All of those kids Happy Meals pushed McDonald's to an all time high stock price today.
Unemployment rates were released today by the State Department for state by state comparisons to last months figures.
Here are the top financial stories of the day:
1) Earnings, hope for debt deal brighten Wall Street-From Reuters
Investors poured into tech shares on Friday as promising chipmaker earnings and optimism that a solution was on the horizon for the U.S. debt stalemate triggered a move into growth-oriented shares.
The Dow was held back by Caterpillar Inc (NYSE:CAT - News), with shares of the heavy equipment maker falling 5.8 percent on disappointing results. The stock exerted a 48.6-point drag on the Dow, which ended off 43 points.
The benchmark S&P 500 index rose 2.2 percent for the week, lifted by strong earnings and a new bailout plan for Greece to contain Europe's debt crisis. Stocks have been restrained, however, by the long slog of negotiations to resolve the U.S. debt crisis.
"It's likely an agreement in any form will cause a relief rally for equities," said Andrew Slimmon, managing director, global investment solutions at Morgan Stanley Smith Barney in Chicago.
"Coming on the heels of overall pretty good earnings numbers and some sort of resolution in Greece and that could make for a rally in the market," he said.
President Barack Obama insisted on Friday he was prepared to make "tough choices" for a sweeping deficit-reduction deal to avert a U.S. default, despite Democrats warning him not to make too many concessions.
Semiconductor shares led the market on Friday after Sandisk (NasdaqGS:SNDK - News), a maker of flash memory chips used in smartphones and tablets like the iPad, and Advanced Micro Devices (NYSE:AMD - News) reported strong results late Thursday. The PHLX Semiconductor index (Nasdaq:^SOX - News) rose 2.4 percent, led by AMD, which jumped 19.2 percent to $7.75.
"Nasdaq has more things out on the risk curve, and one of the things our folks have been saying is that the risk-on button should be pushed here," said Glenn Starkman, global head of sales trading at Dahlman Rose in New York.
"You might see some rotation into things like energy, into materials and industrials as well as technology and money might rotate out of things like defensives."
The Dow Jones industrial average (DJI:^DJI - News) dropped 43.25 points, or 0.34 percent, to 12,681.16.
The Standard & Poor's 500 Index (^SPX - News) added 1.22 points, or 0.09 percent, to 1,345.02. The
Nasdaq Composite Index (Nasdaq:^IXIC - News) gained 24.40 points, or 0.86 percent, to 2,858.83.
For the week, along with the S&P's 2.2 percent, the Dow rose 1.6 percent and the Nasdaq advanced 2.5 percent.
The second bailout for Greece supported sentiment, even as Fitch ratings agency on Friday said Greece would be in temporary default as the result of the new rescue plan. Fitch pledged to give Greece a higher, "low speculative grade" rating after its bonds had been exchanged and said Athens now had some hope of tackling its debt mountain.
Caterpillar, a maker of equipment used in mining and construction, has been a stalwart performer in recent years and was the top Dow performer for 2010, but rising labor and materials costs hit earnings.
Fellow Dow component McDonald's Corp's (NYSE:MCD - News) income topped estimates, sending the stock up 2.3 percent to $88.56.
Microsoft Corp (NasdaqGS:MSFT - News) posted a greater-than-expected jump in its fiscal fourth-quarter profit but sales of its flagship Windows software disappointed for a third straight quarter. The Dow component rose 1.6 percent to $27.53.
But General Electric Co (NYSE:GE - News) dipped 0.6 percent to $19.04, even as it reported a 21.6 percent jump in quarterly profit.
Verizon Communications Inc (NYSE:VZ - News) lost 2.2 percent to $36.74 after the telecom giant posted second-quarter results and named a new chief executive officer.
Volume was light with about 5.81 billion shares traded on the New York Stock Exchange, NYSE Amex and
Nasdaq, well below the daily average of 7.48 billion.
Declining stocks outnumbered advancing ones on the NYSE by 1,530 to 1,400, while on the Nasdaq, decliners beat advancers 1,294 to 1,256.
