BC-Business News Digest

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Associated Press

Posted on April 24, 2013 at 3:00 PM

Updated Wednesday, Apr 24 at 3:00 PM

Business News at 5:40 p.m.

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All times EDT.

NEW THIS DIGEST:

Adds: FIAT-CHRYSLER-STOCK SALE; ON THE MONEY-PROM SPENDING-DEALS-GLANCE; ON THE MONEY-PROM SPENDING-CHECKLIST-GLANCE; BEST BUY-EXECUTIVE COMPENSATION; OBAMA-FAA; SANDBERG-LEAN-IN CIRCLES

Updates: EARNS-ZYNGA; OIL PRICES

TOP STORIES:

WALL STREET-TWITTER TUMBLE

NEW YORK — For decades, computers have been helping people sort through data and news to decide whether to buy or sell stocks. Now the machines seem to have dispensed with the slowpoke humans. Just how big a role computers played in Tuesday's brief market swoon is uncertain. But, according to some experts, when human traders read a fake news tweet and hesitated to buy, the computers took over and went into sell mode. The result, they say, was a market completely on autopilot, at least for a few crucial seconds. What are the risks of such a market and should it be regulated? By Business Writers Bernard Condon and Matthew Craft.

AP photos.

EARNS-BOEING

Boeing says it will begin delivering 787s again in early May. The 787 has been grounded since mid-January because of smoldering batteries. Federal authorities have approved Boeing's redesigned battery system. The company also says its net income rose 20 percent in the first quarter, beating Wall Street expectations, despite its troubles with the plane. By Business Writer Joshua Freed.

AP photo.

BRITAIN-TRIPLE DIP?

LONDON — Recession may just be a word. But in Britain it may become a habit — and a dangerous one at that. Official figures on first quarter economic growth, to be released Thursday, could show the country is back in recession, and tension is building. Experts warn that confirmation of another recession would create a wave of negative media attention that would scare consumers away from spending, feeding into a vicious cycle that has the economy flat-lining. By Danica Kirka.

AP photos.

ITUNES-ANNIVERSARY

NEW YORK — When Apple launched its iTunes music store a decade ago amid the ashes of Napster, the music industry — reeling from the effects of online piracy — was anxious to see how the new music service would shake out. As iTunes, now music's biggest retailer, celebrates its 10-year mark Sunday, it faces renewed scrutiny on how it will continue to dominate in the next decade — or whether it can. By Entertainment Writer Nekesa Mumbi Moody.

AP photo.

HOLLYWOOD IN CHINA

Coming soon to a theater near you: China's Communist Party. From demanding changes in plot lines that denigrate the Chinese leadership, to dampening lurid depictions of sex and violence, Beijing is having increasing success in pressuring Hollywood into deleting movie content Beijing finds objectionable. It's even getting American studios to sanction alternative versions of films specially tailored for Chinese audiences, like "Iron Man 3," which debuts in theaters around the world later this week. The Chinese version features local heartthrob Fan Bingbing, absent from the version showing abroad, and lengthy clips of Chinese scenery that local audiences love. By Peter Enav.

AP photos.

FOOD-GAS DRILLERS' DELIGHTS

PENNSDALE, Pa. — The land of scrapple and chipped ham is starting to get a taste for jambalaya and boudin. Thanks to an influx of Southerners filling jobs in north-central Pennsylvania's booming natural gas industry, a region not often placed on many culinary maps is finding itself flush with the foodways found below the Mason-Dixon line, arguably the source of some of the nation's richest culinary traditions. Suddenly, convenience stores stock sweet tea, barbecue is a hot seller, and the almost Norman Rockwell-quaint Country Store in Pennsdale even makes its own boudin, a pork sausage popular in Louisiana. By Genaro C. Armas.

AP photos.

MARKETS & ECONOMY:

DURABLE GOODS

WASHINGTON — Orders for long-lasting U.S. factory goods fell sharply last month, dragged lower by a steep drop in volatile commercial aircraft demand. But orders that reflect business investment plans rose slightly. By Economics Writer Christopher S. Rugaber.

AP photo.

HEALTH OVERHAUL-UNINSURABLES

WASHINGTON — House Republicans make a political gambit to rescue one of the most popular features of President Barack Obama's health care program — guaranteed coverage for people with pre-existing medical conditions — by raiding a disease prevention program. But they run into a buzzsaw of veto threats and cries from conservatives that it further extends the government's role in health care. By Jim Abrams.

