GM narrows European loss, improves profit at home

General Motors reported strong earnings in North America and smaller losses in Europe.

NEW YORK (CNNMoney)

GM said Thursday it earned $1.2 billion, or 75 cents a share, in the quarter, down from $1.5 billion it earned a year earlier. But excluding special items, the drop in earnings was not as bad as forecast by analysts surveyed by Thomson Reuters, and shares of GM (GM, Fortune 500) rose in premarket trading.

Revenue rose $1.1 billion to $38.2 billion, as the number of vehicles sold worldwide rose 4% to 2.5 million. Sales volume was flat in China, now the largest market for car sales, and down in Europe, but increased 7% in North America.

Related: J.D. Power ranks GM tops in quality for first time

Earnings in North America rose 4% to just under $2 billion on the improved sales, and the company also hired 6% more North American workers from a year earlier, primarily white collar jobs such as engineers. It also trimmed prior-year losses in Europe by 72%, taking losses down to $110 million. But earnings in the international unit that includes China and Asia tumbled 64% to $228 million.

The results were similar to those reported Wednesday by rival Ford Motor (F, Fortune 500), which also beat forecasts and raised its earnings guidance on reduced losses in Europe and strong North American results.

First Published: July 25, 2013: 8:15 AM ET

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SAC Capital hit with criminal charges

SAC has earned a reputation for being one of the world's most profitable hedge funds.

NEW YORK (CNNMoney)

The indictment charges that the hedge fund was guilty of both "unlawful conduct by individual employees and an institutional indifference to that unlawful conduct."

The government alleges a pattern of insider trading that was "substantial, pervasive and on a scale without known precedent in the hedge fund industry."

SAC Capital did not immediately reply to CNNMoney's requests for comment.

The indictment charges that the insider trading started in 1999. and that the firm hired research analysts and money managers specifically because they possessed insider information. It says the insider trading resulted in "hundreds of millions" of dollars of illegal profits and "avoided losses" for the hedge fund.

The indictment follows a wide-ranging investigation that has already implicated more than half-a-dozen current or former SAC employees.

Cohen himself has not been charged criminally, though the Securities and Exchange Commission announced civil charges against him last week, accusing him of failing to supervise employees who engaged in insider trading.

Investigators have been circling Cohen and SAC for years. The firm agreed in March to pay the SEC roughly $615 million in connection with alleged insider trading by employees including two portfolio managers, Mathew Martoma and Michael Steinberg.

Martoma and Steinberg have already been charged criminally and are awaiting trial. Both have pleaded not guilty.

Martoma is accused of selling and shorting shares of the pharmaceutical companies Elan (ELN) and Wyeth based on inside information from drug trials that had not been publicized. The trades allegedly allowed SAC to generate profits and avoid losses worth $276 million in total.

Steinberg is accused of insider trading in Dell (DELL, Fortune 500) and Nvidia (NVDA) stock. An analyst who reported to Steinberg, Jon Horvath, has already pleaded guilty and is cooperating with prosecutors.

Related: Wall Street sheriff says no one too big to indict

Investors have been fleeing SAC in droves over the past few months as the firm's legal troubles have mounted.

The indictment of the firm makes matters worse. The Justice Department could permanently shutter SAC, which reportedly employs about 1,000 people, with a conviction in the case.

The SEC, meanwhile, is seeking to bar Cohen for managing investor funds. He could also be barred from the financial services industry.

Even if the firm is closed and Cohen himself faces sanctions, he could still manage the massive personal fortune he has invested with SAC, said Jacob Frenkel, a former federal prosecutor and SEC lawyer. As of May, Cohen accounted for $7 billion out of the roughly $15 billion managed by SAC, according to Bloomberg.

Nonetheless, the criminal charges against SAC represent a significant step.

Prosecutors have generally been reluctant to indict companies since accounting firm Arthur Andersen essentially collapsed a decade ago -- taking down nearly 28,000 jobs -- after being convicted in connection with the Enron scandal, said Michael Clark, a defense lawyer and former federal prosecutor. The conviction was later overturned by the Supreme Court.

Subsidiaries of global banks Royal Bank of Scotland (RBS) and UBS (UBS) have pleaded guilty in the past few months to criminal charges in connection with the Libor rate-rigging scandal, though those pleas didn't affect the firms' ability to operate in the United States.

-- CNNMoney's Chris Isidore and Maureen Farrell contributed to this report.

First Published: July 25, 2013: 9:58 AM ET

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Stocks turn mixed as earnings roll in

Click chart for stock market data.

