Hobby Lobby Stores Inc. is asking a federal appeals court for an exemption from part of the federal health care law. Hobby Lobby says it shouldn’t be required to offer health coverage that includes access to the morning-after pill.

The Oklahoma City-based arts-and-crafts chain argues that businesses — not just religious groups — should be exempted from that part of the health law if it violates their religious beliefs.

Lower courts have rejected Hobby Lobby’s claim, saying that secular for-profit companies aren’t exempt from the requirement.

The 10th Circuit is hearing the case Thursday before all nine judges, indicating the case’s importance.

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The 2008 deal handed about 400 million euros to magnate Bernard Tapie to settle a dispute with state-owned bank Credit Lyonnais over the botched sale of Adidas in the 1990s.

Tapie was close to then-French President Nicolas Sarkozy, who was Lagarde’s boss. Critics have said the deal was too generous to Tapie at the expense of the French state.

Lagarde left her Paris apartment Thursday morning and appeared at a special court that handles cases involving government ministers. She has denied wrongdoing.

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Supported by Republicans, the bill would avoid a rate increase for students with new subsidized Stafford loans if lawmakers pass it, as expected, on Thursday. Democrats generally opposed the measure, which would provide some students a deal in the first years of the new system before ratcheting up interest rates later.

“As the economy continues to recover and at a time when market interest rates are at historic lows, more than 7 million students who rely on these loans to finance postsecondary education should not be burdened with additional college debt as they seek to graduate, launch a career or a business, start a family or buy a house,” the White House Office of Management and Budget said in a memo announcing its opposition.

The top Republican on the Education Committee, Rep. John Kline of Minnesota, said Obama was standing against many of the ideas he included in his own budget.

“The legislation is based on the president’s own proposal and provides a solid basis for negotiation through the legislative process,” Kline said.

Interest rates on new subsidized Stafford loans are set to double, from 3.4 per cent to 6.8 per cent, for new loans on July 1. Lawmakers said they wanted to avoid that but were divided on how, exactly, to accomplish that. With most lawmakers set to leave Washington for the Memorial Day holiday, time is running short.

“They’ll be out all next week,” said Terry Hartle, a top official with the higher education lobbying group the American Council on Education. “They’ll have four weeks to figure it out.”

Senate Democrats are weighing a number of options for avoiding the rate increase.

Lobbying from consumer groups and student organizations is adding pressure and is set to escalate as students leave campus for the summer.

“The House is poised to throw college students under the bus by approving a student loan plan that drives up their costs,” said Christine Lindstrom, higher education director for the consumer advocacy group US PIRG.

“Students are better off letting the subsidized Stafford loan rate double to 6.8 per cent on July 1″ than agreeing to the House Republicans’ plan, she added.

Some Democrats are seeking an extension of the current rates until Congress takes up a higher education bill later. Republicans have rejected that as costly and irresponsible.

“I would love to have the rates at 2 per cent. It’s just not realistic,” Rep. Phil Roe, R-Tenn., said during hearings on the bill.

A two-year extension of the 3.4 per cent rate for subsidized Stafford loans would cost taxpayers about $9 billion.

Last week, the GOP-led House Education and the Workforce Committee approved its bill, which would offer some students a better deal at first. Democratic critics warned that graduates would face steadily climbing rates and costs over the long haul if the markets change.

“I’m not really thrilled with the Republican plan, which would make student loan interest rates a variable interest rate and could rise above 6.8 per cent, which is what the interest rate would rise to if Congress did nothing,” said Rep. Mark Takano, a California Democrat who taught in public high schools before his 2012 election to Congress. “The Republican plan is unacceptable and worse than if we do nothing.”

Under the GOP proposal, student loans would be reset every year and based on 10-year Treasury notes, with added percentage points. For instance, students who receive subsidized or unsubsidized Stafford student loans would pay the Treasury rate, plus 2.5 percentage points.

Current subsidized Stafford loans are offered at a fixed 3.4 per cent rate and unsubsidized Stafford loans are offered at 6.8 per cent. The interest rate on loans to parents and graduate students is 7.9 per cent.

Using Congressional Budget Office projections, the GOP plan would translate to a 5 per cent interest rate on all Stafford loans in 2014, but the rate would climb to 7.7 per cent for loans in 2023.

Stafford loan rates would be capped at 8.5 per cent, while loans for parents and graduate students would have a 10.5 per cent ceiling under the GOP proposal.

In his budget proposal, Obama included flexible rate student loan rates pegged to 10-year Treasury bills. The president did not limit interest rates but included a smaller added interest rate. His plan also expanded income-based repayment options and loan forgiveness.

___

Follow Philip Elliott on Twitter: www.twitter.com/philip_elliott

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Several recent polls show the president sustaining an overall approval rating around 50 per cent, with no major uptick from gains in housing, jobs and the stock market, and no downtick from the recent storms over the terror attack in Benghazi, Libya, the targeting of conservative groups by the IRS and a leak investigations that has swept up the phone records of Associated Press journalists.

The data suggests the economy could be insulating Obama from the immediate troubles confronting his administration. But it also indicates that while a growing number of those surveyed are more optimistic about the economy, they are evenly split on whether they approve or disapprove of his handling of it.

A Washington Post/ABC poll found that 48 per cent approve of his handling of the economy, and 48 per cent disapprove. That’s a better showing for Obama than his economic approval ratings in 2011 and 2012. But it doesn’t match the 56 per cent who told Post/ABC pollsters last week that they feel the economy has begun to recover. Clearly, there is a subset of people who believe the economy is improving but either think it’s not enough or don’t give Obama credit.

David Winston, a Republican pollster and a top adviser to House Speaker John Boehner, R-Ohio, said he has found that about 60 per cent of Americans are roughly equally divided between those who find the economic advances acceptable and those who don’t believe the economy has improved at all. The remaining 4 out of 10 Americans believe the economy has improved but at a rate that is unacceptable.

“They are the folks who are defining the direction,” he said.

The economy remains the top issue with the public, and after a deep recession and financial crisis, its weaknesses are still evident. Federal Reserve Chairman Ben Bernanke offered a stark reminder on Wednesday, testifying to Congress that the unemployment rate remains well above “longer-run normal levels,” that the rate of long-term unemployment is historically high and the labour force participation rate has continued to move down.

“Moreover,” he added, “nearly 8 million people are working part-time even though they would prefer full-time work.”

Still, employment has grown by about 6 million jobs since its low point in March 2009, and the unemployment rate dipped 2.5 percentage points since its October 2009 high of 10 per cent.

And even as it crowds out other issues as a top concern, the economy is not attracting the public’s attention as it once did. A Pew Research Center poll conducted last week found that 61 per cent of those polled were following economic news stories either very or fairly closely. That compares with the 75 per cent who were paying some or much attention to economic news in October. Andrew Kohut, the founding director of the Pew Research Center, said that modest loss of interest and the Post/ABC finding of the percentage of respondents who feel the economy is recovering — the highest yet in Obama’s presidency — can help the president weather the current eruptions.

He noted that a rising economy boosted President Bill Clinton at the height of his impeachment over the Monica Lewinski scandal in 1998, giving him the highest approval ratings of his administration. At the time, the Gallup Poll showed Clinton’s ratings for handling the economy soared to 81 per cent.

“If people are feeling better about the economy, not focused on bad economic times and not paying a great deal of intense attention to the controversies swirling about the White House here in Washington, all of that tends to insulate him a bit,” Kohut said.

The White House has been trying to make its economic case publicly and privately, in recent Obama speeches about job creation initiatives or in White House sessions with lawmakers. Chief of Staff Denis McDonough and Council of Economic Advisers Chairman Alan Krueger met with three Democratic senators and 13 House Democrats on Tuesday in part to draw attention to the economic improvements.

Given modest economic growth of 2.5 per cent in the first three months of this year, participants said Krueger made a point of emphasizing that growth was 4.1 per cent if only the private sector was taken into account. That figure tracks with other economic assessments. Mark Zandi, chief economist at Moody’s Analytics, says he too expects the drag on the economy caused by government tax increases and spending cuts to be about 1.5 percentage points for the entire year.

Yet, aggressively promoting the economy publicly has its risks and could be premature.

“It’s tough to celebrate any economic news, both because it can be ephemeral and turn, and because we’re so far from where we need to be by way of growth and employment,” said Matt Bennett, a veteran of the Clinton White House and now senior vice-president at Third Way, a Democratic-leaning policy group.

What’s more, Winston, the GOP pollster, said Republicans now have an opportunity to make their own economic case as the White House works to deal with the fallout of the Benghazi, IRS and AP phone record controversies.

He said Republicans need to carry out their oversight responsibilities, but, he added, “The other opportunity that is also there, because the White House has managed to create a very difficult situation for itself, is that congressional Republicans have an opportunity to define the direction of the policy discourse.”

“Boehner is starting to put some stuff out — you’ll see the word ‘jobs’ a lot,” Winston added.

John Feehery, a former top aide to ex-House Speaker Dennis Hastert, predicted Boehner would keep capitalizing on public apprehension about Obama’s health care law.

“Boehner is going to keep pounding on health care as a job killer,” he said.

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Lenovo said it earned $127 million, or 1.22 cents per share, in the three months ending March 31. Revenue rose 4 per cent over a year earlier to $7.8 billion.

Lenovo ranks a close second behind Hewlett-Packard Co. as the biggest maker of personal computer makers but growth in that market has slowed as consumers shift to mobile Web surfing on smartphones and tablets.

Lenovo said sales of desktop and laptop PCs both declined 2 per cent to $2.4 billion and $4.2 billion, respectively, but still made up a combined 83 per cent of its business.

Sales of smartphones and other mobile Internet and “digital home” products rose 74 per cent to $736 million, accounting for 9 per cent of revenue.

“We will focus our investments on the fast-growing tablet, smartphone and enterprise hardware areas, while working to enhance the profitability of our core PC business,” said chairman Yang Yuanqing.

For its full fiscal year ending March 31, Lenovo’s profit rose 34 per cent to $635 million on a 15 per cent rise in sales to a record $34 billion.

Lenovo, with headquarters in Beijing and in Research Triangle Park, North Carolina, entered the wireless Internet market in 2010. It has launched smartphones and Web-linked tablet computers to compete with Apple Inc. and South Korea’s Samsung Electronics Corp.

The company said quarterly sales in North America, traditionally a weak area for Lenovo, rose 13 per cent over a year earlier to $1.2 billion, accounting for 15 per cent of the global total. It said its market share rose 1.8 percentage points to 9.3 per cent.

