Yellen says economy still needs Federal Reserve support
WASHINGTON (AP) — Federal Reserve Chair Janet Yellen said Tuesday that the economic recovery is not yet complete and for that reason the Fed intends to keep providing significant support to boost growth and improve labor market conditions.
In delivering the Fed's semi-annual economic report to Congress, Yellen said the Fed's future actions will depend on how well the economy performs. She says if labor market conditions continue to improve more quickly than anticipated, the Fed could raise its key short-term interest rate sooner than currently projected. But she said weaker conditions will mean a longer period of low rates.
Many economists believe the federal funds rate, which has been at a record low near zero since December 2008, will not be increased until next summer. Yellen said current monthly bond purchases will likely end in October.
Tobacco firm Reynolds American to buy Lorillard
RICHMOND, Va. (AP) — Joe Camel is bulking up to take on the Marlboro Man.
Camel cigarette maker Reynolds American Inc.'s $25 billion deal to buy Newport maker Lorillard Inc. creates a formidable No. 2 tobacco company in the U.S. behind Marlboro maker Altria. It also creates a powerhouse in menthol cigarettes, which are becoming a bigger part of the business and gives the combined company some breathing room even as people smoke fewer cigarettes every year.
The deal announced Tuesday also creates a new major player in the country's tobacco market, the U.K.'s Imperial Tobacco, which is buying some of the companies' other brands including Kool and Winston and instantly becomes the king of e-cigarettes in the U.S.
Drones: Next big thing in aviation is small
LONDON (AP) — The next big thing in aviation may be really small.
With some no bigger than a hummingbird, the hottest things at this week's Farnborough International Airshow are tiny compared with the titans of the sky, such as the Airbus 380 or the Boeing Dreamliner.
What's got aviation geeks salivating at Farnborough, this year's biggest aviation jamboree, are the commercial possibilities of unmanned aerial vehicles — drones to most of us.
Drones are more commonly known for their use in conflict areas. But drones, which can weigh less than an ounce, have potential commercial applications that are vast. The industry, military and non-military, is growing and could see investments of nearly $90 billion over the next ten years.
US retail sales tick up 0.2 percent in June
WASHINGTON (AP) — U.S. retail sales increased slightly in June, evidence that consumers remain cautious despite steady job gains this year.
Retail sales rose just 0.2 percent last month, the Commerce Department said Tuesday, held back by a sharp drop at building and garden supply stores. Sales also fell at restaurants and at auto dealers.
The figures suggest that Americans are still reluctant to spend freely, limiting growth in the April-June quarter. While employers have stepped up hiring since January, wage growth remains weak and is barely keeping up with inflation. Retail sales are closely watched because consumer spending accounts for 70 percent of the economy.
In Seattle, delivering legal pot illegally
SEATTLE (AP) — William "Jackrabbit" Large pulls his SUV onto the side of a downtown Seattle street, parking behind an Amazon Fresh delivery truck and carrying a product the online retailer doesn't offer: marijuana.
The thin, bespectacled Large is a delivery man for Winterlife, a Seattle company that is among a group of new businesses pushing the limits of Washington state's recreational pot industry by offering to bring marijuana to almost any doorstep.
While delivery services have existed for years to supply medical marijuana patients, the rise of similar businesses geared toward serving recreational users in Washington and Colorado highlights how the industry is outpacing the states' pot laws.
Agency toughens protections for pregnant workers
WASHINGTON (AP) — Pregnant women have new protections against on-the-job discrimination.
The government has updated 30-year-old guidelines, citing "the persistence of overt pregnancy discrimination, as well as the emergence of more subtle discriminatory practices."
The new guidelines from the Equal Employment Opportunity Commission make clear that any form of workplace discrimination or harassment against pregnant workers by employers is a form of sex discrimination and illegal.
JPMorgan's second-quarter net income falls
NEW YORK (AP) — JPMorgan Chase, the nation's largest bank by assets, said Tuesday its second-quarter earnings fell 9 percent as revenue at its investment banking and mortgage businesses dropped.
The bank's net income totaled $5.6 billion in the quarter after payments to preferred shareholders. That was down from net income of $6.1 billion in the same period last year.
Earnings amounted to $1.46 per share, compared with $1.60 a year earlier. They beat the forecasts of analysts polled by FactSet, who predicted earnings of $1.29 a share.
Goldman Sachs posts higher profit and revenue
NEW YORK (AP) — Goldman Sachs said Tuesday that its quarterly profit rose 5 percent, helped by record results from investment banking.
Second-quarter net income climbed to $1.95 billion from $1.86 billion a year earlier, the bank said early Tuesday. That's after paying dividends on preferred stock.
Analysts had forecast that weak trading revenue would hamper results for Wall Street banks in the second quarter. Goldman's revenue and earnings were expected to shrink.
Yahoo 2Q earnings, revenue fall amid ad slump
Yahoo Inc. said Tuesday that its second-quarter earnings and revenue declined, as the company struggled again with display advertising sales.
The company also announced that Alibaba Group agreed to reduce the number of shares Yahoo is required to sell in the Chinese Internet company in an initial public offering of stock this year. Yahoo, which holds a 23 percent stake in Alibaba, now has to sell only 140 million shares in the IPO, down from 208 million earlier.
Although the reduction means that Yahoo's immediate windfall from the Alibaba IPO will be smaller, it's also a long-term bet on Alibaba's success. Analysts say Alibaba's IPO could be bigger than Facebook's $16 billion stock debut two years ago, which would make Alibaba the biggest tech IPO ever.
US businesses rebuild stockpiles at steady pace
WASHINGTON (AP) — U.S. companies restocked their store shelves and warehouses at a steady pace in May, a sign they expect sales will remain solid in the months ahead.
Business stockpiles rose 0.5 percent in May, the Commerce Department said Tuesday. That was down slightly from a 0.6 percent gain in the previous month. April's increase was the highest in six months. Total business sales rose 0.4 percent, much lower than April's 0.8 percent gain.
Steady inventory rebuilding can bolster economic growth by increasing demand for manufactured goods and boosting factory production.
The Dow Jones industrial average rose 5.26 points, or 0.03 percent, to close at 17,060.68. The Standard & Poor's 500 index slipped 3.82 points, or 0.2 percent, to 1,973.28. The Nasdaq composite index fell 24.03 points, or 0.5 percent, to 4,416.39.
Benchmark U.S. crude for August delivery fell 95 cents to close at $99.96 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 92 cents to close at $106.02 on the ICE Futures exchange in London. Wholesale gasoline fell 2.6 cents to close at $2.899 a gallon. Natural gas slipped 5 cents to close at $4.097 per 1,000 cubic feet. Heating oil shed 1.7 cents to close at $2.856 a gallon.