Afternoon Roundup: Today's Top Stories
At The Motley Fool, we know our readers like to be informed. So we have scouted out today's most relevant news items and brought them to you all in one page. We hope you find this midday edition informative and useful.
Companies buckle up for U.S. default
With the default date looming over the country, companies have realized that Congress may not reach a deal. To prepare for what could be a catastrophic economic event, companies have started hoarding large amounts of cash.
General Electric's (NYS: GE) chief financial officer said the only way companies can protect themselves is by having a lot of liquidity to weather any adversities. GE ended the second quarter with a record $91 billion pile of cash. Chemical company FMC Corp. (NYS: FMC) , which makes most of its sales abroad, has secured foreign credit lines and added new banks as lenders to assure its liquidity. The uncertainty on whether a deal will be reached gave companies a reason to delay hiring and investment. Read more atThe Wall Street Journal.
Boeing takes off
With increasing sales in the second quarter, Boeing (NYS: BA) upped its outlook on future earnings. Its commercial plane profit surged, helping increase net income by 20%, earning $941 million, or $1.25 per share. The new 2011 outlook was raised to $3.90 to $4.10 per share; even though analysts expected $4.12.
The company's defense, space, and security business fell by 4% because Boeing decided to cut costs in the area to offset a slowdown in U.S. and overseas defense spending. Read more atThe New York Times.
Amazon grows fast, but at a high price
Amazon (NAS: AMZN) pulled off $191 million in net income, compared to $207 million from a year earlier. The largest online retailer saw a surge in its e-reader Kindle sales and new ventures in online entertaining. Its executives have said this is the best growth year in the past 10 years. But the growth was costly, as the company raced to buy more warehouses and provide more online offerings.
Challenges facing Amazon include that California, New York, Rhode Island, and North Carolina have all attempted to impose sale taxes on the goods it sells. Read more atBloombergandThe Wall Street Journal.
Dunkin' Brands dunks itself into the market
Dunkin' Brands (NAS: DNKN) , the parent company of Dunkin' Donuts and Baskin Robbins, has raised $422.75 million after pricing its IPO at $19 per share. The market value for the company has reached over $2.4 billion, which is less than one-tenth of Starbucks' value.
Dunkin Brands' biggest potential is the scarcity of its stores in western areas of the country. Starbucks and McDonald's have 11,000 and 14,000 stores in the U.S., Dunkin Brands has roughly 6,700 Dunkin Donuts stores and about 2,500 Baskin Robbins stores. Experts said investors are eager to invest in relatively strong eateries with a particular growth potential. The company began trading Wednesday. Read more atReuters.
In foreclosure debate, one more hurdle
Major U.S. banks trying to negotiate a settlement over the home foreclosure fiasco are now debating how to split the blame. The lack of a deal could further scare investors away from an already fragile banking system. Insiders said Wells Fargo (NYS: WFC) told the government it should pay less than Bank of America and JPMorgan Chase because it had fewer risky or delinquent mortgages.
Citigroup (NYS: C) argued that its better control on the management of foreclosures should earn it some reward. Bank of America, on the other hand, is pushing for a deal to get done as soon as possible and later deal with people's money. Read more atThe Wall Street Journal.
So there you have it, the top financial stories for this afternoon. Check Fool.com throughout the day for commentary on these and other stories. Also, follow us on Twitter, on Facebook, or through our email digests.
At the time this article was published Michelle Zayedowns no shares of any companies mentioned in the story. The Motley Fool owns shares of Starbucks and JPMorgan Chase. The Fool owns shares of and has created a ratio put spread position on Wells Fargo. The Fool owns shares of and has opened a short position on Bank of America. Motley Fool newsletter services have recommended buying shares of Starbucks and McDonald's.Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.