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.
Apple Stock Hits 52-Week High; Buffet: Wall Street Pay Needs "Downside"; Housing Starts Rise, Producer Prices Fall; Obama Administration to Unveil New Small Business Assistance; Coke Profit Flat, Revenue Misses Estimates; Caterpillar Lifts 2010 Forecast; Oil Steps Back After Breaking $80; Pfizer Profit Up Despite Earnings Decline; Airlines Still Struggling to Take Off
- Shares of Apple Inc. (Nasdaq: AAPL) hit a 52-week high of $201.75 yesterday (Tuesday) after the company posted its highest-ever quarterly profit. Apple stock settled at $198.76, up 4.69%. The iPhone maker saw its profit balloon to $1.67 billion, or $1.82 per diluted share on revenue of $9.87 billion. Analysts polled by Bloomberg News were expecting a profit of $1.43 per share and revenue of $9.22 billion. Apple sold 7.4 million iPhones in the quarter and 3 million Macintosh computers in the quarter, gains of 7% and 17% respectively over the same period last year. Sales of its iPod media players continue to erode, falling 8% due to cannibalization from the iPhone, which also plays music and video.
- Billionaire investor Warren Buffett said Wall Street pay needs a "downside" when profits deteriorate. "You have to put in something where there is downside to people who really mess up large institutions," Buffett said in an interview with Cathy Baron Tamraz, chief executive officer of Berkshire Hathaway Inc. (NYSE: BRK.A,BRK.B) division Business Wire. "Too many people have walked away from the troubles they have created for society, not just for their own institution, and they have walked away rich." Wall Street bonuses in 2009 may rise 40% to $26 billion, according to estimates by compensation consultant Johnson Associates Inc. Buffet makes $100,000 per year as Berkshire's CEO.
- Housing starts in the United States rose 0.5% to an annual rate of 590,000 units in September, up from August's revised 587,000, the Commerce Department said. Meanwhile, the producer price index (PPI), which measures prices received by farms, factories and refineries, fell by 0.6% last month after rising 1.7% in August, the Labor Department said. Analysts were expecting prices to be flat. "The expectations are for a very tepid economic recovery," John Canally, an economist and investment strategist at LPL Financial told Reuters. "The recovery is firmly in place, but I don't think consumers are going to recognize this until we see job growth."
- U.S President Barack Obama is expected to unveil new initiatives today (Wednesday) with the goal of increasing credit to small businesses, an administration official told The Wall Street Journal. Among the moves to be announced is an increase in caps on existing Small Business Administration (SBA) loans and making it easier for small banks to access funds from the Troubled Asset Relief Program (TARP). Several community banks have complained the Bush and Obama administrations moved swiftly to bail out large banks but made it harder for smaller banks to qualify. Nearly 100 banks have failed so far this year, all of which are small- to medium-sized lenders.
- The Coca-Cola Co. (NYSE: KO) blamed a weak economy after it missed analysts' revenue estimates for its third quarter. The soft drink maker's revenue fell to $8.04 billion, missing Thomson Reuters Corp. (NYSE: TRI) analysts' estimates of $8.11 billion. Coca-Cola's net income was $1.90 billion, or 81 cents per share, roughly flat from last year's profit of $1.89 billion or 81 cents per share. "We expect the consumer to continue facing economic uncertainties into 2010 and for consumer sentiment to recover slowly," Chief Executive Officer Muhtar Kent said. The company repurchased $241 million of its stock, and intends to repurchase up to $1 billion of stock by the end of the year, it said. Shares of the company closed at $54.07, down 1.31%.
- Shares of Caterpillar Inc. (NYSE: CAT) yesterday (Tuesday) rose 3.04% after to close at $59.61 after the company . Sales will climb 10% to 25% from their 2009 midpoint, the company said. "We are seeing encouraging signs that indicate a recovery may be under way," said Chief Executive Officer Jim Owens.
- Crude oil for November delivery yesterday (Tuesday) fell 52 cents, or 0.7%, to settle at $79.09 a barrel on the New York Mercantile Exchange (NYMEX). Prices rose as much as 0.6% to $80.05 a barrel earlier in the day – breaking $80 for the first time in more than since Oct. 14, 2008. Futures are up 77% this year.
- Drug maker Pfizer Inc. (NYSE: PFE) yesterday (Tuesday) posted a 26% increase in third-quarter profit as cost cuts made up for a decline in sales. Net income at the company rose to $2.88 billion, or 43 cents a share, from $2.28 billion, or 34 cents a share, a year earlier. Sales fell 3%, to $11.62 billion, from $11.97 billion.
- Airline passenger Air Transport Association. However, that decline was largely the result of lower fares, as passenger volume slipped just 2% during the month. "The demand for air travel remains weak," ATA Chief Executive James May, said in a statement. "While other sectors may be seeing signs that the economy is getting back on track, the airline industry has faced challenges in its effort to generate revenue." , according to the