Summary: Stocks rally despite a revision showing the biggest economic contraction since the Great Recession; Aereo Supreme Court defeat sends media stocks higher; Google expands Android beyond phones. Conway G. Gittens reports.
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The U.S. Supreme Court rules that Aereo, a video streaming service backed by media mogul Barry Diller, violated copyright laws by using tiny antennas to broadcast free TV content to the smartphones, tablets or computers of paying subscribers. The ruling is a victory for traditional TV operators and protects $3 billion in so-called retransmission fees that they get from cable and satellite TV systems.
Horizon Media's Brad Adgate:
SOUNDBITE: BRAD AGATE, SENIOR VP OF RESEARCH, HORIZON MEDIA (ENGLISH) SAYING:
"The one thing that retransmission consent fees do is that it's constant dollars. The other big revenue is advertising and there can be ebbs and flows and fluctuations depending on the marketplace or advertisers deciding to allocate on other media."
Looking at the victors: CBS, Fox, Walt Disney and Comcast - all rallied after the ruling.
The first day of Google's developers conference had something for everyone as the tech giant looks to expand the reach of its Android software Google is launching a streaming video service with Android TV, cars running Android Auto will roll out later this year, and smartwatches made by Samsung and LG - powered by Android Wear go on sale before the day is out. Google is in a race with Apple and Amazon for a piece of the growing field of Internet-connected devices. All three have announced new products recently. Google shares were higher. Apple was little changed. Amazon gained one percent.
Other movers of the day: General Mills was one of the worst stocks in the S&P 500 after announcing the third straight drop in quarterly sales.
And Barnes & Noble rallied 5.3 percent after saying it will spin off the loss-making Nook e-reader business.
In the economy: a second revision to first quarter growth figures show the economy plummeted at the steepest pace since the Great Recession. The problem? Along with a harsh winter and slower consumer spending due to benefit cuts, healthcare spending was actually down instead of up as first announced. More negative news: orders for long-lasting items, known as durable goods, fell in May.
Investors, however, shrugged off the data, sending stocks higher since other reports ranging from consumer confidence to housing point to a growing economy.
In Europe, shares fell on fear that violence in Iraq could escalate.
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