Expedia's Profits Climb

Expedia, Inc. announced soaring second-quarter profits this week. Profits rose from $40.9 million one year ago to $114.3 for the quarter. Expedia attributed the higher profits to an increase in international business, which accounted for 33% of worldwide bookings. International bookings were up 31% this quarter from the prior year.

Expedia said that worldwide hotel revenue increased for the second quarter primarily due to an increase in room nights stayed, including rooms that were included as part of purchased travel packages. While the length of nights stayed increased, total room revenue declined by 7% per room night. The company said that revenue per room night fell due in part to the impact from foreign exchange and lower hotel service fees compared with the prior year period.

Expedia extended its European presence during the quarter with the acquisition of Holiday Lettings, the U.K.'s number one independent vacation rental site. Expedia-owned Hotels.com also launched a Welcome Rewards loyalty program in the U.K.. In addition, Expedia signed a partnership agreement with Japan's third largest travel agency during the period.

Expedia kicked off its annual summer sale in May, marking the largest-ever promotion in company history with more than 7,400 participating hotels. Hotels.com also launched its first ever full summer sale, with more than 5,000 participating properties. The travel site introduced unpublished rates for hotel inventory to increase its value to customers and capture additional bookings.

Expedia (EXPE) ended the week up at $22.68.

Amgen Falls on Lower Sales

Biotech giant, Amgen, reported lower second-quarter earnings this week due to decreased sales. The company attributed its decline to a weak Euro and lower purchases for Enbrel and Aranesp, two of its leading products.

Despite the quarterly decline, Amgen said that its earnings increased by 7% over the second-quarter of 2009, while profits increased by 1% when compared with the prior year. "We delivered a solid quarter," said Kevin Sharer, Chairman & CEO. "We are in the process of launching Prolia worldwide and look forward to working with global regulatory authorities to gain approval for denosumab in patients with advanced cancer."

Amgen said that the U.S. Food and Drug Administration (FDA) recently granted priority review designation to denosumab. Priority review designation is granted to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.

As a result of the weaker Euro, Amgen said that it now expects its 2010 revenues to be slightly below $15.1 billion. The company anticipates the release of data from its Phase 3 study of Vectibix for the treatment of metastatic squamous cell carcinoma of the head and neck in the upcoming quarter.

Amgen (AMGN) ended the week up at $54.53.

Chevron Triples Profits

Chevron reported this week that company profits tripled in the second-quarter. The oil company attributed the higher revenues to higher prices for crude oil, natural gas and refined products.

Chevron reported earnings of $5.41 billion for the second quarter 2010, compared with $1.75 billion in the second quarter of 2009. The impact of foreign currency exchange rates also increased earnings this quarter. Chevron said that oil production increased this quarter following lower production activity in the aftermath of the Gulf oil spill.

"We had another very successful quarter - both operationally and financially," said Chairman and CEO John Watson. "Current quarter earnings from upstream operations benefited significantly from higher prices for crude oil and natural gas and higher net oil-equivalent production. In the downstream, improved margins for refined petroleum products contributed to increased earnings."

Chevron said that it continues to make progress toward building a natural gas business to supply Australia and the Asia-Pacific region. The company noted two deepwater natural gas discoveries in Australia during the quarter and said that it had signed an agreement to increase gas delivery in that country. Chevron is also working on an expansion project in Indonesia that is anticipated to increase crude oil production.

Chevron (CVX) ended the week up at $76.21.

The Dow started the week at 10,424 and ended at 10,466. The S&P 500 started the week at 1,102 and ended at 1,102. The NASDAQ started the week at 2,260 and finished at 2,255.

Treasuries Rise on Slow Growth

Treasuries rose this week followed by the release of U.S. Commerce Department data showing that U.S. economic growth slowed in the second quarter. The report said that U.S. gross domestic product (GDP) growth slowed to 2.4% from a revised 3.7% in the first quarter of the year.

Demand grew for Treasuries by the end of the week as economists analyzed the GDP data. Economists say that the new data shows the recession was worse than previously estimated. The lower GDP reflected the decline in consumer spending and housing, which signaled manufacturers to pull back in the last quarter.

The Chicago purchasing managers index also released this week provided a more positive view of manufacturing activity in the upper Midwest. The index increased to 62.3 points from 59.1 in June signaling that manufacturing is growing again in these regions of the country.

Also impacting the markets this week, the Reuters and University of Michigan consumer sentiment index declined. Economists say that consumers are concerned by declining stock prices, rising U.S. debt and a slow comeback in the housing market. The survey's reading on consumer expectations also fell significantly to the lowest level for this index since March of 2009.

The 10-year Treasury note yield began at 2.99% and ended at 2.91%. The 30-year Treasury note yield began at 4.02% and finished at 3.99%.

Mortgage Rates Down for Sixth Week in a Row

Freddie Mac reported mortgage rates down for the sixth consecutive week with the 30-year and 15-year fixed-rate mortgages reaching record lows. The 30-year fixed-rate mortgage (FRM) averaged 4.54%, down from last week when it averaged 4.56%. Last year at this time, the 30-year FRM averaged 5.25%.

The 15-year FRM this week averaged a record low of 4.00%, down from last week when it averaged 4.03%. One year ago at this time, the 15-year FRM averaged 4.69%.

"For the sixth week in a row, interest rates on fixed-rate mortgages eased to all-time record lows during a week of mixed housing data reports," said Frank Nothaft, Freddie Mac Vice President and Chief Economist. Nothaft said that the number of local markets experiencing increases in home prices appears to be growing.

However, Nothaft noted that existing home sales in June slowed to an annualized pace of 4.37 million units. Moreover, although new home sales jumped by almost 24% for the month, this represents the second slowest rate for home sales since 1963.

The money market fund finished this week at 0.75%. The 1-year CD finished at 1.13%.

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