BC-Business News Digest


Associated Press

Posted on August 13, 2013 at 3:00 PM

Business News at 5:30 p.m.

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WASHINGTON — In a surprising challenge, the federal government seeks to stop the proposed merger of US Airways and American Airlines, saying the deal to create the world's largest airline would result in "substantial harm to consumers" in the form of higher fares and fees. The Justice Department's opposition was unusually broad and came after antitrust regulators had allowed three other major airline mergers to go ahead in the last five years. As shares of both companies plunged, the airlines vowed to fight back. By Pete Yost and David Koenig.

AP photos.


— JUSTICE-AIRLINE MERGER-GLANCE — Why the Justice Department challenged the merger.

— AIRLINE STOCKS — Airlines stocks fall across the board.


LONDON — The recession that's gripped the eurozone since late 2011 is likely over. On Wednesday, analysts predict, official data will show that economic growth among the 17 countries that use the euro inched up 0.2 percent from April to June compared with the same quarter last year. The increase is slight. But it would end six straight quarters of a debilitating recession — the longest to afflict the single-currency bloc since its creation in 1999. And it would represent an encouraging sign for other economies, including the United States, the world's largest. By Pan Pylas.

AP photos.


— GERMANY-ECONOMY — A German survey of economic confidence among investment professionals rose more than expected in August, helped by signs of returning growth in the eurozone currency bloc.

— BRITAIN-ECONOMY — Inflation in the U.K. slipped back slightly last month largely because of lower clothing prices and an easing in the rate of growth of airfares.


BEIJING — China, one of the most visited countries in the world, has seen sharply fewer tourists this year, with worsening air pollution partly to blame. That could hurt government efforts to reduce reliance on trade-driven manufacturing. By Louise Watt.

AP photos.


PLANO, Texas — The boardroom drama may be over, but J.C. Penney is still grappling with an uncertain future. William Ackman has resigned from J.C. Penney's board as part of a deal to resolve an unusually public battle between the activist investor and the struggling department store operator. Ackman's departure could provide some relief from a battle that became a distraction while Penney has been working to fix its ailing business. By Anne D'Innocenzio and Michelle Chapman.

AP photos.


WASHINGTON — More than half of the estimated 10 million people who now buy their own health insurance will qualify for financial help from the government to offset the "rate shock" from potentially higher premiums next year under President Barack Obama's health care law, according to a new study from a nonpartisan research group. Several million others could face higher premiums without any federal help because they earn too much money. By Ricardo Alonso-Zaldivar. Eds: Hold For Release at 12:01 AM Wednesday.

AP graphic.


WASHINGTON — Despite all the grumbling about tuition increases and student loan costs, other college expenses also are going up. The price of housing and food trumps tuition costs for students who attend two- and four-year public universities in their home states, according to a College Board survey. Even with the lower interest rates on student loans that President Barack Obama signed into law, students are eyeing bills that are growing on just about every line. By Philip Elliott.

AP photo.


CHICAGO — There's a sense of urgency to the quest for workplace harmony, as baby boomers delay retirement and work side-by-side with people young enough to be their children — or grandchildren. The solution for a growing number of companies: generational awareness training to help foster understanding and more effective communication among its workers. By Matt Sedensky.

AP photos.

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WASHINGTON — U.S. retail sales edged up in July despite a drop in auto sales. A category of sales that excludes the most volatile areas rose by the most in seven months, a sign that consumer spending could boost economic growth in the coming months. Overall sales increased 0.2 percent in July from June. "Core" retail sales, which exclude the auto, gas and building supply categories, rose 0.5 percent, the biggest such gain since a similar increase in December. By Martin Crutsinger.

AP photo.


LOS ANGELES — Americans remain stingy about carrying credit card balances and are making more of an effort to make timely payments, trends that have helped whittle the rate of late payments on credit cards down to the lowest level in nearly 20 years. By Alex Veiga.

— BUSINESS INVENTORIES —U.S. businesses left stockpiles unchanged in June while sales rose modestly, an encouraging sign.

— AUDITING CHANGES — A watchdog agency for the accounting industry is proposing that auditors be required to give shareholders more information when they assess the accuracy of public companies' financial reports.


NEW YORK — A crew of con men sold worthless penny stocks to people around the globe at pumped-up prices, then victimized the investors again by setting up a fake law firm that charged them to try to get their money back, say federal authorities in New York. The international scheme generated more than $140 million, making it one of the largest penny stock fraud schemes in history, U.S. Attorney Loretta Lynch says, announcing an indictment charging nine defendants. By Tom Hays.


NEW YORK — Stock indexes eke out small gains after an upturn in technology companies outweighed weakness in other parts of the market, including a drop in airlines. The gain in technology stocks was driven by Apple. The technology company surged after billionaire investor Carl Icahn said on Twitter that he held a large position in Apple and that its stock was undervalued. By Steve Rothwell.

