Late Edition July 24 2008 at 03:17 PM Edited by Chi-Chu Tschang and Harry Maurer
Ford Hits a Tree
The carmaker reported the worst quarter in its history, with a loss of $8.7 billion, as the economic slowdown and American's shift away from large vehicles continue to clobber Detroit. Revenues fell to $38.6 billion from $44.2 billion in the second quarter last year.
In an effort to offset news of the thumping loss, Ford offered details of its updated recovery plan. It will add more fuel-efficient cars and crossovers to the North Amercan lineup, including six European small vehicles; convert three of its truck and SUV plants to small-car production; and revamp the Ford, Lincoln, and Mercury lines by the end of 2009. Nevertheless, its shares dropped about 15% in midafternoon trading, helping to hammer the wider market. The Dow was down 230 points around 3:15 p.m.
Source: Detroit Free Press
Housing sales fall again
Existing-home sales fell 2.6% in June, to the lowest level in 10 years, says the National Association of Realtors. Resales have tumbled 15.5% in the past year and have sunk 33% from their peak in 2005.
Source: MarketWatch.com
More trouble for UBS
New York State Attorney General Andrew Cuomo sued the beleaguered Swiss bank, claiming it defrauded investors by promoting auction-rate securities as safe havens similar to money-market funds. Cuomo wants UBS to buy back at face value $25 billion in such securities held by its customers in New York and around the country. Massachusetts and Texas have both sued UBS on similar grounds since the market for auction-rate securities cratered in February.
Source: Bloomberg
Nokia Settles with Qualcomm
Telecom giant Nokia has signed a patent agreement with U.S. chipmaker Qualcomm, ending three years of legal battles. Under the 15-year agreement, the Finnish company will make an upfront payment and pay royalties to Qualcomm, but said payments per phone would fall. The deal, which ends all legal cases between the two, covers the world's most widely used mobile phone technologies. The financial terms of the agreement weren't disclosed, but the announcement soothed investor fears about Qualcomm's ability to reach an agreement with Nokia after an earlier contract expired last year.
Source: Reuters
Goldman raises $10 billion for LBOs
Goldman Sachs has raised $10 billion to invest in loans backing leveraged buy-outs to take advantage of a gap in the financing markets. The fund will buy senior loans -- so-called because they are paid off before other debts -- and comes alongside an existing $20 billion fund that invests in 'mezzanine' debts, which are paid after the senior debt.
Source: Financial Times
Western banks struggle in the Gulf
Western investment banks are rushing to the oil-rich Persian Gulf, but most are finding business in the region disappointing. According to research firm Dealogic, international investment banks pulled in just $366 million in revenue from the region during the first half of 2008. That's sharply down from the $631 million they raked in during the same period last year.
Source: Wall Street Journal
The benefits of high oil prices
The soaring cost of energy is causing plenty of pain for Americans, especially at a time when they're being hammered by declining house values and rising food prices. Yet expensive energy, in many ways, is good. Why? When the price of oil goes up, people will use less, find substitutes, and develop new supplies.
Source: BusinessWeek
Credit Suisse earnings fall 62%
Credit Suisse -- Switzerland's second-biggest bank -- said earnings dropped 62% as its securities unit returned to profit and the company attracted new investments from wealthy clients. In a July 24 statement, the banks said second-quarter net income fell to $1.18 billion.
Source: Bloomberg
Fannie-Freddie rescue package reaches Senate
The U.S. Senate will consider housing legislation designed to shore up confidence in Fannie Mae and Freddie Mac and stem record mortgage foreclosures after the House of Representatives approved the bill on July 23. House members voted 272-152 in favor of the measure, which would give U.S. Treasury Secretary Henry Paulson power to inject capital into the mortgages lenders and provides for a federal agency to insure refinanced home loans.
Source: Bloomberg
Amazon's quarterly profit doubles
Amazon.com said on July 23 quarterly profit doubled and sales grew 41%, indicating that many cost-conscious shoppers are heading online to save money in a tough economy. The company said it had benefited from shoppers going online to save on gas.
Source: Reuters
Facebook looks to extend Internet presence
Social-networking Web site Facebook unveiled new features on July 23 that will allow other Web sites to use parts of Facebook's service. In a speech at his company's annual conference for developers, Mark Zuckerberg, Facebook's 24-year-old chief executive, said there soon would be a wave of social Web sites built on top of the information users give to social networks.
Source: New York Times
Top Microsoft exec departs
Microsoft announced on July 23 that one of the top executives who pushed for the takeover of Yahoo will leave the company. Kevin Johnson, president of Microsoft's Platforms & Services division -- responsible for its Windows franchise and its online operations - will take over networking equipment maker Juniper Networks.
Source: BusinessWeek
Conversation of the Day: The Frozen Economy
Reader Dave in VA Writes: "Whether you lived beyond your means or you were a hard-working, penny-pinching retiree, it looks like we're all headed to broke-land. Does it matter what train we took to get there?"
Tell Us: Is The American Dream Now a Fantasy?
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