2) McDonald's Shares Hit High After Profit Beats Estimates-From CNBC
McDonald's shares hit an all-time high Friday, after the company
June sales at restaurants open at least 13 months were stronger than analysts expected in each of the world's biggest hamburger chain's operating units.
During the month, closely watched same-restaurant sales were up 6.9 percent in the U.S., 9.1 percent in
Europe, and 4.8 percent in McDonald's Asia/Pacific, Middle East and Africa unit.
Analysts were expecting June same-restaurant sales to rise 2 percent in the U.S., 3 percent in Europe, and 2 percent in the Asia/Pacific, Middle East and Africa unit. Europe is McDonald's largest market for sales, contributing about 40 percent of revenue, and the U.S. is a close second.
For the second quarter, sales at established restaurants were up 4.5 percent in the U.S., up 5.9 percent in Europe and up 5.2 percent in the Asia/Pacific, Middle East and Africa unit.
The company said net income rose to $1.41 billion, or $1.35 per share, from $1.23 billion, or $1.13 a share, a year earlier.
The results exceeded the analysts' average forecast of $1.28 per share, according to Thomson Reuters I/B/E/S.
Revenue rose to $6.91 billion from $5.95 billion.
McDonald's has been taking market share from its fast-food peers. It has added more value-priced Dollar Menu items, as well as high-margin beverages such as coffee to broaden its appeal beyond the young males that account for the biggest share of sales at most other fast-food chains.
David Palmer, senior restaurant and packaged food analyst at UBS, told CNBC that McDonald's benefited in the quarter from strong sales of its McCafe beverage line, including the new Frozen Strawberry Lemonade, which the company introduced in May 2009.
"Their cold beverage initiative is obviously helping during this hot month," he said. "It's also helping their margins as well, you're seeing the food inflation and those are high-margin products that are helping to bolster the margin for them and for franchisees just at a time when inflation is peaking."
3) Unemployment rates rose in majority of US states-From the AP
Unemployment rates rose in more than half of U.S. states in June, evidence that slower hiring is affecting many parts of the country.
The Labor Department said Friday that unemployment rates in 28 states and Washington, D.C., increased last month. Rates declined in eight states and were flat in 14. That's a change from May, when 24 states reported falling unemployment rates.
Twenty-six states reported a net gain in jobs in June, while 24 states lost jobs.
The changing trend in state unemployment rates reflects a weaker economy hampered by high gas prices and lower factory output. Nationally, employers added only 18,000 net jobs in June, the second straight month of feeble hiring.
The U.S. unemployment rate ticked up to 9.2 percent.
The economy expanded only 1.9 percent in the January-March period, and most economists expect similar growth in the April-June quarter. The government releases its first estimate for second-quarter growth on July 29.
Nevada had the highest unemployment rate among the states for the 13th straight month. It rose in June to 12.4 percent, up from 12.1 percent in May. The state has been hampered by foreclosures, depressed home sales and a decline in tourism.
It was followed by California (11.8 percent) and Rhode Island (10.8 percent).
Some companies are cutting their work forces. Layoffs rose to their highest level in nine months in May, according to a separate Labor Department report last week.
The impasse in Washington over raising the federal government's borrowing limit could affect several states, including Tennessee and Virginia. Those states could see a downgrade to their credit rating if the U.S. defaults on its debt, according to Moody's Investors Services.
The government reached its $14.3 trillion borrowing limit in May. The Treasury Department has said it will default on its debt if the limit is not raised by Aug. 2.
Virginia is closely tied to the federal government because of its large number of military bases, defense contractors and government employees. A downgrade to a state's rating would mean it would pay higher interest rates to borrow money.
Analysts are expecting another weak month of hiring in July, based on recent data.
The economy needs to generate about 125,000 jobs per month to keep up with population growth and prevent the unemployment rate from rising. It needs at least twice that many to rapidly reduce unemployment.
Quote of the Day from Dave Ramsey.com:
A duty dodged is like a debt unpaid; it is only deferred, and we must come back and settle the account at last. — Joseph Newton
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