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American Airlines Reports Record Quarterly Profit


Joe Raedle/Getty Images(FORTH WORTH, Texas) -- American Airlines reported record quarterly earnings Thursday, detailing a net profit of $1.5 billion -- a record for any quarter in company history, according to airline representatives.

The American Airlines Group announced a record GAAP net profit of $864  million, compared to $220 million in the second quarter of 2013, which was prior to its merger with US Airways.

 "We are very pleased to report the highest quarterly profit in the history of American Airlines," said Chairman and CEO Doug Parker. "Our merger is off to a great start and our 100,000 team members are doing a wonderful job working together to take care of our customers."

The company also publicized a capital deployment program aimed at reducing its debt and providing additional pension contributions, as well as returning capital to shareholders.

"The fact that we are able to implement this program while still funding our significant product improvements, fleet renewal program and integration costs is further evidence of the success of our merger," Parker added. "We have much hard work ahead, but we are extremely encouraged by the great work being done by our team members."

Other airlines also shared in the wealth, as United Airlines announced a nearly $800 million profit for its second quarter. Delta, JetBlue, and Southwest also reported strong gains.

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Stocks Mixed Following Jobless Claims, Home Sale Figures


iStock/Thinkstock(NEW YORK) -- Stock prices ended the day mixed on Wall Street Thursday, following good news on jobless claims and mixed quarterly earnings results from several companies.

The Dow Jones Industrial Average lost three points, finishing at 17083.80, the Nasdaq Composite fell two points at 4472.11, and the S&P 500 gained one to end at 1987.98.

Investors received positive news regarding jobs, with the Labor Department reporting that weekly applications for unemployment benefits dropped to their lowest level in eight years. Details on home sales, however, weren't as promising, with home builder stocks dropping after news that sales of newly built homes fell eight percent last month.

Facebook shares jumped six percent to $75.41 after the company reported a profit that beat analysts expectations, while Caterpillar slid after reporting revenue figures that fell short of predictions. One day after news of yet another recall, automaker General Motors posted an 80 percent drop in second-quarter earnings compared to the same period last year, and reported net earnings of $278 million.

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Walmart US Names Greg Foran Next President, CEO


Walmart(NEW YORK) -- Retail giant Walmart announced a new president and chief executive officer for U.S. operations Thursday, naming Greg Foran as the successor to Bill Simon.

Simon, who has held the role since June 2010, is expected to "transition" out of the company and assume consulting responsibilities for the next six months, according to a statement from Walmart.

Foran, 53, takes over on Aug. 9 and will report to Walmart President and CEO, Doug McMillon.

“Greg is one of the most talented retailers I’ve ever met. His depth of knowledge and global experience will bring a fresh perspective to our business,” McMillon said. “His passion for fresh food, experience in general merchandise and commitment to e-commerce will help us serve our customers even more effectively for years to come.”

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New Home Sales Plummet 8.1% in June


iStock/Thinkstock(WASHINGTON) -- The number of Americans purchasing new homes took a big plunge last month.

The Commerce Department reported on Thursday that sales of newly built homes dropped by more than 8 percent in June to 406,000.

"The numbers are definitely a little disappointing. I think it's important to keep it in perspective. Part of the drop is from an abnormally high May figure," said Robert Denk, a senior economist with the National Association of Home Builders.

In another bit of bad news, May's figure was also revised downward by about 12 percent.

"The decline in June is not necessarily unexpected. It's not a disaster. The June number sort of puts us back on trend and we expect these numbers to definitely firm up in the second half of the year," Denk said.

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Why Recalls Haven't Dented GM’s Sales


Justin Sullivan/Getty Images(NEW YORK) -- GM's 29 million recalled cars since January is costing the car company more than $1 billion, but the company's varying fleet of vehicles have prompted a steady sales growth, according to the company’s quarterly earnings.

Despite huge falling profits at the company largely due to the recall and legal expenses, customers are still buying lots of GM cars, according to the car manufacturer's report Thursday.

"GM would have had an outstanding quarter had it not been for the recall expenses," said Michelle Krebs, senior analyst for AutoTrader.com.

Here are some of the cars that are boosting the embattled American car company.

1. Chevy Silverado

Alec Gutierrez, senior analyst with Kelley Blue Book, called the Silverado a "tried and true favorite."

In GM's second quarter, there were 132,922 Silverado sales, an increase of 5.5 percent compared to the same period in 2013. In June, Silverado sales were up 1 percent compared to June 2013. It's not a huge sales bump, but the Silverado is still GM's best-selling model in its overall lineup and the most profitable by a fairly wide margin, Gutierrez said.