NEW YORK (CNNMoney)

The Dow Jones Industrial Average and the S&P 500 both dipped by more than 0.2%, while the Nasdaq gained 0.4%.

More than a third of the companies in the S&P 500 have reported second-quarter results so far, according to S&P Capital IQ. As of Wednesday afternoon, more than 65% had topped analysts' lowered expectations.

Tech stocks were getting a big boost from Facebook (FB).

Shares of Facebook surged more than 25% Thursday, a day after the social networking site posted strong quarterly results, led by a marked improvement in its mobile business.

The momentum propelled Zynga's (ZNGA) stock, as well. The app developer has games on Facebook.

General Motors (GM, Fortune 500) reported an improvement in second-quarter earnings but a slowdown in China pressured overall profits.

Dow Chemical (DOW, Fortune 500) and Tripadvisor (TRIP) also reported quarterly profit gains.

Amazon (AMZN, Fortune 500) and Starbucks (SBUX, Fortune 500) are due to report after the close.

In economic news, the government released jobless claims data Thursday morning in line with expectations. Initial claims rose to 343,000 for the week ended July 20, an increase of 7,000 from the previous week.

New orders of durable goods, also reported by the Census Bureau, surged past expectations. The number jumped by 4.2% in June to $244.5 billion and has risen for four of the past five months. The increase is largely due to a $5.4 billion increase in non-defense spending for capital goods.

Related: Fear & Greed Index, still greedy

U.S. stocks finished mostly lower Wednesday, though a tech rally fueled by Apple's (AAPL, Fortune 500) better-than-expected earnings on Tuesday limited the losses.

European markets were lower in midday trading. London's benchmark FTSE 100 index, Germany's DAX and the CAC 40 in France were all down by about 0.7%.

Asian markets ended with losses, even as the Chinese government announced a mini-stimulus plan that should give a boost to certain areas of the economy, including small businesses.

Baidu (BIDU) shares surged 14% after the Chinese Internet company reported a second quarter profit that topped analyst expectations.

Hong Kong's Hang Seng index lost 0.3% and the Shanghai Composite index declined by 0.6%.

In Japan, Tokyo's Nikkei fell by 1.1%.

First Published: July 25, 2013: 9:53 AM ET

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Enter the disrupters

(Fortune)

"Yo," the hipster replied with a smarmy aura of self-importance. "I suppose I should introduce myself. I'm a disrupter, and I'm here to disrupt whatever it is you think you're doing, drain it of value, and replace it with something else entirely."

"Get off my property," I replied as cordially as I could. "Not only are you trespassing, but you're obnoxious."

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Time Warner Cable delays CBS cut-off

CBS shows such as "Under the Dome" are at risk of not being seen by Time Warner Cable customers due to a dispute between the network and cable operator.

NEW YORK (CNNMoney)

The dispute between the network and cable operator could also cut off pay cable network Showtime for all Time Warner Cable customers. Showtime is owned by CBS.

Time Warner Cable spokeswoman Maureen Huff said the agreement to extend talks came about 11 p.m. ET Wednesday. The new deadline is 5 p.m. ET Monday. Huff said there is still no long-term deal and that negotiations are continuing.

The dispute is over the fees that CBS (CBS, Fortune 500) receives from Time Warner Cable (TWC, Fortune 500) for carrying the affiliates that it owns and operates itself. The 3 million customers affected by these talks are mostly in New York, Los Angeles and Dallas, but subscribers in Chicago, Boston, Pittsburgh, Detroit and Denver are also at risk.

CBS affiliates elsewhere are owned by other companies that hold their own negotiations with cable operators.

The dispute threatens to cut off access to shows such as CBS' summer hit "Under the Dome" as well as Showtime original series "Dexter" and "Ray Donovan"

Related: What digital network TV execs fear most

CBS could not be reached for comment. It has been running TV commercials warning customers in the affected cities of the negotiations and that "Time Warner Cable is threatening to hold your favorite shows hostage."

Time Warner Cable, which was spun off from CNNMoney parent Time Warner Inc. (TWX, Fortune 500) in 2009, has responded with its own Web site saying that CBS is demanding 600% more than the cable operator pays for the network shows in other cities.

First Published: July 25, 2013: 7:45 AM ET

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GM narrows European loss, improves profit at home

General Motors reported strong earnings in North America and smaller losses in Europe.

NEW YORK (CNNMoney)

GM said Thursday it earned $1.2 billion, or 75 cents a share, in the quarter, down from $1.5 billion it earned a year earlier. But excluding special items, the drop in earnings was not as bad as forecast by analysts surveyed by Thomson Reuters, and shares of GM (GM, Fortune 500) rose in premarket trading.