In its home China market, quarterly sales rose 8 per cent to $3.1 billion and revenue for mobile Internet products rose 74 per cent.

___

Lenovo Group: www.lenovo.com

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Japan’s 10-year government bond yield rose above 1 per cent for the first time in a year, unnerving investors at a time when Japan’s already overburdened government finances are vulnerable to rises in interest rates. It later slipped back to about 0.9 per cent.

The spike in long-term debt comes despite the Bank of Japan’s aggressive efforts to keep interest rates down. It followed overnight news that some officials of the U.S. Federal Reserve are willing to scale back the American central bank’s stimulus effort as soon as June if the economy perks up.

Chris Weston, chief market strategist at IG Markets in Melbourne, said the Nikkei has been on such a tear this year that all it took was the convergence of a few negative events to spark a sharp correction. The Nikkei, even after Thursday’s fall, is up 39 per cent so far this year.

“If everyone is standing on one side of the ship, it doesn’t take too much to make it tip. All we needed was a cluster of negative events,” he said.

Still, the sell-off is a reminder of Japan’s vulnerability as Prime Minister Shinzo Abe tries to end two decades of stagnation with unprecedented monetary easing, increased government spending and reforms to make the world’s No. 3 economy more competitive.

The level of Japan’s debt is higher, relative to its economy, than even some of the crisis-stricken European countries. But because it is mostly owned by domestic investors, especially huge banks and insurance companies, the country’s credit rating has remained steady.

Markets elsewhere in Asia sank sharply after a survey showed China’s manufacturing contracted in May.

Hong Kong’s Hang Seng slumped 2.5 per cent to 22,688.40. South Korea’s Kospi lost 1.2 per cent to 1,969.19. Australia’s S&P/ASX 200 dropped 2 per cent to 5,062.40. Benchmarks in Singapore, Indonesia and the Philippines all fell more than 2 per cent.

HSBC Corp. said its preliminary Purchasing Managers Index fell to a seven-month low of 49.6 in May from April’s 50.4. Numbers below 50 indicate that activity is contracting. Analysts had expected a slight decline to 50.3 for the most recent month.

Recession in Europe, growth-robbing deflation in Japan and economic anemia in the U.S. have finally caught up with export-hooked China despite the government’s attempts at bolstering consumption at home.

“It’s no secret. The true picture is that China’s export sector is slowing down and its manufacturing sector is also slowing down. That means the trade surplus is almost gone,” said Francis Lun, chief economist at GE Oriental Financial Group in Hong Kong.

“The Chinese government really failed in their goal to shift the focus of the economy to consumption. It is still too heavily dependent on property and infrastructure investment,” Lun said, with the country continuing to invest in big-ticket buildings and projects that stand empty while artificially boosting GDP growth.

Investors also recoiled from stocks after mixed messages by the U.S. Federal Reserve on the future of its massive bond-buying program sent Wall Street on a rollercoaster ride.

U.S. stocks shot up early Wednesday after Fed chairman Ben Bernanke told Congress that it was too soon for the central bank to pull back on its monetary stimulus. The Fed has been buying massive amounts of government bonds and keeping short-term interest rates near zero to encourage people and businesses to borrow and spend more.

The Dow ended the day lower, however, after minutes released from the Fed’s latest policy meeting showed some Fed officials are willing to scale back the stimulus effort, dubbed quantitative easing or QE, as early as June if the economy picks up.

Investors have flocked to stocks because returns on bonds have dwindled due to the Fed’s efforts to keep rates down. Bu the Fed minutes sowed doubt whether massive gains in stock markets will continue. There are also fears about how the economy will perform once monetary stimulus is withdrawn, another negative for stocks.

“Bernanke wants to wait and see how the data unfold before tapering back on QE. Three or four more hawkish members think they’ve seen enough and, absent surprises, want to get started as early as June,” said analysts at DBS Bank Ltd. in Singapore.

On Wednesday, the Dow Jones industrial average fell 0.5 per cent to close at 15,307.17. The Standard & Poor’s 500 fell 0.8 per cent to 1,655.35. The Nasdaq composite index fell 1 per cent to 3,463.30.

Benchmark oil for July delivery was down $1.05 to $93.23 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.90 to close at $94.28 a barrel on the Nymex on Wednesday.

In currencies, the euro rose to $1.2849 from $1.2845 late Wednesday in New York. The dollar fell to 101.80 yen from 103.15 yen.

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The spike in long-term debt comes despite the Bank of Japan’s aggressive efforts to keep interest rates down. It followed overnight news that some officials of the U.S. Federal Reserve are willing to scale back the American central bank’s stimulus effort as soon as June if the economy perks up.

The benchmark long-term bond yield later dropped back to about 0.9 per cent, near its recent trading level.

Like the Fed, the BOJ is buying massive amounts of government bonds, seeking to keep interest rates low to encourage people and businesses to borrow and spend more — the main tenet of Prime Minister Shinzo Abe’s “Abenomics” economic strategy.

The aim is to break out of a deflationary rut of sagging prices that has slowed investment and is thought to be discouraging consumers from spending. By raising expectations that rising prices mean their savings will go further now than later, the government hopes to get Japanese to step up spending, especially for big ticket items like cars and houses.

So far, the effort to “reflate” the economy has pushed share prices sharply higher: the benchmark Nikkei stock index has surged past 15,000, its highest level in over five years, though mid-afternoon Thursday it was down more than 6 per cent because of the spike in bond yields and weak Chinese manufacturing figures. Meanwhile, the value of Japan’s currency has fallen by 25 per cent against the U.S. dollar since late last year. The yen was trading at about 102.6 to the dollar on Thursday after briefly passing 103 to the dollar.

If the central bank succeeds in reviving inflation, it will eventually have to raise interest rates to keep price rises in check. But low long-term rates are a priority for Japan because its government debt amounts to over twice the size of the economy. Higher rates would vastly increase the government’s repayment burden as it continually sells new bonds to finance its deficits.

“Japan really has a long-term debt problem,” said Franklin Allen, a professor at the Wharton School at the University of Pennsylvania. “If the long-term JGB (Japanese government bond) goes to 2.5 per cent to 3 per cent, there will be a financial stability problem.”

The central bank has been grappling with unexpected swings in the market for Japanese government bonds since its new governor Haruhiko Kuroda announced in early April a drastic shift in policy aimed at doubling the amount of cash circulating in Japan’s economy. The goal of the policy is to attain a 2 per cent inflation target within two years.

“We’ve never seen this volatility in percentage terms on a daily basis that we’re seeing today in the Japanese market,” said Ken Courtis, a former Goldman Sachs vice chairman and investment banker.

The volatility raises questions over how much influence the BOJ wields over the market, despite soaking up about 70 per cent of all new bond issuance.

Paying interest on the government debt already takes a quarter of government spending, he said.

“What will Japan do, he said, “when interest rates go up and debt servicing starts to swallow the entire budget?”

The level of Japan’s debt is higher, relative to its economy, than even some of the crisis-stricken European countries. But because it is mostly owned by domestic investors, especially huge banks and insurance companies, the country’s credit rating has remained steady.

But many Japanese financial institutions, especially regional banks and credit co-operatives, would be unable to keep such large holdings of government bonds if the value of those bonds drops too far, Allen said.

Japan’s economy expanded at a faster-than-expected annual pace of 3.5 per cent in the last quarter, a development many supporters view as a vindication of Abe’s approach. The Bank of Japan ended a two-day policy meeting on Tuesday with no change in policy, saying the economy was “picking up,” despite the lack of any change in price trends so far.

Critics contend that keeping interest rates artificially low to encourage borrowing merely encourages companies to waste money and avoid improving their efficiency and competitiveness.

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The U.N.’s Development Policy and Analysis Division released a mid-year update forecasting world gross product growth at 2.3 per cent in 2013, “a subdued pace” characterized by sub-par expansion and weak employment prospects. The U.N. forecast improving growth in 2014 at 3.1 per cent.

“In the United States, the avoidance of the fiscal cliff and the expansion of monetary easing, along with a continued recovery in the housing sector, have improved growth prospects,” the forecast said, but “the automatic spending cuts and uncertainties associated with budget issues will continue to weigh on aggregate demand.” U.S. growth was forecast at 1.9 per cent in 2013, down from last year’s 2.2 per cent. The report forecast U.S. growth to rise to 2.6 per cent in 2014.

In Europe, the forecast said, “the real economy is held back by austerity programs, weak bank lending and continued uncertainty, and only a very gradual recovery is expected as these factors diminish.”

“In Japan, the bold expansionary policy actions adopted by the monetary and fiscal authorities are expected to provide some support for economic activity in the short run. They may, however, create heightened medium-term uncertainties regarding the sustainability of public debt,” the report said.

Developing countries are showing much stronger growth than the developed world, it said. “The pick-up in growth will, however, be slower than previously estimated as many large economies in the group, including Brazil, China, India and Russia, face significant structural challenges,” it said. It forecast 5 per cent growth in 2013.

The least-developed countries will see faster growth, but with commodity demand moderating and official economic aid falling, the pace of expansion will be “notably slower” than in 2004-2008, the report said. It forecast 2013 growth at 5.8 per cent.

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Last month’s disaster killed more than 1,100 workers and highlighted the hazardous working conditions in Bangladesh’s $20 billion garment industry and the lack of safety for millions of workers who are paid as low as $38 a month.

“The owner used extremely poor quality iron rods and cement,” committee head Khandker Mainuddin Ahmed told The Associated Press a day after submitting the report to the government. “There were a series of irregularities.”

The report found that building owner Sohel Rana had permission to build a six-story structure and added two floors illegally so he could rent them out to garment factories. Past statements from authorities said the owner had permission for a five-story structure and added three floors illegally.

The report also said the building was not built for industrial use and the weight of the heavy garment factory machinery and their vibrations contributed to the building collapse. Those factors had previously been cited.

The ground on which the building was built was not fit for a multi-story building, the report said.

“A portion of the building was constructed on land which had been a body of water before and was filled with rubbish,” Ahmed said.

The committee recommended that Rana and the owners of the garment factories be sentenced to life in jail if they are found guilty of violating building codes.

Rana, three engineers and four factory owners have been arrested.

The building was shut down briefly after workers spotted cracks in its walls and pillars a day before the April 24 collapse. But the garment factory workers were called back to work, many of them forcefully.

More than 2,500 people were rescued shortly after the disaster. The committee urged the government to ensure that all those injured receive free medical treatment.

