Early Edition July 31 2008 at 04:30 AM Chi-Chu Tschang and Harry Maurer
Bush Signs Housing Bill
President George W. Bush signed into law a sweeping rescue package designed to shore up the housing market from its worst slump since the Great Depression and stabilize mortgage giants Fannie Mae and Freddie Mac. The new law launches a $300 billion government initiative to refinance troubled mortgages and boosts oversight of the two mortgage giants.
It also expands a line of U.S. Treasury credit for the companies and gives the government the option to take equity stakes if they ran into trouble.
Source: Reuters
Starbucks Sees Better Days Ahead
Starbucks posted a loss for its third quarter after spending $168 million to close 600 stores and pay severance to fired baristas. But shares of the coffee chain jumped 4% in after-hours trading as the company forecast relief down the road from its current slump. Starbucks reported a loss of $6.7 million, or 1 cent per share, compared to a profit of $158.3 million, or 21 cents per share, a year earlier.
Source: CNNMoney
Amgen Ordered to Change Drug Label
The Food and Drug Administration has ordered Amgen to change the labels for its flagship anemia drugs, a move that could further restrict their use in treating patients with cancer. Sales of Aranesp and Procrit have already plummeted in the last year due to studies suggesting that their use to treat the anemia caused by chemotherapy could actually make cancer worse or shorten lives.
Source: New York Times
United Sues Pilots' Union
United Airlines has sued its pilots' union and four pilots, asking them to stop slowdowns that United says forced the carrier to cancel hundreds of flights. United says a rise in sick leave and pilots' refusal to accept voluntary back-up assignments cost the carrier about $8 million in revenue and $3.9 million in operating profit.
Source: Financial Times
Chrysler in Talks with Fiat, Tata
Chrysler is in talks with Fiat to lease U.S. production capacity and share retail distribution, allowing the Italian automaker to return to the U.S. market for the first time in 25 years. The No. 3 U.S. automaker has also been negotiating with India's Tata Motors about selling its Jeep Wrangler SUV in India and possibly other Asian markets.
Source: Reuters
Apple's Cash Conundrum
If there is one complaint about Apple, it's the company's refusal to do anything with the $20.8 billion in cash and short-term investments it has socked away. The cash just sits there, earning little more than the average savings account. Analysts predict the company's hoard could surge to nearly $30 billion over the next year, passing Microsoft, which has $23.7 billion in cash.
Source: BusinessWeek
Google Plans Venture-Capital Arm
Google has hired William Maris, a 33-year-old former entrepreneur who has worked as an investor, to help set up a venture-capital arm. David Drummond, Google's senior vice president of corporate development and chief legal officer, will lead the group but how it will be structured and what sort of investments it is likely to target remain unclear.
Source: Wall Street Journal
Disney Posts a 7% Profit Gain
Walt Disney keeps defying economic gravity. It reported earnings of nearly $1.3 billion for the third fiscal quarter ended June 28, up 7% from a year earlier, although investors had expressed nervousness about the effect of the deteriorating economy on Disney's parks and television businesses. This included an accounting gain related to the acquisition of Disney Stores in North America and the sale of Movies.com.
Source: Los Angles Times
National Australia Bank Promotes Clyne to CEO
After the worst share slump in 21 years triggered by swelling credit-market losses, National Australia Bank promoted Cameron Clyne to chief executive officer, replacing John Stewart. Clyne, 40, who has run the New Zealand unit of Australia's largest bank for 18 months, will work alongside Stewart from Oct. 1 and take over at the start of next year.
Source: Bloomberg
Conversation of the Day: This Bud's for China
"Just stop and think of the infinite potential in the Chinese market.40 billion liters of beer!"
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