Celebrating 7-Eleven's 87th birthday? There's an app for that. Read about this and more of the day's top business news stories.
Brother of Jailed Hedge Found Founder Acquitted
Rengan Rajaratnam, the brother of an imprisoned ex-billionaire hedge fund founder, was acquitted of conspiracy on Tuesday. He still faces civil charges from the Securities and Exchange Commission. The defendant's brother, Raj Rajaratnam - founder of the Galleon Group of hedge funds - is serving an 11-year sentence after the government said he earned up to $75 million illegally by trading on secrets provided by corrupt employees of public companies and a network of analysts and portfolio managers who also obtained inside information, The Associated Press reports. Two dozen other defendants have pleaded guilty or were convicted in the case. In all, prosecutors have obtained guilty pleas or jury verdicts against 81 individuals in insider trading cases in the last six years. This was their first loss.
Solid Gold Earnings for Alcoa
Aluminum company Alcoa reported better-than-expected second-quarter earnings Tuesday, USA TODAY reports. The company earned $138 million during the quarter reversing the company’s $148 million loss in the same period a year ago. Alcoa reported revenue of $5.8 billion, which is 2.6 percent higher than expected. Revenue is flat from the year-ago period.
Alcoa’s release of its profit report unofficially kicks off what traders consider to be the start of earnings season. Analysts forecast 6.6 percent earnings growth from companies in the Standard & Poor’s 500 in the second quarter, an increase from 3.4 percent earnings growth in the first quarter of 2014 and 4.9 percent growth in the second-quarter of 2013, USA TODAY notes.
Pace of Consumer Borrowing Slowed in May
Overall credit rose by $19.6 billion in May, down from a gain of $26.1 billion in April, the Federal Reserve said Tuesday. Total outstanding consumer debt is now approaching $3.2 trillion, The Associated Press reports. Auto and student loans increased by a combined $17.8 billion, a year over-year rise of 9.3 percent. Credit card debt rose by a slight $1.8 billion in May, after recording an April surge. Credit card debt has increased 2.5 percent over the past year. Increased borrowing generally indicates increased consumer confidence and a willingness to take on debt.
Driller Thriller--U.S. Oil Production to Hit Four-Decade High
U.S. crude oil production is likely to hit its highest level since 1972 next year, while Iraq’s output, despite continued unrest there, is expected to hold steady, according to a forecast Tuesday by the U.S. Energy Information Administration, USA TODAY reports. U.S. oil production has jumped from 5 million barrels per day in 2008 to 7.4 million last year and is expected to average 8.5 million this year and 9.3 million next year, according to the EIA, the analytical arm of the Department of Energy. Texas’ monthly oil output recently topped 3 million barrels per day for the first time since 1977 and North Dakota’s oil production reached an unprecedented 1 million. This oil boom, along with a rise in natural gas liquids production, has dramatically lowered petroleum imports. The EIA forecasts that the U.S. and Canada will account for most of the world’s projected growth in production of oil and other liquid fuel through 2015 while China and less developed countries will drive most of the growth in
Honda Expands Its Recall
Honda, one of eight automakers caught up in the recalls of Takata air bags, has expanded its recall by 500,000 to 1 million vehicles. The expansion is limited to cars in California, the paper notes. Honda had originally ordered three recalls of more than two million vehicles on June 23. The expansion was precipitated by an incident in California involving a 2005 Accord occurred. The air bags made by Japan's Takata can rupture with too much force when a crash occurs. When they do, they spew metal chunks that can injure a car's occupants. Included in the recall to replace the passenger-side air bags are certain 2003 to 2005 Honda Accords, Civics, CR-Vs, Elements, Pilots, Acura MDX and 2005 Acura RLs and 2003 to 2004 Honda Odysseys. With California, the states impacted by the recall include Alabama, Florida, Georgia, Hawaii, Louisiana, Mississippi, South Carolina, Texas, Puerto Rico and the U.S. Virgin Islands.
“App”y Birthday, 7-11
Convenience store 7-Eeven will celebrate its 87th birthday on Friday by offering millions of free 12-ounce Slurpees, its signature iceee drink. But for customers who download the company’s app, 7-Eleven will expand its birthday giveaways, USA TODAY reports. Continuing the festivities into the following week, the company will hand out ice cream bars, free cookies and Big Gulps to its app-y customers. The nation’s largest convenience store has adopted July 11 (7-Eleven) as its birthday. This year, it plans to give out more than 7 million Slurpees between the giveaway hours of 11 a.m. to 7 p.m. The smartphone promotion extends the celebration to July 12-19.