BC-Business News Digest


Associated Press

Posted on May 16, 2013 at 3:00 PM

Business News at 4:00 p.m.

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NEW YORK — The payroll tax increase, delayed tax refunds and bad weather add up to a tough quarter for Wal-Mart Stores Inc. The world's largest retailer's first-quarter profit edged up slightly, but the company struggled with a sales slump in its namesake business. The company also offered a profit outlook that came in below Wall Street expectations. By Anne D'Innocenzio.

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BEIJING — Global economic malaise has knocked the stuffing out of Luo Yan's business making toy animals. Sales of Hello Kitty dolls and plush rabbits have fallen 30 percent over the past six months, according to Luo, owner of Tongle Toy Enterprise, which employs 100 people in the southern city of Foshan, near Hong Kong. Orders from the United States and debt-crippled Europe are down 80 percent. China's shaky economic recovery is losing steam, adding to pressure on its new leaders to shore up growth after a surprise first-quarter decline and launch new reforms to support entrepreneurs like Luo who create its new jobs and wealth. By Joe McDonald.

AP photos.


WASHINGTON — To the U.S. technology industry, there's a dramatic shortfall in the number of Americans skilled in computer programming and engineering that is hampering business. To unions and some Democrats, it's more sinister: The push by Facebook's Mark Zuckerberg to expand the number of visas for high-tech foreign workers is an attempt to dilute a lucrative job market with cheap, indentured labor. By Anne Flaherty.

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NEW YORK — Launching his namesake company's news division in the 1990s, Michael Bloomberg largely rejected long-held rules of the journalism trade that insist on keeping thick firewalls between reporters and the profit-making workings of their companies. Now, a byproduct of Bloomberg's widely admired and novel business model has ensnared his company in a problem of its own making. But the uproar — revolving around specialized computer terminals unknown to most news consumers, and the reporters who tapped into data showing how high-powered Wall Street customers were using them — is potentially about much more than Bloomberg. By Adam Geller.

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FORT WORTH, Texas — If you're traveling light, you can board earlier on American Airlines. The airline says people carrying just a personal item that fits under the seat — no rolling suitcases — will be allowed to board before most other passengers. By David Koenig.


CARACAS, Venezuela — First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities — toilet paper. Blaming political opponents for the shortfall, the embattled socialist government says it will import 50 million rolls to boost supplies. That's little comfort to consumers struggling to to find toilet paper this week. By Fabiola Sanchez and Karl Ritter.

AP photos.



WASHINGTON — The number of Americans seeking unemployment benefits rose 32,000 last week to a seasonally adjusted 360,000, the most since late March. The jump came a week after applications had reached a five-year low. The less volatile four-week average rose just 1,250 to 339,250, the Labor Department said. That's a level consistent with modest job gains. By Christopher S. Rugaber.


WASHINGTON — U.S. builders broke ground on fewer homes in April, one month after topping the 1 million mark for the first time since 2008. But most of the decline was in apartment construction, which tends to vary sharply from month to month. And applications for new construction reached a five-year peak, evidence that the housing revival will be sustained. By Martin Crutsinger.


WASHINGTON — A plunge in the cost of gas drove down a measure of U.S. consumer prices last month by the most since December 2008. Excluding the drop in fuel costs, prices were largely unchanged. The consumer price index fell 0.4 percent in April from March, the Labor Department said. The main reason the index fell was that gas prices plunged 8.1 percent. By Christopher S. Rugaber.


WASHINGTON — Average U.S. rates on fixed mortgages rose this week but stayed near their historic lows. Cheaper mortgages have helped the economy by spurring more home-buying and refinancing. Mortgage buyer Freddie Mac says the average rate for the 30-year loan increased to 3.51 percent from 3.42 percent last week. That's still near the average of 3.31 percent reached in November, the lowest on records dating to 1971. By Marcy Gordon.


WASHINGTON — A rule intended to loosen the largest U.S. banks' control over the trading of complex investments and help safeguard the financial system was weakened Thursday by regulators. The Commodities Future Trading Commission says investment firms will only need two price quotes for a derivatives contract from only two banks this year and three beginning in 2014. An earlier proposal had called for quotes from five banks. Critics say the changes will allow large Wall Street banks to continue to dominate the $700 trillion derivatives market. By Marcy Gordon.


