Claims for unemployment rise 23,000, Argentina poised for default, and Target gets a new CEO. Read about these and more of the day's top business news stories.
Jobless Claims Rise 23,000
The U.S .Labor Department Thursday announced initial jobless claims of 302,000 for the week ending July 26. Economists surveyed had expected a rise of 17,000 to 301,000. The prior week’s claims were adjusted to show 5,000 fewer applications than previously reported. Economists say the level of jobless claims still shows continued strong job growth, especially since the most recent jobless report includes plant closings at automakers which retool assembly lines for new models.
Argentina Will Be In Default Again
After two days of negotiations, Argentina failed to come to a deal with its creditors and will report its second default in the last 12 years. Axel Kicillof, Argentina’s economy minister, said Wednesday in New York that the hedge funds holding Argentina’s debt were “vultures’’ after the negotiations failed. Kicillof said Argentina offered to the holdout funds similar terms as other creditors negotiated with the South American country as it attempts to get back into solid form on the international capital markets, but those terms were rejected. After defaulting in 2002, Argentina restructured its debt in 2005 and 2010. More than 90 percent of the current bondholders agreed to accept new bonds with reduced payments, but the holdout funds refused and were awarded $1.33 billion plus interest by a U.S. judge.
House Republicans Authorize Lawsuit Against Obama
U.S. House Republicans led the vote to authorize a lawsuit against President Barack Obama for his use of executive actions. The move is expected to play a large part in the midterm election cycle that runs through November. The vote went along party lines, 225-201, with no Democrats voting in favor of the lawsuit. The suit alleges the president exceeded his Constitutional authority by changing how the Obamacare health care bill was implemented. The lawsuit does not require Senate approval. Democrats say the lawsuit is the first step toward an intended impeachment of Obama, but Republicans deny that.
Weight Watchers Adds Revenue
Weight Watchers International Inc., reported second-quarter revenues that exceeded expectations, saying the number of active subscribers in Central Europe rose significantly. Shares jumped 15 percent in extended trading following the report. The company also raised its full-year profit outlook to $1.65 to $1.85 per share from the original report of $1.45 to $1.70 per share. The company earned 98 cents per share in the quarter ended June 28, while analysts had expected earnings of 77 cents per share. Marketing expenses dropped 35 percent in the quarter.
Target Names New CEO
Target has called on PepsiCo executive Brian Cornell to serve as its new Chief Executive Officer, marking the first time the company has called on someone from outside to lead the U.S. retailer, the Wall Street Journal reports. Cornell has led Pepsi’s food business for the past two years, and now steps into the position vacated three months ago by Gregg Steinhafel. Target is still suffering at the cash register from the security breach of its customers’ credit and debit cards which occurred last fall.
Sony Will Not Make Money on Its Smartphones
Sony Corp. announced Thursday is does not expect to make money on its smartphones this year due to weak demand. But the company said a restructuring plan will help it turn a profit in its consumer electronics division for the first time in four years. Sony said April to June operating profit doubled thanks to increased sales from its games and networks division. On Thursday the company cut its smartphone sales target for this fiscal year by 14 percent, saying the initial target was too ambitious amid competition from Apple Inc. and other Asian electronic makers.