Stocks drop for a 3rd day as earnings slide
NEW YORK (AP) — A parade of grim economic news, from weak corporate earnings to a pullback at U.S. factories to spreading fault lines in Europe's debt crisis, sent investors fleeing stocks for a third straight day on Tuesday.
The Dow Jones industrial average fell 104.14 points, or 0.8 percent, to 12,617.32. It was the third triple-digit loss in a row for the blue chip index. The last time that happened was September, on fears that the U.S. was on the brink of another recession.
Lower earnings forecasts from corporate bellwethers like United Parcel Service combined with a weak report on manufacturing fed fears of more disappointing results from Corporate America in the coming days.
UPS sees global economy getting worse
NEW YORK (AP) — UPS expects the global economy to get worse before it gets better. Again.
The world's largest package delivery company is more pessimistic about U.S. growth than many economists. It predicts global trade will grow even slower than the world's economies — a trend not seen since the recession. It's making cuts in its business and reducing its earnings projections.
UPS on Tuesday lowered its forecast for all of 2012 and said its third-quarter earnings will fall below last year's results.
Apple sags as iPhone gets cheaper
NEW YORK (AP) — Apple products have been getting cheaper. That's good news for consumers but not for investors, who thought the company would keep boosting profits and sales at its previous breakneck pace.
On Tuesday Apple Inc. revealed that its growth slowed in the most recent quarter. In both revenue and net income, the company posted the smallest increases in years, and failed to meet analysts' expectations.
It wasn't so much the volume of sales: Apple sold 17 million iPads in the April-to-June period, beating expectations, and 26 million iPhones, at the low end of expectations.
But Apple's average selling prices for both gadgets declined to levels last seen in 2010 for the iPhone and to the lowest levels ever for the iPad.
Budget office: Obama's health law reduces deficit
WASHINGTON (AP) — President Barack Obama's health care overhaul will reduce rather than increase the nation's huge federal deficits over the next decade, Congress' nonpartisan budget scorekeepers said Tuesday, supporting Obama's contention in a major election-year dispute with Republicans.
Republicans have insisted that "Obamacare" will actually raise deficits — by "trillions," according to presidential candidate Mitt Romney. But that's not so, the Congressional Budget Office said.
The CBO gave no updated estimate for deficit reductions from the law, approved by Congress and signed by Obama in 2010. But it did estimate that Republican legislation to repeal the overhaul — passed recently by the House — would itself increase the deficit by $109 billion from 2013 to 2022.
Netflix 2Q earnings fall 91 percent as growth slows
SAN FRANCISCO (AP) — Netflix second-quarter earnings plunged 91 percent as it signed up fewer subscribers.
The financial deterioration reported Tuesday follows a rare loss for the video subscription service during the opening three months of the year.
Although earnings were better than analysts anticipated, disappointing subscriber growth and a muddied outlook for the rest of the year unnerved investors, who were already skeptical about Netflix prospects amid intensifying competition. Netflix shares plummeted 14 percent after the results were released.
AT&T smartphone sales fall in 2Q, boosting net
NEW YORK (AP) — AT&T Inc. on Tuesday posted the best profitability ever in its wireless arm, paradoxically because it sold fewer smartphones.
The largest telecommunications company in the U.S. said its subscribers are now holding on to their phones longer: The rate of upgrades to new phones was at a record low in the second quarter.
That's good news for the company because it has to subsidize each smartphone by hundreds of dollars to sell it to customers for $99 or $199. IPhones, in particular, are expensive to sell, because Apple charges AT&T an average of around $650 for each one.
Marlboro maker Altria 2Q profit nearly triples
RICHMOND, Va. (AP) — Marlboro maker Altria Group Inc. said Tuesday that its net income nearly tripled in the second-quarter as higher prices helped offset flat cigarette volume compared with a year ago when its results were depressed by a big charge.
The owner of the nation's biggest cigarette maker, Philip Morris USA, reported net income of $1.23 billion, or 60 cents per share, for the three-month period ended June 30, compared with $444 million, or 21 cents a share, a year earlier when the company also recorded charges related to lease transactions. Continued...