BC-Business News Digest

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Associated Press

Posted on February 27, 2013 at 4:00 PM

Updated Wednesday, Feb 27 at 4:00 PM

Business News at 5:30 p.m.

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NEW THIS DIGEST:

— Adds: BOEING 787, EARNS-MYLAN, MORNING SICKNESS DRUG

— Updates: BUDGET BATTLE, EARNS-JC PENNEY, WALL STREET

TOP STORIES:

BUDGET CUTS-SPARING THE ECONOMY

WASHINGTON — An ax is scheduled to hit the federal budget Friday: Unless the White House and Congress reach a budget deal by then, automatic cuts will carve $85 billion from the budget through Sept. 30 and $1.2 trillion over the next decade. The cuts in defense, unemployment benefits and other programs could slow an already struggling economy. And they would leave unaddressed the biggest long-term threats to the government's finances — rising bills for Medicare and Social Security. Economists say there's a better way. Shrinking the federal debt doesn't have to mean either hurting the economy now or ignoring the spending burdens of the future. By Economics Writer Paul Wiseman.

AP photo.

With:

— BUDGET BATTLE — With big, automatic budget cuts about to kick in, House Republicans are turning to mapping strategy for the next showdown just a month away, when a government shutdown instead of just a slowdown will be at stake.

— BUDGET BATTLE-NEWS GUIDE — If no one backs down, big cuts in federal spending begin Friday. Should Americans be worried?

— BUDGET BATTLE-CRISIS FATIGUE — President Barack Obama is pulling out all the stops to warn just what could happen if automatic budget cuts kick in. Fatigued by crises of Washington's making, Americans are reacting with a collective yawn. AP photos, audio.

— BUDGET BATTLE-AIR TRAVEL — Spending cuts could force busy some of the nation's busiest airports to close runways, causing widespread flight delays and cancellations, air traffic controllers say.

— BUDGET BATTLE-FEDERAL WORKERS — Unions urge government agencies not to furlough workers, seek to soften impact of spending cuts.

Also:

SMALLBIZ-SMALL TALK

NEW YORK — Martha Lou Mackey's software company gets 90 percent of its revenue from the government. Bill Weedon's radar and sensing equipment company gets 50 percent of its revenue from government agencies and laboratories. Think the prospect of deep cutbacks on March 1 to government contracts and programs because of federal budget reductions is keeping them up at night? Not exactly. They and other small-company owners who have traditionally depended on the government for a large chunk of revenue are busy developing and selling new products and services geared toward consumers and corporations, to replace sales to the government that they could lose. By Business Writer Joyce M. Rosenberg.

AP photo planned.

— SMALLBIZ-BUDGET CUTS-Q&A — What the impending sequestration means for small business.

WIRELESS SHOW-INTERNET OF EVERYTHING

BARCELONA, Spain — A car that tells your insurance company how you're driving. A bathroom scale that lets you chart your weight on the Web. And an electric meter that communicates with your air conditioners to warn them that electricity is expensive this afternoon. Welcome to the next phase of the wireless revolution. It's all about getting things to talk to each other, with no humans in between. So-called machine-to-machine, or M2M, communication is generating a lot of buzz at this year's wireless trade show. Some experts believe these connections will outgrow the traditional phone business in less than a decade. By Technology Writer Peter Svensson.

AP photos

APPLE-SHAREHOLDERS

CUPERTINO, Calif. — Apple CEO Tim Cook seeks to assure shareholders that the company is working on some "great stuff" that may help reverse a sharp decline in its stock price. True to Apple's secretive nature, Cook doesn't provide any further product details during the company's annual shareholders meeting. By Technology Writer Michael Liedtke.

AP photo.

MICHELLE OBAMA

WASHINGTON — Wal-Mart is putting special labels on some store-brand products to help shoppers quickly spot healthier items. Millions of schoolchildren are helping themselves to vegetables from salad bars in their lunchrooms, while kids' meals at Olive Garden and Red Lobster restaurants automatically come with a side of fruit or vegetables and a glass of low-fat milk. The changes put in place by the food industry are in response to the campaign against childhood obesity that Michelle Obama began waging three years ago, and more changes are in store. By Darlene Superville and Mary Clare Jalonick.

AP photos, interactive.

With:

— MICHELLE OBAMA-LIST — Steps by retailers, restaurants and others for Michelle Obama's anti-childhood obesity campaign.

MARKETS & ECONOMY:

WALL STREET

NEW YORK — The Dow comes within 100 points of its all-time high after rising sharply for a second straight day. The market surges following more evidence that the Fed will keep interest rates low, housing will keep recovering and shoppers aren't pulling back on spending, even with a payroll tax hike. By Business Writer Steve Rothwell.

AP photo.

— OIL PRICES — The price of oil is little changed near $93 a barrel as markets digest the Federal Reserve chairman's fairly sanguine view about the risks from the central bank's super-easy monetary policy.

