Business Highlights

Recovery mixed on strong earnings, weak home salesWASHINGTON (AP) — A flurry of strong earnings reports renewed Wall Street's optimism in the economic recovery, even as new data Thursday showed homes sales sinking and claims for unemployment benefits rising.Sales of previously occupied homes fell...

Recovery mixed on strong earnings, weak home sales

WASHINGTON (AP) — A flurry of strong earnings reports renewed Wall Street's optimism in the economic recovery, even as new data Thursday showed homes sales sinking and claims for unemployment benefits rising.

Sales of previously occupied homes fell 5.1 percent in June to a seasonally adjusted annual rate of 5.37 million, the National Association of Realtors said.

Meanwhile, new claims for unemployment insurance jumped by 37,000 to a seasonally adjusted 464,000, the Labor Department said. Separately, the Conference board, a private research group, said its gauge of future economic activity dropped in June. It was the second decline in three months.


Stocks surge on upbeat earnings and forecasts

NEW YORK (AP) — Stocks have surged after strong earnings from Caterpillar, UPS and other companies revived optimism about the economic recovery. A better than expected report on housing and ncouraging signs of growth in Europe added to the market's upbeat mood.

The Dow Jones industrial average rose more than 200 points in afternoon trading. Broader indexes also rose more than 2 percent. Interest rates surged in the Treasury market as investors felt less need to put their money into the safety of government securities.


GM to pay $3.5B for auto financing company

DETROIT (AP) — General Motors Co. will buy AmeriCredit Corp. for $3.5 billion, a deal that allows the automaker to expand loans to customers with poor credit and offer more leases, key areas where GM must grow to accelerate its car sales.

But the acquisition of the independent auto financing company also means that GM, which is 61 percent owned by the U.S. government, is getting back into the business of making risky loans. GM said it advised the U.S. Treasury Department of the acquisition, although government approval was not required.


Fed chief to Congress: Don't end stimulus spending

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke told Congress Thursday that the fragile economy needs government stimulus spending to strengthen the recovery and help reduce unemployment.

Testifying before the House Financial Services Committee, Bernanke urged lawmakers to come up with a credible plan to reduce the government's record-high budget deficits in the long run. But he said they shouldn't move now to slash spending or boost taxes in the near future.

Bernanke again said the Fed is prepared to take new steps to bolster the recovery if needed.


Refinancings rise as mortgage rates hit 4.56 percent

NEW YORK (AP) — The lowest mortgage rates in decades are just too good for some people to pass up.

Brokers are reporting rising interest in home refinancings as rates on a 30-year fixed loans have hit record lows in four of the past five weeks. This week the average rate fell to 4.56 percent, the lowest since mortgage company Freddie Mac began tracking rates in 1971.

Weekly applications to refinance home loans have nearly doubled in July from April, according to the Mortgage Bankers Association.


AT&T 2Q earnings up 26 percent, raises forecast

NEW YORK (AP) — AT&T Inc. said Thursday that its earnings rose 26 percent in the latest quarter and raised its forecast for the year, helped by its iPhone-fueled wireless arm and cost-cutting.

The country's largest telecommunications provider said it now expects a "strong" increase in earnings over last year, compared to its previous forecast of "stable-to-improved" results.

The company, based in Dallas, also posted its first-ever decline in wired broadband subscribers, capping a decade of growth.

Its shares rose 77 cents, or 3.1 percent, to $25.69 in midday trading.


Caterpillar 2Q profit soars; raises outlook

Caterpillar's second-quarter earnings shot up 91 percent with the heavy machinery manufacturer reporting robust sales of equipment for industries that range from mining and infrastructure to energy.

The company boosted its 2010 profit outlook as well on Thursday, saying it is trying to keep up with new orders and will ramp up production of its signature black-and-yellow equipment in the second half of the year.

The results and Caterpillar's own forecast reflect an uneven recovery and some anxiety about what kind of rebound to expect. Emerging markets like China and Brazil, not U.S. or Europe, still lead the way.


Microsoft 4Q net income surges 48 percent

REDMOND, Wash. (AP) — Microsoft Corp. said Thursday that its net income surged 48 percent in the most recent quarter, the latest sign that businesses are again spending money on technology.

Microsoft's results were stronger than Wall Street had expected.

Big businesses stopped replacing aging computers, servers and software during the worst of the recession. Microsoft makes the majority of its money from selling Windows software for PCs and servers, plus Office and other business software.


Dell paying $100 million in SEC deal

WASHINGTON (AP) — Computer maker Dell Inc. is paying $100 million to settle federal regulators' charges of using fraudulent accounting to meet Wall Street earnings targets.

Under the settlement announced Thursday by the Securities and Exchange Commission, company Chairman and CEO Michael Dell agreed to pay a $4 million civil penalty.

The SEC said the company also failed to disclose to investors large payments it received from Intel Corp. in exchange for not using equipment made by an Intel rival.


Amazon 2Q profit jumps 45 pct; misses Wall Street

SAN FRANCISCO (AP) — Inc. said Thursday that its second-quarter income jumped, bolstered by shoppers who spent more with the online retailer even as consumer confidence fell overall.

But the Seattle-based company's earnings fell below analyst expectations, and its stock dove in after-hours trading.

For the April-June quarter, Inc. earned $207 million, or 45 cents per share. That is a 45 percent increase from $142 million, or 32 cents per share, in the same quarter last year.

By The Associated Press

The Dow Jones industrial average rose 206.54, or 2 percent, to 10,327.37.

The Standard & Poor's 500 index rose 23.66, or 2.2 percent, to 1,093.25, while the Nasdaq composite index rose 52.55, or 2.4 percent, to 2,239.88.

Benchmark crude surged $2.74, or 3.6 percent, to settle at $79.30 a gallon on the New York Mercantile Exchange.

Natural gas gained 13 cents at to settle at $4.643 per 1,000 cubic feet; heating oil rose 7.32 cents to settle at $2.0624 a gallon and gasoline added 7.88 cents to settle at $2.1466 a gallon.

Brent crude rose $2.45 to settle at $77.82 on the ICE futures exchange