Business update: Factories aid bumpy recovery
New government data offered a mixed picture of the economic recovery today, as U.S. manufacturing activity grew in July at the fastest pace in nearly a year while the outlook for the housing market remained dim. Auto plants stayed open when they normally close for summer renovations and businesses replaced worn-out equipment. That helped boost factory output 1.1 percent — the biggest increase since August 2009.
Stocks rise on earnings, economic reports: Investors regained their enthusiasm for stocks today, sending prices sharply after reports showed a slight improvement in the housing market and a big jump in industrial production. Investors were also encouraged by earnings from Home Depot Inc. and Wal-Mart Stores Inc. that were better than expected. The Dow Jones industrial average rose 136 points in afternoon trading.
Banking execs say gov’t needs to back mortgages: The Obama administration invited banking executives today to offer advice on changing the government’s role in the mortgage market. Their response: stay big. While the executives disagreed on the exact level of support needed, the group overwhelmingly advocated the government should maintain a large role propping up the nearly $11 trillion market.
Wal-Mart 2Q profit rises 3.6 percent on cost-cutting: Wal-Mart Stores Inc. reported a 3.6 percent increase in second-quarter net income and raised its earnings guidance for the full year as it benefits from cost-cutting and robust global growth in China, Brazil and Mexico. But a closely watched measure of revenue fell for the fifth consecutive quarter, dragged down by its U.S. Walmart division, as its main customers have felt the biggest impact of the economy’s woes.
Starbucks backs outlook even as bean prices spike: Starbucks Corp. is backing its profit guidance for next year even as it deals with higher coffee prices, saying it will be able to absorb the costs. The Seattle-based coffee chain said today that despite spikes in the market, it will be able to offset the “short-term fluctuations.”
BP to stop handling claims related to Gulf spill: BP plans to stop processing claims from people and businesses hurt by the Gulf oil spill as it prepares to transfer that role to a government-appointed administrator. The company says it will stop accepting new claims after Wednesday. The Gulf Coast Claims Facility, led by Kenneth Feinberg, will take over the process starting Aug. 23. BP PLC says it’s paid roughly $368 million to invididuals and businesses, including about $102 million so far in August.
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