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Economy seen regaining muscle in second quarter
By Lucia Mutikani WASHINGTON (Reuters) - U.S. economic growth likely regained steam in the second quarter as activity picked up broadly, which would bolster expectations for a stronger performance in the last six months of the year. Gross domestic product likely grew at a 3.0 percent annual rate after shrinking at a 2.9 percent pace in the first quarter, according to a Reuters survey of economists. "I don't think the contraction we saw in the first quarter is reflective of what's truly going on in the economy," said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh. Earlier in the second quarter, growth estimates were as high as 4 percent, but they were cut as trade, consumer spending and business investment rebounded from the winter slump by less than expected.

Asian shares hit six and a half year high, dollar steady before Fed
The Fed will not be updating its economic forecasts and Chair Janet Yellen will not hold a news conference following the two-day policy meeting, leaving investors' focus squarely on a statement scheduled to be released at 2 p.m. (18:00 GMT). "In the end it's really part of a global rally, it's been underpinned by the U.S., where economic growth is seen to be improving albeit slowly, and earnings growth in Australia looks reasonable at this stage," said Matthew Sherwood, head of investment market research at Perpetual in Sydney.

Fed seen trimming bond buys, could offer vague rate clues
By Michael Flaherty WASHINGTON (Reuters) - The U.S. Federal Reserve on Wednesday looks certain to press forward with its plan to wind down its bond-buying stimulus, and could offer some vague clues on how much nearer it might be to finally raising interest rates. With little drama expected from the decision, and no fresh economic projections and no news conference to guide investors, financial markets will be left to scour the Fed's announcement for any hint on whether officials are growing more anxious to start to reverse their monetary accommodation. The Fed has kept overnight interest rates near zero since December 2008 and has more than quadrupled its balance sheet to $4.4 trillion through a series of bond purchase programs. "It is possible that the Fed will begin to alter its view on how much slack remains in the labor market," Paul Dales, of Capital Economics, said in a research note.

Exclusive: Upstart trading venue IEX may prompt U.S. market rule change
By John McCrank NEW YORK (Reuters) - U.S regulators may relax rules that require the fastest possible execution of securities trades, potentially helping upstart trading venue IEX Group's plans to become a full-fledged stock exchange. IEX, described in author Michael Lewis' book "Flash Boys: A Wall Street Revolt" earlier this year as a place for investors to place buy and sell orders without worrying that they are being "front-run" by other traders whose order transmission speeds are faster than theirs. IEX has put in place a "speed bump" – delaying incoming orders by 350 millionths of a second, or a thousandth of the time it takes to blink -- on its trading venue, letting it update prices faster than the fastest market participants can calculate them, so that high-frequency trading firms cannot use their speed advantage to front-run others. The strategy has proved popular with investors, who have made IEX the 7th most used alternative trading system in the U.S. for the week of July 7, according to data from the Financial Industry Regulatory Authority.

Twitter assuages growth concerns for now as shares soar 35 pct
By Edwin Chan SAN FRANCISCO (Reuters) - Twitter Inc halted a slowdown in user-growth in the second quarter with the help of product tweaks and services built around the summer's World Cup, assuaging concerns for now that the online messaging service had peaked. Twitter, which has battled to reverse a steady decline in its once-heady pace of growth, surpassed targets for virtually every metric Wall Street scrutinizes. Before Tuesday's after-hours surge, Twitter had lost about 40 percent of its market value since the start of 2014. "The expectations going in had become quite low," said Sterne Agee analyst Arvind Bhatia.

Time almost up for Argentina to avoid debt default
By Richard Lough BUENOS AIRES (Reuters) - Argentina faced a race against on time on Wednesday to avert its second default in 12 years, needing to either cut a deal by the end of the day with "holdout" investors suing it or win more time from a U.S. court to reach a settlement. Argentine Economy Minister Axel Kicillof scrambled to New York on Tuesday to join last-ditch negotiations, holding the first face-to-face talks with the principals of New York hedge funds who demand full repayment on bonds they bought at a discounted rate after the country defaulted in 2002. The hedge funds are owed $1.33 billion, but an equal treatment clause in an agreement Argentina made with bondholders in 2005 would cost Argentina many billions more. Latin America's No. 3 economy has for years fought the holdout hedge funds that rejected large writedowns, but after exhausting legal avenues Argentina faces default if it cannot reach a last-minute deal.

