Early Edition July 23 2008 at 02:46 PM Edited by Chi-Chu Tschang and Harry Maurer
U.S. Housing Bill Nears Passage
Shares in Fannie Mae and Freddie Mac rose sharply after lawmakers in Congress struck a deal on housing legislation. The House of Representatives will vote today on a plan that allows the U.S. Treasury to inject capital into Fannie and Freddie. Fannie's stock soared more than 25% on the news, while Freddie's jumped 18%.
The legislation also authorizes the creation of a program to help some 400,000 homeowners refinance their subprime loans into 30-year, fixed-rate mortgages backed by the government. In addition, the White House dropped its threat to veto the bill because it includes a measure to provide billions of dollars to communities for the purchase of foreclosed properties.
Source: Bloomberg
Toyota edges ahead of GM
Toyota sold almost 300,000 more vehicles than General Motors in the first half of 2008. That puts the Japanese automaker on course to wrest the title of world's largest carmaker from the Detroit giant, which has held it for 77 years.
Source: New York Times
Apple's Chief Says He is Cancer-Free
Steve Jobs has told several Apple colleagues, including members of the company's board, that he does not have cancer. Rumors that Apple's boss has suffered a recurrence of pancreatic cancer-for which he was treated four years ago-or is afflicted by some other disease have been circulating since June. That's when the public saw a noticeably gaunt Jobs make his pitch for the new iPhone 3G.
Source: New York Times
Trading Down Trend Fattens McDonald's
The world's largest restaurant chain reported a profit of $1.19 billion for the first quarter of 2008, compared with a loss of $711 million for the same quarter last year. McDonald's same-store sales-those from outlets open at least a year-rose 3.4% in the U.S., where the fast-food company has benefited from cash-strapped consumers trading down to less expensive fare. Abroad, same-store sales were up 6.1%, helped by the weak dollar.
Source: MarketWatch
Bush Makes Light of Wall Street's Troubles
U.S. President George Bush said Wall Street 'got drunk' and was experiencing a hangover during a speech at a recent fundraiser in Houston. In a video that emerged on July 22, Bush questioned how long Wall Street banks would remain sober and 'not try to do all these fancy financial instruments.'
Source: Financial Times
Yahoo's net profit falls, investors worry
Yahoo's second quarter net profit fell 19%, but the company didn't change its economic outlook despite a weakening U.S. economy and the fallout from Microsoft's failed takeover bid. Now, investors are scouring the company's numbers for evidence that Yahoo's efforts to reinvigorate growth are taking effect and that the firm was justified in repelling Microsoft.
Source: Reuters, BusinessWeek
Lockheed Martin posts strong quarterly results
Lockheed Martin -- the world's biggest defense contractor -- reported strong second-quarter results on July 22 with profit up 13% over the same period last year. The company's one weak spot was aeronautics -- a shifting market for fighter jets caused revenue from the division to fall 8% to $2.88 billion.
Source: Washington Post
Abu Dhabi becomes major investor in GE
Mubadala -- Abu Dhabi's state investment vehicle -- said on July 22 that it plans to become one of the 10 biggest institutional investors in General Electric after announcing a series of deals with the U.S. company. That includes an $8 billion joint venture to set up a commercial finance business.
Source: Financial Times
Iranian president talks tough on nukes
Iranian President Mahmoud Ahmadinejad said his country will resist pressure from world powers to halt its nuclear program. In a speech broadcast on state television, Ahmadinejad said: 'If the great powers think they can sit down and discuss Iran's rights and pressurize Iranians, such a thing won't happen in 100 years.'
Source: Bloomberg
India weighs in on oil speculators
Indian Finance Minister Palaniappan Chidambaram said on July 22 that oil speculators are having a major inflationary impact on the country's growth. Citing testimony given in congressional hearings, Chidambaram said the inflow of $250 billion to commodities indexes indicates speculators have had a big role in the run-up in prices.
Source: New York Times
European automakers' profits remain strong
Volkswagen -- Europe's largest automaker -- said on July 23 that second-quarter profit rose 35% on sales of the Tiguan compact sport-utility vehicle and new car models. On the same day, PSA Peugeot Citroen -- Europe's second-biggest carmaker -- said its first-half profit increased 49% on cost cuts and buoyant demand for its new 308 compact and 207 small car.
Source: Bloomberg
AT&T faces drop in landline demand
With millions buying the iPhone, AT&T -- the exclusive U.S. carrier for the phone -- should be pleased with the stream of revenue it can expect from customers. Yet, analysts say consumers are dropping traditional landlines faster than expected. AT&T still gets 32% of revenue from its landline business. The company is expected to address how its traditional phone service is contracting when it announces results on July 23.
Source: New York Times
GlaxoSmithKline makes a play for generic drug market
GlaxoSmithKline -- the world's second largest drugmaker -- took a step into the branded generics marketplace on July 23 via an alliance with South Africa's Aspen Pharmacare Holdings. Under the agreement, the British-based company gains access to a broad range of low-cost branded but unpatented medicines.
Source: Reuters
Latin American inflation hits five-year high
Driven by soaring costs for food and energy, inflation in Latin America is at its highest in at least five years. The International Monetary Fund predicts annual inflation for the region will reach 8.1% by the end of the year, compared with 6.3% in 2007.
Source: BusinessWeek
Conversation of the Day: India's Economic Woes
Reader Vivek A. Writes: "Private entrepreneurship and the energetic youth of India with its changed expectations and increased awareness of the world will not allow India to fall behind."
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