FTC investigating University of Phoenix
The University of Phoenix, an online college popular among military veterans, is under federal investigation for possible deceptive or unfair business practices, its parent company the Apollo Education Group announced. The for-profit, publicly traded company is the largest recipient of federal student aid for veterans and often a sponsor at military education and employment events. In a filing to the Securities and Exchange Commission, the company told shareholders that it received a "civil investigative demand" from the Federal Trade Commission this week. According to the document, investigators asked for information on a "broad spectrum" of matters. The filing said Apollo is "evaluating the demand and intends to cooperate fully with the FTC."
Maker's Mark marketing lawsuit dismissed
Chalk up another round for Maker's Mark distillery in fending off claims of misleading marketing for promoting its Kentucky bourbon as handmade. A federal judge in California this week dismissed a lawsuit filed by two consumers who claimed they were misled by the bourbon maker's handmade claims on its bottles, known for their red-wax seal. They said the claim enticed them to purchase Maker's Mark. The judge, however, accepted the bourbon producer's request to dismiss the suit. " 'Handmade' cannot reasonably be interpreted as meaning literally by hand," the judge wrote.
Cars' life expectancy climbs to 11½ years
Automakers say they are building the best cars ever, and there's proof on the road. The average age of vehicles in the U.S. has climbed to a record 11.5 years, according to research firm IHS Automotive. The age continues to creep up even though new car sales are at near record levels. People are holding on to their cars longer because of "the increasing quality of automobiles," said Mark Seng, global aftermarket practice leader at IHS Automotive. Consumers are now driving cars they bought new for 77.8 months before selling them, he said. That's an increase of 26 months since the start of 2006. Used car drivers hold on to their vehicles for an average 63 months before disposing of them, a 25-month increase since early 2006.
U.S. pending home sales fell last month
The number of signed contracts to buy homes fell in June, as limited supplies of homes on the market are holding back possible sales growth. The National Association of Realtors said its seasonally adjusted pending home sales index declined 1.8 percent to 110.3 last month. Still, strong demand from would-be buyers has pushed the index up 8.2 percent during the past 12 months. Solid hiring and relatively low mortgage rates have fueled the previous five months of gains in the pending sales index. But buying options are increasingly limited because the market contains just five months' supply of homes, compared with the historical average of six months in a healthier market.
Shake Shack rises as lockup period ends
Shares of Shake Shack soared 18 percent, making it the biggest gainer in the Russell 2000 restaurants index, as the lockup period that restricts insiders from selling shares expired. The stock closed trading in New York at $62.15, the biggest one-day gain since Jan. 30, when the burger chain first began trading on the New York Stock Exchange. The stock more than doubled on that day and has been volatile in the subsequent months. That's partly because the company has a small float — the amount of stock available for trading — and a high percentage of its shares are sold short, meaning investors are betting they will lose value.
IMF: The world economy is recovering
International Monetary Fund chief Christine Lagarde says the world economy is recovering but fragile and "faces some downside risks." In an online news conference, Lagarde described the United States "a strong performer" and China "resilient" despite a recent drop in Chinese stock prices. She also expressed optimism for the 19 countries that use the euro. The IMF expects the eurozone economy to grow 1.5 percent this year and 1.7 percent in 2016; it expanded just 0.8 percent in 2014. "The euro area is beginning to turn the corner. … We have a more upbeat forecast than we have in a long time," she said.