July 18 - -Summary of business headlines: IBM earnings beat forecasts; Cisco will cut 6,500 jobs and transfer out 5,000 more; Debt stalemate could move to plan B; stock indexes close lower. Bobbi Rebell reports.
PLEASE NOTE : THIS EDIT CONTAINS 4:3 MATERIAL. IBM reporting earnings after the closing bell that were better than expected. Quarterly profits rose 8 percent from a year earlier, thanks to strong growth in sales of its computers and software. Cisco will cut 6500 employees. That is about 9 percent of its regular full-time workforce. U.S. lawmakers are scrambling to avoid a government debt default- as the Treasury approaches the limit on borrowing. Bank stocks took a beating- among the losers Bank of America and Barclays, both hitting 52-week lows. But with an eye on Europe and its fiscal problems, Michael Shaoul of Marketfield Asset Management offers some perspective: SOUNDBITE: MICHAEL SHAOUL, PRESIDENT, MARKETFIELD ASSET MANAGEMENT (ENGLISH) SAYING: "I think that Wall Street understands that even if you had a technical default it wouldn't really mean anything. Its not the same as the sort of events where you have in Italy where the country wouldn't be able to pay its debts back or Greece where the country certainly can't afford to pay its debt back. In the U.S. what you have is a debate trying to make sure that we are never in that situation. " Also taking a hit in the US market: shares of News Corp. As the phone hacking scandal widens, the company says it plans to set up an independent committee to oversee new ethics procedures. US corporate earnings are off to a strong start. According to Thomson Reuters, 74 percent of the Standard & Poor's 500 companies reporting so far posted higher than expected profits. Monday Halliburton reported a 54 percent jump in profits. Charles Schwab's earnings were up 16 percent. US crude oil prices fell on growing concerns about debt problems, closing below $96 a barrel. Gold, meanwhile, rallied to record highs, above $1600 an ounce. Taking a look at the three major US indexes, all finished in the red in the first trading session of the week. In Europe, shares fell to a four-month closing low, on concerns the latest bank stress tests were unrealistic. Bobbi Rebell, Reuters.