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The RBC says its latest affordability report shows household financial conditions relative to home ownership were relatively unchanged in the first quarter of 2013 compared with the fourth quarter of 2012.

The RBC affordability measure represents the pre-tax household income required to service the costs — mortgage, utilities and property taxes — of owning a home.

The higher the measure, the less affordable that home is to a particular household.

In the case of standard two-storey homes and condos, the overall index readings were largely unchanged at 48 and 28.1 per cent respectively.

For owners of detached bungalows, the index deteriorated only slightly, by 0.3 points, to 42.5 per cent.

The bank says exceptionally low mortgage interest rates are the main reason affordability remains stable

However, RBC chief economist Craig Wright cautions he would be singing a different tune if interest rates were to suddenly rise.

With home prices still near or at record levels and household debt per annual income also at an all-time high, the Bank of Canada has been warning for years that Canadians need to prepare their finances for when mortgage costs begin to rise.

In one sense, they have. Bank governor Mark Carney has recently noted that more and more Canadians are choosing to lock in their mortgages for five years and moving away from more volatile variable vehicles.

As well, says Wright, the day of reckoning is still some ways in the future. He predicts the central bank likely won’t start hiking rates until mid-2014, and even then only moderately.

When that day does happen, Wright added, it will be because the Canadian economy has strengthened and households likely will start enjoying stronger income growth, meaning they may be able to absorb higher mortgage costs.

Given the variation in home prices and incomes, there is wide disparity in RBC’s affordability measure depending on location.

For instance, the affordability reading on a bungalow in Vancouver, where home prices top the nation, deteriorated slightly to 82.3 per cent in the first quarter.

The measure was also slightly higher, or worse, in Toronto at 53.8 per cent, in Montreal at 40.1, in Ottawa at 39.1 and in Calgary at 38.7.

The affordability measure dropped, or improved, by 0.2 points in Edmonton to 30.4, and was down one point to 38.1 in Saskatchewan, where no city was listed.

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HSBC Corp. said Thursday the preliminary version of its monthly purchasing managers index fell to a seven-month low of 49.6 from April’s 50.4 on a 100-point scale. Numbers below 50 show a contraction.

“The cooling manufacturing activities in May reflected slower domestic demand and ongoing external headwinds,” said HSBC economist Hongbin Qu in a statement.

That showed a possible “downside risk to China’s fragile growth recovery” while signs of weakness in the labour market “call for more policy support” from the government, Qu said.

China’s economic growth slowed unexpectedly in the first quarter to 7.7 per cent and forecasters have cut their growth outlook for the year.

The latest HSBC survey “pretty much dashed hopes” for an economic rebound this quarter, said Societe Generale economist Wei Yao in a report.

China’s top economic official, Premier Li Keqiang, said last week there was little room for additional government stimulus to boost growth. He said improvement would have to come from economic reforms. Chinese leaders have promised changes but have yet to announce details and economists say any reforms will take time to show results.

HSBC’s preliminary PMI is based on responses from 80 to 90 per cent of the 420 manufacturing companies it surveys each month. The full survey is due out June 1.

May factory output increased but at a slower rate, while new orders and new export orders decreased, HSBC said.

Some analysts have suggested economic activity is weaker than reported by Beijing because export data might be distorted due to companies reporting inflated prices in an effort to evade capital controls and bring money into China.

Also Thursday, Capital Economics said its own activity indicator showed economic growth weakened in April after a brief upturn in March.

Growth in trade through Chinese ports is stable but railway freight has slowed and construction activity appears to be weakening, said economists Mark Williams and Qinwei Wang in a report.

“The weakness was broad-based,” the report wrote. “Our figures suggest that the economy is growing one to two percentage points slower than the official GDP data show.”

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The closure of the U.S. automaker’s plants in the state of Victoria will mean the loss of 1,200 jobs and will transform the company into an import-only brand in Australia. Ford began making cars in Australia in 1925 and is the third largest auto manufacturer in the country.

“We understand the very real impact that this will have on our team,” Ford Australia President Bob Graziano told reporters at the company’s Melbourne plant. “We came to this conclusion only after thoroughly reviewing our business and exhausting all other alternatives.”

Australia’s stubbornly high dollar has put pressure on the country’s auto manufacturers, making locally produced cars far more expensive than those made overseas. Last month, Ford’s chief competitor, Holden, said it was cutting 500 jobs amid the high dollar and falling demand.

“The strength of the Australian dollar bears down on Australian manufacturing and it does make it a difficult environment for manufacturing to prosper,” Australian Prime Minister Julia Gillard said following Ford’s announcement.

The automaker also released its annual financial report, which showed a loss of $141 million Australian dollars ($136 million) after tax for the 2012 financial year. That follows a loss of AU$290 million in 2011, and a total loss of AU$600 million over the past five years.

Graziano said a reduced demand for large cars and the high price of production in Australia had left the manufacturing operation uncompetitive. Ford’s production costs in Australia are twice that of Europe and nearly four times higher than in Asia, Graziano said.

“Manufacturing is not viable for Ford in Australia in the long term,” Graziano said.

Around 1,500 employees, including dealers and those in product development, will continue working for the company after production ends in October 2016.

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The new law, believed to be the first in the nation, allows courts to consider if a claim is deceptive, specifies factors that can be considered as evidence, and provides for damages or relief to Vermont companies wrongly pressured into paying licensing fees or a settlement. The Vermont attorney general also can conduct civil investigations and bring civil action against violators.

“This bill will help to protect our good Vermont businesses from unscrupulous patent trolls who take advantage of them through bad faith claims of patent infringement. It will help us grow jobs,” the governor said.

New York lawyer Jeffrey Lewis, president of the American Intellectual Property Law Association, said the association has been watching the legislation move through the Vermont Legislature in recent weeks and knows of no other law like it in the country.

“It’s, as far as we can tell, a novel approach for states to try to do, this sort of bootstrapping, if you will, of the unfair competition laws to try to address patent assertions,” he said.

Intellectual-property law professor Eric Goldman of Santa Clara University in California said that while the law is novel, it’s not clear Vermont has the authority to regulate patent activity.

“At the state level, we’re not sure if states can even have a voice in the matter, so there’s a question about whether the law will even stand,” he said. “But that’s part of why this is such a novel approach.”

Under the law, a court can consider as evidence of a bad faith claim a letter that does not provide the patent number, the name and address of the patent owner and/or assignee, or an explanation of how the target company’s products or services infringed on the patent.

The court also can consider if the letter demands payment of a license fee or a response in an unreasonably short period of time.

Coinciding with the new law, the state filed a lawsuit Wednesday accusing a Delaware company of patent trolling. The attorney general’s office sued Wilmington-based MPHJ Technology Investments and its 40 subsidiary companies operating in Vermont.

The office alleged that MPHJ claimed to have a patent on the process of scanning documents and attaching them to emails via a network and that MPHJ sent letters making deceptive statements to small businesses in Vermont, demanded money, and threatened litigation over licensing fees.

Bryan Farney of Austin, Texas, an attorney for MPHJ, said the company disputes the allegations and is doing its best to identify companies that used the technology. Farney said the company was aware of Attorney General Bill Sorrell’s investigation and stopped its activities in Vermont during the review.

“We are disappointed that they chose to take that step,” Farney said. “And we think that we are attempting as best we can to legitimately identify people who are using the client technology, which has been admitted and issued by the U.S. Patent office and try to figure a reasonable licensing fee from them.”

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The lawsuit filed in San Diego County Superior Court argues that plans for a 5.5-mile extension to the south State Route 241 toll road don’t meet basic environmental requirements.

Widespread opposition in 2008 killed a proposed 16-mile toll road extension linking south Orange County and northern San Diego County.

The California Coastal Commission rejected that project, which would have bisected San Onofre State Beach.

That is not part of the current proposal by the Foothill/Eastern Transportation Corridor Agency, but opponents say the plan is nonetheless an illegitimate end-run around an already-rejected project.

“This illegal segment is a desperate attempt to perpetuate a project which is so contrary to the public interest,” said Dan Silver of the Endangered Habitats League, one of the groups who filed the lawsuit. “TCA’s existing toll roads are a financial disaster, and we shouldn’t throw good money after bad”

TCA Spokeswoman Lori Olin said the agency expected the lawsuit but she had not seen it and couldn’t comment specifically on its claims.

But she said there are no plans to extend the road beyond the 5.5-mile extension currently proposed, so concerns about San Onofre beach are unfounded.

She said the addition is necessary to alleviate traffic brought by a 14,000-home development and 5 million square feet of commercial space going up in the area where the extension would end.

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Prime Minister Stephen Harper announced aid Wednesday that his government’s website says amounts to $53 million and includes strengthening the effectiveness of environmental impact assessments of mining and energy projects.

That is nearly double Canada’s 2011-12 aid to Peru and includes spending on education and agriculture.

Harper met with President Ollanta Humala and told reporters that “responsible development” is vital to creating jobs and economic growth in Peru.

Canadian mining companies have some major investments in Peru, some of which have drawn protests. One $1.5 billion copper exploration project by Candente Copper was suspended last week following protests.

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The company says the recall affects the 2013 Cadillac SRX with 18-inch wheels. Canadian safety regulators say the wheel nuts may not have been tightened enough at the factory.

GM says the problem hasn’t caused any crashes or injuries, and no wheels have fallen from vehicles.

Dealers will rotate tires and tighten the nuts at no cost to the owners.

The recall affects almost 19,000 SUVs in the U.S. and another 913 in Canada. The rest were exported to other countries.

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President Cristina Fernandez says the programs also will reach nearly 700,000 more children, expanding the social safety net and encouraging consumer spending this election year.

She says the total cost of the subsidies will grow from 24 billion pesos to 41 billion pesos, roughly equal to $7.8 billion a year at the official exchange rate.

Fernandez also says her government will be watching businesses closely and taking action against what she says are unjustified price increases that are fueling Argentina’s inflation. The government says prices are rising about 10 per cent a year, but private economists estimate the inflation rate is really two to three times more than that.

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The commission says it will seek to set a hearing date June 25 on the allegations against Siu Mui (Debbie) Wong and Siu Kon (Bonnie) Soo.

The allegations, which have not been proven, involve a joint venture with an Alberta company the sisters co-founded called Wheatland Industrial Park Inc.

The regulator claims at least 78 individuals and companies bought $85,000 shares in the venture, for which a prospectus was never issued in British Columbia even though the shares were promoted in that province.

For approximately 25 of the purchasers —totalling $2 million in shares — there was no applicable exemption to prospectus requirements.

