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With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Pickens' Wind Farm Delayed; Apple Tarnished by SEC Scrutiny; UBS May Settle Tax Dispute; Higher Gas Prices Help Reduce Traffic; Discount Retailer Thrives in Recession; Pepsi Bottling Profits Rise
- Billionaire oilman T. Boone Pickens has delayed his plan to build the world's largest wind farm in the Texas panhandle, blaming financing issues and transmission limitations. "I didn't cancel it," Pickens told Reuters after a press conference on Capitol Hill. "Financing is tough right now and so it's going to be delayed a year or two." Pickens' plan calls for the installation of 4,000 megawatts of wind turbines at a site near Pampa, Texas, which could power 1.2 million average homes by 2014 at a cost of $8 billion. Money Morning reported a new study set for release next month suggests wind forces may be getting weaker.
- Apple Inc. (Nasdaq: AAPL) Chief Executive Officer Steve Jobs, back at work after an almost six-month leave of absence to undergo a liver transplant, is under scrutiny by the U.S. Securities and Exchange Commission over how his condition went from "relatively simple" to "more complex" in nine days, a person familiar with the matter told Bloomberg News. "The issue here is: Did Apple or Jobs make misleading disclosures, tested by what they knew at the time?" said Robert Hillman, a securities law professor at the University of California, Davis. "A disclosure could be misleading if it's a partial truth." At the heart of the matter is whether Jobs' absence was material -Apple's strong performance in the first half of the year under Chief Operating Officer Tim Cook suggests Jobs' absence was not material, Bloomberg said.
- Swiss bank UBS AG (NYSE: UBS) may be able to pay up to $5.5 billion to end a U.S. tax dispute without needing an immediate cash infusion, thanks to a recent increase in capital and proceeds from asset sales, Reuters reported. Authorities in the United States have accused UBS of helping wealthy Americans hide $15 billion of untaxed money and are trying to force it to hand over the names of 52,000 clients. A hearing on the matter will be held on Monday.
- Rising gas prices and a faltering economy have had at least one benefit: Traffic on U.S. highways is down, according to a data from the Texas Transportation Institute. Among the findings in the 2009 Urban Mobility Reportwas that delays per traveler dropped by 1.3 hours from 2005 to 2007. The decline marks the first time in 25 years the delays have dropped.
- Tough economic times have resulted in profitable times for discount retailer Family Dollar Stores Inc. (NYSE: FDO). The company reported a net income of $87.7 million – up 34.8%, or 62 cents per diluted share on revenues of $1.8 billion for the third quarter ended May 30. That compares to a net income of $64.7 million, or 46 cents per diluted share on revenue of $1.7 billion for the same quarter last year. "In today's environment, Family Dollar's commitment to value has great appeal.Customers are shopping us more frequently and relying on us to meet more of their basic needs. As a result, we continue to gain market share," said Howard R. Levine, chairman and chief executive officer. Shares of Family Dollar skyrocketed 12.36% in trading yesterday (Wednesday), closing at $31.18, up $3.43.
- Consumer credit in the United States dropped for the fourth straight month in May after the unemployment rate reached its highest point in 25 years and banks clamped down on lending. Borrowing dropped $3.23 billion, or 1.54% to $2.52 trillion according to a Federal Reserve report released yesterday (Wednesday). The series of declines is the longest since 1991. "Consumers are still in a retrenchment mode," said Gary Thayer, a Wells Fargo Advisors senior economist in a Bloomberg News interview. "We're seeing the savings rate go up, which suggests people are holding back on spending, especially big-ticket purchases."
- Pepsi Bottling Group Inc. (NYSE: PBG) posted a higher profit in its second quarter, thanks to what Chairman and Chief Executive Officer Eric Foss called an "ability to execute an effective global pricing strategy, [achieving a] robust cost and productivity savings, and [delivering] solid execution at the point of sale." The company reported a net income of $211 million, or 96 cents per diluted share on revenues of $3.2 billion for the quarter ended June 13. That compares to a net income of $174 million, or 78 cents per diluted share on revenues of $3.5 billion in the same quarter last year. Pepsi Bottling last month rejected a $6 billion takeover bid from PepsiCo Inc. (NYSE: PEP), calling it "grossly inadequate" and "not acceptable."