He said full-size pickup trucks provide car companies with anywhere from $3,000 to $5,000 in profit, depending on the model. Meanwhile, cars may yield manufacturers less than $1,000.

"That says while Silverado sales are not knocking anyone’s socks off, it’s an absolutely critical vehicle for GM," he said.

2. Buick Encore

GM's Buick brand had its best June since 2006, the company reported, and that surge was driven by an 82 percent increase in Encore sales, compared to June 2013.

The Encore is within the crossover utility vehicle category, a segment between cars and SUVs. That segment has been growing faster than any other in the car industry, Gutierrez said.

The category is so new that Ford doesn't yet have a vehicle in this category.

"I think that’s why GM is doubling down on that platform," Gutierrez said, pointing to the "fuel-efficient" and "really small" Encore that skews toward a younger demographic.

Jessica Caldwell, an Edmunds.com senior analyst, said this subcompact SUV segment is only going to grow in popularity in the next five to 10 years.

3. Chevrolet Suburban

Caldwell said trucks and SUVs like the Suburban, Tahoe and Silverado "have been doing very well for GM as the auto market has embraced them in a big way."

Sales of Chevrolet Tahoe increased 93 percent in June, while Suburban sales are up 73 percent, compared to June 2013.

Caldwell calls this the new "heyday for SUVs." For the past 10 months, light trucks have outsold cars. That's the longest streak since 2005, when a 31-month streak lasted from February 2003 through August 2005, she notes.

4. GMC Yukon

Gutierrez said SUVs, such as the Yukon, have seen sales, and thereby GM profitability, "growing at a pretty big clip."

GM's GMC brand had its best June since 2006, the company reported earlier this month, with sales up 11 percent compared to June 2013, driven by the redesigned Yukon, up a whopping 120 percent from June 2013.

5. Chevrolet Sonic


Caldwell said the Sonic is on the complete opposite side on the size spectrum, as one of GM's smallest products.

Sales of Sonic increased 36 percent in June 2014 compared to June 2013, GM reported earlier this month.

Gutierrez said the Sonic is an example of GM trying to diversify its fleet of cars.

While the subcompact category of cars hasn't been gaining in the industry, the Sonic is gaining traction and Sonic is only behind Nissan's Versa in that segment, Gutierrez said.

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Christian Louboutin Debuts $50 Nail Polish


Christian Louboutin(NEW YORK) -- Christian Louboutin is best known for his signature red-soled stilettos. But the most recent creation from the French designer delivers a different kind of lift.

Earlier this week, Louboutin revealed his first foray into the beauty industry. The craftsman announced a range of nail polishes in the pages of Women's Wear Daily.

Each bottle of Rouge Louboutin contains less than half an ounce of the luxury lacquer and will retail for $50.

But what the collection lacks in volume, it makes up for in height. Modeled after the heel of the impossibly arched ballerina shoe that Louboutin designed in 2007, the packaging that holds his standout scarlet hue measures eight inches tall.

Like his fashionable footwear, these formulations make a statement. Louboutin insisted that just two coats of his new polish are equal in intensity to 20 layers of more inferior -- and affordable -- brands.

The varnishes are now available at the flagship Saks Fifth Avenue in New York and will launch at select retailers nationwide on Aug. 6.

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Profits Plunge at General Motors


Joe Raedle/Getty Images(DETROIT) -- The troubles continue for General Motors, as the automaker on Thursday reported an 80 percent drop in second quarter profits from this time last year.

GM had previously announced it will pay $400 million to the victims of its defective ignition switches after a wave of lawsuits and $1.5 billion paid out in fines.

The company is now facing some immediate financial repercussions of the more than 29 million cars it has recalled since January. However, overall sales of its vehicles have not been greatly hampered as total revenues increased to $39.6 billion from $39.1 billion last year.

"Our underlying business performance in the first half of the year was strong as we grew our revenue on improved pricing and solid new vehicle launches," GM CEO Mary Barra said in a statement. "We remain focused on keeping our customers at the center of all we do, and executing our plan to operate profitably in every region of the world."

GM stock was down more than 2 percent in pre-market trading.

Meanwhile, in other earnings news, Ford Motor beat analysts’ expectations, posting a $2.6 billion profit in the second quarter -- up 6 percent from last year and setting a record for operating profit in North America.

