GM profit 2Q falls 85 pct. on recall costs
Recall expenses chopped $1.5 billion from General Motors' bottom line in the second quarter, as it added up the costs of repairs for nearly 30 million cars and set aside funds to compensate victims of small-car crashes.
The nation's biggest automaker posted a net profit of $190 million, or 11 cents per share. A year ago GM made $1.26 billion, or 75 cents per share. Without one-time items GM would have made 58 cents per share, equaling Wall Street's expectations, according to data provider FactSet.
So far this year GM has recalled almost 30 million vehicles, surpassing the company's annual record of 11.8 million in 2004.
IMF cuts US and global growth forecasts for 2014
WASHINGTON (AP) — The International Monetary Fund foresees the global economy expanding less than it had previously forecast, slowed by weaker growth in the United States, Russia and developing economies.
The lending organization predicted Thursday that global growth will be 3.4 percent in 2014, below its April forecast of 3.7 percent. But the fund still expects the growth of the world's economy to accelerate a bit to 4 percent in 2015.
The downgrade of this year's estimate for the global economy reflects much slower growth in the United States. The IMF now expects just 1.7 percent U.S. growth in 2014, which would be the weakest since the recession officially ended five years ago. That's down from its April prediction of 2.8 percent, mostly because of a sharp weather-related contraction in the first quarter. The U.S. economy shrank at an annual rate of 2.9 percent in the first three months of the year.
US new-home sales plummet in June
WASHINGTON (AP) — Sales of new U.S. homes plunged in June, a sign that real estate continues to be a weak spot in the economy.
New home sales fell 8.1 percent last month to a seasonally adjusted annual rate of 406,000, the Commerce Department said Thursday. The report also revised down the May sales rate to 442,000 from 504,000.
Buying of new homes fell 20 percent in the Northeast, followed by less extreme declines in the Midwest, South and West. The modest sales caused the inventory of new homes on the market to increase to 5.8 months, the highest since October 2011.
The median sales price was $273,500, up 5.3 percent over the past 12 months.
Morgan Stanley paying $275M to settle SEC charges
WASHINGTON (AP) — Morgan Stanley has agreed to pay $275 million to settle U.S. civil charges that it misled investors about risky mortgage bonds it sold ahead of the 2008 financial crisis.
The Securities and Exchange Commission announced the settlement Thursday with the Wall Street bank. The SEC said Morgan Stanley failed to accurately disclose the delinquency status of home mortgages backing two securities deals that it financed and sold in 2007.
The mortgages underlying the securities had a total value of about $2.5 billion, according to the SEC.
The $275 million Morgan Stanley is paying includes a $96.4 million penalty and $160.6 million in restitution of profits from sales of the bonds, plus about $18 million in interest. It will be returned to investors in the deals who were harmed, the SEC said.
By The Associated Press=
The Dow Jones industrial average edged down 2.83 points, or 0.02 percent, to close at 17,083.80. The Standard & Poor's 500 index rose 0.97 of a point, or 0.05 percent, to 1,987.98. Nasdaq composite fell 1.59 points, or 0.04 percent, to 4,472.11.
Benchmark U.S. crude for September delivery dropped $1.05 to $102.07 a barrel on the New York Mercantile Exchange. Brent crude for September delivery, a benchmark for international oils, fell 96 cents to $107.07 on the ICE Futures exchange in London. Wholesale gasoline fell 2 cents to $2.84 a gallon. Heating oil was flat at $2.87 a gallon. Natural gas gained 8.5 cents to $3.85 per 1,000 cubic feet.