DURABLE GOODS

WASHINGTON — Orders for U.S. factory goods that signal business investment plans jumped last month by the most in more than a year, suggesting companies are confident about their business prospects. The Commerce Department says orders for so-called core capital goods, which include machinery, equipment and software, rose 6.3 percent in January from December. A sharp drop in demand for commercial aircraft caused overall durable goods orders to drop 5.2 percent, the first decline since August. By Economics Writer Christopher S. Rugaber.

AP photo

PENDING HOME SALES

WASHINGTON — A measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than 2 ½ years. The increase suggests sales of previously occupied homes will continue rising in the coming months. The National Association of Realtors says its seasonally adjusted index for pending home sales rose 4.5 percent last month to 105.9. That's the highest since April 2010, when a homebuyer's tax credit was about to expire. By Economics Writer Christopher S. Rugaber.

AP photo.

US-BERNANKE

WASHINGTON — Facing criticism from Republican lawmakers, Chairman Ben Bernanke stands behind the Federal Reserve's low-interest-rate policies and seeks to reassure members of Congress that the central bank has a handle on the risks. By Economics Writer Martin Crutsinger.

AP photos.

ITALY-POLITICS

ROME — Why has Italy's muddled election result spooked global investors so much? Because it threatens to punch a hole in the safety net that has kept Europe from catastrophe for the past six months. By David McHugh and Victor L. Simpson.

AP photo.

With:

— ITALY-FINANCIAL CRISIS — Italy's borrowing costs jump in a pair of bond auctions.

ARGENTINA DEBT SHOWDOWN

NEW YORK — Three U.S. appellate judges hear oral arguments in New York in a case between Argentina and holders of defaulted bonds that has shaken financial markets and worried bankers, lawyers and diplomats. By David B. Caruso.

Eds: Arguments at 2 p.m.

With:

— ARGENTINA DEBT SHOWDOWN-Q&A — Some questions and answers about the case. AP photos

RETAIL:

EARNS-JC PENNEY

NEW YORK — Boy, it just wasn't J.C. Penney's year. The mid-priced department store chain reports another much larger-than-expected loss in the fiscal fourth quarter and a nearly 30 percent plunge in revenue in the latest sign that shoppers aren't happy with the changes it's made in the past year. By Retail Writer Anne D'Innocenzio.

AP photo.

EARNS-TARGET

NEW YORK — Target's Neiman Marcus collaboration did not turn out to be a holiday gift to the retailer. The retailer's profit fell 2 percent in its latest quarter as it dealt with intense competition during the crucial holiday season. Still, the company's forecast for 2013 indicated it may beat many analysts' expectations. By Michelle Chapman and Anne D'Innocenzio.

AP photo.

EUROPE-HORSE MEAT

STOCKHOLM — After withdrawing meatballs from stores across Europe, home furnishings company Ikea says its own tests confirmed "a few indications of horse meat" and that it would also remove wiener sausages made by the same supplier. By Karl Ritter.

AP photos.

— EARNS-AB INBEV — Anheuser-Busch InBev, the world's largest brewer, says its profit fell 5 percent in the fourth quarter to $1.8 billion. It expects weak first-quarter volumes in Brazil and in the U.S., its most profitable market, due to bad weather and consumers having less spending money.

— FASHION-FASHION'S NIGHT OUT — The party's over for Fashion's Night Out, an annual shopping event that has been part of New York Fashion Week each September since 2009, after grumbling from some stores and designers over costs. The event, which expanded to 500 U.S. cities and 30 cities globally, will still be held in some international cities.

INDUSTRY:

HOSTESS-BREADS

NEW YORK — Wonder bread is one step closer to popping up in school lunchboxes again. A person familiar with the situation who requested anonymity because the auction process is private says there will be no competing offers Thursday to a bid by Flowers Foods to buy several bread brands from Hostess. By Food Industry Writer Candice Choi.

GULF OIL SPILL-TRIAL

NEW ORLEANS — A well design expert testifying for the federal government accused BP of withholding critical information from industry regulators before a blowout triggered a deadly explosion on the Deepwater Horizon drilling rig in 2010. By Michael Kunzelman.

AP photos, video, audio.

INTERNET GAMBLING

ATLANTIC CITY, N.J. — Nevada and New Jersey once had the whole country to themselves when it came to casino gambling. Now, with the sudden advent of Internet gambling, those two states are expected to slug it out again for dominance of the fledgling U.S. online betting market. By Wayne Parry.

— SHELL-ARCTIC OFFSHORE DRILLING — Royal Dutch Shell PLC says it will not drill for petroleum in the Arctic Ocean in 2013.

— SUPREME COURT-SEC LAWSUIT — The Supreme Court says the federal government doesn't get more time to sue for securities fraud.

