Fed cuts monthly bond purchases and sounds upbeat
WASHINGTON (AP) — The Federal Reserve struck an encouraging note Wednesday: It will further cut its bond purchases because the U.S. job market needs less help. And it said the economy had strengthened after all but stalling during a harsh winter.
The Fed also reaffirmed its plan to keep short-term interest rates low to support the economy “for a considerable time” after its bond purchases end, likely late this year. But it again offered no specific timetable for any rate increase. Most economists expect no rate increase before mid-2015 at the earliest.
US economy slowed to 0.1 per cent growth rate in Q1
WASHINGTON (AP) — The U.S. economy slowed sharply in the first three months of the year as a harsh winter exacted a toll on business activity. The slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer weather.
Growth slowed to a barely discernible 0.1 per cent annual rate in the January-March quarter, the Commerce Department said Wednesday. That was the weakest pace since the end of 2012 and was down from a 2.6 per cent rate in the previous quarter.
China rejects sign it may soon be No. 1 economy
BEIJING (AP) — China has rejected a World Bank report that suggests it might pass the United States this year to become the biggest economy measured by its currency’s purchasing power.
China is on track to become the top economy by sheer size by the early 2020s, possibly sooner. But its leaders downplay such comparisons, possibly to avert pressure to take on financial obligations or make concessions on trade or climate change.
While faster-growing China would pass the United States in purchasing power terms this year, it still would be about 60 per cent the size of the U.S. economy at market exchange rates.
What Wal-Mart doesn’t sell
NEW YORK (AP) — Wal-Mart’s decision to get into the car insurance business begs the question: Is there anything that the world’s largest retailer doesn’t sell?
The answer is plenty.
You can find food, meds and toys for your dog, but chances are you didn’t buy your pet there. You can pick up a wedding veil at Wal-Mart, but not a traditional white wedding gown.
All that could all change someday.
Wal-Mart says that almost anything is possible as it pushes to cement its reputation as a place where shoppers can stop in for nearly everything. The pressure to become all things to all people is only intensifying as Wal-Mart continues to face competition from expanding online rival Amazon.com.
Survey: US businesses add 220K jobs in April
WASHINGTON (AP) — U.S. businesses boosted hiring in April, according to a private survey, a sign the economy may improve after a sluggish start this year.
Payroll processer ADP said Wednesday that private employers added 220,000 jobs in April, the most since November and up from 209,000 in March.
The figures suggest that the government’s jobs report for April, to be released Friday, could show a healthy gain. Economists forecast that report will show employers added 210,000 jobs in April, according to a survey by FactSet. That would be the most in five months.
Study: Wealth gap growing across rich countries
PARIS (AP) — A new study says the gap between the richest and poorest is growing across leading economies, and recommends fairer tax laws to reduce it.
The Organization for Economic Cooperation and Development says the gap is growing even in countries seen as more equal, such as Finland, Norway and Sweden. The Paris-based OECD is made up of 34 major economies, including the United States.
The study says the top 1 per cent of earners in the United States earned 47 per cent of all income growth over the past three decades.
It warns that the gap will continue to grow “without concerted policy action.” Ideas it is mooting include reducing tax breaks and havens that reward the rich more than the poor.
Exelon buying Pepco Holdings for $6.83 billion
CHICAGO (AP) — Energy provider Exelon is buying Pepco Holdings Inc. for $6.83 billion to create a large electric and gas utility in the Mid-Atlantic region.
The deal will combine Exelon Corp.’s electric and gas utilities BGE, ComEd and PECO with Pepco’s Atlantic City Electric, Delmarva Power and its namesake utility. The combined utility businesses will serve approximately 10 million customers.
Under terms of the deal, Exelon will pay $27.25 per Pepco share, an 18 per cent premium to the company’s $23.10 closing price on Tuesday.
GE buy of Alstom energy business not a done deal
NEW YORK (AP) — General Electric inched closer to buying the energy-related businesses of France’s Alstom with a $16.9 billion bid, but rival offers and the concerns of French politicians may hold up or scuttle the deal.
The GE bid, announced Wednesday, has been endorsed by Alstom’s board. But France’s government, which regularly intervenes in corporate decision making, has questioned whether selling Alstom to U.S.-based GE threatens the country’s energy independence and jobs. French officials have also pressed for a delay to allow GE rival, Siemens, time to form its own bid. Siemens said that it would make an offer if Alstom allowed it access to company data and allowed it to perform due diligence.
Energizer to split into 2 companies to hone focus
ST. LOUIS (AP) — Energizer Holdings plans to split into two separate and publicly traded companies, one selling batteries and household items, the other selling personal care brands such as Schick razors and Edge shaving gel.
The St. Louis company says the split will give each company a clearer focus and let them make a more transparent case to investors. The split will be structured as a tax-free spinoff to existing Energizer shareholders.
Energizer did not say what names the companies would operate under.
J&J halts sale of electric fibroid removal devices
WASHINGTON (AP) — Johnson & Johnson is halting sales of devices used to remove growths in the uterus following a government warning that the electronic surgical tools can inadvertently spread cancer to other parts of the body.
The announcement comes one week after the Food and Drug Administration discouraged doctors from using the devices, known as laparoscopic power morcellators. Surgeons use the devices to treat painful fibroids, either by removing the growths themselves or the entire uterus.
The FDA said there is a significant risk that the devices can grind up undetected uterine tumors, spreading the cancer to the pelvis, abdomen and other regions. J&J said that three of its products have always included language cautioning doctors about this risk.
By The Associated Press=
The Dow Jones industrial average rose 45.47 points, or 0.3 per cent, to close at 16,580.84. The Standard & Poor’s 500 index rose 5.62 points, or 0.3 per cent, to 1,883.95. The Nasdaq composite rose 11.01 points, or 0.3 per cent, to 4,114.56.
Benchmark U.S. crude oil for June delivery dropped $1.54, or 1.5 per cent, to close at $99.74 a barrel on the New York Mercantile Exchange. Wholesale gasoline lost 4 cents to $2.96 a gallon. Heating oil shed 4 cents to $2.93 a gallon. Natural gas retreated 2 cents to $4.82 per 1,000 cubic feet. Brent crude, an international oil benchmark, fell 91 cents to $108.07 on the ICE Futures exchange in London.