TODAY

– July 24, 2014

Stocks edge higher; Dow boosted by McDonald's

The Dow Jones industrial average rose 15 points with a strong report from McDonald’s. The S&P was flat; the Nasdaq rose 9 points. The Dow Jones industrial average rose 15 points with a strong report from McDonald’s. The S&P was flat; the Nasdaq rose 9 points. (AP) — Stocks edged higher Monday on Wall Street after a strong sales report from McDonald's offset concerns about the surprise resignation of Italy's prime minister. Investors also waited for developments in crucial U.S. budget talks.

The Dow Jones industrial average rose 14.75 points to 13,169.88. The index traded within a narrow range of just 56 points throughout the day. The Standard and Poor's 500 finished 0.48 point higher at 1,418.55. The Nasdaq composite ended up 8.92 points at 2,986.96.

McDonald's rose 93 cents to $89.41. A key sales figure rose in November as U.S. customers bought more breakfast offerings and limited-time Cheddar Bacon Onion sandwiches.

Robert Pavlik, chief market strategist at Palm Beach, Fla.-based Banyan Partners, said the company's strength was encouraging. McDonald's, one of the 30 stocks in the Dow, was trading as high as $100 at the beginning of 2012.

The pickup in McDonald's sales, he said, gave investors something positive to focus on as Italy's sudden political turmoil sent a jolt through European markets.

Hewlett-Packard rose 36 cents to $14.16 and also helped push the Dow higher. The company's stock has been battered the past two months following a weak earnings forecast and a public spat with the founder of Autonomy, a company it acquired for $10 billion last year.

Italian Prime Minister Mario Monti, who has been credited with restoring confidence in the nation's economy, announced that he would step down after former Prime Minister Silvio Berlusconi's party dropped its support for his government.

Italian government bond yields, a critical measure of how much the country has to pay to borrow, jumped. Concern that the European debt crisis was enveloping Italy, one of the euro region's largest economies, helped stymie markets around the world earlier in the year.

Investors were also following developments in budget talks in Washington. Tax increases and federal spending cuts start Jan. 1 unless a deal is reached to reduce the U.S. budget deficit. Economists say the measures, if implemented, could eventually push the economy back into recession.

The yield on the 10-year Treasury note fell 1 basis point to 1.62 percent.

President Barack Obama and House Speaker John Boehner met at the White House on Sunday while rank-and-file Republicans stepped forward with what they called pragmatic ideas to break the stalemate. The Obama-Boehner meeting was the first between just the two leaders since Election Day.

"There's a pretty good belief that the 'fiscal cliff' can be avoided," said Craig Johnson, a technical market strategist at Piper Jaffray. "Anytime somebody is talking, it's a good thing."

Other stocks making big moves:

— Priceline.com fell $33.14, or 5 percent, to $625.96 after Deutsche Bank cut its recommendation on the stock to "hold" from "buy" and lowered its price target to $710 from $800.

— Phillips 66, the refining and pipeline company, gained $1.24, or 2.4 percent, to $53.58 after saying late Friday that it was raising its quarterly dividend to 31.25 cents per share from 25 cents. The company also said it had approved the repurchase of another $1 billion in company stock, after approving the repurchase of $1 billion during the first quarter.

— Intermec, a maker of barcode printers and radio frequency identification products, jumped $1.85, or 23.2 percent, to $9.83 after it agreed to be acquired by Honeywell for about $603.4 million in cash.

— AIG fell 74 cents, or 2.3 percent, to $33.36 after the insurer said late Friday that it will take $1.3 billion in losses related to Superstorm Sandy, more than other major insurance companies have reported so far. UBS said in a client note that AIG's Sandy-related losses were above his estimate and cut his price target to $35 from $36.