With:

HEALTH OVERHAUL-GOVERNMENT WORKERS

OLYMPIA, Wash. — In a move that would capitalize on provisions under President Barack Obama's health care law but could cost the federal government millions of dollars, Washington state lawmakers have found a creative way to pass a large chunk of their health care expenses along to Washington, D.C. — and analysts say others are likely to follow suit. By Mike Baker.

AP photos.

— $100 BILL — The Federal Reserve says it will begin circulating a redesigned $100 bill this fall, more than two years after its initial target.

WALL STREET

NEW YORK — Weak earnings forecasts from Procter & Gamble and AT&T hold the Dow Jones industrial average back. By Markets Writer Steve Rothwell.

AP photos.

— OIL PRICES — Oil had its biggest daily gain since December, finishing above $91 a barrel, as oil supplies rose less than expected in the U.S. and speculation grew that the European Central Bank will cut interest rates.

DEBT SHOWDOWN

WASHINGTON — Get ready for another debt showdown this summer. House Republicans are preparing for one. The House Ways and Means Committee pass a bill to protect Social Security recipients and investors in Treasury bonds if the government hits the limit of its borrowing authority. By Stephen Ohlemacher.

AP photo.

STUDENTS-ECONOMIC SAVVY

WASHINGTON — The Wall Street meltdown of 2008 and the ensuing recession did little to improve the economic illiteracy of high school seniors, according to a new Education Department report. Students' scores changed little between 2006 and 2012, suggesting that heightened public discussion, millions of jobs lost, and homes foreclosures didn't translate to higher academic achievement. By Philip Elliott.

AP photo.

With:

—NATION AT RISK — The warnings about U.S. education issued 30 years ago in the Reagan administration's "Nation at Risk" report still reverberate today.

—AGING AMERICA-LONG TERM CARE — Americans underestimate their chances of needing long-term care as they get older — and are taking few steps to get ready, according to a poll by the AP-NORC Center for Public Affairs Research. AP photos.

SMALL BUSINESS:

SMALLBIZ-SMALL TALK

NEW YORK — Crowdfunding has been touted as a windfall for small businesses hoping to raise money. But this online method of soliciting money from investors may be more of a bust for many small business owners. People involved in venture funding say entrepreneurs may find that investors aren't interested if their companies don't have a good track record or the promise of a good return. The Securities and Exchange Commission is still writing rules to govern crowdfunding. In the meantime, experts say, they shouldn't get their hopes too high. By Joyce M. Rosenberg.

AP photo.

— SMALLBIZ-MINIMUM WAGE — Small-business owners support raising the federal minimum wage because they believe it will help the economy and, in turn, enable small companies to hire more workers.

AUTOS:

EARNS-FORD

DEARBORN, Mich. — Ford Motor Co. reports a better-than-expected $1.6 billion profit in the first quarter as growing demand in the U.S. and China for its new vehicles helped overcome steep losses in Europe and South America. By Auto Writer Dee-Ann Durbin.

AP photo.

— CHEVROLET SPARK-ELECTRIC RANGE — General Motors says the battery-powered version of its Chevrolet Spark mini-car can travel up to 82 miles on a single charge, putting it among the leaders in mass-market electric vehicles sold in the U.S. AP photo.

FIAT-CHRYSLER-STOCK SALE

DETROIT — The head of Italian automaker Fiat is considering a plan to hold a public stock offering after the company buys 100 percent of Chrysler, according to a person briefed on the matter. The plan to sell shares of a combined company is among several options being evaluated by Sergio Marchionne, who serves as CEO of both automakers, said the person, who didn't want to be identified because no decision has been made. Fiat now owns 58.5 percent of Chrysler, and it's trying to buy the remaining 41.5 percent from a health care trust fund for union retirees. By Tom Krisher and Colleen Barry.

JAPAN-TOYOTA

TOKYO — Toyota held onto its status as the world's top-selling automaker in the first quarter of this year, although the three-way race with General Motors and Volkswagen is proving tight, as its sales fall in China and Japan. Toyota Motor Corp. reported it sold 2.43 million vehicles during the January-March period, outpacing U.S. automaker General Motors Co. at 2.36 million vehicles and Volkswagen AG of Germany at 2.27 million vehicles. By Business Writer Yuri Kageyama.

AP photos.

