Stocks drop for a 3rd day as earnings slide
NEW YORK (AP) — A parade of grim economic news, from weak corporate earnings to a pullback at U.S. factories to spreading fault lines in Europe's debt crisis, sent investors fleeing stocks for a third straight day on Tuesday.
The Dow Jones industrial average fell 104.14 points, or 0.8 percent, to 12,617.32. It was the third triple-digit loss in a row for the blue chip index. The last time that happened was September, on fears that the U.S. was on the brink of another recession.
Lower earnings forecasts from corporate bellwethers like United Parcel Service combined with a weak report on manufacturing fed fears of more disappointing results from Corporate America in the coming days.
UPS sees global economy getting worse
NEW YORK (AP) — UPS expects the global economy to get worse before it gets better. Again.
The world's largest package delivery company is more pessimistic about U.S. growth than many economists. It predicts global trade will grow even slower than the world's economies — a trend not seen since the recession. It's making cuts in its business and reducing its earnings projections.
UPS on Tuesday lowered its forecast for all of 2012 and said its third-quarter earnings will fall below last year's results.
Apple sags as iPhone gets cheaper
NEW YORK (AP) — Apple products have been getting cheaper. That's good news for consumers but not for investors, who thought the company would keep boosting profits and sales at its previous breakneck pace.
On Tuesday Apple Inc. revealed that its growth slowed in the most recent quarter. In both revenue and net income, the company posted the smallest increases in years, and failed to meet analysts' expectations.
It wasn't so much the volume of sales: Apple sold 17 million iPads in the April-to-June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for both gadgets declined to levels last seen in 2010 for the iPhone and to the lowest levels ever for the iPad.
Budget office: Obama's health law reduces deficit
WASHINGTON (AP) — President Barack Obama's health care overhaul will reduce rather than increase the nation's huge federal deficits over the next decade, Congress' nonpartisan budget scorekeepers said Tuesday, supporting Obama's contention in a major election-year dispute with Republicans.
Republicans have insisted that "Obamacare" will actually raise deficits — by "trillions," according to presidential candidate Mitt Romney. But that's not so, the Congressional Budget Office said.
The CBO gave no updated estimate for deficit reductions from the law, approved by Congress and signed by Obama in 2010. But it did estimate that Republican legislation to repeal the overhaul — passed recently by the House — would itself increase the deficit by $109 billion from 2013 to 2022.
Netflix 2Q earnings fall 91 percent as growth slows
SAN FRANCISCO (AP) — Netflix second-quarter earnings plunged 91 percent as it signed up fewer subscribers.
The financial deterioration reported Tuesday follows a rare loss for the video subscription service during the opening three months of the year.
Although earnings were better than analysts anticipated, disappointing subscriber growth and a muddied outlook for the rest of the year unnerved investors, who were already skeptical about Netflix prospects amid intensifying competition. Netflix shares plummeted 14 percent after the results were released.
AT&T smartphone sales fall in 2Q, boosting net
NEW YORK (AP) — AT&T Inc. on Tuesday posted the best profitability ever in its wireless arm, paradoxically because it sold fewer smartphones.
The largest telecommunications company in the U.S. said its subscribers are now holding on to their phones longer: The rate of upgrades to new phones was at a record low in the second quarter.
That's good news for the company because it has to subsidize each smartphone by hundreds of dollars to sell it to customers for $99 or $199. IPhones, in particular, are expensive to sell, because Apple charges AT&T an average of around $650 for each one.
Marlboro maker Altria 2Q profit nearly triples
RICHMOND, Va. (AP) — Marlboro maker Altria Group Inc. said Tuesday that its net income nearly tripled in the second-quarter as higher prices helped offset flat cigarette volume compared with a year ago when its results were depressed by a big charge.
The owner of the nation's biggest cigarette maker, Philip Morris USA, reported net income of $1.23 billion, or 60 cents per share, for the three-month period ended June 30, compared with $444 million, or 21 cents a share, a year earlier when the company also recorded charges related to lease transactions.
Adjusted earnings were 59 cents per share, topping Wall Street expectations of 57 cents per share.
Plains ranchers sell cattle as US drought spreads
WICHITA, Kan. (AP) — Kansas cattleman Ken Grecian sold 20 pairs of cows and calves a few weeks after drought had sucked his pastures dry and no rain was in the forecast. He sold 20 more pairs Friday.
Grecian spent years meticulously breeding his cows to improve the genetics in each generation, but with Kansas in one of the worst droughts seen in decades, he's struggling to find enough grazing to feed 300 cows, plus their calves. He hopes to get by with selling only a quarter of his herd, but there are no guarantees with the drought expected to linger through October.
Other cattlemen throughout the middle and western part of the U.S. also are selling animals they can't graze or afford to buy feed for. Beef from the animals now flooding livestock auctions will start showing up in grocery stores in November and December, temporarily driving down meat prices. But then prices are expected to rise sharply by January in the wake of dwindling supplies and smaller livestock herds.
Ford takes aim at Lexus with new Lincoln
DETROIT (AP) — Ford is taking aim at Lexus with a new Lincoln luxury sedan that goes on sale this fall.
Ford said Tuesday that the Lincoln MKZ will start at $35,925. That's $175 less than the Lexus ES 350.
The MKZ is a critical product for Ford, which is trying to revamp the Lincoln brand after years of neglect. It's the first in a string of new Lincolns that Ford plans to roll out over the next three years.
Among the MKZ's features is an all-glass roof that opens automatically and slides over the back window, giving both front and rear passengers a convertible-like ride. It has Lincoln's split-wing grille, one of the brand's most recognizable features. But designers toned it down after complaints about the ungainly maw on the most recent Lincoln sedans.
'Yogurt bars' open in NYC amid Greek yogurt craze
NEW YORK (AP) — Yogurt companies are looking to cultivate Americans' taste for dairy.
The country's top Greek yogurt maker, Chobani, is opening up its first "yogurt bar" in New York City on Wednesday as it looks to strengthen its position in a rapidly growing market. Dannon, a long-time industry giant, also opened a shop in New York City earlier this month called The Yogurt Culture Company that serves both fresh Greek and traditional varieties.
The two companies say there are no plans yet for additional locations. But such flagship stores can add luster to a brand and help build loyal fan bases, which will be critical at a time when tastes are shifting and competition is intensifying.
By The Associated Press(equals)
The Dow Jones industrial average fell 104.14 points, or 0.8 percent, to 12,617.32. The broader Standard & Poor's 500 fell 12.21 points, or 0.9 percent, to 1,338.31. The Nasdaq composite was off 27.16 points, 0.9 percent, to 2,862.99.
Benchmark U.S. crude rose by 36 cents to end the day at $88.50 per barrel in New York. Brent crude, which sets the price for imported oil, climbed by 16 cents to finish at $103.42 per barrel in London.
Natural gas rose by 7 cents to finish at $3.1870 per 1,000 cubic feet.
Heating oil added less than a penny to finish at $2.8244 per gallon, while wholesale gasoline fell 5.81 cents to finish at $2.8248 per gallon.