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Written on 07/24/2014, 10:16 am by Associated Press
(AP) — The state Public Utility Commission has approved emergency permits for two ride-sharing companies that have been operating in the Pittsburgh...
Written on 07/24/2014, 10:08 am by Associated Press
(AP) — A California wine collector the government has characterized as a prolific wine counterfeiter who sold at least $20 million in fake wine is set for sentencing on fraud charges. Rudy Kurniawan, 37, was convicted in December of mail and wire fraud charges after evidence was presented to a jury that he manufactured bogus bottles of wine in his Arcadia, California, kitchen, and then peddled them as vintage wine. Although the charges carry a potential of up to 40 years in prison, federal sentencing guidelines call for him to serve at least 11 years in prison. Defense lawyer Jerome H. Mooney has told U.S. District Judge Richard M. Berman that Kurniawan, born of Chinese descent in Indonesia, should be sentenced to the two years and three months he has already served, since he will be deported anyway. His sentencing is on Thursday. Mooney said his client used millions of dollars of his family's money to build a large collection of rare wines from 2004 to 2012 as he was embraced by the wine collecting community, which attended tastings he arranged. "Rudy liked the feeling of being the center of attention. It gave him a feeling of achievement and belonging that he had never before experienced," he wrote. At one party for Kurniawan's mother's birthday, actor Jackie Chan was a special guest, the lawyer said. "The highlight of the evening for Rudy was when Jackie Chan stood on a chair and applauded Rudy. It was the best night of his life," Mooney added. But prosecutors say Kurniawan deserves a longer sentence after he sold millions of dollars of fake wines and then "flaunted that wealth with extravagant purchases of authentic wine, luxury cars, a Beverly Hills mansion, flights on private jets, designer watches and clothing, fine art and much more." They said his lust for money and attention motivated him. "Simply put, Kurniawan is not sorry for what he did, he is sorry that he was caught," prosecutors wrote. "The court should thus not show Kurniawan any leniency based on an 11th hour attempt to show remorse." Billionaire yachtsman, entrepreneur and wine investor William Koch filed a letter with the court saying he lost more than $2 million in the fraud and had spent millions more investigating it. He said serious fraud merits serious punishment.
Written on 07/24/2014, 8:59 am by The Associated Press
(AP) — Rep. Paul Ryan proposed a new plan Thursday to merge up to 11 anti-poverty programs into a single grant program for states that he said would allow more flexibility to help lift people out of poverty. Programs that would be merged include food stamps, cash welfare, housing subsidies, and heating aid for the poor, among others. The Wisconsin Republican and 2012 vice presidential nominee is a respected voice within his party. His new "Opportunity Grant" plan would impose work or job training requirements on aid recipients and require states that choose to participate to set up at least two service providers, a move he says would encourage partnerships with locally-based nonprofits and community groups that may better know the needs of their communities. Ryan, who has traveled the country in the past year visiting with the poor and with those who help them, said current anti-poverty programs are "fragmented and formulaic" and that his new grant program would allow greater collaboration within communities to help lift people out of poverty. "The idea would be to let states try different ways of providing aid and then to test the results — in short, more flexibility in exchange for more accountability," Ryan said in a speech to the American Enterprise Institute, a Washington think tank. "Get rid of these bureaucratic formulas. Put the emphasis on results." In the speech, Ryan said his plan would permit greater innovation to help people find opportunities to get jobs. A single mother who wants to be a teacher, for example, might focus on getting help with transportation and child care to take night classes rather than on getting other forms of aid like food assistance. "Right now, you have to go to a bunch of different offices to enroll in a bunch of different programs." Ryan said. "Under the Opportunity Grant, you could go to one office and work with one person for all your needs." Third-party monitors would judge the effectiveness of programs and providers. Participation by states would be voluntary, and Ryan said he sees the proposal as an experimental pilot program that wouldn't be expanded until the initial results are in. "Any provider who came up short could no longer participate. And at the end of the program, we would pool the results and go from there," Ryan said. Ryan largely endorses a plan by President Barack Obama to increase tax credits for the working poor by doubling the credit available to childless workers and lowering the eligibility age from 25 to 21. He proposes to pay for it by cutting what he calls "corporate welfare" and ineffective programs. He also endorsed bipartisan efforts to give judges more discretion in handing down prison sentences to nonviolent offenders.
Written on 07/24/2014, 8:57 am by The Associated Press
