Fannie Mae reduces request for additional taxpayer aid

Fannie Mae is asking for less money from the government, a sign that the cost to taxpayers for bailing out the mortgage giant could be billions lower than once thought.

The government-controlled mortgage buyer said Thursday it has now set aside enough money to cover the majority of losses stemming from bad loans made from 2005 through 2008.

It requested $1.5 billion in additional taxpayer aid after posting the best quarterly results since the company was put under federal control in September 2008. It was also the smallest quarterly request since November 2008.

Fannie Mae said it lost $3.13 billion, or 55 cents per share, in the April-to-June period. That takes into account $1.9 billion in dividends paid to the Treasury Department. It compares with a loss of $15.2 billion, or $2.67 a share, in the quarter a year ago.

 

European economy better than expected, official says

Europe’s economy is doing better than expected as the continent’s government debt crisis eases, the European Central Bank’s president said Thursday. But he cautioned that growth would remain “relatively modest.”

Jean-Claude Trichet’s comments underlined the new-found optimism about the 16-nation eurozone’s prospects after it appears to have put the worst of the debt crisis behind it.

Trichet’s monthly news conference came after the bank, as expected, left interest rates unchanged at a record low 1 percent for the 15th consecutive month.

There was no hint as to when the bank might consider raising rates — a prospect that still appears distant given modest growth prospects and little sign of inflation.

 

GM leader expects demand to be good for public shares

Demand for General Motors Co. stock should be good once the company decides to offer its shares to the public, CEO Ed Whitacre said Thursday.

Although Whitacre wouldn’t say when GM wants to sell the stock or when it would file paperwork with regulators to start the official process, he repeatedly said GM wants the sale as soon as possible.

GM spokesmen later said the decision on both when and how much equity to sell will be made by current stockholders, the U.S. and Canadian governments, a United Auto Workers health care trust and former bondholders.

GM reported net income of $865 million in the first quarter.

 

Kraft Foods’ net income up 13 percent for quarter

Kraft Foods Inc. says its net income grew 13.3 percent in the second quarter, but it trimmed its sales outlook in an increasingly competitive market.

The nation’s largest food maker said Thursday that it earned $937 million, or 53 cents per share, for the quarter. That’s up from $827 million, or 56 cents per share, a year earlier.

Kraft, which makes Oreo cookies and Ritz crackers and bought British confectioner Cadbury in February, had more shares outstanding in this year’s second quarter.

 

Cigna’s income tumbles, but 2010 outlook improves

A big hit from a discontinued business helped drop net income 32 percent for managed-care company Cigna Corp.

However, the Philadelphia insurer lifted its full-year earnings outlook Thursday after seeing sizable gains in business it still sells, and its stock rose briskly.

Cigna was the last of the large health insurers to report second-quarter earnings Thursday. Competitors like UnitedHealth Group Inc. and Aetna Inc. reported healthy profit increases that beat Wall Street expectations.

Cigna earned $294 million, or $1.06 per share, in the three months that ended June 30. That’s down from the $435 million, or $1.58 per share, in net income last year.