Wachovia Cuts Dividend and Jobs; Caterpillar Builds a Global Business; Home Prices Collapse; UPS Delivers More Revenue, Less Profit; Fed Directors Split; Oil Hits Six-Week Low; UAL Stock Soars; Two For, One Against Satellite Radio Deal
- Wachovia Corp. (WB) said yesterday (Tuesday) that it lost $8.86 billion in the second quarter and would be forced to slash its dividend and cut 10,750 jobs. Wachovia said it lost the equivalent of $4.20 per share in the April-June period. Over the same period of time last year, the bank earned $2.34 billion, or $1.22 per share.
- Caterpillar Inc.'s (CAT) second-quarter profit jumped 34%, $1.11 billion, or $1.74 per share, for the three months ended June 30, compared with $823 million, or $1.24 per share, a year earlier. While the domestic market falter overseas sales for the company increased 60% of quarterly sales and revenue coming from outside North America, up from 55% a year earlier.
- The Office of Federal Housing Enterprise Oversight said yesterday (Tuesday) that U.S. home prices fell a record 4.8% in May from the same month last year. On a seasonally adjusted basis, prices fell 0.3% from April to May. , the Associated Press reported.
- United Parcel Service Inc. (UPS) said yesterday (Tuesday) that its profit fell nearly 21% in the second quarter despite a more than 6% increase in sales. Profit was $873 million, or 85 cents a share, in the second quarter, compared to $1.10 billion, or $1.04 a share, for the same period a year ago. Revenue grew to $13 billion from $12.2 billion. " ," Chief Executive Scott Davis told the Associated Press.
- Two out of the 12 Federal Reserve directors wanted an increase in the discount rate in June, according to documents released yesterday (Tuesday). Dallas Fed President Richard Fisher and Kansas City Fed President Tom Hoenig asked that the discount rate be raised from 2.25% to 2.50% in June, MarketWatch reported, a request that was ignored by the majority of the Federal Open Market Committee.
- Light, sweet crude for August delivery fell $3.09, hitting a six-week trading low yesterday (Tuesday). On their last day of trading, August delivery contracts settled at $127.95 a barrel in afternoon trading on the New York Mercantile Exchange, CNNMoney reported. September delivery contracts, which begin trading today (Wednesday), are priced at $128.42.
- UAL Corp. (UAUA), parent of United Air Lines Inc., yesterday (Tuesday) announced a new credit-card/frequent flyer agreement that would boost liquidity $1.2 billion, Reuters reported. The news, helped along by lower oil prices, pushed UAL stock up over 65% for the day with a gain of $3.42 to close at $8.41.
- Federal Communications Commissioner Michael Copps voted against the proposed merger between Sirius Satellite Radio Inc. (SIRI) and XM Satellite Radio Holdings Inc. (XMSR) late Monday night, The Wall Street Journal reported. It’s the first vote against the deal, as two commissioners have voted for it and two others have yet to vote. The deal must receive majority approval from the five-member FCC board to proceed.