(AP) — The number of people seeking U.S. unemployment benefits fell last week to its lowest level in more than eight years. Weekly applications for unemployment aid dropped 19,000 to a seasonally adjusted 284,000, the Labor Department said Thursday. That's the lowest reading since February 2006, nearly two years before the Great Recession began. The four-week average, a less volatile measure, declined 7,250 to 302,000. Claims for jobless aid have been falling for the past three months. Recent reports have coincided with the temporary summer shutdowns of auto plants, yet the impact of those closures is addressed through seasonal adjustments. Applications are a proxy for layoffs. When employers hold onto their workers, it's a sign of potential income gains, increased hiring and confidence that the economy will grow. The recent drop-off in unemployment benefit applications point to a substantial number of jobs added in July, raising expectations for the monthly employment report to be released August 1. "All in, it looks like we may be in for another solid payroll report," said Jennifer Lee, a senior economist at BMO Capital Markets. The decline in people applying for benefits buttresses other reports that the economy is improving. Employers added 288,000 jobs in June, the fifth straight month of job gains above 200,000. That's the first such stretch since 1999, during the height of the dot-com boom. The unemployment rate has fallen to 6.1 percent, the lowest since September 2008. Total layoffs in May dropped below pre-recession levels, the government said in a separate report. Job openings are at their highest level in seven years, while more workers are quitting their jobs. Workers usually quit when they have an offer for a better position or confidence that they can find one. Still, the job growth has done little to lift wages significantly. Wage growth has barely matched inflation during the economic recovery. But more people with jobs increases the total number of paychecks, which could boost consumer spending and growth. After a sharp contraction in the economy in the first three months of the year, most economists expect growth to return in the April-June quarter and exceed 3 percent at an annual pace in the second half of 2014.
Written on 07/24/2014, 8:55 am by The Associated Press
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Written on 07/24/2014, 8:51 am by The Associated Press
(AP) — Sales of new U.S. homes plunged in June, a sign that real estate continues to be a weak spot in the economy. New home sales fell 8.1 percent last month to a seasonally adjusted annual rate of 406,000, the Commerce Department said Thursday. The report also revised down the May sales rate to 442,000 from 504,000. Buying of new homes fell 20 percent in the Northeast, followed by less extreme declines in the Midwest, South and West. The modest sales caused the inventory of new homes on the market to increase to 5.8 months, the highest since October 2011. The median sales price was $273,500, up 5.3 percent over the past 12 months. "Today's report underscores" Federal Reserve Chair Janet Yellen's "observation in testimony last week that housing sector data still are 'disappointing,'" said Dana Saporta, director of economic research at the bank Credit Suisse. Home sales had been improving through the middle of 2013, only to stumble over the past 12 months due to a mix of rising prices, higher mortgage rates and meager wage growth. The pressures from mortgage rates have eased since the start of 2014 and the pace of price increases have slowed. Still, other indicators suggest that home-buying has stalled after rebounding from lows reached during the Great Recession. The National Association of Realtors reported that sales of existing homes increased 2.6 percent in June to a seasonally adjusted annual rate of 5.04 million homes. It marked the first time that sales have been above the 5 million-mark since October. Economists were encouraged by the second straight monthly gain in existing home sales, though those sales are still hovering below the recent peak of 5.38 million sales hit last July. Nasty winter storms weighed on sales of both existing and new homes in late 2013 and early 2014, making it unlikely that sales can match last year's pace. Sales of existing homes are expected to be below the 5.1 million homes bought last year and the 5.5 million annual sales that would be consistent with a healthy housing market. Still, there are indications that sales could pick up. Along with the arrival of spring, average mortgage rates have dropped to 4.13 percent, from 4.53 percent at the beginning of this year, according to Freddie Mac. The rate of price gains has slowed as the inventory of homes for sale has improved. But wage growth has barely kept pace with inflation, reducing how much income people have to spend and save for down payments.
Written on 07/24/2014, 8:49 am by The Associated Press
(AP) — Wal-Mart U.S. chief Bill Simon is stepping down after being in the role since June 2010, the company said Thursday. The world's largest retailer named the head of its Asian business as his replacement.The Bentonville, Arkansas-based retailer said Greg Foran, 53, who was promoted to president and CEO of Wal-Mart Asia earlier this year, will succeed Simon. The changes will take effect Aug. 9. Wal-Mart Stores Inc. said Simon will be available on a consulting basis for the next six months to ensure a seamless transition. U.S. Wal-Mart stores have suffered five straight quarters of sales declines at stores open at least a year, hurting from a tough economy and fierce competition from dollar stores and Amazon.com. The measure is considered a key indicator of a retailer's health because it excludes results from stores recently opened or closed. Thursday's announcement marks the company's biggest management shakeup since Doug McMillon took over as president and CEO of Wal-Mart Stores Inc. in February. Foran will report to McMillon, who had been head of Wal-Mart's international business before taking over the top job at the company. Simon, who joined Wal-Mart in 2006, was the chief operating officer for Wal-Mart's U.S. division from 2007 to 2010 and created and launched Wal-Mart's successful $4 prescription drug program. When Simon took over as CEO of Wal-Mart's U.S. division, he led the turnaround of Wal-Mart's business right after the recession by focusing on the company's roots of offering everyday low