Wholesale prices and industrial production fell in June in what one analyst likened to the economy hitting a speed bump. A retreat in food and energy costs made the Labor Department's producer price index decline by 0.3 percent last month following increases of 0.7 percent in April and 0.8 percent in May. Energy prices, after soaring by 1.6 percent in both April and May, declined by 1.6 percent in June. Separately, the Federal Reserve reported that industrial production dropped 0.3 percent in June, its largest decline since April 2003, following a 0.9 percent advance in May. New claims for unemployment benefits jumped last week by a seasonally adjusted 40,000, to 349,000, the Labor Department said. Part of the increase was due to layoffs as automobile plants shut down temporarily to retool for new models, a department analyst said.
OPEC Raises Its Output Target
OPEC agreed to raise its daily production target by 500,000 barrels in an effort to keep crude-oil prices from rising further. The increase is to take effect Aug. 1. The Organization of Petroleum Exporting Countries also canceled a meeting it had planned for July 21. The group decided in June to raise its ceiling by 2 million barrels on July 1, and it agreed to follow up with a second increase of 500,000 barrels on Aug. 1 if market conditions warranted.
The Securities and Exchange Commission charged five former Prudential Securities brokers and their manager in Boston with using fake identities and other tactics to help investors make more than $1.3 billion in improper mutual fund trading. The SEC filed an amended complaint accusing the former Prudential employees of using different names and broker identification numbers and misspelling their own names after a federal judge ruled an original complaint was unspecific.
Mortgage rates dropped for the fourth week in a row. Freddie Mac said rates on benchmark 30-year, fixed-rate mortgages fell to 6 percent, down from 6.01 percent last week. Rates for 15-year, fixed-rate mortgages dropped to 5.40 percent from 5.42 percent last week. Rates on one-year, adjustable-rate mortgages fell to 4.02 percent from 4.05 percent.
Maytag was sued in federal court for alleged age discrimination. The Equal Employment Opportunity Commission charged that the appliance manufacturer began to discriminate in 1999 when it demoted 11 sales managers, eight of whom were over 50. Some employees said that their new supervisor, age 33, suggested they were too old to perform their jobs well.
Personal computer shipments, led by growth in the European Union, rose more than 13 percent worldwide in the second quarter, according to market research firms IDC and Gartner. In the United States, shipments increased at least 11 percent, the firms said. Dell maintained its lead in sales over rival Hewlett-Packard.
Carl F. Pascarella, president and chief executive of Visa USA, will retire in September 2005, the credit card company announced. He has been chief executive since 1993.
International Business Machines' second-quarter profit rose nearly17 percent over last year on strong sales of computer hardware. For the April-to-June period, IBM reported earnings of $1.99 billion on revenue of $23.15 billion.
Citigroup's second-quarter earnings plunged more than 73 percent, to $1.14 billion, as the financial institution took a $4.95 billion after-tax charge to pay for a class-action settlement with WorldCom investors and bolster its reserves to cover other regulatory settlements. Revenue rose 15 percent, to $22.3 billion.
PepsiCo posted a 12 percent gain in second-quarter earnings as overseas sales offset weakness in its snacks, cereal, rice and pasta businesses. The company earned $1.06 billion in the three months ended June 12, compared with $944 million during the same period a year earlier. The company said it would introduce more low-sugar, high-protein products to woo carb-conscious consumers.
Tribune Co. said earnings fell 58 percent, to $96.4 million, in the second quarter. It cited a debt restructuring and the cost of an anticipated $35 million settlement with advertisers over circulation misstatements at two of its newspapers.
Sony Ericsson posted a second-quarter profit of $140 million as demand for its camera phones helped reverse last year's loss. The London cell phone maker's average selling price per phone -- a heavily monitored figure in the industry -- dropped amid intense competition in Japan and elsewhere.
Nokia reported that its profit rose 14 percent, to $865 million, in the second quarter, but sales fell 5.7 percent. It warned that its future profitability remains threatened by competition, lower prices and a lack of popular new models.
Dow Jones reported a 10 percent rise in second-quarter profit but cautioned that advertising continues to lag at the Wall Street Journal. The financial news publisher earned $34 million in the three months ended in June, up from $30.8 million in the comparable period a year ago.
E.W. Scripps, owner of the Home & Garden cable television network, said second-quarter profit rose 34 percent on higher advertising sales at its cable TV networks. Earnings fell at its 21 newspapers. Net income increased to $86.4 million, from $64.7 million a year earlier, the Cincinnati company said in a statement.
Wachovia's second-quarter earnings climbed 21 percent, to a record $1.25 billion, as deposits and loans grew and credit quality was exceptional. Revenue increased nearly 16 percent, to $5.5 billion.
Peabody Energy reported second-quarter profit of $41.5 million as mine acquisitions boosted production and demand for electricity improved sales and prices. Sales at the St. Louis coal producer rose 33 percent, to $920.1 million, from $693.2 million.
Marriott Ownership Resorts, a subsidiary of Marriott International of Bethesda, was sued for sexual harassment by the Equal Employment Opportunity Commission. The lawsuit, filed in U.S. District Court in Honolulu, alleges that a former sales executive in training at a Marriott Oahu time-share condominium, Ko Olina Beach Club resort, was harassed and solicited for sex by her project director in 2001. The EEOC said the woman, a single mother of two in her 40s, feared losing her job. She confronted her alleged harasser, said EEOC San Francisco Regional Attorney William Tamaya. The agency alleges she was eventually fired for rejecting the project director's advances and complained to higher-ups. The company offered to rehire her, Tamaya said, but under the condition that she work for the same project director. The EEOC will seek back pay, lost wages, compensatory damages and other relief. Marriott spokesman Thomas Marder said the company had not yet had time to study the lawsuit but has a "zero-tolerance policy" toward discrimination and harassment.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.