Revenue rose $1.1 billion to $38.2 billion, as the number of vehicles sold worldwide rose 4% to 2.5 million. Sales volume was flat in China, now the largest market for car sales, and down in Europe, but increased 7% in North America.

Related: J.D. Power ranks GM tops in quality for first time

Earnings in North America rose 4% to just under $2 billion on the improved sales, and the company also hired 6% more North American workers from a year earlier, primarily white collar jobs such as engineers. It also trimmed prior-year losses in Europe by 72%, taking losses down to $110 million. But earnings in the international unit that includes China and Asia tumbled 64% to $228 million.

The results were similar to those reported Wednesday by rival Ford Motor (F, Fortune 500), which also beat forecasts and raised its earnings guidance on reduced losses in Europe and strong North American results.

First Published: July 25, 2013: 8:15 AM ET

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Bribery scandal will hit Glaxo's China growth

GlaxoSmithKline CEO Andrew Witty said a bribery investigation would hit the company's business in China, where sales grew 14% in the second quarter.

LONDON (CNNMoney)

GSK (GSK) admitted this week that some of its executives may have broken the law, and promised to change its business practices, after Chinese police accused the company of facilitating a bribery ring to artificially boost drug prices.

The British drugmaker is accused of channeling nearly $500 million through a network of 700 travel agencies to pay bribes to government officials, medical associations, hospitals and doctors.

"Clearly, we are likely to see some impact to our performance in China as a result of the current investigation, but it is too early to quantify the extent of this," GSK CEO Andrew Witty said in a statement. "We are co-operating fully with the Chinese authorities in this matter."

Four senior GSK executives have been detained. State television has aired an apparent confession by one of the four, Liang Hong, explaining how the scheme worked, including the use of fake conferences and travel agencies to create receipts for services that were never performed. The surplus funds were allegedly then used to pay bribes.

In addition, Steve Nechelput, finance director for GSK China, has been prevented from traveling outside the country since the end of June.

Related: China drugs scandal set to grow

Chinese police accused 39 hospital workers of taking more than $450,000 in kickbacks from pharmaceutical firms over a three-year period, state media reported Wednesday. Nine of the doctors involved had been suspended or had their licenses revoked, and a case involving a trade union official was referred to the judicial system.

China appears determined to clean up its healthcare sector. It is investigating price-setting practices at 60 pharmaceutical companies and lawyers believe firms other than GSK may become ensnared in the anti-corruption drive.

Two managers working for a second British drugs firm, AstraZeneca (AZN), have been questioned by police after a local sales representative was detained last week. The firm said it had no reason to believe the action was linked to the GSK investigation.

Big pharmaceuticals companies have rushed to invest in China in recent years to take advantage of rapid growth for medical treatments, but they're now under enormous pressure to reduce costs as the population ages, straining the country's medical system and care facilities.

GSK's sales of pharmaceuticals and vaccines in emerging markets grew by 2% in the second quarter, double the rate for the division as a whole. Revenue from China spiked 14% to £212 million ($18 million). Emerging markets account for about 23% of revenue in the division.

First Published: July 24, 2013: 9:30 AM ET

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New home sales surge to 5-year high

New home sales were up 38% over the year before.

NEW YORK (CNNMoney)

New homes sold at an annual rate of 497,000 in June, up 8.3% from May, which was revised downward. June sales were well above the 483,000, that economists surveyed by Briefing.com were expecting,

It was the highest pace of sales since May 2008, when they reached 504,000.

Sales were 38% higher from the same period last year.

Related: The home bidding wars are back!

The report comes a day after the National Association of Realtors reported that sales of existing homes stumbled last month, which some experts called a possible side effect of rising mortgage rates lately.

The 30-year mortgage rate recently rose to its highest level in nearly two years to 4.51%.

The higher rates dragged down the pace of home building last month.

Record low mortgage rates, coupled with a drop in foreclosures, had helped boost the housing market over the past year. As a result, home sales, prices and construction had surged earlier this year.

But in the last 10 weeks, mortgage rates began a steady climb, raising the cost of buying a home. Rates, however, are still low by historical standards.

First Published: July 24, 2013: 10:23 AM ET

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Apple, EA boost tech stocks

Click chart for more market data

NEW YORK (CNNMoney)

The Dow Jones industrial average slipped 0.2% in early trading. The S&P 500 was little changed. The Nasdaq rose 0.4%.

Stocks have been grinding higher as investors take solace in mostly improved earnings.

The Dow closed at a record high Tuesday, while the S&P 500 remains near its record high. All three indexes have gained about 19% so far this year.