prices. He also helped restore thousands of popular items that the company had stopped selling in an overzealous attempt to declutter the stores. That helped Wal-Mart get out of a two-year slump in late 2011. Simon also led the company's campaign to revitalize U.S. manufacturing and helped to spearhead the company's move to accelerate its plans for small-store formats. But Wal-Mart, like many of its store rivals, is facing seismic changes in the retail landscape as shoppers are increasingly going to small stores or buying and researching on their mobile devices for convenience. The move to name Foran indicates Wal-Mart is looking to further shake up its strategy. "Greg is one of the most talented retailers I've ever met," McMillon said in a statement. "His depth of knowledge and global experience will bring a fresh perspective to our business. His passion for fresh food, experience in general merchandise and commitment to e-commerce will help us serve our customers even more effectively for years to come." Foran, a 35-year retail industry veteran, joined Wal-Mart in October 2011 and became president and CEO of Wal-Mart China in March 2012. He was promoted to president and CEO of Wal-Mart Asia earlier this year. Before joining Wal-Mart, Foran held a number of roles with Woolworths, the leading retailer in Australia and New Zealand.
Written on 07/24/2014, 8:48 am by The Associated Press
(AP) — Union Pacific Corp. says its quarterly profit climbed 17 percent as the railroad hauled 8 percent more freight and raised shipping rates. The Omaha, Nebraska-based company said Thursday that profit increased to $1.29 billion, or $1.43 per share, in the second quarter. That's up from $1.11 billion, or $1.18 per share, a year ago. The analysts surveyed by Zacks Investment Research expected profit of $1.42 per share on average. Union Pacific's earnings per share were helped by the railroad's purchase of 8.3 million shares of its own stock for $806 million during the quarter. The railroad said revenue rose 10 percent to $6.02 billion from $5.47 billion in the same quarter a year earlier, and beat Wall Street forecasts. Analysts expected $5.98 billion, according to Zacks. Union Pacific shares gained $19.31, or 23 percent, to $102.51 since the beginning of the year, while the Standard & Poor's 500 index has climbed 7.5 percent. Union Pacific operates 32,400 miles of track in 23 states from the Midwest to the West and Gulf coasts.
Written on 07/24/2014, 8:10 am by Business Journal Staff
Johnson Capital, a national real estate capital advisory firm in Sacramento, has arranged a $6.67 million loan for a buyer to purchase the 192-unit Willow Lakes Apartment Homes in Corcoran. The loan is secured by the apartment complex. Housing Solutions LLC of Martinez, Calif. is the buyer. Lanford Tobe, senior vice president of Johnson Capital, hooked up with Streamline Realty Funding in New York, which provided the loan under its bridge loan program. The seller, Willow Lakes RECA LLC, which purchased the complex from the bank after it was foreclosed on, refurbished the apartment complex before putting it up for sale. The apartments remained open during the transition. The purchase was made possible by a three-year, interest-only, non-recourse loan that includes two one-year extension options. The loan amount represents 85 percent of the purchase price and has an interest rate in the low 5 percent range. "This 85 percent loan-to-value loan is a great example of the low-cost, short-term bridge loans that we can now arrange for multifamily investors,” Tobe said. “Since 25 percent to 30 percent down is the norm and financing in the Central Valley towns near Fresno is limited, we are very pleased to arrange a purchase transaction that required only a 15 percent down payment.” The property, Willow Lakes Apartment Homes, was built in 1987 and is a townhome apartment community situated on 16.87 gated acres in a private park-like setting. The property consists of one-story flats, two-story townhome-style buildings and a central one-story clubhouse with a new fitness room. Willow Lakes features three lakes with fountains as well as many willow trees throughout the property. The unit mix is comprised of 37 one-bedroom units, 117 two-bedroom units and 36 three-bedroom units. The complex includes two swimming pools and a spa.
Written on 07/23/2014, 4:06 pm by Business Journal staff
The Riverbend Golf Club in Madera County has changed its name to the Dragonfly Golf Club as part of a major expansion and upgrade that also includes new golf carts and membership opportunities. Located east of Highway 41 on Avenue 12, the golf club has been undergoing several changes in the last few months under President of Operations Gene Gabelmann. "Golf is an activity for all ages and skill levels," said Gabelmann, in a release. "We want Dragonfly to be a place where enjoyment goes beyond the score of the day." Among the changes are 75 new golf carts with onboard GPS touch screens, improvement to golf course conditions, water feature renovations and a remodel of the clubhouse. Members are also benefiting from new reduced golf cart fees, up to seven-day advance reservation for walking and riding rates and Monday-through-Friday play for weekday members. As well, there are new new men's, ladies, twilight and corporate leagues and a new golf performance institute for all ages to learn and excel at the game. The Super Monday summer play deal charges a fee of just $35 to play, including the golf cart. Golfers can even get food prepared for them or on the links when they order through the touch screen display on the golf cart. Future plans include a major expansion of existing facilities, a monumental entry structure, a way-finding system and grounds upgrades.

Latest State News

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Written on 07/24/2014, 8:59 am by The Associated Press
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