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.
Retail Sales Rise; Eurozone Output Up; Intel Posts Loss, Lower Sales; KFC/Pizza Hut Parent Sees Profit Rise; Layoffs Ground US Airways; Continental Records $44 Million Charge; Wells Fargo Sells $600 Million in Bad Mortgages?
- Higher gas prices and heavy discounts at automakers led to a rise in retail sales in June – the second straight month of gains, the government reported. The Commerce Department said total retail sales rose 0.6% last month, compared with May's gain of 0.5%. The report showed auto sales rose 2.3% in June while gasoline station sales jumped 5% in the month.
- Industrial production in the 16-nation Eurozone rose in May for the first time since last summer, jumping 0.5%, the European Union’s (EU) statistics office said. Output was still 17% below the level seen the year before, the Financial Times reported.
- Intel Corp. (NYSE: INTC) yesterday (Tuesday) reported a second-quarter loss of $398 million, or 7 cents per share, compared with a profit of $1.6 billion, or 28 cents per share a year earlier. Revenue was $8 billion, down from $9.5 billion for the same quarter last year. "Intel's second-quarter results reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half," said Paul Otellini, Intel president and CEO. "Intel's strategy of investing in new technologies and innovative products, combined with ongoing focus on operating efficiencies, continues to yield benefits that are evident in our strengthening financial performance."
- Shares of Yum Brands Inc. (NYSE: YUM) rose 56 cents, or 1.57% a share yesterday (Tuesday) after the company said second-quarter net income rose to $303 million, or 63 cents per share, for the quarter ended June 13. That compares to $224 million, or 45 cents per share, a year earlier. Profit excluding special items was 50 cents per share. The company attributes the increased profits to restaurant margins improving by 1.7%, driven by the combination of prior year pricing, flat commodity costs and refranchising.
- US Airways Group (NYSE: LLC) said yesterday (Tuesday) that it would reduce airport staffing by 600 jobs this fall because of weak demand for business travel and declining revenue, Reuters reported. "In today's economy, however, this is no longer the case with attrition hovering in the low single digits," US Airways Chief Operating Officer Robert Isom said in a statement. "So, we find ourselves with more employees than our operation requires."
- Continental Airlines Inc. (NYSE: CAL) will record $44 million in charges in its second quarter ended June 30, largely due to the lowered fair value of its retired aircraft from Boeing Inc. (NYSE: BA). Last year, Continental said it would retire all of its Boeing 737-300s and a large portion of its 737-500s by early next year, The Wall Street Journal reported. Continental will report its second quarter results on July 21.
- Wells Fargo & Co. (NYSE: WFC) has quietly sold $600 million of distressed subprime loans to Irvine, Calif.-based Arch Bay Capital LLC, the National Mortgage News reports, citing an unnamed source. The publication could not get a statement from either company regarding the sale.