AP photo.

— OIL PRICES — The price of oil climbs near $107 a barrel as a government report indicates consumer spending could boost economic growth in the months ahead.



NEW YORK — Chipotle Mexican Grill, which has grown in popularity in part because of its "Food with Integrity" slogan, says it's reviewing a change to start using some beef that's been treated with antibiotics, but said no decision has yet been made on the matter. The company notes that it occasionally experiences shortages of meat that falls within its current standards. During such shortages, it said it uses conventionally raised meats and posts notices by registers to alert customers. By Candice Choi.


COLUMBUS, Ohio — Regulators have imposed millions of dollars in civil penalties against energy companies that risk the dependability of the U.S. electrical grid since new rules following the 2003 Northeast blackout made such fines possible, including a record $25 million fine for a power failure in Florida, according to an AP review of annual reports and a database. By Julie Carr Smyth.

AP photos, graphic.


— BLACKOUT ANNIVERSARY-GLANCE — The day the lights went out: A look at the blackout of 2003.


NEW YORK — Coca-Cola plans to run its first ad defending the safety of artificial sweeteners, a move that comes as the company looks to stem declining sales of diet soda. By Candice Choi.

AP photo.

— HEINZ-LAYOFFS — Food company H.J. Heinz Co. is eliminating 600 jobs across the U.S. and in Canada, including 350 in Pittsburgh, nearly a third of its operation there.

— CANADA-OIL TRAIN DERAILMENT — Canada's transportation agency says a U.S.-based rail company whose runaway oil train caused a fire and explosion that killed 47 people in a Quebec town has lost its operating license.

— TOYOTA-CAMRY — Toyota will not relinquish the Camry's spot as America's most popular car this year, a top executive told industry analysts on Tuesday.

— SKOREA-ASIANA-COMPENSATION — Asiana Airlines has offered $10,000 to each of the 288 surviving passengers of the flight that crash landed in San Francisco last month. The payout is not a settlement and accepting the money does not prevent passengers from suing the airline.

— VISTEON-CHINESE JOINT VENTURE — Visteon plans to sell Chinese joint venture stake for $1.25 billion, use proceeds on buybacks.

— WHIRLPOOL-HEFEI SANYO — Whirlpool is buying a majority stake in China's Hefei Sanyo for approximately $552 million.

— STURM RUGER MOVE — Sturm, Ruger & Co. aims to keep up with demand for its guns by opening a new factory in the small North Carolina community already home to America's largest firearms maker.



In Mexico, says marketing executive Ana Falcon, employers often assume women like her, in their childbearing years, are ready to immediately Lean Back, rather than Lean In. And so, she's working to form a Lean In circle, or small empowerment group, in her home city of Monterrey. In the meantime, she's also part of a virtual circle with women in other countries. The Lean-In foundation, launched last spring along with Facebook COO Sheryl Sandberg's book of the same name, says that well over 7,000 circles have been formed — in all 50 states and at least 50 countries. "It's exceeded everyone's expectations," says Sandberg, who started it all. "But we still have a long way to go. We're trying to change people's minds." By Jocelyn Noveck.

AP photos.

— ICAHN-APPLE — Billionaire investor Carl Icahn discloses a big position in Apple, tells CEO Tim Cook that the tech giant should buy back more of its "extremely undervalued" stock.

— COMCAST-LOW-COST-INTERNET — Comcast is expanding the number of low-income families who can automatically qualify for its $9.95-per-month Internet access and boosting download speeds.



SANTIAGO, Chile — Chilean presidential front-runner Michelle Bachelet is studying changing mining policy in the world's top copper-producing country. Bachelet, a former president who is widely expected to win the Nov. 17 election or a possible runoff, has promised to use a second term to reduce Chile's high income inequality and a thriving mine sector is key to her plans. By Luis Andres Henao.

AP photos.

— THAILAND-ONLINE CHATS — Thai police seek to monitor chats on mobile app for criminal activity. AP photos.

— GERMANY-EARNS-EON — German gas, electric and water utility E.ON's profit fell 22 percent in the second quarter due to weak demand for power in Europe and increased competition from subsidized renewable energy.


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Reconsidering bonds

Investors are rethinking their bond strategies. In July, they pulled money out of taxable bond mutual funds for a second straight month. That's the first time that's happened since late 2008. In the five weeks ended July 31, investors withdrew an average $2.3 billion each week, following a net $44 billion in June. Muni-bond funds have recorded monthly net withdrawals since March.


New brands boost Flowers

Acquisitions helped Flowers Foods in the second quarter. The bakery company saw its profit rise 64 percent.