The market rally continues, the Gates Foundation gets a boost from Buffett and Alta Vista, we hardly knew ye. Read about these and other of the day's top business news stories.
Corporate Earnings Season Begins; Stocks Close Higher
Stocks closed higher Monday as companies prepared to start reporting their second-quarter earnings. The Dow Jones industrial average rose 0.6 percent to close at 15,224.69. The Standard & Poor's 500 climbed 0.5 percent, to end at 1,640.46. The Nasdaq composite closed at 3,464.83, a gain of 0.2 percent. Alcoa launched the start of the second-quarter earnings season. The aluminum producer reported second quarter earnings of $76 million, or 7 cents a share.
Consumers Lead the Charge as Credit Rises by Most in a Year
Consumer credit increased in May by the most in a year, Reuters reports. Total consumer installment credit advanced by a better-than-forecast $19.6 billion to $2.8 trillion, according to Federal Reserve data released on Monday. Consumer debts grew both for non-revolving credit, which includes loans for cars and college tuition, as well as for revolving facilities like credit cards. Overall consumer debt rose the most since May 2012. The rise in consumer credit is an indication that low borrowing costs were boosting economic growth although interest rates have since risen. The report does not cover borrowing for homes.
Greece Bailout Details Released
Greece will receive a 6.8 billion euro bailout payment as yet another step in saving the country’s failing economy, Reuters reported. The euro zone finance ministers agreed to give the country an initial installment payment of 2.5 billion euros in July, followed by a second payment of 500 million euros in October. Central banks in the Eurosystem agreed to contribute 1.5 billion euros in July, followed by a payment of 1.8 billion euros from the International Monetary Fund in August, and another 500 million euros from the Eurosystem in October. But Greece has been made aware that the euro zone authorities must see continued improvement in the country’s fiscal debt picture if it is to receive any more funds.
Obama Calls for Greater Government Efficiency
President Barack Obama Monday issued a directive to Office of Management and Budget director Sylvia Mathews Burwell to begin “an aggressive management agenda’’ to create a more sleek and innovative government with an eye toward saving money and creating a more responsive, accountable government. At a White House event, President Obama said the government has made strides in terms of downsizing “but now we need to do more.” He also called on Congress to help in the effort. “Taxpayers deserve the biggest bang for their buck, especially at a time when budgets are tight and we’ve got to do a lot more with less,” he said. ”I’m going to keep on doing what we can administratively, but we sure could use Congress’ help.”
Small Business Confidence Slips
The National Federation of Independent Business reports Tuesday that its Small Business Optimism Index dropped almost a full point to 93.5 in June, the first drop in three months. The index uses 10 components and six of them fell in June, while two remained unchanged and job creation plans and the six-month outlook improved. The Index report says negative sales reports are outweighing positive ones among small businesses. "Nothing cheers up a small business owner more than a customer, and they remain scarce and cautious," the NFIB said.
R.I.P Alta Vista
“You were loved. You really were.” So eulogized search industry expert Danny Sullivan of Alta Vista, which was shut down Monday by its owner, Yahoo Inc., CNN reports. The company had unceremoniously announced the search engine’s fate on June 28 on its Tumblr page. Alta Vista was introduced in 1995, three years prior to the founding of Goodle Inc. Its star had already faded by the time Yahoo acquired it as part of its $1.7 billion purchase of Overture Services Inc. 10 years ago, CNN said. According to comScore, Yahoo is the third most-used search engine behind Goodle and Microsoft’s Bing.
Gates Foundation Gets $2 Billion Boost from Warren Buffett
Warren Buffett has donated $2 billion to the Bill and Melinda Gates Foundation, his investment company Berkshire Hathaway announced Monday, Forbes reports. The 82-year-old billionaire donated 17,458,431 in class B shares of Berkshire Hathaway stock, which was trading at $115 per share on Monday. He also donated $200 million worth of shares to the Susan Thompson Buffett Foundation, named for his late wife. He also donated another $140 million of shares to each of three foundations: Howard G. Buffett, named for his son, as well as the NoVo and Sherwood foundations.