US auto sales roar back in May, led by pickups
DETROIT (AP) — Full-size pickups once again dominated U.S. auto sales in May, as small businesses — increasingly confident in the economy — raced to replace the aging pickups they held on to during the recession.
Car buyers, too, were lured by low interest rates and Memorial Day sales. Overall, U.S. consumers bought 1.4 million vehicles in May, up 8 per cent from the same month a year ago, according to Autodata Corp.
The results suggest the auto industry will remain a bright spot in an economy that’s been slowed by weak manufacturing. And the boost from the industry will help sustain the economy’s steady job growth.
Airlines group raises industry profit estimate
Packed planes should help the world’s airlines earn $12.7 billion this year, as travel demand accelerates faster than the airlines add seats, according to a new prediction from a trade group.
The estimate represents a 67 per cent increase over the airlines’ $7.6 billion in profits last year. The new estimate is a 20 per cent jump over IATA’s estimate just three months ago.
IATA said that if its forecast holds, the global airline industry will have its third strongest year since 2001.
New IRS head says taxpayers no longer trust agency
WASHINGTON (AP) — His agency under relentless fire, the new head of the Internal Revenue Service acknowledged to Congress on Monday that American taxpayers no longer trust the IRS amid a growing number of scandals — from the targeting of conservative political groups to lavish spending on employee conferences.
But Acting Commissioner Danny Werfel declared he was “committed to restoring that trust.” He said he has installed new leadership at the agency and is conducting a thorough review of what went wrong and how to fix it.
He promised the transparency that was lacking for several years as tea party groups complained about harassment by the IRS, only to be met with denials from the agency.
FDA weighs lifting safety restrictions on Avandia
WASHINGTON (AP) — A former blockbuster diabetes pill that was subjected to major safety restrictions in 2010 may be less risky than once thought, according to the latest analysis of the much-debated GlaxoSmithKline drug Avandia.
The Food and Drug Administration is reviewing a new interpretation of the key study of Avandia’s heart attack risks, which suggests the drug is as safe as older diabetes drugs. At a highly unusual meeting this week, the FDA will ask a panel of experts to vote on a range of options for the drug, including lifting restrictions on its use.
The positive safety review from Duke University researchers is the latest twist in a yearslong debate over Avandia, which has divided medical experts, cost Glaxo billions of dollars and possibly involved an unknown number of patient heart attacks.
Dunkin’ taking doughnut bacon sandwich national
NEW YORK (AP) — Even as fast-food chains tout their healthy offerings, they’re also coming up with fatty new treats to keep customers interested. Case in point: Dunkin’ Donuts is adding a doughnut breakfast sandwich to its national menu this week.
The sandwich, which comes with fried eggs and bacon between a split glazed doughnut, will become a part of the permanent menu starting Friday, which the chain claims is “National Donut Day.” Dunkin’ Donuts had tested the sandwich in select stores in eastern Massachusetts in April, creating considerable buzz online.
Notably Dunkin’ Donuts says the “Glazed Donut Breakfast Sandwich” checks in at 360 calories, which is less than the 390 calories for the turkey sausage sandwich it recently introduced for people looking to eat healthier.
US manufacturing gauge sinks to June 2009 level
WASHINGTON (AP) — A measure of U.S. manufacturing fell in May to its lowest level since June 2009 as slumping overseas economies and weak business spending reduced new orders and production.
The Institute for Supply Management said Monday that its index of manufacturing activity fell to 49 last month from 50.7 in April. That’s the lowest level in nearly four years and the first time the index has dipped below 50 since November. A reading under 50 indicates contraction.
The ISM index had sunk during the recession to a low of 33.1 in December 2008. Since the recession ended in June 2009, it peaked at 59.6 in February 2011.
US construction spending up 0.4 per cent in April
WASHINGTON (AP) — Spending on U.S. construction projects rose in April despite weakness in residential projects and government spending.
Construction spending rose 0.4 per cent in April, compared with March, when spending fell a revised 0.8 per cent, the Commerce Department reported Monday.
Construction activity has been volatile in recent months, falling by a record 4 per cent in January, but rising in February only to drop in March.
Wal-Mart aims to perk up produce sections
NEW YORK (AP) — Wal-Mart Stores Inc., which is working to keep its produce aisles fresh, announced steps to improve the quality of its fresh fruits and vegetables
The nation’s largest grocer and retailer said Monday it is making more changes in its operations, training and sourcing as it looks to increase sales of bananas, lettuce and other produce and instil more confidence among shoppers looking for healthier choices.
Changes include delivering produce from farms to store shelves more quickly by purchasing fruits and vegetables directly from local growers. It’s also conducting independent weekly checks of the produce aisles at its more than 3,400 Supercenters, Neighborhood Markets and Express stores.
Zynga to cut 520 jobs amid performance woes
SAN FRANCISCO (AP) — Online game maker Zynga Inc. said Monday that it is cutting 520 jobs, about 18 per cent of its workforce, in a cost-saving move designed to help it adapt to consumers shifting game play from computers to mobile devices.
Zynga expects the move to save about $70 million to $80 million in annual costs. But the San Francisco-based company behind “FarmVille” and “Words With Friends” also now expects a worse loss in the second quarter than it previously anticipated, as well as weak bookings, which will weigh on future revenue.
Zynga’s stock plunged 12 per cent to close at $2.99 on the Nasdaq stock market after trading was halted twice on Monday. Its shares have traded below $4 since about July 2012, after debuting at $10 in its December 2011 initial public offering.
Lululemon’s black yoga pants return to stores
NEW YORK (AP) — Lululemon is starting to get its Luon black yoga pants, which were pulled in March for being too sheer, back into its stores.
That bodes well for the company, analysts said Monday. And the see-through snafu didn’t affect Lululemon’s brand too much, says Canaccord’s Camilo Lyon.
Lululemon Athletica Inc. had blamed the sheerness on a style change and production problems. It hired a new team to oversee the making of the pants, which retail for about $72 to $98. The company has said it expects to lose $57 million to $67 million in revenue because of the pants problem.
By The Associated Press(equals)
The Dow Jones industrial average rose 138.46 points to 15,254.03, a gain of 0.9 per cent. The Standard & Poor’s 500 index climbed 9.68 points to 1,640.42, up 0.6 per cent. The Nasdaq composite, which is heavily weighted with technology stocks, rose 9.46 points to 3,465.37, an increase of 0.3 per cent.
Benchmark oil for July delivery rose $1.48 to close at $93.45 a barrel in New York. Brent crude, a benchmark for pricing oil used by many U.S. refineries to make gasoline, gained $1.67 to finish at $102.06 in on the ICE Futures exchange in London on Monday.
Wholesale gasoline added 3 cents to end at $2.79 a gallon. Heating oil rose 5 cents to finish at $2.83 per gallon. Natural gas advanced by about a cent to end at $3.99 per 1,000 cubic feet.