US economy shrank at steep 2.9 per cent rate in 1Q
WASHINGTON (AP) — The U.S. economy shrank at a steep annual rate of 2.9 per cent in the January-March quarter as a harsh winter contributed to the biggest contraction since the depths of the recession five years ago. But the setback is widely thought to be temporary, with growth rebounding solidly since spring.
The first-quarter contraction reported Wednesday by the government was even more severe than the 1 per cent annual decline it had estimated a month ago. Much of the downward revision reflected an unexpectedly sharp drop in health care spending. Another factor was a bigger trade deficit than earlier estimated.
US justices rule for broadcasters over Aereo
WASHINGTON (AP) — The U.S. Supreme Court ruled Wednesday that a startup Internet company has to pay broadcasters when it takes television programs from the airwaves and allows subscribers to watch them on smartphones and other portable devices.
The justices said by a 6-3 vote that Aereo Inc. is violating the broadcasters’ copyrights by taking the signals for free. The ruling preserves the ability of the television networks to collect huge fees from cable and satellite systems that transmit their programming.
Had services such as Aereo been allowed to operate without paying for the programming, more people might have ditched their cable services, meaning broadcasters would have been able to charge less for the right to transmit their programs.
Ruling could help US become major oil exporter
NEW YORK (AP) — Companies are taking advantage of new ways to export oil from the U.S. despite government restrictions, and in the process helping the U.S. become an ever bigger exporter of petroleum on the world stage.
The Obama Administration has opened the door to more exports — without changing policy — by allowing some light oils to be defined as petroleum products like gasoline or diesel, which are not subject to export restrictions.
Google shows off Android Auto, wearables
SAN FRANCISCO (AP) — Some 1 billion people are now using Android devices, Google said as the company kicked off its two-day developer conference Wednesday in San Francisco.
But the online search leader’s effort to broaden its focus beyond smartphones and tablets was on full display as the company unveiled far-reaching plans to push further into the living room, the family car and the TV set.
As part of a nearly three-hour opening presentation, Google gave more details about Android Wear, a version of the operating system customized for wearable gadgets such as smartwatches. The company also introduced Android Auto, which has been tailored to work with cars. Android TV, meanwhile, is optimized for TV-watching, aided by a recommendation system and voice searches for things like “Breaking Bad” or “Oscar-nominated movies from 2002.”
Minimum wage issue pits franchisees against cities
NEW YORK (AP) — Hundreds of franchisees are learning they’re not small businesses, at least in the eyes of city government.
A new law that will raise Seattle’s minimum wage to $15 from the current $9.32 gives small businesses more time to phase in the 61 per cent increase — seven years versus three for large companies. But franchisees, which have ties to bigger corporations like restaurant chain Denny’s, Dunkin’ Donuts and Merry Maids, won’t get the reprieve even if they have just a handful of workers.
Ukraine to sign EU deal that sparked revolution
Kyiv, Ukraine (AP) — For years, Russia has been the cash cow for Ukrainian dairy producer Anatoliy Yurkevych. These days he’s looking to skim some of the cream in the European Union, thanks to Ukraine’s sweeping new trade deal with the EU.
The deal, which President Petro Poroshenko is set to sign Friday in Brussels, would give Ukraine’s economy and society a massive shove toward Europe. It will lower trade tariffs and in theory open Europe’s market of 506 million people — if Ukraine can comply with the many complex provisions in the 1,200-page document that will take 10 years to fully implement.
Yurkevych’s Milkiland N.V. is aiming to be part of the country’s pivot. That’s even though Milkiland still gets more than half its revenues from Russia, 53 per cent of its 77.3 million euros in sales there in the first quarter. The company both exports to Russia and owns a dairy plant there.
Yoplait Light changing artificial sweeteners
NEW YORK (AP) — The maker of Yoplait Light is hoping a sweetener change can help bring back customers.
General Mills Inc. said Wednesday it plans to remove aspartame from its popular reduced-calorie yogurt in favour of another artificial sweetener, sucralose. Aspartame is better known by the brand names NutraSweet and Equal, while sucralose is the sweetener used in Splenda.
Although sucralose is also an artificial sweetener, General Mills CEO Ken Powell said it has greater acceptance among consumers.
The change comes as General Mills struggles to fix its Yoplait business, which has been upended by the popularity of Greek yogurt and the move toward ingredients people feel are natural.
Stocks edge higher despite economic data
NEW YORK (AP) — The U.S. stock market inched modestly higher Wednesday, recovering more than half of what it lost the day before, as investors were able to set aside two disappointing economic reports.
CBS and other broadcasters rose after the Supreme Court ruled in favour of them over a startup Internet company in a closely watched copyright case. Monsanto rose after the agricultural company announced a big stock buyback and reported earnings that beat analysts’ estimates.
Orders for US durable goods drop 1 per cent in May
WASHINGTON (AP) — Orders for U.S. durable goods tumbled 1 per cent in May as demand for military equipment fell sharply. But excluding defence-related goods, orders actually rose, and orders in a key category that signals business investment also increased.
The gains outside of military goods suggest business spending is picking up, which could give the economy a much-needed boost.
The Commerce Department said Wednesday that orders, excluding defence, rose 0.6 per cent in May, after falling 0.8 per cent in April. Orders for core capital goods, which reflect business investment, increased 0.7 per cent, after a 1.1 per cent drop.
Demand for military goods is highly volatile and had surged in April, so the sharp drop in May wasn’t a surprise and was dismissed by many economists.
Compromise on Ex-Im Bank floated at hearing
WASHINGTON (AP) — A potential compromise on the contentious issue of the U.S. Export-Import Bank’s future was floated during a House hearing Wednesday.
Rep. John Campbell, a California Republican, said he has drafted compromise legislation that addresses some of the concerns of conservative Republicans who oppose the bank as a taxpayer-subsidized giveaway to large companies. Their opposition has pitted them against their traditional allies among major corporations who have made the bank’s renewal a top priority.
The Ex-Im Bank provides loans, loan guarantees and credit insurance to overseas buyers of U.S. goods. Its charter expires in September, and without legislation it would be unable to back new loans.
Court sides with employees in retirement fund case
WASHINGTON (AP) — The Supreme Court on Wednesday sided with bank employees in a lawsuit against Fifth Third Bancorp that accused management of irresponsibly investing employee retirement money in the bank’s then-failing stock.
The unanimous ruling came in a case involving a retirement fund invested primarily in the bank’s stock.
The court considered whether those in charge of investing in the fund have the freedom or the duty to direct investment money elsewhere when they have reason to believe the stock price is inflated.
The employees said management knew that borrowers increasingly were defaulting on risky, subprime loans, but concealed that information or misled investors.
The bank continued to invest in the stock-ownership fund even when the problems came to light and the share price plummeted.
By The Associated Press=
The Dow Jones Industrial average rose 49 points, or 0.3 per cent, to close at 16,867. The Standard & Poor’s 500 index rose nine points, or 0.5 per cent, to 1,959. The Nasdaq composite rose 29 points, or 0.7 per cent, to 4,379.
Benchmark U.S. crude for August delivery rose 47 cents to $106.50 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, dropped 46 cents to $114 a barrel in London. Wholesale gasoline fell 3 cents to $3.09 a gallon. Natural gas rose 2 cents to $4.55 per 1,000 cubic feet. Heating oil fell 1 cent to $3.03 a gallon.