Business News You Need Today: July 27, 2010
BP Posts $17B Loss: Petroleum-giant BP (BP) reported earlier today that it lost $17 billion in the second quarter after accounting for more than $32 billion in charges related to the Gulf oil spill. The beleaguered British company also confirmed that embattled CEO Tony Hayward is indeed being replaced, confirming rumors in recent days of his departure. Mississippi-native Robert Dudley will take over the reins of the company starting Oct. 1. Hayward, whose handling of the Gulf oil spill was roundly criticized in many quarters, won't be joining the unemployment lines, however. He's been offered a job with TNK-BP, the company's joint venture in Russia, leading many to joke that the gaffe-prone Hayward has been banished to Siberia. Hayward will also receive a £1 million ($1.6 million) payout and a £10 million pension, BP said.
Home Prices Gain: Monday's Commerce Department report on new home purchases showed sales in June picked up but at an anemic rate. More data is due today -- this time for May. The Case-Shiller home price index is expected to report a roughly 4% year-over-year rise in the 20 cities sampled in the report, according to analyst estimates. That would be on par with the increase reported in April, providing further proof that the nation's housing market is recovering, albeit slowly.
Consumer Confidence Weakens: The Conference Board will report its latest measure of consumers' confidence in the U.S. economy at 10 a.m. ET. The survey is expected to show consumer confidence fell in July to its lowest level since July 2009, with the Conference Board's measure falling to 51 from 52.9 in June. Americans continue to face high rates of unemployment, tight credit and growing uncertainty in an economic recovery, prompting the decline.
Earnings Season Rolls On: More corporate giants are due to release earnings reports today. Among them are DuPont (DD), energy-giants Massey Energy (MEE) and Occidental Petroleum (OXY), defense contractor Lockheed Martin (LMT) and leading chip-maker Broadcom (BRCM).
FedEx Raises Guidance: FedEx (FDX) on Monday boosted its earnings outlook for the full year to $4.60 to $5.20 a share, up from $4.40 to $5 a share. As DailyFinance's Melly Alazraki reports, the shipping giant credits the current market outlook for fuel prices and the ongoing moderate recovery in the global economy for its more upbeat forecast.
Genzyme Shares Surge: Genzyme (GENZ) shares, already on a roll due to take-over rumors by rival Sanofi-Aventis (SNY), jumped nearly 8% Monday. Genzyme would seem a good fit for the French pharmaceutical firm, which desperately needs to replace lost revenue in the wake of a successful generic challenge to its Lovenox drug. Sales of the blood thinner topped $3.9 billion last year.
Credit-Card Befuddlement: A new study shows that most Americans have little clue about what's contained within credit-card agreements, those squint-inducing contracts that accompany most new cards. Moreover, as WalletPop contributor Martha White explains, some consumer advocates are claiming that card issuers make it deliberately tough for consumers to grasp what they're signing up for until it's too late.