It is that amount that the commission is concerned with, an official said in an email, adding that to date the BCSC is unaware of any realized losses by investors.

The goal of the venture was to divide a property owned by Wheatland into individual swaths of industrial land, then sell them to bring in money for investors and the company.

The venture authorized the sisters, who were the sole directors of Wheatland, to co-ordinate the development and re-sale of the property, and entitled them to five per cent of the profits.

However, unknown to investors, the sisters allegedly took $5.2 million of the money raised and lent it to themselves and their various companies, although the money was later paid back.

The regulator also claims they transferred roughly $2.8 million worth of shares in the joint venture to companies owned by their adult children without the knowledge or permission of the investors.

The securities commission says Wong and Soo have agreed to pay the money owing to Wheatland plus interest by July 31.

Meanwhile, Wheatland has defaulted on the mortgage for parts of its property and foreclosure proceedings have begun.

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The first lady commented as American Express announced its donation of $1 million to the White House Historical Association to preserve Decatur House and pay for education programs for children. The nearly 200-year-old house is owned by the National Trust for Historic Preservation and operated by the association.

Most of the money will be spent to preserve the building’s former slave quarters, where about 20 men and women “spent their days serving those who came and went from this house” and their nights “jammed together on the second floor of the slave quarters, all the while holding onto a quiet hope, a quiet prayer that they, too, and perhaps their children, would someday be free,” Mrs. Obama said.

The red-brick, three-story townhouse built in 1818 has been home to many, including several secretaries of state.

Mrs. Obama, briefly invoking her ancestry as a descendant of a South Carolina slave, said even more history came from the back of Decatur House, where the slave quarters were located, “the kind of stories that too often get lost, the kinds of stories that are a part of so many of our families’ histories, including my own.”

“These stories of toil, and sweat, and quiet, unrelenting dignity — these stories are as vital to our national memory as any other,” she said. “And so it is our responsibility as a nation to ensure that these stories are told.”

The slave quarters is one of the few such dwellings in an urban setting, and the only physical proof that slaves were held near the White House. Decatur House is located one block north of the White House, on Lafayette Square.

Afterward, Mrs. Obama toured several rooms, including one that researchers concluded had been a kitchen because of the dark splotches on a brick wall they believe were made by an oven, as well as splatters of animal fat on the wall that were made during cooking.

She also visited with a group of sixth-graders from a Fairfax, Va., elementary school that was participating in an educational program based on the signing of the Emancipation Proclamation, including a 12-year-old dressed up as Abraham Lincoln. They weren’t told about their special visitor and the jaws of several students dropped each time the first lady entered the different rooms they were in.

Decatur House was built for Navy Commodore Stephen Decatur. It was bequeathed to the National Trust for Historic Preservation in 1956. The National Center for White House History was established there in 2010.

Decatur House also is a National Trust for Historic Preservation site.

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Online:

White House Historical Association: http://www.whha.org

National Trust for Historic Preservation: http://preservationnation.org

Decatur House: http://www.whitehousehistory.org/decatur-house/

___

Follow Darlene Superville on Twitter: http:/www.twitter.com/dsupervilleap

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Singer and actress Jennifer Lopez on Wednesday announced she’s opening a chain of 15 cellphone stores and a website under the Viva Movil brand. The aim is to sell Verizon phones and services to Latinos.

The first store will open in New York on June 15, with others following in Los Angeles and Miami. The stores will have bilingual staff and provide a “culturally relevant shopping experience,” Viva Movil said.

Viva Movil will be an authorized Verizon reseller, with the same prices and plans as regular Verizon stores.

Lopez is the majority owner and “chief creative officer” of Viva Movil. She said Viva Movil and its Facebook page will be a way for fans to connect with her.

“Latinos need a place to go and they need to be catered to because it is such a growing, growing demographic and market and people want to capture that, and they deserve to be catered to,” Lopez said in an interview.

Lopez is no stranger to business. She owns a film and television production company and has launched clothing and perfume lines.

She said she wasn’t looking specifically to get into wireless — “it was just one of those things where you sit down with people and you start spitballing.”

Marketing cellphone service specifically to Latinos has not been a winning formula so far in the U.S. One company targeting Spanish speakers, Movida Communications, raised $40 million in 2007 and filed for bankruptcy the following year.

Most attempts to cater to Latinos have focused on low-cost, no-contract service. By partnering with Verizon, Lopez is hitching her business to a company that’s focused on premium, contract-based service, backed by a top-rated wireless network.

The U.S. wireless market does have a large but low-profile Latin American presence: Mexican cellphone company America Movil owns Tracfone, the largest provider of no-contract service, with 23 million phones active. That service isn’t marketed specifically to Latinos.

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AP Entertainment Writer Sandy Cohen contributed to this report from Los Angeles.

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Its uncertainty burst into view Wednesday, when Chairman Ben Bernanke testified to Congress in the morning and the Fed in the afternoon released the minutes of its last policy meeting.

Stock prices gyrated through the day as investors struggled to determine whether the Fed might soon pull back — even gradually — on its extraordinary efforts.

At one point, the Dow Jones industrial average had jumped more than 150 points after Bernanke’s testimony signalled his belief that it was too soon for the Fed to pull back on its support for the economy, including its $85 billion a month in Treasury and mortgage bond purchases.

But the Dow plunged and closed down 80 points after minutes from the Fed’s April 30-May 1 meeting showed that several members favoured cutting the level of purchases, perhaps as early as June. Even that was hard to decipher because the minutes said members would have to agree that the economy had shown strong and sustained growth before the Fed would slow its bond purchases.

The Fed is buying the bonds to try to ease long-term borrowing costs, encourage borrowing and accelerate growth. And it’s said it will maintain its pace of bond purchases until the job market improves substantially.

Economists don’t expect the Fed to curtail the bond purchases next month. But Paul Ashworth, chief U.S. economist for Capital Economics, said the September meeting is a real possibility.

For one thing, Bernanke told lawmakers Wednesday that the Fed might reduce the purchases within the next few meetings if the job market showed “real and sustainable progress.” Bernanke is scheduled to hold a news conference after the September meeting, so Ashworth said it would allow him to directly explain the change then.

Still, whatever the Fed does is likely to be done gradually, Ashworth said.

“It could begin with a relatively trivial reduction to gauge market reaction,” he said.

Most of Bernanke’s testimony Wednesday to the Joint Economic Committee focused on the many risks the U.S. economy still faces and the help the Fed’s support programs have provided. His remarks suggested that the Fed isn’t ready to taper the bond purchases.

In recent weeks, the job market and the broader economy have shown renewed vigour. The unemployment rate has reached a four-year low of 7.5 per cent. A resurgent housing market has helped lift consumer confidence. And a powerful stock market rally has made many consumers feel wealthier.

Unemployment does remain well above levels consistent with healthy economies. And some economic sectors like manufacturing are struggling. Bernanke also said higher taxes and deep federal spending cuts will likely slow growth this year.

David Wyss, a former Fed economist who teaches at Brown University, said recent economic data has been mixed, suggesting that the Fed is unlikely to change course soon.

Wyss said Fed policymakers will want to see more data and that any reduction in the Fed’s current pace of bond purchases would probably not occur until the end of this year at the earliest.

“I can’t see them doing anything before fall and they may well wait until next year,” he said.

And when the Fed does start trimming its bond purchases, Wyss predicts they will cut the pace to around $50 billion as a first step and then spend most of 2014 gradually reducing that level to zero.

He expects investors’ reaction by then to be “fairly muted.”

“I would assume the market will be expecting it by the time they finally do it,” Wyss said.

The prospect of a pullback in bond purchases is on the minds of several Fed policymakers, as the minutes of last meeting made clear. It wasn’t what most investors wanted to hear Wednesday.

A slowing of the Fed’s bond purchases would ease downward pressure on long-term interest rates. As a result, they would likely rise from near-record lows, along with mortgage rates and rates on many others loans. Stocks, which have been boosted by investors shifting money out of low-yielding bonds, would likely fall.

Though the Fed’s tapering of its bond purchases would be gradual, any change from its current record-low-rate policy tends to incite anxiety.

Still, Wyss said he didn’t expect any panic in the stock market because the Fed will be acting in response to a stronger economy, which is good for stocks.

“But the details are hard to know because it will depend on what the economy is doing at that point,” Wyss said.

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Known as the Supplemental Nutrition Assistance Program, or SNAP, the food stamp program is administered by the Agriculture Department and federal dollars are unlimited as long as recipients qualify. The program cost $78 billion last year, more than double the price in 2008.

A proposal by Sen. James Inhofe, R-Okla., to a wide-ranging farm bill would have converted the program into grants to states, which could decide how to use the money, with certain restrictions. The Senate rejected the amendment 60-36.

The total amount of the grants would have been capped at between $46 billion and $54 billion a year over 10 years. Inhofe said the change would make the farm bill, which long has set policy for domestic food aid as well as agriculture programs, “into a farm bill and not a charity bill.”

Food stamps have come under renewed scrutiny as the program’s costs have ballooned in recent years. Many Republicans have favoured changing the SNAP program into grants, though the idea has never gained much traction in Congress.

Last year more than 47 million people used SNAP. The numbers have risen rapidly because of the economic downturn, higher food prices and expanded eligibility under the 2009 economic stimulus law.

Democratic Sen. Debbie Stabenow of Michigan, who heads the Senate Agriculture, Nutrition and Forestry Committee, said Inhofe’s plan would mean “devastating results for millions of families who are trying to feed their children.”

The Senate adopted a separate amendment by voice vote that would prevent convicted murderers, rapists and pedophiles from receiving food stamps for life.

Though no senators objected to the amendment, offered by Sen. David Vitter, R-La., the liberal-leaning think-tank Center on Budget and Policy Priorities said it could have “strongly racially discriminatory effects.”

“Poor, elderly African-Americans convicted of a single crime decades ago by segregated Southern juries would be among those hit,” said Robert Greenstein, president of the group. “The amendment essentially says that rehabilitation doesn’t matter and violates basic norms of criminal justice.”

The Senate farm bill would cut the food stamp program by $400 million a year, or about half of 1 per cent. The Senate on Tuesday rejected a Republican amendment to increase that cut and a Democratic amendment to decrease the cut.

The House version of the farm bill would cut $2 billion a year, or a little more than 3 per cent, from the domestic food aid.

Both the Senate and House bills would target states that give people without heating bills small amounts of heating assistance so they automatically can qualify for higher food stamp benefits. The House also would eliminate policy that would allow states to give people automatic food stamp benefits when they sign up for certain other programs.