FISKER AUTOMOTIVE

WASHINGTON — Newly released documents show that the Obama administration was warned as early as 2010 that electric car maker Fisker Automotive Inc. was not meeting milestones set up for a half-billion-dollar government loan — nearly a year before U.S. officials froze the loan after questions were raised about the company's statements. By Matthew Daly.

AP photo.

GERMANY-EARNS-DAIMLER

FRANKFURT, Germany — Automaker Daimler AG says profits sagged 60 percent in the first quarter, hurt by weak demand for cars in recession-hit Europe.

— GERMANY-EARNS-VOLKSWAGEN — Volkswagen AG says its first-quarter profit was down 38 percent compared with a year earlier as sagging demand in Europe pushed revenue slightly lower.

— FRANCE-PEUGEOT-CITROEN-SALES — PSA Peugeot Citroen said crumbling automobile markets across Europe lay behind a steep drop in its first quarter sales.

— FRANCE-RENAULT — Renault says that sales of its cars slumped 12.6 percent in the first quarter as Europe's sliding economies hit automakers across the continent.

AEROSPACE:

OBAMA-FAA

WASHINGTON — Under pressure, the White House signaled Wednesday it might accept legislation eliminating Federal Aviation Administration furloughs blamed for lengthy flight delays for airline passengers, while leaving the rest of $85 billion in across-the-board spending cuts in place. By David Espo and Jim Kuhnhenn.

AP photos.

INDIA-JET-ETIHAD

MUMBAI, India — India's Jet Airways approved the sale of a 24 percent stake to Etihad Airways for $379 million, the first foreign investment in an Indian airline since the South Asian country eased restrictions on aviation deals last year. By Kay Johnson.

— ISRAEL-F-35 — Israel Aerospace Industries says it has signed a long-term contract with U.S. defense giant Lockheed Martin to produce wings for the F-35 next-generation fighter jet.

HEALTH CARE:

EARNS-WELLPOINT

INDIANAPOLIS — WellPoint says its first-quarter earnings rose about 3 percent, as the nation's second largest health insurer saw a revenue gain from an acquisition. It also raised its 2013 net income forecast. By Business Writer Tom Murphy.

— SWITZERLAND-EARNS-NOVARTIS — Swiss pharmaceutical company Novartis AG reports a 6.7 percent increase in profit for the first quarter, boosted by new products and emerging markets. AP photo.

— BRITAIN-EARNS-GLAXO — Pharmaceutical company GlaxoSmithKline reports a 26 percent drop in profits in the first quarter compared to a year ago, as it restructures its manufacturing and research and development divisions.

EARNINGS:

EARNS-PROCTER & GAMBLE

NEW YORK — Procter & Gamble's turnaround is still a work in progress. The world's largest consumer product maker says its third-quarter net income rose 6 percent, helped by cost cuts and improvement in North America. But P&G's fourth-quarter outlook comes in short of Wall Street's expectations thanks to a mixed response to its new product introductions and what the company calls "choppy" market conditions that led to modest revenue gains. By Retail Writer Mae Anderson.

AP Photo.

— BRITAIN-EARNS-BARCLAYS — Barclays PLC has reported a return to profit in the first quarter, as it tries to restructure and get past recent scandals.

— SWITZERLAND-EARNS-CREDIT SUISSE — Swiss bank Credit Suisse Group has reported first quarter profits of 1.3 billion Swiss francs ($1.37 billion), a sharp rebound from the same period a year ago.

— NETHERLANDS-EARNS-HEINEKEN — Heineken NV says its sales and profits rose in the first quarter, due to recent acquisitions. The Dutch brewer blamed austerity policies for weak European markets, and said growth in revenues for the full year would not be quite as strong as it hoped. It has not set any specific target.

INDUSTRY:

PILOT FLYING J-FBI

NASHVILLE, Tenn. — Tennessee's Haslam family — Gov. Bill Haslam and Cleveland Browns owner Jimmy Haslam — is furiously trying to control the damage following a federal investigation into the family business that could threaten to unravel decades of growing wealth and influence that spans business, sports and politics in the state and beyond. By Erik Schelzig.

AP photos.

COUNTERFEIT PILLS-FDA

WASHINGTON — U.S. health officials are making a high-tech screening device available in Africa to help spot counterfeit malaria pills in hopes that the technology may eventually be used to combat the fake drug trade worldwide. By Health Writer Matthew Perrone.

