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.
Ford's Focus is Top "Cash for Clunkers" Replacement; Personal Incomes and Savings Fall While Spending Increases; Pending Home Sales Rise Again; GE Pays $50 Million in SEC Settlement; Housing Data, Tech Help Markets Rise; Electronic Arts Tops Wall Street Estimates; Homemade Meals Boost Kraft's Profit
Ford Motor Co.'s (NYSE: F) Focus is the top-selling vehicle so far in the U.S. government's Car Allowance Rebate System (CARS), also known as "cash for clunkers." The remaining four in the top five best-selling cars in the program were from foreign automakers: Toyota Motor Corp.'s (NYSE ADR: TM) Corolla was second, followed by Honda Motor Co. Ltd.'s (NYSE ADR: HMC) Civic, Toyota's Prius and Camry, according to Transportation Department data. U.S. Sen. Majority Leader Harry Reid, D-NV, expects the Senate to vote in favor of injecting an additional $2 billion into the CARS program before they leave on a month-long recess after Friday, Bloomberg News reported.
Personal incomes were back on the decline in June, falling 1.3% after a 1.3% gain in May that was prompted by one-time stimulus payments, the Bureau of Economic Analysis said yesterday (Tuesday). The personal savings rate fell to 4.6% in June, compared with a rate of 6.2% in May. Despite the declining incomes, consumer spending rose 0.4% compared to May's gain of 0.1%.
Low interest rates and bargain home prices helped June pending home sales gain 3.6% after a revised 0.8% increase in May, the National Association of Realtors (NAR) said yesterday (Tuesday). The pending home sales index is up 6.7% year-over-year. "Historically low mortgage interest rates, affordable home prices and large selection are encouraging buyers who've been on the sidelines," said Lawrence Yun, the NAR's chief economist. "Activity has been consistently much stronger for lower priced homes."
General Electric Co. (NYSE: GE) will pay $50 million to settle accounting fraud charges from the Securities and Exchange Commission (SEC), GE said yesterday (Tuesday). The SEC alleged GE used improper accounting methods to increase its reported earnings or revenue in 2002 and 2003 to avoid negative financial results. GE did not admit nor deny any wrongdoing in the matter. Shares of GE closed at $13.82, up 10 cents or 0.73% yesterday.
Positive housing data and better-than-anticipated earnings from high-profile technology companies helped all three major stock indices gain yesterday (Tuesday). The Standard & Poor's 500 added 0.3% to 1,005.65, the Dow Jones Industrial Averagerose to 9,320.19, up 0.4%, and the Nasdaq Composite Index closed at 2,011.31, a gain of 0.1%.
Strong sales of "The Sims 3" and "EA Sports Active" propelled video game publisher Electronic Arts Inc. (Nasdaq: ERTS) to easily beat analysts' estimates. Excluding restructuring charges and other items, EA reported a loss of 2 cents a share, bettering Thomson Reuters estimates of an average 13 cents. EA's net loss was $234 million, or 72 cents a share for the quarter ended June 30. That compares to a net loss of $95 million, or 30 cents a share in the same quarter last year.
Multi-faceted food maker Kraft Foods Inc. (NYSE: KFT) posted a better-than-expected second quarter profit thanks to price increases, cost cuts and consumers skipping dinner at restaurants. The company's net income rose to $827 million, or 56 cents a share for the quarter ended June 30, compared to a profit of $745 million, or 49 cents a share a year earlier.