Resolving the differences on food aid between the two chambers will be key to passage of the five-year farm bill. The legislation costs almost $100 billion annually and would set policy for farm subsidies, other rural programs and the domestic food aid.

The Senate is expected to consider several more amendments to the farm bill this week, including cuts to government-subsidized crop insurance.

The chamber rejected another amendment Thursday 54-45 that would have scaled back a Depression-era sugar program that supports prices and protects growers from foreign competition. Candymakers and other food and beverage companies have long said government protections for sugar farmers artificially restrict supplies, force consumers to pay more for sugar products and only benefit a few thousand well-off growers.

The Senate passed a similar farm bill last year, but the House did not consider it. The House Agriculture Committee approved its version of the farm bill last week and the full House is expected to vote on the bill this summer.

___

Find Mary Clare Jalonick on Twitter at http://twitter.com/mcjalonick

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The Palo Alto, Calif., company said it wired in a $451.8 million payment to the government on Wednesday. The money, coupled with two prior payments, paid off a $465 million loan Tesla got from the Department of Energy loan in 2010 to foster development of advanced-technology vehicles.

Tesla used money from a $968 million stock and note sale that closed Wednesday to repay the debt.

The repayment is good for Tesla’s image because the company no longer owes taxpayers money. And the government quickly touted the payment as an example of a success from an Energy Department loan program used to start clean-energy companies. The $34 billion loan portfolio has seen several high-profile defaults, including solar panel maker Solyndra, plus a potential default by electric car maker Fisker Automotive.

But the Energy Department said in a statement that losses to date amount to 2 per cent of the portfolio, or about $680 million. The department said it has helped to start 19 new clean-energy power plants that have added enough solar, wind and geothermal generating capacity to power a million homes.

“When you’re talking about cutting-edge clean-energy technologies, not every investment will succeed,” Energy Secretary Ernest Moniz said.

Tesla sells only one car, the $70,000 Model S, which the company says can travel up to 300 miles on a charge at 55 mph.

Earlier this month, Tesla reported its first quarterly profit. Its stock price has more than doubled since the first of the year and closed Wednesday at $87.24. Also in May, Consumer Reports magazine said the Model S tied for the highest rating in the history of the magazine’s auto testing.

Industry analysts say the success of the debt and stock offerings give the company working capital for the future and are a strong indicator of the market’s confidence in the company, led by PayPal billionaire and SpaceX founder Elon Musk.

The payment helps Tesla show its independence, said Dougherty & Co. analyst Andrea James. “It allows them to say, ‘We’re not dependent on low-interest financing from the government,’” she said.

It also lets Musk thumb his nose at critics like Republican presidential candidate Mitt Romney, who in the first presidential debate accused President Barack Obama of picking “losers” for putting money into Tesla and Fisker.

Tesla Motors Inc. is among five auto companies that got loans from the Energy Department to develop clean vehicles, including Fisker, Ford Motor Co., Nissan Motor Co. and The Vehicle Production Group LLC.

Ford got a $5.9 billion loan, while Nissan got $1.45 billion.

The government is in danger of losing $171 million at Fisker, which may soon seek bankruptcy protection, and it could lose about $45 million at VPG. The Allen Park, Mich.-based company got its loan to build wheelchair-accessible vans. About 25 per cent of the company’s models ran on compressed natural gas, a feature that helped it win the loan.

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Associated Press Writer Matthew Daly contributed to this report from Washington.

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A majority of Food and Drug Administration panelists voted Wednesday that Merck’s sleeping aid, suvorexant, helped patients get to sleep and stay asleep. In a separate set of votes, the panel voted that the drug appears safe at the starting doses proposed by the company.

The FDA is not required to follow the recommendations of its experts, though it often does.

The panel opinion was somewhat at odds with the agency’s own scientists, who issued a negative review of the drug earlier in the day. FDA staff pointed out that suvorexant was associated with daytime drowsiness, driving difficulties and suicidal thinking in trials conducted by Merck.

“How much is it worth to try and make the drug safer? How many people are you willing to risk versus how much effort are you willing to make?” said Dr. Ronald Farkas, who presented the FDA’s findings.

The FDA drew attention to five women, or roughly 5 per cent of patients, who had to stop a supervised driving test because they were too sleepy to continue. In another case, a 59-year-old man reportedly fell asleep at a traffic light and later veered off the road while taking the drug.

The FDA suggested that a lower dose of 10 milligrams might be safer for patients than the higher doses proposed by Merck.

But a majority of panelists endorsed the safety of initial doses proposed by Merck: 15 milligrams or 20 milligrams a day for elderly patients or non-elderly patients, respectively. The panel backed their safety in a vote of 13-3, with one abstention.

“Start low and go slow is likely to be effective,” said Dr. Matthew Rizzo of the University of Iowa. “I also think the safety profile of this drug is not any worse and likely better than the drugs we are already using.”

Much the meeting’s discussion focused on the shortcomings of sleeping pills already on the market, most of which are also associated with lingering drowsiness.

In January, the FDA required drugmakers of Ambien and similar sleeping pills to lower the doses of their medications, based on studies showing that the drugs remain in the bloodstream at levels high enough to interfere with driving.

The panel narrowly voted 8-7, with one abstention, against doses as high as 30 milligrams and 40 milligrams, saying they could exacerbate problems with drowsiness and narcolepsy.

“I think the risks are substantial and it seemed to go up with the higher dose,” said Natalie Portis, the panel’s patient representative.

Merck has suggested raising patients’ prescriptions to the higher levels if they do not respond to lower doses.

If the FDA ultimately approves suvorexant, it will be the first in a new group of drugs that aid sleep by blocking chemical messengers that keep people awake.

A Merck spokeswoman said Wednesday the FDA is expected to issue a decision on suvorexant by mid-year. If approved the drug will have to be scheduled as a controlled substance by the Drug Enforcement Administration.

Shares of the Whitehouse Station, N.J., company fell 62 cents to close at $46.71.

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The expanded financing deal with Goldman Sachs comes as the Plano, Texas-based retailer has been burning through cash and struggling to win back customers. An overhaul plan spearheaded by its former CEO Ron Johnson had backfired and caused sales to plummet.

The company last month fired Johnson after 17 months on the job and brought back Johnson’s predecessor, Mike Ullman, to take over the top spot. UIlman is bringing back sales and coupons and basic merchandise that were eliminated under Johnson’s regime.

Johnson’s strategy led to massive financial woes at Penney. The company reported last week that its first-quarter loss widened as revenue dropped 16 per cent. It was the fifth-straight quarter that the company had posted large sales declines. Penney lost almost $1 billion last year and its revenue dropped 25 per cent to $12.98 billion.

“This new funding gives us the financial flexibility to pursue our plans to put the company back on a path for profitable growth,” said Ken Hannah, Penney’s chief financial officer in a statement.

Ullman is restoring merchandise like khakis and key store brands like St. John’s Bay that were dropped by Johnson, who was seeking to grab a younger, wealthier shopper but ended up alienating Penney’s loyal middle-income base.

Penney is also in the midst of transforming its home area that includes shops devoted to such designers as Jonathan Adler and Michael Graves. The new home area is expected to be rolled out to 500 of the chain’s 1,100 stores by early June. The costly makeover was part of Johnson’s plans to carve up the stores into mini-boutiques.

On April 29, Penney had announced that Goldman Sachs would provide it with $1.75 billion in financing. The five-year loan announced Wednesday will be used to fund the company’s operations as well as pay off some of its debt. It will be secured by real estate, as well as an interest in the company’s other assets and some of its subsidiaries.

Shares rose 3 cents to $18.75 in after-hours trading after falling 26 cents to $18.72 in regular trading, off 29 per cent over the past 12 months. Penney announced the loan after the stock market had closed.

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Foxx told a jammed Senate confirmation hearing that he will look for “partners” in local and state government to help find creative ways to finance air, rail and highway improvements. While senators pressed him for commitments on a host of issues from passenger rail improvements in the Northeast to funding air traffic control towers as small airports, the mayor from North Carolina nimbly steered away from controversy.

At several points, he asked for more time to study an issue and get back to a senator with a response.

“This is probably one of the most pleasant hearings on the Hill today,” said Sen. Amy Klobuchar, D-Minn., alluding to a House hearing going on at the same time where IRS officials were grilled by lawmakers about the agency’s targeting of tea party groups.

Foxx’s reception from Republicans lawmakers was unusually warm. Sen. Roy Blunt, R-Missouri, predicted his nomination will be “noncontroversial.” But he noted senators from both parties were well represented at the hearing because “everybody we work for” are “totally dependent on the things he is (going to be) responsible for.”

Senators tempered their welcome with dire warnings that nation has a backlog of pressing transportation needs and no plan on how to pay for them. The Highway Trust Fund that pays for highway transit programs is forecast to face bankruptcy again, having only been rescued from impending bankruptcy by Congress last year. The fund is dependent on federal gas taxes, which have been raised since 1993. But the revenue raised by the taxes is declining as cars become more fuel efficient and people drive less.

The Transportation Department, like other federal agencies, is grappling government-wide, across-the-board spending cuts imposed by Congress that are scheduled to ratchet up next year absent a budget deal between Republican and Democratic leaders and the president.

“You have a huge job in front of you, massive. The challenges are many and the solutions are hard,” Sen. Jay Rockefeller, D-W.Va., chairman of the Senate Commerce, Science and Transportation Committee, told the nominee.

“I want you to be a good secretary of transportation and you cannot do that without new revenue,” he said, urging Foxx to “goad” Congress into finding more money for transportation.

But Sen. John Thune of South Dakota, the senior Republican member of the committee, said the responsibility goes both ways, and White House should offer its own funding plan.

“I hope you will lead, the president will lead, and come up and put specific ideas on the table how to solve these specific problems,” he said.

Foxx, 42, has been nominated to replace Transportation Secretary Ray LaHood, who is retiring. Foxx won national recognition when Charlotte hosted the Democratic National Convention last year, and he was a key surrogate in North Carolina for the president during his re-election bid last fall. He calls Obama a friend.

An attorney for a Charlotte-based transit bus company, Foxx has worked on transportation issues since joining the City Council in 2005, when the mayor was current Republican Gov. Pat McCrory. His mayoral tenure since late 2009 was marked by initial construction for a demonstration electric streetcar line and an agreement with federal transportation officials to pay for half of a light rail line going out to northeast Charlotte.

Foxx, who grew up in poverty in Charlotte, recalled riding the bus to get to his first job at a local museum when he was 12 years old.