Shares of Apple (AAPL, Fortune 500) were rallying after the iPhone maker reported quarterly earnings that beat expectations, easing investor anxiety about tech giant's future. One of the most widely-held stocks, Apple shares often have an out-sized impact on the overall market.

Also boosting the broader market was Ford (F, Fortune 500), which posted better-than-expected profits, and said this was its best-ever second quarter in North America and Asia.

Click here for more on stocks, bonds, currencies and commodities

In other earnings, PepsiCo (PEP, Fortune 500), maker of Pepsi and Frito-Lay products, reported a increase in quarterly profit.

Airplane manufacturer Boeing (BA, Fortune 500) reported improved earnings and revenue, and raised its guidance for the year.

Caterpillar (CAT, Fortune 500) posted earnings and sales below forecasts. The heavy equipment manufacturer also lowered its earnings and sales outlook for the year.

Shares of EA (EA) rose nearly 10% after the video game maker said earnings were above the company's forecast.

Broadcom (BRCM, Fortune 500) reported a sharp drop in quarterly earnings, which the chipmaker blamed on its $3.7 billion acquisition of NetLogic Microsystems.

Facebook (FB)and Visa (V, Fortune 500) are due after the close.

Overall, corporate earnings have been better than anticipated, although revenue growth remains modest.

Among the nearly 150 companies in the S&P 500 that have reported second-quarter results, 65% have topped analysts' low expectations, according to S&P Capital IQ.

Aside from earnings, Dell (DELL, Fortune 500) said it has received a revised offer from founder Michael Dell, and would be holding a special meeting Aug. 2 to consider its options.

Apparel company HanesBrands (HBI) said it reached an agreement to buy Maidenform Brands (MFB) in an all-cash deal worth $575 million.

On the economic front, the Commerce Department said new home sales rose at an annual rate of 497,000 in June, up 8.3% from May. Economists had expected an annual rate of 483,000.

Related: Fear & Greed Index, still greedy

European markets were all moving up in midday trading after the latest eurozone purchasing managers' index showed the region was stabilizing. Manufacturing output grew for the first time since February 2012, while the service sector saw its smallest rate of decline for 18 months.

"The hope for the eurozone is that current gradually rising confidence encourages businesses to increasingly pare back their job cutting and become more prepared to invest," said Howard Archer, chief European economist at IHS Global Insight.

Related: Factory output puts brakes on China's growth

Meanwhile, Asian markets had a mixed day after HSBC said Wednesday that its "flash" index of Chinese manufacturing purchasing managers' sentiment fell to an 11-month low in July.

First Published: July 24, 2013: 9:41 AM ET

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Royal baby betting exceeds £1 million

Gamblers in 100 countries around the world have wagered royal-related bets. Most people are tying to guess the baby's name.

LONDON (CNNMoney)

British bookmakers were reporting a huge surge in royalty-related bets, taking in over £1 million ($1.5 million) from people around the world who are wagering on everything from the royal baby's name to his future career.

Even after the royal family announced the birth of a baby boy Monday, the bets kept coming in, with gamblers primarily trying to guess the soon-to-be-disclosed name.

"The money keeps pouring in for the royal baby," said Joe Crilly, a spokesman for William Hill, one of the world's biggest online betting outfits. "At £350,000 we have already far exceeded the amount we were predicting we would take in."

Related: Retailers cashing in on royal baby bonanza

Online betting agency Paddy Power has taken in nearly £450,000 by offering its clientele a wide range of royal gambling opportunities.

"Whilst most punters are putting down money on the name of the new arrival, we're also seeing bets on everything from the baby's first word to his first nightclub gaffe with old Uncle Harry in tow," said a Paddy Power spokesperson.

Paddy Power is also taking bets on where the royal christening will take place and when 'Baby Number Two' will come along.

Meanwhile, a spokesperson for Ladbrokes said the U.K. betting agency is taking an average of 900 bets an hour on the baby's name, a record for royal-related betting.

The odds are good that the name will be James, George or Alexander, while Henry and Arthur are considered long-shots.

"James is the red-hot favourite ... We're staring down the barrel of a gun if the baby's named Henry," the spokesman said, referring to the steep payout Ladbrokes would have to pay.

Gamblers and bookmakers alike had widely expected Catherine and William to welcome a baby girl after Kate accidentally indicated she might have a daughter. Some bookmakers even stopped taking bets on the baby's sex. But those gamblers who went against the grain pocketed a nice sum.

"Punters who believed it would be a boy have now collected over £100,000 worth of winnings," said a Ladbrokes spokesperson.

First Published: July 23, 2013: 9:15 AM ET

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