— BEST BUY-EXECUTIVE COMPENSATION — The CEO of Best Buy, turnaround expert Hubert Joly, earned compensation worth $19.6 million in his five months on the job in 2012.

— GEORGIA-PACIFIC-BUCKEYE TECHNOLOGIES — Georgia-Pacific is buying Buckeye Technologies Inc., boosting its product lineup, for about $1.46 billion.

— JONES GROUP-CLOSURES — Jones Group, a clothing, shoes and accessories maker that owns chains including Nine West and Easy Spirit, says it's closing 170 U.S. stores and slashing jobs as part of a plan to improve profitability.

— BRITAIN-LLOYDS — Lloyds Banking Banking Group says a mulitmillion pound deal to sell hundreds of branches to Co-operative Group has unraveled. The bank, which is 40 percent owned by taxpayers, said it will now pursue a stock market flotation for the branches.

— SWITZERLAND-BASELWORLD — The world's biggest trade fair for watches opens this week, a spectacle of luxury items and highly-crafted gadgetry competing in a time of austerity and smartphones.

TECHNOLOGY & MEDIA:

DIGITAL LIFE-TECH TEST-SAMSUNG GALAXY S4 PHONE

NEW YORK — I've seen Android phones get better and more powerful over the years, as Google and phone manufacturers pack devices with more and more features. There comes a time, though, when less is more. I'm afraid we've reached that time. By Technology Writer Anick Jesdanun.

AP photos.

With:

DIGITAL-LIFE-TECH-TEST-BLACKBERRY-Q10-PHONE

NEW YORK — The BlackBerry has finally caught up to the world of touch-screen smartphones. It took time — six years, from the launch of the first iPhone — and it may be too late to save the company that makes it. But the BlackBerry deserves to be taken seriously again. By Technology Writer Peter Svensson.

AP photos.

Also:

— SAMSUNG GALAXY S4 DELAYS — Sprint is delaying shipments of Samsung's latest flagship phone, citing "unexpected inventory challenges."

— EARNS-SPRINT — The flow of new customers to Sprint stopped in the latest quarter, even as the company weighs the offers of two corporate suitors.

SANDBERG-LEAN-IN CIRCLES

NEW YORK — "If you lean back, you are denying the universe your greatness. So lean in, shout out, and get comfortable with who you are! Tonight is about teamwork," business coach Franne McNeal told some 100 women crowded into a downtown Manhattan office lounge one evening last week. Sheryl Sandberg, the Facebook chief operating officer whose best-selling book, "Lean In," inspired the meeting, would surely have been happy with the turnout. By Jocelyn Noveck.

AP photo.

ONLINE SNOOPING

WASHINGTON — Online privacy rules are changing. The question now is how much you'll care. America's tech industry is finalizing voluntary disclosure standards on the sensitive information being sucked from your smartphone like your location, surfing habits and contacts. Senate Democrats are pushing for a clearer opt-out button for all online tracking. And Microsoft is offering a new browser that encourages people to block the technology that enables tracking. By Anne Flaherty.

AP photo.

With:

— US-CHINA — The top U.S. military officer says that he has called on China to be more transparent about cyberattacks and boost collaboration with the U.S. to tackle a common threat to their economies. AP photo.

— CHINA-FOREIGN BUSINESS-INTERNET — An American business group has called on China to improve its Internet security, ease controls on Web use by businesses and open its online industries wider to foreign participation.

— EARNS-ZYNGA — Zynga Inc.'s surprise profit for the first three months of the year was overshadowed by a revenue decline, a drop in the number of users and a lower-than-expected second-quarter forecast.

— T-MOBILE USA-METROPCS— MetroPCS Communications Inc., the country's fifth-largest cellphone carrier, says its shareholders have approved the company's takeover by No. 4 T-Mobile USA.

— JAPAN-EARNS-NINTENDO — Nintendo Co. returned to profit for the fiscal year ended March 31 as a lift from the weak yen offset sales struggles caused by software delays for its latest home console Wii U. AP photos.

— SKOREA-EARNS-LG-ELECTRONICS — LG Electronics Inc. says its first quarter earnings shrank to less than one tenth of the year-earlier quarter as its TV business languished, masking a recovery in mobile phone sales.

— SKOREA-EARNS-SK HYNIX — South Korean chipmaker SK Hynix Inc. reports its third consecutive quarterly profit as prices for PC memory chips rose.

