July 18 - Summary: New lifetime highs on Wall Street but after the bell sales misses for Google and Microsoft could spell trouble for tech stocks. Detroit files biggest bankruptcy in municipal history. Conway G. Gittens reports.
Earnings, economy, Bernanke - take your pick - all helped give Wall Street a bounce. The Dow and S&P 500 set lifetime closing highs - but nervousness ahead of after the bell earnings put a lid on the Nasdaq. A double whammy at Microsoft: sales of Windows software hurt by the shrinking PC market, while weak demand for its Surface tablet resulted in weaker-than-expected profits. Over at Google, ad pricing, which is the search giant's major source of revenue, was down last quarter after falling the previous quarter. Another big story after the market close: Detroit. The Motor City filed for bankruptcy - the biggest ever for a U.S. municipality. The former manufacturing powerhouse is saddled by debt estimated as high as $18-1/2 billion. A quick round-up of other earnings: Sales at Verizon came in slightly below targets. The telecom company says government and corporate customers cut back on traditional phone service. Over at Morgan Stanley, revenues jumped 22 percent thanks to improvements in its trading unit. Profits beat the consensus. Federal Reserve Chairman Ben Bernanke was on Capitol Hill for a second day - this time speaking with the Senate Finance Committee. SOUNDBITE: FEDERAL RESERVE CHAIRMAN BEN BERNANKE (ENGLISH) SAYING: "With inflation below target and with unemployment still quite high and by some measures with unemployment in some ways being even too optimistic a measure of the state of the labor market given some of the other the statistics that you cited - that both sides of our statuary mandate are suggesting that we need to maintain a highly accommodative monetary policy for the foreseeable future." Incoming data more upbeat than in recent days. Business activity in the Mid-Atlantic expanded to its fastest pace in more than two years, and first-time claims for unemployment benefits dropped to the lowest since March. Signs of a stronger economy sending crude oil prices to a 16-month peak. Finally, European stocks traded at their best level in six weeks. The European Central Bank widened what kind of collateral banks can offer in exchange for cheap loans.