Small business optimism, Netflix "Developments" and Detroit's first scheduled hearing in its $18.5 billion bankruptcy top our roundup of the day's top business news stories.
Detroit Bankruptcy Hearing Scheduled for Wednesday
The federal judge overseeing Detroit's $18.5 billion bankruptcy will hear arguments Wednesday on the city's request to freeze lawsuits by retirees who claim their pensions are protected by the state constitution, The Associated Press reports. This will be the first hearing since Detroit became the largest U.S. city to declare bankruptcy last Thursday. The city wants the judge to suspend lawsuits or prevent new ones, especially in state court. The Michigan Constitution says pensions for public employees "shall not be diminished or impaired." Detroit retirees claim any reduction would be illegal.
Small Business Optimism Drops in June
Customers remain scarce and small business optimism falls, according to the National Federation of Independent Business, which released its Small Business Optimism Index Tuesday. The index fell 0.9 points to 93.5 in June, after reaching after enjoying two months of growth and reaching a one-year high in May. Of the 10 components to the index, six fell, and only job creation plans and the six-month outlook components advanced. The NFIB said business owners are reporting negative sales trends. “Nothing cheers up a small business owner more than a customer, and they remain scare and cautious,’’ the NFIB said in a press release.
Second Quarter Earnings are a McDisappointment
McDonald’s could use a break today. The world’s largest hamburger chain on Monday reported a second-quarter profit that rose 4 percent but was short of Wall Street expectations. McDonald’s also said July sales are expected to be “relatively flat” due to heightened competition and challenging global economic conditions, The Associated Press reports. Company stock is up 13 percent year to date. The company, which has more than 34,000 locations worldwide, says global sales edged up 1 percent at restaurants that have been operating for at least one year. Domestic sales have grown by the same amount as the iconic burger-and-fries purveyor has been freshening up its menu with healthier choices to accommodate healthier eating habits. But the small sales bump in the U.S. wasn't enough to offset higher costs to advertise and promote those new items, AP notes.
Netflix Soars Thanks to “Arrested Development”
Netflix’s second-quarter earnings soared to $29.5 million, up from $6.2 million a year earlier, on the heels of the long-anticipated revival of the comedy series “Arrested Development.” The report Monday revealed Netflix added 630,000 subscribers in the United States during the three months ending in June. Some estimates suggested they would add almost 1 million subscribers, so the actual performance was disappointing from that aspect. Stock fell 6 percent on Monday as a result of the earnings report and additional subscriber numbers. On Memorial Day weekend Netflix released 15 new “Arrested Development” to the delight of fans of that show. Netflix now has 29.8 million U.S. subscribers.
Jaguar to Roll Out Affordable Models
Jaguar will introduce new affordable models in the second half of 2015, sources told Reuters. The new cars will include a compact saloon, or sedan, and crossover SUV, currently the fastest-growing models in terms of global sales. The British luxury automaker is looking to emulate the success of is sister company Land Rover’s lower cost luxury vehicles, Reuters said. The less expensive versions of Land Rover’s Evoque small SUC and Freelander are currently among Jaguar Land Rover TAMOJL.UL group. The new Jaguar models will bring it into direct competition with the likes of BMW and Mercedes-Benz which dominate the market for entry-level luxury vehicles.
Shipwreck Brings Up $36 Million in Silver
A cache of silver valued at over $36 million has been recovered from a cargo ship that was torpedoed and sunk off the coast of Ireland during World War II. Odyssey Marine Exploration, a Tampa-based company, reports that it has recovered over 61 tons of silver bullion from the SSS Gairsoppa, a 412-foot British ship sunk 300 miles off the coast of Ireland in February of 1941. The silver came in the form of 2,792 silver ingots. The company has been pulling ingots up from the ship since last year.