— SWEDEN-EARNS-ERICSSON — Wireless equipment maker Ericsson says a 2 percent gain in sales in the first quarter was not enough to prevent an 86 percent slump in net profit as it booked costs connected with downsizing its Swedish operations. AP photos.

KICKSTARTER-ZACH BRAFF

NEW YORK — Since directing "Garden State," Zach Braff has continually prepared music in an iTunes playlist titled, "For Next Movie." Nine years and hundreds of saved songs later, Braff hopes he's finally making his follow-up to "Garden State" — if his fans can help. By Entertainment Writer Jake Coyle.

AP photos.

—BRITAIN-TRUMP ADS — Britain's Advertising Standards Agency has ruled that Donald Trump's anti-wind farm advert should be withdrawn in its current form.

— BRITAIN-PHONE HACKING — British prosecutors say that a senior editor at Rupert Murdoch's tabloid The Sun is being charged with conspiring to pay 23,000 pounds (roughly $35,000) in bribes in return for tips about the royal family.

— AUSTRALIA-HACKING ARREST — Australian police have arrested a man they say is affiliated with international hacking collective Lulz Security on a charge of attacking and defacing a government website.

INTERNATIONAL:

BANGLADESH-BUILDING COLLAPSE

SAVAR, Bangladesh — An eight-story building housing several garment factories collapses near Bangladesh's capital, killing at least 87 people and trapping many more under a jumbled mess of concrete. Less than five months after a factory fire killed 112 people, the disaster again underscores the unsafe conditions in Bangladesh's massive garment industry. By Julhas Alam.

AP photos.

EUROPE-ECONOMY

FRANKFURT, Germany — Evidence that Europe's economic downturn is affecting its strongest member, Germany, is convincing many experts that the European Central Bank will cut interest rates from the current record low. After a survey showed a slowdown in German's key manufacturing sector, an index of business optimism also came in surprisingly weak. The Ifo index fell to 104.4 points in April from 106.7 in March, more than the modest dip foreseen by market analysts to 106.2. By Business Writer David McHugh.

AP photos.

With

— GERMANY-ECONOMY — A key measure of German business optimism fell in April, suggesting Europe's biggest economy might not be rebounding as expected. The Ifo institute says its index fell to 104.4 points from 106.7 in March. Market analysts had expected a more modest decline to 106.2. By David McHugh.

— AUSTRALIA-CHINA — Australia's central bank said it will invest up to 5 percent of its foreign currency reserves in Chinese government bonds as economic and business ties between the two countries deepen.

— FRANCE-ROUGH-AND-TUMBLE LABOR — The French government will not vote for a law that would give amnesty to workers who ransacked company offices or threatened their bosses during labor disputes.

— HONG KONG-QUAKE AID SKEPTICS — Hong Kong lawmakers fiercely opposed a plan to donate money to a Chinese provincial government for earthquake victims, underlining widespread public concerns about mainland corruption.

— INDIA-INVESTMENT FRAUD— An Indian businessman who allegedly duped hundreds of thousands of small depositors in eastern India after promising them huge returns on their investments has been arrested.

PERSONAL FINANCE:

ON-THE MONEY-PROM SPENDING

Gowns, limos and corsages don't come cheap. Parents are also willing to pay for a growing list of services, from spray tans to makeup artists, in order to give their teenagers a memorable night. By Joseph Pisani.

AP photo planned.

With:

— ON THE MONEY-PROM SPENDING-DEALS-GLANCE

— ON THE MONEY-PROM SPENDING-CHECKLIST-GLANCE

_____

A sampling of Money & Markets modules is below. The full digest for AP's Money & Markets service can be found at markets.ap.org. For questions about Money & Markets content, please contact Trevor Delaney (800-845-8450, ext. 1807). For technical support: Todd Balog (816-654-1096). After 6 p.m., contact the AP Business News desk (800-845-8450, ext. 1680) for content questions; 1-800-3AP-STOX for technical support and 212-621-1905 for graphics help.

CENTERPIECE

Time to buy utilities?

The investing adage "Sell in May and go away" is catchy, but it's not the best investment strategy. It's better to sell in May and invest in a defensive sector, like utilities, rather than keep cash on the sidelines. That's the conclusion of financial analyst Hugh Wynne of Bernstein Research.

COMPANY SPOTLIGHT

P&G issues weak outlook

Procter & Gamble issued weak guidance for its fourth-quarter earnings. Its stock posted one of the biggest drops in the Dow Jones industrial average.

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