“The Number 6 connected me to the larger world of opportunity, and I truly believe, whether it is a bus route, a road, a train, a plane or a ship, our transportation system at its best connects people to jobs and a better quality of life,” Foxx he told senators.

___

Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy

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The conflicting signs of further deterioration and potential recovery emerged in Hewlett-Packard Co.’s latest quarterly report released Wednesday.

Even as HP’s revenue declined at the fastest rate yet in a nearly two-year slump, the company delivered fiscal second-quarter earnings that topped the estimates of both its own management and the analysts who influence investor perceptions.

“The results were better than feared,” said Edward Jones analyst Bill Kreher.

HP provided Wall Street with another encouraging sign by predicting its earnings for the current quarter will top analyst projections. The Palo Alto, Calif., company also raised its earnings forecast for the full year, another sign that management is confident that HP’s profits won’t fall as dramatically as many investors feared while the PC market crumbles.

“You can feel the turnaround taking hold at HP,” CEO Meg Whitman told analysts during a Wednesday conference call.

Investors evidently saw enough progress to believe HP is finally heading in the right direction. The company’s stock soared $2.84, or more than 13 per cent, to $24.07 in extended trading. If the shares move similarly in Thursday’s regular session, it would be the biggest one-day percentage gain in HP’s stock in more than four years. Even so, HP’s stock would remain nearly 50 per cent below where it stood just three years ago.

Since then, consumers and corporate customers have been gravitating toward smartphones and tablet computers equipped with touch screens and voice recognition technology. As these mobile devices add more features and grow increasingly powerful, their prices are falling, too, making them even more attractive compared with the laptop and desktop computers that HP makes.

Like many other PC manufacturers, HP was slow to respond to the shift and then stumbled trying to catch up with Apple and other manufacturers, such as Samsung Electronics, that make devices running Google Inc.’s Android operating system.

Those missteps are still haunting HP, as illustrated in its latest quarter. The results included the seventh consecutive decline in HP’s quarterly revenue compared with the same period the previous year. HP’s 10 per cent decrease in revenue during the three months ending in April was the largest drop so far during the downturn.

Most of the erosion has occurred under the leadership of Whitman, a former CEO at eBay Inc. and defeated California gubernatorial candidate, who was hired to run HP in September 2011.

As she has repeatedly warned, Whitman emphasized HP remains on a “multi-year journey” as she cuts costs, overhauls the company’s product line and pushes into more profitable niches in business software, data analysis and storage and technology consulting.

Revenue shrank in all those areas too during the second quarter, but not as severely as the PC contraction.

Whitman suggested HP’s revenue could start rising again in the next fiscal year ending in October 2014, though she said the company still has a lot of work to do to make that happen.

“We have to do a better job managing the transition from the technologies that power the past to the ones that will power the future,” Whitman said.

To gain some financial stability during the upheaval, HP is in the process of eliminating nearly 30,000 jobs and shedding other expenses to help offset its waning revenue. Through April, HP had jettisoned about 18,800 workers during the past year.

That’s the main reason that HP’s earnings are holding up better than Wall Street anticipated, Edward Jones’ Kreher said.

HP earned $1.1 billion, or 55 cents per share, during its most recently completed quarter. That was down 32 per cent from $1.6 billion, or 80 cents per share, last year.

If not for certain items unrelated to its ongoing business, the company would have earned 87 cents per share in its fiscal second quarter. That figure topped the average estimate of 81 cents per share among analysts surveyed by FactSet.

HP’s revenue totalled $27.6 billion — about $400 million below analyst projections.

HP’s biggest problems are rooted in its personal computer business. Revenue in that division plunged by 20 per cent from last year.

In comparison, rival Dell Inc.’s PC sales declined by 9 per cent during the same period. By Dell’s own admission, the company aggressively slashed its PC prices to prod reluctant consumers and corporate customers into buying laptop and desktop machines.

HP also is lowering PC prices, but not as dramatically as Dell, according to Cathie Lesjak, the company’s chief financial officer.

“We are focused on profitable growth,” Lesjak said in an interview. “We will walk away from deals that really throw us into a loss and don’t generate good value for HP.”

Dell is in the process of trying to gain shareholder approval to sell itself to its CEO, Michael Dell, and a group of investors for $24.4 billion.

Whitman believes HP can bounce back by inventing new technologies and packing them into appealing products more quickly, recapturing the spirit the company established as a Silicon Valley pioneer nearly 75 years ago.

HP’s first foray into tablet computers and smartphones designed for the Palm operating system flopped two years ago. The company is now selling tablets running on Android and a recently introduced version of Windows, but it hasn’t re-entered the smartphone market yet.

The effectiveness of Whitman’s strategy is likely to be tested during the next few months as HP releases another wave of PCs that have touch screens and tablets in different sizes. HP is lowering the prices on its upcoming touch-screen PCs in an effort to lure more consumers.

All the new devices are expected to be on the market in time for the back-to-school season.

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The release of minutes of the Fed’s April 30-May 1 meeting reversed a surge earlier in the day.

The Dow Jones industrial average fell 80 points to 15,307 Wednesday, a loss of 0.5 per cent. It had risen 154 points after Fed Chairman Ben Bernanke told Congress it was too early to cut back on the Fed’s bond-buying program.

The Standard & Poor’s 500 fell 13 points to 1,655, or 0.8 per cent. The Nasdaq composite fell 38 points to 3,463, or 1.1 per cent.

Three stocks fell for every one that rose on the New York Stock Exchange. Volume was heavy at 4.3 billion shares.

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Twitter said in a blog post Wednesday that users will be able to enrol in a login verification program. For those who sign up, Twitter will send a six-digit code using a text message each time they sign in to Twitter.com. Besides their username and password, users will have to enter the code to log in as well.

Microsoft Corp., Google Inc. and Facebook Inc. already allow two-step verification as an option. Twitter has been criticized for not having this option, especially following recent breaches of Twitter accounts belonging to major news organizations and other companies.

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Online:

https://blog.twitter.com/2013/getting-started-login-verification

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Hawaiian Airlines agreed to the plan that takes effect on June 1, American Samoa Gov. Lolo Matalasi Moliga said. The Honolulu-based airline is the only carrier connecting the unincorporated U.S. territory midway between Hawaii and New Zealand with the rest of the United States.

Moliga announced the policy this week in a memo to the territorial government’s various agencies. He acknowledged some people might see the move as unfair but called it “morally wrong” for employees to get extra benefits from the privilege of travelling for the territory as a government employee.

“We have a moral responsibility to help out those of our people who, not by any fault of theirs, find themselves in situations where outside assistance is needed,” Moliga said. “The added benefit provided by the frequent flier mileage award should be shared with those of our community who are truly impoverished and destitute.”

American Samoa, made up of two small islands in the south Pacific slightly larger in area than Washington, D.C., budgeted nearly $6 million for government travel in fiscal 2013.

Tim Winship, editor and publisher of FrequentFlier.com, a website dedicated to the use of airline miles, said corporations and governments have sometimes considered keeping miles from employees. But he hasn’t heard of any taking the idea as far as American Samoa has with its new policy.

Winship said the arrangement presents practical and moral hurdles. Airlines typically tie frequent flier miles to individual travellers, while frequent travel takes employees away from home without really compensating them for time away from family and the normal frustrations of air travel, he said.

“None of that is in any way compensated through one’s normal salary, and frequent flier miles have historically been seen as a way of compensating business travellers for that,” Winship said.

Winship said it’s an uncomfortable stretch for Moliga to call government travel a privilege.

“At the very least, you can expect there to be a lot of disgruntled passengers — a lot of disgruntled (American Samoa) employees,” Winship said. “Calling travel on business a privilege, you’re going to get some pretty frequent pushback from travellers on that characterization.”

Moliga said Hawaiian Airlines agreed to create a corporate account for the territory to deposit all miles for flights paid for by the territory’s government.

Hawaiian Airlines, owned by Hawaiian Holdings Inc., did not immediately respond to a request for comment from The Associated Press. Shares of Hawaiian Holdings were unchanged on Wednesday at $5.50 per share.

The new policy comes four years after a territorial lawmaker tried to introduce legislation for a similar arrangement to provide funding for a referral program to send patients off the islands from American Samoa’s only hospital, which is publicly run. The program has gone without funding since 2008. Since then, patients who need medical care outside American Samoa have had to pay their own airfare and hospital care through private insurance or Medicaid.

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Associated Press writer Oskar Garcia in Honolulu contributed to this report. He can be reached at http://twitter.com/oskargarcia

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The lawsuit also claims XanGo bribed Russian customs officials to allow tax-free imports of its mangosteen-based juice, derived from a tropical fruit with purported curative powers.

Lehi, Utah-based XanGo said Wednesday the claims are without merit and that co-founder and board member Bryan B. Davis was being asked to leave the company before filing his $3 million lawsuit May 16 in federal court in Salt Lake City.

The company brought a lawsuit Monday against Davis in state court, asserting he fumbled obtaining regulatory approval for sales in Europe, among other alleged job lapses.

“Mr. Davis made his intention to sue his partners clear during his separation discussions,” company attorney Richard J. Armstrong responded by email. “The result of this threat is the unfounded allegations in Mr. Davis’ lawsuit, intended to embarrass his partners.”

It isn’t the first allegation of looting at XanGo, with the company pointing out Davis was among defendants of the first lawsuit.

In 2007, a group of minority shareholders asserted executives were buying expensive cars and designer suits, among other things, on the company dime.

XanGo ultimately reached a confidential settlement with Angel Investors LLC after accusing the group of being handsomely rewarded many times over for its initial investment.

Now, Davis is accusing top executives of charging the company for luxury watches and jewelry, furniture, electronics, guitars, event tickets, sports equipment, Vespa scooters and country club memberships. They also take expense-paid vacations by private jet, his lawsuit claims.

The lawsuit was filed against XanGo co-founders Aaron Garrity, Gary Hollister, Kent Wood, brothers Gordon and Joseph Morton, and the company’s chief financial officer Nate Brown.

XanGo sells a mangosteen-based juice for nearly $40 a bottle through a network of unsalaried sales associates who take a cut of the profits of others they recruit.

The private company has claimed to have enjoyed explosive growth with more than $2 billion in cumulative sales since it got started in 2003. It doesn’t have to make financial information public.

“XanGo is known as a category-creator and brought the mangosteen supplement category to the global marketplace,” Armstrong said. “While the global financial crisis and changes in the marketplace have certainly challenged business, XanGo continues to grow internationally and expand its market reach.”

