Positive news from retail gives small boost to stocks

Stocks resembled summer vacationers Friday, rising not-too-impressively in the morning and then mostly lying around for the rest of the day.

Positive news from retailers was the main reason U.S. indexes posted small gains. Apple helped by hitting a new high.

Traders in both the United States and Europe are on vacation, so volumes were low. And the dog days continued for Facebook. A 4 percent decline left its shares at about half the price of its May initial public offering.

The Dow Jones industrial average rose 25.09 points to close at 13,275.20. The Standard & Poor’s 500 index rose 2.65 points to close at 1,418.16. The Nasdaq rose 14.20 points to close at 3,076.59.

The modest gains put some indexes close to their highs for the year. The Dow is now within four points of 13,279, its high for the year set on May 1. The S&P 500 is within one point of its four-year high set on April 1.

The Dow has now risen eight out of the last 11 days and finished the week up a half-percent. The Dow is sporting a gain of almost 8.7 percent for the year, while the S&P 500 is up almost 12.7 percent.

Southwest Airlines raises fares on its short routes

DALLAS – Southwest Airlines Co. is raising fares on short routes by $10 per round trip, and other airlines are expected to match the increase.

The fare hike Friday applied to flights of less than 500 miles each way, or about one-third of Southwest’s routes.

“We never like to increase fares, but simply we needed to cover the cost of business,” Southwest spokeswoman Ashley Dillon said.

During the second quarter, which ended June 30, Southwest’s operating expenses rose 6 percent compared with the same period last year. Fuel, labor and maintenance costs all increased.

The company covered the higher expenses by boosting revenue nearly 12 percent, partly due to a 5 percent increase in the average fare, to $150 each way. Net income rose 42 percent, to $228 million.

Moody’s says it expects more defaults in California

SACRAMENTO, Calif. – One of the nation’s top credit rating agencies said Friday that it expects more municipal bankruptcies and bond defaults in California, the nation’s largest issuer of municipal bonds.

Moody’s Investors Service issued a report saying that the growing fiscal distress in many California cities was putting bondholders at risk.

The service will begin a wide-ranging review of municipal finances in the nation’s most populous state because of what it sees as a growing threat of insolvency.

It noted that some municipalities were considering bankruptcy as a new strategy to address budget deficits and avoid obligations to bondholders, an emerging dynamic that could have ripple effects throughout the investment community.

Three California cities — Stockton, San Bernardino and Mammoth Lakes — have filed for bankruptcy so far this year. They are not likely to be the last, Moody’s said.

American seeks to get out of union pilots contract

DALLAS – American Airlines is going back to court to throw out its contract with union pilots after making changes to satisfy the bankruptcy judge.

If it wins in court, American could cut annual spending on pilots by more than $300 million and do more revenue-sharing deals with other airlines.

— From news service reports