Hedge funds: From rock stars to fallen stars?
NEW YORK (AP) — Hedge funds were once the rock stars of the financial industry. The smartest people worked for them. The wealthiest gave them their money. They were an easy path to fortune.
But if that get-rich-quick narrative was an exaggeration before the financial crisis, it's even less true since. The hedge fund industry's performance has been spotty in recent years; its public image, bruised. SAC Capital Advisors became the latest high-flyer brought low when the Justice Department on Thursday accused it of allowing insider trading and making hundreds of millions of dollars illegally.
To critics, hedge funds are secretive, risky, loosely regulated playgrounds for the super wealthy. And while the industry keeps expanding, its performance does not. This year could be the fifth in a row that hedge funds underperform the Standard & Poor's 500 stock index, according to Hedge Fund Research, or HFR, which analyzes the industry. That's an unwelcome reversal: For the 19 years from 1990 to 2008, hedge fund returns beat or tied the S&P 500 15 times.
Signs point — finally — to end of Europe recession
FRANKFURT, Germany (AP) — After a year and a half of recession, Europe's battered economy could finally be showing signs of life.
It's not the kind of recovery that calls for a big celebration. Any upswing will be a slow and arduous climb — up a slope strewn with high unemployment and scarce credit for businesses.
But signs of improvement are there. On Thursday, a German index of business confidence rose for the third month in a row. Meanwhile, surveys of purchasing managers in the euro area indicate manufacturing activity edged back into growth territory in July for the first time in 18 months.
Toyota top-selling automaker despite China slump
TOKYO (AP) — Toyota shrugged off China sales woes to stay the world's top selling automaker for the first half of this year, outpacing U.S. rival General Motors Co., which boasted such bragging rights for seven decades until 2008.
Toyota Motor Corp. sold 4.91 million cars and trucks around the world for the January-June period, down 1.2 percent from the previous year, according to numbers it released Friday.
GM said earlier this month it sold 4.85 million vehicles worldwide in the six months, growing almost 4 percent as it gained U.S. sales faster than Toyota. For the second quarter alone, GM had a slight edge, outselling Toyota by about 10,000 vehicles.
FDA proposes rules for safer imported foods
WASHINGTON (AP) — Chances are that about 15 percent of the food you eat — more if your diet includes lots of fruits, vegetables and cheese — comes from abroad, and the government is taking steps now to make it safer.
New rules proposed Friday by the Food and Drug Administration would make U.S. food importers responsible for ensuring that their foreign suppliers are handling and processing food safely.
Imported fruit and cheese has been responsible for many recent outbreaks, including 153 recent Hepatitis A illnesses linked to a frozen berry mix sold at Costco last month as well as four deaths last year that were linked to listeria in Italian cheese. Imported fruits or vegetables are also the top suspect in an ongoing outbreak of cyclosporiasis, a gastrointestinal infection that has so far sickened 321 people in 13 states.
AP source: No Fed chair pick until the fall
WASHINGTON (AP) — The White House says President Barack Obama is not expected to name a new chairman of the Federal Reserve until the fall, lowering expectations for an imminent announcement.
A senior official says the president has not made a decision on who will replace current Fed chairman Ben Bernanke. His term expires early next year.
The president's pick is highly anticipated, given the Fed chairman's impact on economic policy.
US consumer sentiment reaches 6-year high in July
WASHINGTON (AP) — Americans are more confident about the economy than at any time since July 2007, a survey found, suggesting consumers will spend more and accelerate growth in the months ahead.
The University of Michigan said Friday that its final reading of consumer sentiment in July was 85.1. That's up one point from June but nearly 13 points higher than a year ago.
Rising home prices and steady job gains are boosting household wealth and income. The proportion of Americans who expect their inflation-adjusted incomes to rise in coming year is greater than at any time since late 2007, the survey found. And the percentage of Americans who say their home values have risen is also at a six-year high.
United finds 787 transmitter with pinched wire
United Airlines says it found a transmitter with a pinched wire on one of its Boeing 787s — the same problem that investigators think may have sparked a fire on a parked 787 in London.
Christen David, a spokeswoman for United Continental Holdings Inc., says the airline inspected all six of its 787s, and found one emergency transmitter with a pinched wire. That transmitter was removed and sent back to Honeywell International Inc. for further inspection. It has been replaced and David says all six planes are flying with transmitters.
Earlier this month, an Ethiopian Airlines 787 parked at London's Heathrow Airport caught fire. Investigators said it may have been caused by an emergency transmitter. That prompted U.S. authorities to order inspections for pinched or damaged wires.
Apple's smartphone market share slips
Apple's share of the global smartphone market fell during the second quarter to its lowest level in four years, according to data released Friday.
Apple took 13.1 percent of the worldwide market, according to ABI Research, down from 16.6 percent a year ago. That's the lowest level since the third quarter of 2009, two years after the launch of the first iPhone.
Apple Inc., based in Cupertino, Calif., sold 31.2 million iPhones in the April-to-June period, up from 26 million in the same period a year ago, the report said. But the company's sales growth isn't keeping pace with the overall smartphone market, which grew 52 percent from last year.
T-Mobile nixes down payments, ups monthly fees
NEW YORK (AP) — T-Mobile said Friday that it is temporarily eliminating upfront payments on new phones, but it is increasing the prices for some models through higher monthly payments.
Unlike rival carriers, T-Mobile charges the full retail price of phones, spread over two years, but reduces monthly service fees for voice, text and data. AT&T, Verizon, Sprint and others typically charge $200 or so up front for high-end phones and make up for the rest of the phone's cost through higher service fees over the life of a two-year contract.
Under a new payment plan introduced in March, T-Mobile charges a down payment for the phone and monthly installments until the device is paid off in two years. For instance, customers pay $146 up front for an iPhone 5 and $21 a month for two years for a total cost of $650. That's about the same price Apple charges when someone buys the phone without a two-year contract for use at another carrier.
Vivendi sells Activision stake for $8.2 billion
SAN FRANCISCO (AP) — Vivendi SA is selling most of its majority stake in Activision Blizzard Inc. for $8.2 billion, giving the video game company back its independence as the French conglomerate tries to strengthen its balance sheet.
Vivendi said Friday that 429 million of its shares will be sold to Activision itself for $5.83 billion, or $13.60 per share. Another 172 million shares will be sold for $2.34 billion to a consortium of investors including Activision CEO Bobby Kotick and Co-chairman Brian Kelly, who are contributing $100 million each.
Santa Monica, Calif.-based Activision makes games such as "World of Warcraft" and the wildly popular "Call of Duty" series. Vivendi acquired a majority stake in Activision in 2008 and combined it with its games unit, which included "Warcraft" publisher Blizzard Entertainment, so Activision will walk away a bigger company.
By The Associated Press=
The Dow Jones industrial average rose 3.22 points, less than 0.1 percent, to 15,558.83. The Nasdaq composite index edged up 7.98 points, or 0.2 percent, to 3,613.16. The Standard & Poor's 500 index inched up 1.40 points, or 0.08 percent, to 1,691.65.
Oil fell 79 cents to close at $104.70 Friday in New York. In London, Brent crude, which is traded on the ICE Futures exchange, fell 48 cents to $107.17 a barrel.
Wholesale gasoline rose 3 cents to $3.04 a gallon. Heating oil fell 3 cents to $3.01 a gallon. Natural gas shed 9 cents to $3.56 per 1,000 cubic feet.