WASHINGTON — The House and Senate Agriculture Committees have laid the groundwork this week for reducing the size of the federal food stamp program, approving farm bills that would shrink the food aid and alter the way people qualify for it.

AP photos.

— US-ENERGY SECRETARY — The Senate unanimously confirms President Barack Obama's nominee to lead the Energy Department, physicist Ernest Moniz, a professor at the Massachusetts Institute of Technology.

— LABOR BOARD NOMINEES— Senate Republicans say they won't support five nominees to the National Labor Relations Board, raising the possibility the troubled agency could be rendered mostly inoperable later this year.


NEW YORK — Cisco Systems leads the Dow Jones industrial average slightly higher after the technology company reports higher sales. Mixed corporate earnings and economic reports keep the major stock indexes flipping between slight gains and losses. By Matthew Craft.

— OIL PRICES — Oil moved higher to close above $95 a barrel despite some less-than-stellar economic reports.



NEW YORK — U.S. airlines improved their financial performance in the first quarter, although they still lost money in what is traditionally the year's toughest travel period. By Scott Mayerowitz.


SEATTLE — They've spent nearly eight months visiting marijuana grow houses, studying the science of getting high and earning nicknames like "the queen of weed." Now, officials in Washington are taking their first stab at setting rules for the state's new legal weed industry. By Gene Johnson.

AP photos.


Small SUVs fared poorly in front-end crash tests done by an insurance industry group. Popular models such as the Honda CR-V, Ford Escape and Jeep Wrangler got "marginal" or "poor" ratings. Only the Subaru Forrester received a "good" rating. By Tom Krisher.


NEW YORK — The busiest passenger train station in the United States is a 1960s-era, utilitarian labyrinth in the basement of Madison Square Garden. Pennsylvania Station, a gateway to the nation's biggest city, was designed to accommodate about 200,000 riders a day. Now, it is packed with more than 600,000. At rush hours, it resembles a human demolition derby. Two decades after ambitious plans were unveiled to improve Penn Station while expanding it into the massive Beaux Arts post office building across the street, the multibillion-dollar effort is mired in perpetual bickering among movers and shakers in politics, finance, sports and business. By Verena Dobnik.

AP photos.


HOUSTON — Hess and Elliott Capital Management reach an agreement that gives board seats to three people nominated by the activist hedge fund. Elliott, which has a 4.52 percent stake in New York-based Hess, has battled for spots on the company's board while pushing for drastic changes at the energy company. Hess had accused Elliot of trying to disrupt progress it has already made in reshaping itself.


LONDON — BP is seeking to stop paying millions of dollars in what it calls spurious compensation claims stemming from the catastrophic 2010 oil spill in the Gulf of Mexico. The company warned that the excessive claims are jeopardizing its financial prospects.


S&P downgrades Warren Buffett's Berkshire Hathaway to AA, citing overreliance on the company's insurance operations. By Josh Funk.


BERKSHIRE HATHAWAY INVESTMENTS — Warren Buffett's company revealed new investments in Chicago Bridge & Iron Co. and Starz on Wednesday, and it sold off some of its stake in snack food maker Mondelez International Inc.

— US-CANADA-OIL PIPELINE — Canada's prime minister says a controversial oil pipeline from his country to the U.S. Gulf Coast "absolutely needs to go ahead" and warns that the oil will be transported through America one way or another.

— PUERTO RICO-COFFEE WOES — Coffee production in Puerto Rico has hit the lowest level ever in the island's history, leaving farmers and government officials worried about how to revive a once burgeoning industry.

— CZECH-BUDWEISER WARS — Brewing giant Anheuser-Busch InBev says it no longer has plans to acquire Czech brewer Budejovicky Budvar, with whom it has been fighting a long legal battle over the use of the "Budweiser" brand.

— WILLIAM LYON HOMES-IPO — Shares of William Lyon Homes rIse during its first day as a public company, showing that there is continued interest in homebuilder stocks amid the housing market's ongoing recovery.



J.C. Penney Co. reports quarterly financial results after the market closes. By Anne D'Innocenzio.


