taking a $6.2 billion charge because its 2007 purchase of online ad service aQuantive hasn't yielded the returns envisioned. The non-cash adjustment is something companies do when the value of their assets decline. Microsoft Corp. paid $6.3 billion for aQuantive, only to see rival Google Inc. expand its share of the online ad market.
The charge led to a $492 million loss in the April-June quarter, or 6 cents per share. That compares with earnings of $5.9 billion, or 69 cents per share, a year ago.
Revenue rose 4 percent to $18.06 billion.
Verizon's wireless glows, broadband hits wall
NEW YORK (AP) — Verizon Communications Inc., parent of the country's largest cellphone carrier, on Thursday said its net income rose 13 percent in the second quarter as its wireless arm pulled in record profits.
Verizon has one foot in the wireless world and one in the traditional, wired-phone world. In the latter, results were notably weaker. Like other phone companies, Verizon is losing landlines, but has been compensating to some extent by signing up broadband customers. In the second quarter, that trend faltered, as it gained just 2,000 broadband customers — the worst result in four years.
Chief Financial Officer Fran Shammo said the weak showing was in part due to Verizon ending the sale of DSL connections to people who don't have a landline phone account. The effort is part of an attempt to improve profitability. The wired-connection side of Verizon, which still employs nearly half of its workers, is running just above break-even.
US home sales drop 5.4 percent, fewest since October
WASHINGTON (AP) — Americans bought fewer homes in June than May, indicating the weak economy could make a modest housing recovery choppy.
The National Association of Realtors said Thursday that sales of previously occupied homes fell 5.4 percent in June to a seasonally adjusted annual rate of 4.37 million homes. That's the fewest since October.
Sales are up 4.5 percent from a year ago, evidence that the market is still recovering. But the annual sales pace is below the 6 million that economists consider healthy.
US rate on 30-year mortgage: 3.53 percent, a record low
WASHINGTON (AP) — Average rates on fixed-rate mortgages fell again this week to record lows, creating more incentive for buyers to enter the recovering housing market.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 3.53 percent. That's down from 3.56 percent last week and the lowest since long-term mortgages began in the 1950s.
The average rate on the 15-year mortgage, a popular refinancing option, declined to 2.83 percent, below last week's previous record of 2.86 percent.
Foreclosure crisis hits older Americans hard
WASHINGTON (AP) — More than 1.5 million older Americans already have lost their homes, with millions more at risk as the national housing crisis takes its toll on those who are among the worst positioned to weather the storm, a new AARP report says.
Older African-Americans and Hispanics are the hardest hit.
AARP said that over the past five years, the proportion of seriously delinquent loans held by older Americans jumped by more than quadrupled.
Homeowners who are younger than age 50 have a higher rate of serious delinquency than their older counterparts. But the rate is increasing at a faster pace for older Americans than for younger ones, according to AARP's analysis of more than 17 million mortgages.
Measure of US economy falls 0.3 percent in June
WASHINGTON (AP) — A measure of future U.S. economic activity declined in June, the latest signal that the economic recovery is sputtering.
The Conference Board said Thursday that its index of leading economic indicators declined 0.3 percent in June after a 0.4 percent increase in May. The index fell 0.1 percent in April, its first drop in seven months.
Weakness in new orders, consumer expectations and building permits contributed to the decline.
By The Associated Press(equals)
The Dow Jones industrial average rose 34.66 points to close at 12,943.36. The Standard & Poor's 500 index gained 3.73 points to 1,376.51. The Nasdaq composite index rose 23.30 points to 2,965.90.
Crude rose $2.79, about 3 percent, to $92.66 per barrel Thursday, its highest level since mid-May. Brent crude, which is used to benchmark the oil bought by most U.S. refineries, rose $2.64 to $107.80.
Natural gas rose 23 cents to close at $3 per thousand cubic feet. Heating oil rose 7 cents to close at $2.95 per gallon and wholesale gasoline rose 6 cents to close at $2.94 per gallon.