American Airlines also had a record-breaking second quarter, reporting a profit of $864 million versus $220 million last year -- its highest quarterly profit in company history. The carrier's total revenue for the quarter also rose by 76 percent to $11.36 billion.

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Jobless Claims Down to Lowest Level in Eight Years


iStock/Thinkstock(WASHINGTON) -- Jobless claims fell last week, decreasing by 19,000, according to the latest figures released Thursday by the Labor Department.

For the week ending July 19, the number of people filing for benefits dropped to 284,000 -- the lowest level for initial claims since February 18, 2006. The previous week, claims stood at a revised level of 303,000.

The Labor Department said there were no "special factors" impacting this week's figures.

The four-week moving average fell to its lowest level in nearly seven years, decreasing by 17,000 to 2,542,250.

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Nostalgia Turns People into Bigger Spenders


moodboard/Thinkstock(NEW YORK) -- Nostalgia is a powerful emotion. So powerful that it can make us spend more money than if we didn’t feel sentimental.

Researchers from the U.S., Britain and France wanted to learn just why we are suddenly more apt to part with money when we feel nostalgic, so they conducted a number of experiments to prove their thesis.

In one case, they found that consumers who were told to think about pleasant events from the past seem to have no problem paying extra for the same set of products than others who did not dredge up old memories.

Pertaining to charities, those who wrote about a previous experience from the past were later inclined to give more money to others than the control group.

The researchers contend this information is especially valuable to corporations looking to boost promotions and products lines, as well as charities that are interested in filling their coffers.

Meanwhile, the use of nostalgia might also come in handy during periods of recession when people are less inclined to spend, the researchers surmised.

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No Wonder You Feel Weak at the End of the Workweek


iStock/Thinkstock(ATLANTA) -- The 9-to-5, 40-hour workweek. What a quaint concept.

If you’re fortunate enough to have a full-time job, you know that actually working 40 hours has gone the way of maps, landlines and movie rental stores.

Atlanta-based Premiere Global Services Inc. received more than 600 responses to its survey last month, and the most shocking -- yet least shocking -- finding was that 88 percent claimed to work more than 40 hours.

Another sign of the times: just over seven in 10 have to take work home at least once a week.

Want to feel more depressed? Two-thirds eat lunch at their desk, 60 percent commute more than 30 minutes each, with a quarter traveling over an hour, and 71 percent say they work more than they really want to.

Since the survey was called “Take Back 60,” two-thirds said they would either exercise or spend more time with their family if they could work 60 minutes less per week.
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General Motors Announces Six Recalls for Safety Issues


General Motors(DETROIT) -- Automaker General Motors announced another round of recalls Wednesday for more than 700,000 vehicles in the United States.

Newer models of Chevrolets and Buicks are affected, with the company citing them for safety issues. Many concerns include loose nuts and bolts, or welding on the seats.

“These recalls signify how we’ve enhanced our approach to safety,” said Jeff Boyer, vice president of Global Vehicle Safety. “We are bringing greater rigor and discipline to our analysis and decision making. If we identify an issue – large or small – that might affect the safety of our customers, we will act decisively.”

The recent addition of recalls comes on the heels of criticism over faulty ignition switches in numerous cars from the company -- defects blamed for dozens of deaths. The automaker reportedly knew about the defects for years before they acted upon them. In light of this, the spotlight remains on GM, said Edmunds analyst Jessica Caldwell, prompting them to recall vehicles over the smallest of issues.

"I think it just shows that GM is really looking at everything with a fine tooth comb and if there's any issue whatsoever, they're going to recall it," Caldwell added. "So they're looking just really closely at anything that could go wrong, because they're really not in a position to be flippant about anything."

The list of affected models can be found on the GM website.

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Officials: More than 1,600 StubHub Users Affected in International Cybercrime Scheme


iStock/Thinkstock(NEW YORK) -- Six people have been indicted for their roles in an international crime ring involving online ticket-reseller StubHub, officials announced Wednesday.

In a scheme spanning from Russia to New York, cyber thieves allegedly stole StubHub login credentials for more than 1,600 accounts by hacking into other websites or using malware.

The individiauls accessed credit card information to log into the website and stole more than $1 million in tickets, including those to Justin Timberlake and Jay Z concerts, Broadway shows, and sports events. Victims' data were used to make fraudulent e-ticket purchases, according to Manhattan District Attorney Cyrus Vance Jr., and the proceeds were transferred through a "global network of accomplices" in the United States, United Kingdom, Russia, and Canada.