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The White House issued the warning a day before the full House was scheduled to vote on the bill. Leaders from both parties expected the legislation to pass the House over the objections by Obama and many fellow Democrats, who argued that the lower rates would give way to higher ones later.

“The bill’s changes would impose the largest interest rate increases on low- and middle-income students and families who struggle most to afford a college education,” the White House Office of Management and Budget said in a memo announcing the veto threat.

Without congressional action, interest rates on new subsidized Stafford loans are set to double from 3.4 per cent to 6.8 per cent on July 1. Both parties want to avoid that increase but differ on how to do it.

Democrats sought an extension of the current rates until Congress takes up a higher education bill later. Republicans have rejected that as costly and irresponsible. A two-year extension of the 3.4 per cent rate for subsidized Stafford loans would cost taxpayers about $9 billion.

Last week, the GOP-led House Education and the Workforce Committee approved its bill, which would offer some students a better deal at first. Democratic critics at that session warned that graduates would face steadily climbing rates and costs over the long haul if the markets change.

Under the GOP proposal, student loans would be reset every year and based on 10-year Treasury notes, plus an added percentage. For instance, students who receive subsidized or unsubsidized Stafford student loans would pay the Treasury rate, plus 2.5 percentage points.

Rep. John Kline, chairman of the House Education and the Workforce Committee, said lawmakers would vote as scheduled Thursday on the bill despite Obama’s threatened veto.

“The president would rather pick a partisan fight with Congress instead of work in good faith on a bipartisan solution,” the Minnesota Republican said. “The president’s unfortunate position does not alter our intent to advance the bill through the legislative process or our resolve to develop a long-term solution that both the House and the president can support.”

Kline said his proposal had many parallels to Obama’s own effort and was a starting point for negotiations.

Current subsidized Stafford loans are offered at a fixed 3.4 per cent rate and unsubsidized Stafford loans are offered at 6.8 per cent. The interest rate on loans to parents and graduate students is 7.9 per cent.

Using Congressional Budget Office projections, the GOP plan would translate to a 5 per cent interest rate on Stafford loans in 2014, but the rate would climb to 7.7 per cent for loans in 2023.

Stafford loan rates would be capped at 8.5 per cent, while loans for parents and graduate students would have a 10.5 per cent ceiling under the GOP proposal.

Democrats object to increasing the rates within a program that generates vast income for the federal government. The Congressional Budget Office last week revised its figures this week, reporting that federal loans will generate almost $51 billion on loans issued this year.

In real dollars, the GOP plan would cost students and families heavily, according to the nonpartisan Congressional Research Service. The office used the CBO projections for Treasury notes’ interest rates each year.

Students who max out their subsidized Stafford loans over four years would pay $8,331 in interest payments under the Republican bill, and $3,450 if rates were kept at 3.4 per cent. If rates were allowed to double in July, that amount would be $7,284 over the typical 10-year window to repay the maximum $19,000.

For students who borrow the maximum subsidized and unsubsidized Stafford loans, they would pay $12,374 in interest under the Republican bill. The interest charges would be $10,867 if subsidized loans were allowed to double in July, or $7,033 if rates stay the same. The maximum available in subsidized and unsubsidized amounts is $27,000 for four years of school.

Graduate students and parents, meanwhile, would see interest payments reach $27,680 for four years of college under the GOP plan. If Congress keeps the rates the same, their interest payments would be $21,654 on the original maxed-out $40,000 loan, according to the Congressional Research Service report.

Obama included flexible rate student loan rates pegged to 10-year Treasury bills in his budget proposal. The president did not include limits on interest rates but included a smaller added interest rate. His plan also expanded income-based repayment options and loan forgiveness to students.

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Follow Philip Elliott on Twitter: www.twitter.com/philip_elliott

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But this year, his company, Reverie, began making some of its beds entirely in a factory in New York. Shipping costs from Taiwan have soared between 50 per cent and 60 per cent since the company was founded.

“Shipping costs are tremendous,” he says. “I could put that money into the manufacturing side in the U.S.,” he says.

Reverie is one of a growing number of small businesses that are chipping away at the decades-old trend of manufacturing overseas. They’re doing what’s known as reshoring, moving production back to U.S. factories as labour costs grow in countries like China and India and shipping also becomes more expensive. Over the last 20 years, the price of a barrel of oil has risen to about $95 from $20.

There are other issues encouraging the shift. Owners are tired of having to wait weeks for shipments on slow-moving container ships, and they want to get products to customers faster. Some newer businesses aren’t even considering overseas manufacturing. It’s not just small businesses. Some of the largest companies in the U.S. are also joining the trend. Apple Inc. and Caterpillar Inc. are among the manufacturers planning to bring production back to the U.S.

Reverie has had the bases of its beds made in Taiwan since the company was founded. Rawls-Meehan and a business partner in Taiwan agreed that the cost savings and proximity to many customers were good reasons to manufacture there.

“The mentality was that products were going to be manufactured more cheaply in Asia than in the U.S.,” Rawls-Meehan says.

But shipping costs have risen to as much as 20 per cent of the wholesale cost of a bed made in Asia. In 2004, it was just 10 per cent on some of Reverie’s products. So the company is now making a new line of upscale beds in Silver Creek, N.Y., near Buffalo. Shipping on those beds accounts for no more than 5 per cent of the wholesale price. That offsets the higher cost of labour in this country.

Rawls-Meehan is considering moving more of his manufacturing to the U.S., but because the company also sells beds to Asia and Australia, he says it likely will always have overseas production.

A good deal of U.S. manufacturing shifted to foreign shores in the 1990s and early 2000s. Workers in China, India and other countries earned far less than workers in U.S. factories. That lowered costs substantially for U.S. companies. Between 1997 and 2008, the U.S. lost nearly 4.5 million manufacturing jobs, according to the Census Bureau. And the amount of overseas manufacturing by U.S. companies grew 141 per cent between 1997 and 2010, according to the government’s Bureau of Economic Analysis.

But the growing middle class in countries such as China and India have been demanding and getting higher wages. In Asia, labour costs are rising 20 per cent a year, compared to 3 per cent in the U.S., says David Simchi-Levi, a professor at the Massachusetts Institute of Technology whose specialties include supply chain management.

A weaker dollar has also made foreign-made goods more expensive. A study by the consulting firm AlixPartners predicts that the costs of manufacturing in the U.S. and China on average would be equal in 2015. For products including disposable packaging and some metal parts, costs are already equal or less when they’re made in the U.S., the study found.

Reshoring began picking up momentum in 2010 after the recession and as the dollar began to lose value, says Lisa Ellram, a professor at Miami University of Ohio who specializes in supply chain management. Businesses that were unsure how strong their sales would be in a weak economy didn’t want to make as many commitments to far-flung factories.

“They really just didn’t have as much certainty about their volume and their needs, so it was maybe a little bit easier to deal with somebody closer,” she says.

Innovations in manufacturing in the U.S. are encouraging the shift. Many U.S. companies use robots and highly specialized processes that allow them to make custom components for the automotive and aerospace industries.

“Instead of hiring people, we’re using robots,” Ellram says. Chinese companies are also using robots, but U.S. manufacturers are ahead of them, she says.

The government doesn’t have figures tracking how much manufacturing companies are bringing back the U.S., according to Jeannine Aversa, a spokeswoman with the Bureau of Economic Analysis. About 50,000 manufacturing jobs came back to the U.S. between 2010 and 2012, many of them in factories that turn out electrical equipment and components and metal parts, according to the Reshoring Initiative, a non-profit group that advocates moving manufacturing back to the U.S.

The trend could gain momentum because demand for U.S. goods is growing. Ninety-five per cent of manufacturers surveyed last year said they are increasing their purchases from domestic companies, or keeping them at the same level as 2011, according to ThomasNet, a company that operates an online marketplace where businesses can connect with manufacturers, distributors and service companies.

The amount of time it takes to get goods made overseas is another reason manufacturing is coming back to the U.S. It’s taking longer to ship finished products because cargo ships have lowered their speed by 20 per cent to conserve fuel, Ellram says. That reduction adds four or five days to a container ship trip from China, she says. It takes two weeks or more for a ship to travel from China to the U.S., depending on which ports it departs from and where it makes its deliveries.

Shipping times matter for companies that need to get their goods to market quickly. Now that Cotton Babies, a manufacturer and retailer of baby merchandise, has moved manufacturing of its cotton diapers to Denver from Egypt, it has cut in half the time it takes to get them to market, says CEO Jennifer Labit.

Product development can be slowed by the distance between designers in the U.S. and manufacturers in other countries, Labit says. Communication takes longer and expensive overseas trips are often necessary to make sure that the products are being made to specifications.

Quality, and the ability to fix problems faster, gives small domestic manufacturers an advantage over foreign companies, Ellram says.

“Those are the things that (domestic) small businesses can use as a selling point,” she says.

A myriad of problems helped Reading Truck Body decide to bring manufacturing of truck parts back to the U.S. from China.

Shipments were disorganized. The company didn’t know until it opened containers which parts had been shipped. That meant it couldn’t be sure ahead of time which of its truck bodies could be finished and sold, national sales director Craig Bonham says. Reading, based in Reading, Pa., also was concerned about the amount of time it took to get shipments.

“It spans about three months from purchase order to the time you get products to North American shores,” Bonham says. “That timeline did not allow us to become reactionary to market demands.”

Reading lost some sales because it didn’t have the parts to finish a truck a customer wanted. But the impact of unpredictable shipments went beyond lost revenue — it also led to chaos on the production line and frustration among the company’s managers.

“You feel a larger sense of dependency when you’re relying on someone that far away,” Bonham says. The company received its last shipment from Asia in December.

It also dealt with high expenses to send two employees to China each quarter, at a cost of $100,000 a year.

But with production now entirely in the U.S., the company is more confident.

“We have more control of our destiny,” he says.

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Associated Press Writer P. Solomon Banda contributed to this report from Denver.

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Follow Joyce Rosenberg at http://twitter.com/JoyceMRosenberg

Online:

Reshoring Initiative: http://www.reshorenow.org/

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Toronto Mayor Rob Ford (Michelle Siu/Canadian Press)

You might as well stop feeling queazy about efforts at crowdfunding the purchase of the video that allegedly shows Toronto mayor Rob Ford smoking crack cocaine. After all, you’re going to watch the video, aren’t you?

The crowdfunding efforts (and there are at least two of them) have been the source of endless amusement, and almost as much controversy as the reported existence of the crack-smoking video itself. After all, while the video purports to show an important public official engaging in criminal activity, buying the video from the drug dealers who currently possess it would mean, well, doing business with drug dealers.