— BOEING 787 — Experts at the Federal Aviation Administration are expected to say next week whether they recommend accepting Boeing's plan to fix its troubled 787 Dreamliners so the planes can resume flying.

— EARNS-EADS — EADS, owner of Boeing's rival, Airbus, says fourth-quarter profit dropped 47 percent to $425 million after costly charges at the aerospace giant's helicopter and defense electronics divisions. EADS expects to sell more commercial aircraft — about 700 — in 2013.

— HYUNDAI-SHATTERING SUNROOFS — Hyundai adds about 6,100 Veloster hatchbacks to recall for shattering sunroofs.

— INDIAN CASINOS-REVENUE — Indian casino revenue rose 3 percent to $27.4 billion in 2011, despite the weak economy, as tribes competed hard with commercial casinos.

— MORNING SICKNESS DRUG — Morning sickness relief: Pregnancy nausea drug seems safe for moms and fetuses, study finds.

— EARNS-MYLAN — Mylan agrees to buy injectable drug maker Agila from Strides Arcolab for $1.6 billion.

TECHNOLOGY & MEDIA:

DIGITAL LIFE-TECH TEST-ONLINE SECURITY

Rarely does a week go by without news of another hacking incident, whether it's Chinese hackers accused of breaking in to The New York Times' computer systems or a company finding its Twitter account taking over by pranksters. Security threats aren't new and have long been part of online life. But the increased attention on them offers a good time to review ways you can protect yourself. Although there's no way to completely eliminate threats, minimizing them will go a long way. By Technology Writer Anick Jesdanun.

AP photo.

— CLEARWIRE-SPRINT — Clearwire to tap into $80 million in financing from Sprint, complicating the road to a possible deal with Dish. Clearwire has received buyout offers from both Sprint and Dish.

— IRAN-STUXNET — An anti-virus firm says the cyberweapon that targeted an Iranian nuclear plant is older than previously believed, peeling back another layer of mystery on a series of attacks reportedly attributed to U.S. and Israeli intelligence.

PERSONAL FINANCE:

ON THE MONEY-HOMEBUYING READINESS

After years in the doldrums, the housing market appears back on track. Home sales and prices are up, and mortgage rates remain near historic lows, reinvigorating the appeal of homeownership. But qualifying for a home loan remains a hurdle for anyone without a solid personal balance sheet. Here are eight tips to get financially prepared to purchase a home. By Real Estate Writer Alex Veiga.

INTERNATIONAL:

POLAND-OUTSOURCING BOOM

KRAKOW, Poland — Poland's economy has grown for 21 years straight, while some Western European countries are trying to recover from their most crippling recession in generations. The result is a striking change in the country, whose poverty and political oppressiveness once drove its people abroad in droves. It's now attracting workers from the West as it becomes a major European outsourcing hub. By Vanessa Gera.

AP photos.

CHINA-INTERNET CRACKDOWN

BEIJING — China closes websites for offering pornography, video sharing and online gaming in its latest Internet crackdown. The official Xinhua News Agency says the government has shuttered 225 websites and more than 30,000 blogs and Twitter-like microblog accounts found to be offering obscene or improper content.

IRELAND-RYANAIR-AER-LINGUS

BRUSSELS — The European Union's antitrust authority blocks budget airline Ryanair's bid to take over Irish carrier Aer Lingus on grounds that it would undermine competition and drive up ticket prices. By Juergen Baetz.

AP photos.

EUROPEAN CENTRAL BANK

FRANKFURT, Germany — European Central Bank President Mario Draghi acknowledges that austerity measures and economic reforms can have heavy social costs — but argues they are the way to a fairer society because they can reduce injustices such as widespread youth unemployment. By Business Writer David McHugh.

— DUBAI-TALLEST HOTEL — Superlative-hungry Dubai is adding another to its list: A 72-story hotel, the JW Marriott's Marquis Dubai, billed as the world's tallest.

— GERMANY-ECONOMY — Survey finds German consumer confidence edging higher amid hopes for return to growth.

— SPAIN-FINANCIAL-CRISIS — Spain says it cut its 2012 budget deficit to 6.7 percent of annual GDP, just shy of the level it had promised European authorities.

— HONG KONG-ECONOMY — Hong Kong expects a modest economic rebound this year after growth of just 1.4 percent in 2012.

___

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CENTERPIECE

Construction cuts?

A slate of federal budget cuts known as the "sequester" are due to kick in automatically on Friday with the aim of reducing spending by $85 billion. The construction industry is preparing itself because construction spending makes up about 10 percent of the total federal discretionary budget, according to the Associated General Contractors of America. A look at three contractors that could lose out on potential business under the planned budget cuts.

COMPANY SPOTLIGHT

Priceline beats forecasts

Travel website Priceline.com said late Tuesday that its net income climbed 28 percent in the last three months of 2012. On an annual basis, net income rose 34 percent to $1.42 billion.

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