“Cybercriminals know no boundaries – they do not respect international borders or laws,” Vance said in a statement. “...Regardless of where the case originates, nearly every cybercrime case begins with similar breaches: a stolen password, unauthorized use of a credit card, or unaccountable charges on a personal statement, for example. In this case, StubHub discovered evidence of fraud and immediately reported it to law enforcement."

While StubHub reported the incident and implemented security measures, hackers were still able to work around such protocols. An investigation tracked the exchanges to IP addresses, PayPal accounts, and bank accounts used by the indicted individuals.

The six defendants face charges of money laundering, grand larceny, and identity theft, among others.

 

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Stocks Boosted by Corporate Earnings


iStock/Thinkstock(NEW YORK) -- Wall Street stocks ended mostly higher Wednesday, following corporate earnings reports that provided a boost for investors.

The Dow Jones Industrial Average lost 27 points to finish the day at 17086.63, the Nasdaq Composite gained 18 points at 4473.70, and the S&P 500 added 4 points, ending at 1987.01.

Aircraft maker Boeing reported numbers that fell short of expectations before the opening bell, while social networking giant Facebook released its second quarter earnings after the close, with numbers better than anticipated.

General Motors announced another round of recalls, citing 700,000 vehicles for a number of safety issues. German-based Mercedes-Benz maker Daimler had better news, announcing an increase of 12 percent in second quarter profits.

“Our strategy is paying off,” Daimler AG CEO Dieter Zetsche said on a conference call. "We’re growing and, what’s more, we’re growing profitably.”

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GM to Add Jobs, Invest $800M in Michigan


General Motors(DETROIT) -- General Motors is planning to add up to 1,750 jobs and invest $800 million in Michigan over the next several years, according to the Michigan Economic Development Corp.

“GM’s prospects are bright, and we want Michigan to play an important part in the company’s growth,” the automaker said in a statement. “We are pleased with the state of Michigan’s action which makes a strong business case for potential future jobs and investment at GM facilities across Michigan.”

It’s unclear where the jobs will be made available but GM said it planned to add locations throughout the state. Most of the jobs are expected to be offered at its technical center in Warren.

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Comcast Exec Says Infamous Service Rep Was Following Training


Justin Sullivan/Getty Images(NEW YORK) -- In a leaked memo from cable giant Comcast, a top executive expresses contrition for the now-infamous behavior of a service agent that led to a nearly 20-minute recorded call that went viral, but at the same time he conceded that the agent "did a lot of what we trained him and paid him" to do.

Meanwhile, Comcast reported Tuesday that it gained 203,000 high-speed Internet customers in its second quarter, the strongest for a typically slow second quarter in six years. The company reports having 21.3 million high-speed Internet customers.

Dave Watson, chief operating officer of Comcast Cable, wrote in a memo to employees on Monday that the "painful" experience of the customer who recorded the call and posted it on the Internet last week wasn't representative of the "good work" its employees are doing.

"That said, it was painful to listen to this call, and I am not surprised that we have been criticized for it. Respecting our customers is fundamental, and we fell short in this instance. I know these Retention calls are tough, and I have tremendous admiration for our Retention professionals, who make it easy for customers to choose to stay with Comcast," Watson wrote, according to the memo published by Consumerist.

Comcast apologized last week to the customer Ryan Block, co-founder of tech site Engadget. Comcast did not respond to a request for comment by ABC News about Watson's leaked memo.

"The agent on this call did a lot of what we trained him and paid him -- and thousands of other Retention agents -- to do," Watson wrote. "He tried to save a customer, and that’s important, but the act of saving a customer must always be handled with the utmost respect."

While Comcast retention agents may be particularly aggressive to stop losing customers, business has been good. While the company lost 144,000 cable video customers in the second quarter, that was mostly attributed to seasonal losses. It still has 22.5 million video customers. In the same period a year ago, the company lost even more cable subscribers (162,000), which was preceded by two quarters of growth.

Comcast is still a very profitable company. It reported $1.99 billion in profit and $16.8 billion in revenue, both up from the same period a year ago, as its high-speed Internet service grows.

"Comcast's second-quarter results again demonstrated the strength of the cable business in general and the firm’s solid execution in particular. Customer metrics were solid, as the firm posted the strongest second-quarter Internet access customer growth in six years," Morningstar analyst Michael Hodel wrote in an investment note.

"Television customer losses totaled 144,000, reflecting the seasonal weakness of the quarter within a very mature business," he wrote.

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