Two tech giants announced first-quarter results and both surprised Wall Street with stronger-than-expected earnings. Apple shares overnight gained more than 8 percent after the company said it plans to buy back $30 billion in stock and raise its quarterly dividend by 8 percent. Apple also announced a 7-for-1 stock split. It's really benefiting from an alliance with China Mobile, selling 44 million iPhones worldwide, many in China.
Facebook now has more than a billion and a quarter users with two-thirds of them logging in every day. First-quarter earnings and sales surged. Advertising revenue rose 82 percent.
Net neutrality may be on life support. In a major change of policy, the Federal Communications Commission is set to propose new rules to allow Internet service providers to charge companies different rates for faster connection speeds. The announcement is a blow to net neutrality advocates who say the FCC would overturn the ideal of equal access for all consumers. "If you're creating fast lanes for people that can afford preferential treatment, it puts everyone else who wants a piece of the pie in a situation where they can't really compete," says Bartess Cox of the consumer group, Public Knowledge. The new rules are meant to replace the FCC's open Internet order from 2010, which was struck down by a federal appeals court in January. The ruling affirmed that the FCC had the authority to create open-access rules but said it failed to establish that its 2010 regulations didn't overreach.
A mixed picture for the U.S. housing market. A survey out today from the home data firm RealtyTrac says average home prices last month rose 10 percent compared with a year ago. But home sales fell during the first three months of this year. "We critically need more housing inventory," says Walter Malony of the National Association of Realtors "We've got to take the pressure off the price growth and the only way to really do that is to increase the level of housing construction." Fewer than one million homes have been built each year, far below the annual average of one and a half million before the recession. Malony says small construction firms have been the backbone of the industry, but "these folks cannot get construction loans."
Government subsidies to consumers are big contributors to the bottom line at many health care and insurance companies. Aetna's first-quarter profits soared 36 percent. The insurance firm says its acquisition of Coventry Health Care was the main factor behind its growth. Aetna announced its medical enrollment rose 24 percent compared with a year ago. Coventry serves customers in two markets primed for growth. It administers Medicaid, the federally and state-funded program that covers the needy and disabled people, and it offers Medicare Advantage plans. Those are subsidized versions of the federal government's Medicare program for the elderly and also disabled people.
China's government says it will open 80 projects in eight state-run industries to private and foreign investors as part of efforts to make its slowing economy more efficient. The cabinet announcement is the latest in a series of policy changes aimed at carrying out the ruling Communist Party's promises to give entrepreneurs and foreign investors a bigger role in the state-dominated economy.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow