July 24, 2007 > Business Highlights
By AP Wire Service
NEW YORK (AP) Wall Street pulled back Friday, retreating from record levels following disappointing results from longtime favorites Caterpillar Inc. and Google Inc. The Dow Jones industrials fell nearly 150 points.
The drop in stocks capped a losing week for the Dow after three weeks of gains, and came a day after the blue chips finished above 14,000 for the first time. The Standard & Poor's 500 index likewise logged a record close Thursday.
While Friday's retrenchment might not be surprising following weeks of somewhat volatile trading and the big gains Thursday, Caterpillar has been one of the best-performers among the 30 stocks that make up the Dow and a big contributor in the blue chips' march to 14,000. The heavy equipment maker unnerved investors when its results came in well below expectations.
PEORIA, Ill. (AP) Shares of Caterpillar Inc. tumbled Friday as the heavy equipment maker posted profit that fell 21 percent, missing Wall Street expectations amid weak North American machinery sales and higher-than-expected operating costs.
The company's shares, which had risen to record highs over the last month, fell $3.78, or 4.4 percent, to $83.20 Friday. Shares, which have traded in a 52-week range of $57.98 to $87, had dipped to $78.26 before rebounding in late trading.
Caterpillar, one of the world's largest heavy equipment makers, said net earnings fell even though revenue rose 7 percent to $11.36 billion _ a company record for the second quarter _ from $10.61 billion last year.
The company cited sluggish housing construction and engine sales in North America, higher than expected operating costs and a planned reduction in inventories for the decline.
AUBURN HILLS, Mich. (AP) It was all handshakes and smiles Friday as the United Auto Workers formally opened contract talks with Chrysler Group, and while both sides were cordial, it didn't take long for their differences to surface.
UAW President Ron Gettelfinger, while repeatedly refusing to answer specific questions about bargaining strategy, told reporters that the union already has done a lot to make the Detroit Three more competitive.
He cited health care concessions for General Motors Corp. and Ford Motor Co. and approval of buyout and early retirement packages that let all three companies reduce their work forces.
NEW YORK (AP) Citigroup Inc. said Friday its second-quarter profit rose 18 percent on strong overseas operations that led to record revenue for the biggest U.S. bank.
Rival Wachovia Corp. also saw a double-digit jump in quarterly earnings, but both banks saw shares decline as they padded their provisions for loans that go sour _ a move many other banks have made as they gird themselves for a shakier credit environment.
The nation's four largest banks _ Citigroup, Bank of America Corp., JPMorgan Chase & Co., and Wachovia _ all reported rises in second-quarter profits this week. But that wasn't enough to satisfy investors, who fear a credit crunch will give the industry a run for its money.
NEW YORK (AP) Gas prices slid again at the pump Friday, while oil futures briefly passed $76 a barrel before settling lower in a volatile session driven by the August contract's expiration.
The average national price of a gallon of gas dropped 1.6 cents overnight to $3.004 a gallon, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures market, are close to dipping below $3 a gallon for the second time since peaking at $3.227 a gallon in late May.
Refinery problems in the Midwest caused the most recent foray by gas prices above $3. But refineries are returning to service after a spring that had seen an unusual number of unexpected problems. That is adding to the sentiment among futures investors that gasoline prices have peaked for the year.
ABINGDON, Va. (AP) Purdue Pharma L.P., the maker of OxyContin, and three of its executives were ordered to pay a $634.5 million fine on Friday for misleading the public about the painkiller's risk of addiction.
U.S. District Judge James Jones levied the fine on Purdue, its top lawyer and former president and former chief medical officer after a hearing that lasted about four-and-a-half hours. The hearing included statements by numerous people who said their lives were changed forever by the addiction potential of OxyContin, a trade name for a long-acting form of the painkiller oxycodone.
Designed to be swallowed whole and digested over 12 hours, the pills can produce a heroin-like high if crushed and then swallowed, snorted or injected.
From 1996 to 2001, the number of oxycodone-related deaths nationwide increased fivefold while the annual number of OxyContin prescriptions increased nearly 20-fold, according to a report by the U.S. Drug Enforcement Administration. In 2002, the DEA said the drug caused 146 deaths and contributed to another 318.
LONDON (AP) Readers waited in sheets of rain and blazing sun Friday, from Sydney to Seattle, to get their hands on ``Harry Potter and the Deathly Hallows,'' the seventh and final volume in the schoolboy wizard's saga.
In a now-familiar ritual that is part sales frenzy and part Halloween party, bookstores in Britain were flinging open their doors at a minute past midnight to hordes of would-be warlocks, sorcerers and ordinary, non-magical Muggles. Shops throughout the world were putting the book on sale at the same time, and the United States will follow as midnight strikes Saturday in each time zone, from 12:01 a.m. EDT.
J.K. Rowling, who created the magical lad in ``Harry Potter and the Sorcerer's Stone'' a decade ago, was giving a midnight reading to 500 competition-winning children in the grand Victorian surroundings of London's Natural History Museum.
DETROIT (AP) A union representing more than 2,000 of Delphi Corp.'s hourly workers said Friday it has told the auto parts maker that it plans to terminate its contracts, a first step toward a possible strike in October.
The International Union of Electronic Workers-Communications Workers of America said the notification, delivered in a letter earlier this week, comes as contract talks have dragged on concerning job security, wages and benefits.
Lindsey Williams, a spokesman for Troy-based Delphi, said that talks continue with the union. He said the company didn't plan to comment on communications between it and the union.
SAN FRANCISCO (AP) Google co-founders Sergey Brin and Larry Page have always told Wall Street that positioning the Internet search leader to realize long-term ambitions is more important than hitting the short-term financial targets of investors.
Just in case anyone forgot, the company punctuated the point with its second-quarter results.
Propelled by the online advertising boom, Google Inc. reported late Thursday that revenue surged to $3.87 billion, up 58 percent from the same time last year _ a gain that was slightly above analyst estimates.
But Google's profit margins narrowed as management ramped up spending to hire additional employees, develop new products, open more data centers and buy more content for its Web sites. A change in how the Mountain View-based company accounts for employee bonuses also weighed on the results.
By The Associated Press
The Dow fell 149.33, or 1.07 percent, to 13,851.08. The index earlier declined by as many as 200 points, and finished the week down 0.40 percent.
Broader stock indicators also lost ground. The S&P 500 index fell 18.98, or 1.22 percent, to 1,534.10, and ended the week 1.19 percent lower.
The Nasdaq composite index fell 32.44, or 1.19 percent, to 2,687.60, and finished down 0.72 percent for the week.
Oil futures fell 35 cents to settle at $75.57 a barrel on the Nymex after trading as high as $76.13 early in the day. The Nymex September crude contract fell 28 cents to settle at $75.79.
Crude oil ended the week up $1.64, or 2.2 percent, and set 11-month records nearly every day.
Nymex natural gas prices slipped 26 cents to settle at $6.446 per 1,000 cubic feet.
Nymex heating oil futures fell 2.21 cents to settle at $2.0922 a gallon. In London, Brent crude for September delivery fell 3 cents to settle at $77.64 on the ICE Futures exchange.