GM sued over deaths, injuries linked to ignition switch
General Motors was hit Tuesday with a lawsuit brought on behalf of more than 650 people allegedly injured or killed in accidents involving cars that have been recalled this year for faulty ignition switches. The lawsuit was filed in Manhattan federal court, where dozens of cases against GM over the switch recall have been consolidated. Since the beginning of the year, GM has recalled nearly 15 million vehicles worldwide over potentially defective ignition switches. The company has set up a program, run by lawyer Kenneth Feinberg, to compensate victims of crashes involving about 2.6 million of those cars, mostly Cobalts, Ions and other small cars that it linked to 54 crashes and 13 deaths.

Tobacco tax law cost U.S. billions in revenue: report
By Annika McGinnis WASHINGTON (Reuters) - A 2009 law that raised federal taxes to discourage smoking cost the U.S. government billions of dollars in lost revenue as manufacturers relabeled products and consumers shifted to cheaper pipe tobacco and large cigars, the U.S. Government Accountability Office said in a report released on Tuesday. The GAO estimated $2.6 billion to $3.7 billion in lost revenue from April 2009 to February 2014 as manufacturers exploited loopholes in the Children's Health Insurance Program Reauthorization Act which raised taxes for smoking-tobacco products. "Each of the three tobacco manufacturers that agreed to speak with us explained that their companies switched from selling higher-taxed roll-your-own tobacco to lower-taxed pipe tobacco to stay competitive," the congressional watchdog agency said in the report, which was the focus of a Senate hearing on Tuesday. Showing a third sample, he pointed out that a label saying "all-natural pipe tobacco" covered up a statement that the bag "makes approximately 500 cigarettes." "Everyone knows this is cigarette tobacco," Bernstein said.

Icahn cuts stake in Family Dollar
(Reuters) - Activist investor Carl Icahn cut his stake in Family Dollar Stores Inc , a day after the company agreed to be bought by rival discount chain Dollar Tree Inc for $8.5 billion. Icahn said he was "determined" to dispose part of his stake rather than wait for the deal to close or for higher offers to emerge. Icahn, who had threatened a proxy war against the struggling discount chain if it did not put itself up for sale, said on Monday there were "a handful of potential buyers" who could be a better fit to buy Family Dollar. He had earlier touted fellow discounter Dollar General Corp as a potential buyer.

Prosecutors, defense spar over $150 billion forfeiture for Madoff aides
By Joseph Ax NEW YORK (Reuters) - Four months after five former Bernard Madoff aides were convicted of helping conceal his massive Ponzi scheme, their lawyers and U.S. prosecutors are still fighting over the trial's key question: What did they know, and when did they know it? Prosecutors are seeking more than $150 billion in criminal forfeiture from the longtime employees of Bernard L. Madoff Investment Securities: back-office director Daniel Bonventre, portfolio managers Annette Bongiorno and Joann Crupi and computer programmers Jerome O'Hara and George Perez. At a court hearing on Tuesday in New York federal court, the government argued the defendants are responsible for every dollar of investor money that came to the firm after they started working there, because they should have known the money could be lost as a result of the scheme.

Processing issue delays bar exam submissions
DALLAS (AP) — Testing software provider ExamSoft Worldwide Inc. says a processing issue has caused a delay for some bar exam takers in multiple states in submitting their answers.

Twitter 2Q results soar, stock flies high
NEW YORK (AP) — The little blue bird is flying high. Stronger-than-expected financial results pushed Twitter's stock sharply higher on Tuesday after the short messaging service said its revenue more than doubled in the second quarter.

Toyota remains at top in sales after first half
TOKYO (AP) — Toyota remains No. 1 in global vehicles sales after the first six months of this year, followed by Volkswagen which bumped General Motors out of second place as the U.S. automaker grapples with a recall scandal.

PG&E charged with obstruction over San Bruno blast
SAN FRANCISCO (AP) — A federal grand jury charged Pacific Gas & Electric on Tuesday with lying to federal investigators in connection with a fatal pipeline explosion that killed eight people and leveled a suburban Northern California neighborhood in 2010.

Asia stocks rise on earnings, await US growth data
TOKYO (AP) — Asian stocks rose Wednesday ahead of U.S. economic data and as cheery earnings from major Japanese companies such as Honda Motor Co. countered a lower close on Wall Street.