We can start to get a grip on this as an ethical issue by looking at it from the perspectives of both ends and means. The end or goal being sought by those trying to buy the tape is, arguably, an important one. If Ford has a crack habit, this is important, since it speaks to whether he is fit to be mayor. Doubt has already arisen about Ford’s suitability for office: among other worries, the mayor’s ethical failings and erratic behaviour are well documented.

So the ends here might be worthy. What about the means? Well, the proposed means by which to reveal the truth about Rob Ford involve associating with (or at least doing business with) drug dealers. This, in itself, is probably regrettable. Of course, buying a video from drug dealers is not quite like buying crack from them, but still. When you do business with certain types, the taint can’t help but rub off. But then, it’s a one-off deal, not the forming of a long-term business relationship.

So perhaps we can say that the deal, if it happens, would be merely unseemly, rather than fully unethical. And that’s an important distinction. Too often the question gets posed as “Is this ethical?” when what would be more useful is to ask “Just how bad is this?” We shouldn’t think of these things in binary terms. It’s OK to be vaguely uncomfortable with a course of action, as long as we ask ourselves why.

In the end, avoiding the all-or-nothing judgment is pretty important in a case like this, because it’s very unlikely that many of us (in Toronto, at least) will keep our hands clean. The option most of us will choose is to let Gawker or someone else get their hands dirty—let them do the crowdsourcing, buy the tape, and so on—and then cackle with glee at the results in the privacy of our own homes.

Chris MacDonald is Director of the Jim Pattison Ethical Leadership Education & Research Program at the Ted Rogers School of Management

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But the maker of heavy trucks, farm and construction vehicles said in a statement that it believed that making Britain its fiscal base would put its shareholders on the same footing as those of major capital goods competitors.

It said it was awaiting a response from authorities in Britain and the Netherlands, where the new company will be legally based, before finalizing the move.

The prospect that Fiat Industrial would move its tax base has raised concern among Italian lawmakers and unions, already concerned that the Fiat carmaker may shift its headquarters to Detroit once it merges with U.S. carmaker Chrysler. The carmaker last week issued a statement saying that moving its headquarters “was not on the agenda.”

Fiat Industrial SpA, which is based in Turin and was spun off from Fiat in 2011, denied that placing the new company’s tax home in Britain would cause “considerable damage to the tax office of our country.”

It said that the that 500 million euros refers to the total tax burden on all its units, including 46 per cent that are based in North America and 11 per cent in Latin America. It said of the 27 per cent in Europe, only 5 per cent are based in Italy.

The new company will be legally based in the Netherlands and traded on the New York Stock Exchange. The merger was approved by the boards of both companies, but is awaiting shareholder approval.

Fiat Industrial said in the statement that it chose the Netherlands in keeping with its goal of “creating a capital goods company able to attract international investors.”

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Minutes of the Fed’s April 30-May 1 meeting released Wednesday show “a number” of members expressed a willingness to scale back the $85 billion a month in Treasury and mortgage bonds the Fed has been purchasing, perhaps as soon as next month, if the economy accelerates.

The Fed next meets on June 18-19.

Still, Chairman Ben Bernanke, the Fed’s most important voice, signalled Wednesday in testimony to Congress that it is too soon for the Fed to slow its extraordinary stimulus programs.

The central bank has been buying $85 billion a month in Treasury and mortgage bonds since September. That has helped lower long-term interest rates and encouraged more borrowing and spending.

After the April 30-May 1 meeting, the Fed said it could increase or decrease the pace depending on how the job market and inflation fare.

In recent months, the job market and the broader economy have made strides. The economy has added an average of 208,000 jobs a month since November. That’s up from only 138,000 a month in the previous six months.

On Wednesday, Bernanke told the Joint Economic Committee that the economy is growing moderately this year and unemployment has fallen to a four-year low of 7.5 per cent. Still, unemployment remains well above levels consistent with healthy economies. And Bernanke said higher taxes and deep federal spending cuts are expected to slow economic growth this year.

Bernanke warned that reducing the Fed’s efforts to keep borrowing rates low would “carry a substantial risk of slowing or ending the economic recovery.”

When pressed by lawmakers, Bernanke said the pace of the bond purchases could be curtailed over the next few meetings, if the job market shows “real and sustainable progress.” He wouldn’t rule out curbing those purchases by Labor Day.

But Bernanke said that the Fed could just as quickly reverse course and pick up the pace if the economy falters.

The minutes also showed that there was a discussion over whether the central bank needs to update the strategy it will use to exit from the bond purchases and begin reducing the size of its $3 trillion-plus balance sheet.

The Fed published its exit strategy principles two years ago.

However, since an exit from the bond purchases is “well in the future,” the minutes said it might be better to wait and acquire more information on how the markets are performing before releasing any revised plans.

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In a statement of defence filed in Ontario Superior court, COPE said Wednesday that a lawsuit filed by Porter over comments made on Twitter is an abuse of process designed to silence and restrict the union and its members.

“The intended purpose of this litigation is to intimidate the defendants so that they abandon their legitimate criticism of the plaintiffs,” the statement said.

Porter Airlines filed a lawsuit in April seeking $3 million for general and special damages for defamation and $1 million in punitive, aggravated and exemplary damages.

The lawsuit named the Canadian Office and Professional Employees Union Local 343 and its strike co-ordinator, Mary Stalteri, as defendants.

According to court documents, Porter alleges libellous comments against the airline were made by Stalteri on behalf of the union through a Twitter account under the username (at)PorterStrike.

Porter said the tweets used false and misleading information about safety protocols and training practices for the airline and its workers.

The statement of claim contains allegations that have not been proven in court

The union said the comments are fair comment and based on facts.

The airline said Wednesday that it did not dispute that the union and its members are entitled to make public statements about the ongoing labour dispute.

“However, the union and its members are not entitled to make false and harmful statements in their pursuit of public sympathy,” the airline said in a statement.

The 22 employees on strike refuel planes for Porter Airlines. They walked out on Jan. 10.

Talks with a mediator regarding a first contract for the workers, who organized last August, broke down over the issues of wages. The union has said the two sides also cannot agree on benefits and safety.

Porter Aviation Holdings Inc., which employs the workers, said negotiations stalled when the union turned down an average wage increase of 6.1 per cent for this year.

Porter has trained replacement workers to fill in during the labour disruption.

Porter flies to about a dozen cities in Eastern Canada and the United States and carried 2.45 million passengers last year.

The airline is seeking permission to fly jets out its main base on Toronto’s waterfront after placing a conditional order for 12 Bombardier CS100 aircraft, with options for 18 more.

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Among the most active sectors on TSX and TSXV over the last year, Real Estate provides investors with a multitude of investment opportunities. The outlook for the sector remains positive, as a prolonged period of low interest rates continues.

Through access to real estate investment trusts (REITs), real estate structured products (e.g. ETFs), real estate development and service companies, and real estate operating companies, investors can tailor their investment strategies with respect to different types of property, including offices, hotels, apartment buildings, industrial properties, retirement homes and shopping centres – not only in Canada, but in other parts of the world as well.

Of particular interest to investors, REITs issue units that trade like common stock. With the capital raised, REITs buy income-producing assets that generate regular cash distributions for their investors. Milestone Apartments REIT (TSX:MST.UN), for example, completed its IPO on TSX in March 2013, raising $200 million based on a portfolio of 52 multi-family properties in the United States. Summit Industrial Income REIT (TSXV:SMU.UN), which raised more than $75 million in February through a follow-on public offering on TSXV, focuses on light industrial properties in Canada. American Hotel Income Properties REIT LP (TSX:HOT.UN), whose $96 million IPO was one of the top 10 TSX financings in February, has built its business on indirect ownership of hotel properties that focus on railroad employee accommodation across the U.S. In terms of structured products in the real estate space, the Australian REIT Income Fund (TSX:HRR.UN), which primarily invests in stocks of Australian REITs listed on the Australian Securites Exchange, completed its $66 million IPO on TSX in March.

In total, there are 37 real estate companies listed on TSXV, including six real estate investment trusts (REITs), with a total market capitalization of $1.4 billion. On TSX, there are 57 real estate listings, including 34 REITs, with a combined market capitalization of just over $80 billion. There are also five real estate ETFs on TSX with a combined market capitalization of over $1.7 billion.

While the real estate sector accounts for only a small percentage of the total number of listings on TSX and TSXV, it has been particularly active amidst the ongoing uncertainties of the global economy. In the first quarter of 2013, real estate was the third largest sector by financing activity, with $1.9 billion raised. For investors, the real estate sector offers several benefits, including a potential hedge against inflation and a relatively stable source of income.

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According to Canada’s Venture Capital & Private Equity Association (CVCA), investment activity in Canada’s venture capital (VC) industry has accelerated since 2011, reaching its highest level since 2006. And in a reversal of a five-year trend, venture capital investment in the information technology sector increased by 6% in 2012. Six Canadian deals were among the top 30 VC deals in North America.

“During the past 10 years, the domestic venture capital industry has been going through a significant transformation,” says Peter van der Velden, CVCA President. “This has led to the engagement of significant corporate and strategic investors in the Canadian market,” he says, “and to more experienced general partners.”

These developments correspond with the objectives of Toronto Stock Exchange (TSX) and TSXV and, in particular, TSXV’s CPC program, which encourages experienced corporate investors and managers to raise capital and provide expertise for emerging businesses. Over 30% of the companies listed on TSX in the Innovation sectors (Technology, Clean Technology and Life Sciences) are also graduates of TSXV. Of the 40 new issuers listed on TSXV in the first quarter of 2013, 30 emerged from the CPC program.

“TMX Group has a strong history of supporting and partnering with the leading VCs in Canada and the U.S. to enhance funding and incubation for Canadian start-ups,” says Tom Kloet, CEO of TMX Group, “And TSXV is the only public venture capital exchange of this size and scope in the world.”

To encourage interaction between the capital markets, the venture capital, and private equity communities, TMX Group co-hosts an annual Toronto Stock Exchange/CVCA Technology Investor Day. With presentations from five private companies and five public companies in the technology sector, this event attracts Canadian and U.S. investors with the goal of raising institutional and VC investment dollars, and enhancing the capital ecosystem for technology companies in Canada.

These events serve to build bridges between entrepreneurs and the capital markets,” says Kloet, “so they’ll better understand our platform, and how and when to use it for growth.

The post Venture capital returns appeared first on Canadian Business.