Nordstrom Inc. reports quarterly financial results after the market closes. By Mae Anderson.


PHNOM PENH, Cambodia — The ceiling of a Cambodian factory that makes Asics sneakers collapsed on workers early Thursday, killing two people and injuring seven, in the latest accident spotlighting the often lethal safety conditions faced by those toiling in the global garment industry. By Sopheng Cheang.


MILAN — A study says global sales of luxury goods are off to a slow start in 2013 and aren't expected to match the double-digit growth of the last three years.



Computer maker Dell Inc. to report earnings after the market close. By Michael Liedtke.


LONDON — U.K. lawmakers subjected search giant Google to blistering criticism Thursday, accusing the U.S. Internet company of playing games with Britain's tax rules to avoid paying what it owed. By Raphael Satter.

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HANOI, Vietnam — A Russian-financed search engine in Vietnam is redirecting queries for some politically sensitive terms to Google, apparently as a way of avoiding government anger or legal liability for sending surfers to sites critical of the ruling party. The move follows an Associated Press story on the well-funded start up, Coc Coc, that noted it wasn't censoring results. By Chris Brummitt.


HANOI, Vietnam — A Vietnamese satellite TV company stops airing international channels including BBC and CNN, citing a law that foreign governments have warned would result in international news and entertainment channels ending their broadcasts in a country increasingly cracking down on freedom of expression. By Chris Brummitt.

— APPLE-APP STORE — Apple says its customers have downloaded more than 50 billon applications from its App Store since its launch in 2008.

— NEW ZEALAND-KIM DOTCOM— New Zealand's highest court rules it will hear an appeal by Megaupload founder Kim Dotcom and three colleagues as they seek to avoid extradition to the United States.



TOKYO — Japan's economy grew by a stronger-than-expected 3.5 percent in annual terms last quarter, giving Prime Minister Shinzo Abe a boost as his government tackles reforms needed to ensure a sustained recovery from two decades of malaise. By Elaine Kurtenbach.


LONDON — A U.K. pressure group loses its legal challenge to what it called a "sweetheart" tax deal between U.K. authorities and Goldman Sachs. UK Uncut Legal Action, which campaigns against tax avoidance, had sought a High Court declaration that it was unlawful for the U.S.-based investment bank to avoid a multimillion pound interest bill on unpaid tax on bonuses.

— GERMANY-FINANCIAL CRISIS — German Chancellor Angela Merkel says European countries must agree on how to generate sorely needed economic growth, and stresses the importance of France pursuing reforms to become more competitive.

— CHINA-GREECE — Greece's prime minister is in China seeking investment and trade deals to help revive his country's recession-battered economy.

— CHINA-ENVIRONMENTAL PROTEST — About 2,000 demonstrators concerned about pollution take to the streets in southern China to protest plans for a planned refinery on the outskirts of the city of Kunming.

— VATICAN-POPE-MONEY — Pope Francis denounces the global financial system, blasting the "cult of money" that he says is tyrannizing the poor and turning humans into expendable consumer goods.



BOSTON — The headlines about exchange-traded funds suggest there are no limits to the growth of these low-cost, easily traded alternatives to mutual funds. Yet obstacles are beginning to appear. It's become more difficult for fund companies to launch ETFs that are significantly different than what's already on the market. And it may be too late for any company to become competitive in ETFs if it doesn't already have a presence. We'll discuss the implications for average investors with Todd Rosenbluth, an ETF analyst with S&P Capital IQ. By Personal Finance Writer Mark Jewell.

AP photo.


Loyalty programs at supermarkets used to be as simple as getting access to the cheaper advertised prices on store shelves. But as companies fight to hold onto customers amid intensifying competition, they're using shoppers' purchasing histories to offer more personalized deals. Here's a look at how loyalty programs affect where you shop, what you buy and how much you spend. By Candice Choi.


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Gauging results

Earnings season is winding down. Companies in the Standard & Poor's 500 index are expected to report record quarterly earnings, with all 10 sectors posting earnings growth in the first quarter.


Kohl's beats expectations

Kohl's reported first-quarter earnings that beat analysts' estimates Thursday, and the stock jumped on the news.