July 26 - Summary of business headlines: Slower revenue growth for Facebook; Amazon and Starbucks warn; Consumer products companies show strength; Markets reassured by euro zone central bank chief; U.S. initial jobless claims fall near four-year low. Bobbi Rebell reports.
PLEASE NOTE: THIS EDIT CONTAINS 4:3 MATERIAL Facebook's first earnings since its initial public offering underwhelmed Wall Street. Revenue increased by 32 percent in its second quarter- and its users grew to 955 million. But its revenue growth is slowing- and it had a net loss of $157 million. And those results aren't good enough for investors according to Anupam Palit of GreenCrest Capital. SOUNDBITE: ANUPAM PALIT, SENIOR RESEARCH ANALYST, GREENCREST CAPITAL (ENGLISH) SAYING: "I think the biggest concern in the quarter and the biggest story from this quarter is going to be the operating margin. The revenue was ahead but if this company has to keep spending what it's doing in order to grow revenue that is not sustainable in the long term." Amazon reported just a slim quarterly profit and gave a cautious outlook- overshadowing strong revenue growth. Starbucks stock fell in after hours after it cut its outlook blaming economic weakness around the world. Signs of resilience from consumers; Kimberly-Clark and Colgate-Palmolive both turned in better than expected results. Exxon, the world's largest publicly traded oil company, missed earnings forecasts; its oil and gas production dropped 5 percent. Shares of Sprint Nextel jumped after the company raised its earnings forecast; increased customer spending helped drive higher than expected revenues. And cost controls and stronger margins helped Post-it maker 3M narrowly beat forecasts even as revenue disappointed. The number of Americans filing new claims for jobless benefits fell by 35,000 to near a 4-year low. New orders for long lasting U.S. goods rose in June- though excluding transportation they fell- pointing to a slowdown in factory activity. And contracts to buy previously owned U.S. homes fell unexpectedly in June. Stock markets surged after Europe's central bank chief made it clear the ECB would protect the euro zone from collapse. European markets closed with gains across the board. That positive momentum carried into U.S. stocks, which turned in a winning session as well. Bobbi Rebell, Reuters.