Weak signals on the economy send stocks down
NEW YORK (AP) — A series of weak economic reports pushed the stock market to its lowest level in a month on Wednesday.
Companies like miners, banks and chemical makers, with fortunes that are most closely tied to the prospects for growth, led the market lower. It’s a sign that investors may be less confident in the nation’s economy.
The troubling data included weaker-than-expected hiring at private companies, fewer mortgage applications and sluggish orders for U.S. factories.
Eurozone recovery proves elusive
LONDON (AP) — Several economic figures for the 17 EU countries that use the euro all showed the same thing Wednesday — there’s no sign of recovery from recession.
Eurostat, the European Union’s statistics office, confirmed that the eurozone’s economy shrank 0.2 per cent in the first quarter of the year from the previous three-month period, with most sectors declining. Both companies and consumers have shown little willingness to invest and spend as they struggle with high debt, tight credit markets and record unemployment of 12.2 per cent across the eurozone. As a result, the bloc’s economy has shrunk for six straight quarters.
Though the performance is not uniform across the eurozone and was slightly better than the previous quarter’s 0.6 per cent contraction, Eurostat confirmed that nine of the region’s 17 members have seen their economies shrink for at least two quarters, the common definition of a recession. They are Cyprus, Finland, France, Greece, Italy, the Netherlands, Portugal, Slovenia and Spain.
SEC considers tougher rules for money funds
WASHINGTON (AP) — Investors could lose principal from money market investment funds that perform poorly under regulations proposed Wednesday by the Securities and Exchange Commission. But the change would affect mainly institutional rather than individual investors.
The SEC voted 5-0 to advance the plan, which would require shares of some money-market funds to “float”, instead of having a fixed value of $1 per share. The proposal failed to gain support last year but has since won the backing of a panel of regulators that includes Federal Reserve Chairman Ben Bernanke.
The agency also proposed new fees on withdrawals from funds if assets that can be readily converted into cash fall below a certain level. Both changes are intended to better inform investors and protect the industry from risks that surfaced at the height of the 2008 financial crisis.
Cheerios stands by TV ad showing mixed-race family
NEW YORK (AP) — A mom sits at her kitchen table when her grade schooler saunters up with a big box of Cheerios.
“Mom,” says the girl. “Dad told me Cheerios is good for your heart. Is that true?”
Cut to dad waking from a nap on the living room couch with a pile of Cheerios on his chest (where his heart is) crunchily cascading to the floor.
The message is in line with the company’s Heart Healthy campaign, except this 30-second ad features a black dad, white mom and biracial child and produced enough vitriol on YouTube last week that Cheerios requested the comments section be turned off.
This week, the company is standing by the fictitious family, which reflects a black-white racial mix uncommon in commercials today, especially in ads on TV, at a time when interracial and interethnic couples are on the rise in real life, according to 2010 U.S. Census data, brand strategists and marketing consultants.
Survey: US private employers add 135,000 jobs in May
WASHINGTON (AP) — A private survey shows U.S. businesses added just 135,000 jobs in May, the second straight month of weak gains.
Payroll provider ADP said Wednesday that May’s gain was above April’s revised total of 113,000. But it’s much lower than the gains ADP reported over the winter, which averaged more than 200,000 a month from November through February.
Mark Zandi, chief economist at Moody’s Analytics, blamed the slowdown on higher taxes and steep government spending cuts enacted this year.
Survey: US service firms grow at faster pace
WASHINGTON (AP) — U.S. service firms grew at a faster pace in May, driven by a jump in new orders. But a measure of hiring showed companies added fewer jobs.
The Institute for Supply Management said Wednesday that its index of service-sector growth rose to 53.7 from 53.1 in April. Any reading above 50 indicates expansion. Last month’s figure is below the 12-month average of 54.4.
A measure of employment fell to 50.1 from 52, the lowest since last July. Service firms have been the main source of job gains in the past several months. Manufacturers have cut back sharply on hiring this year.
Fed survey: Growth improves modestly throughout US
WASHINGTON (AP) — A Federal Reserve survey says economic growth increased throughout the U.S. from April through late-May, fueled by home construction, consumer spending and steady hiring.
The Beige Book survey released Wednesday said 11 of the Fed’s banking districts reported “modest to moderate” economic growth. The 12th, in Dallas, reported strong growth.
The survey is based on anecdotal reports. The mostly favourable results of the latest survey suggest that the economy and the job market are improving despite tax increases and government spending cuts that took effect this year.
Treasury to sell 30 million shares of GM stock
DETROIT (AP) — The government plans to sell another 30 million shares of General Motors stock in a public offering on Thursday, as it speeds up efforts to divest itself from a stake in the auto giant that it took over in a bailout four years ago.
The Treasury Department will set the price for the shares after the markets close on Thursday, with the sale happening shortly thereafter. A United Auto Workers retiree health care trust fund will join the sale and sell 20 million shares, pushing the size of the offering to 50 million shares.
General Motors Co. stock fell 94 cents, or 2.7 per cent, to close at $34.02 on Wednesday, but it has seen huge growth recently. The stock hit $35.49 on Tuesday, the highest point since December of 2010, according to FactSet. Shares are up 18 per cent since the beginning of the year.
Cyber experts say calling out China may be working
SINGAPORE (AP) — After years of quiet and largely unsuccessful diplomacy, the U.S. has brought its persistent computer-hacking problems with China into the open, delivering a steady drumbeat of reports accusing Beijing’s government and military of computer-based attacks against the U.S.
Officials say the new strategy may be having some impact.
In recent private meetings with U.S. officials, Chinese leaders have moved past their once-intractable denials of cyber espionage and are acknowledging there is a problem. And while there have been no actual admissions of guilt, officials say the Chinese seem more open to trying to work with the U.S. to address the problems.
Spirit Airlines starts serving wine in cans
NEW YORK (AP) — Spirit Airlines is thinking outside of the bottle.
The low-cost carrier known for extra fees and cheeky ads is now pouring wine out of aluminum cans.
Starting this week, passengers can purchase white moscato or strawberry moscato wine from Friends Fun Wine, a Florida company. Spirit will continue to sell mini bottles of Sutter Home wine as well.
By The Associated Press(equals)
The Dow Jones industrial average fell 216.95 points to finish at 14,960.50, a drop of 1.4 per cent. The Standard & Poor’s 500 index ended down 22.48 points, or 1.4 per cent, at 1,608.90. The Nasdaq composite dropped 43.78 points, or 1.3 per cent, to 3,401.48.
Benchmark oil for July delivery rose 43 cents to close at $93.74 a barrel on the New York Mercantile Exchange. Wholesale gasoline was flat at $2.82 a gallon. Heating oil fell 1 cent to end at $2.86 per gallon. Natural gas was flat at $4 per 1,000 cubic feet.