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Business Highlights

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Middle class shrinks in 9 of 10 US cities as incomes fall

WASHINGTON (AP) — In cities across America, the middle class is hollowing out.

A widening wealth gap is moving more households into either higher- or lower-income groups in major metro areas, with fewer remaining in the middle, according to a report released Wednesday by the Pew Research Center.

In nearly one-quarter of metro areas, middle-class adults no longer make up a majority, the Pew analysis found. That’s up from fewer than 10 per cent of metro areas in 2000.

That sharp shift reflects a broader erosion that occurred from 2000 through 2014. Over that time, the middle class shrank in nine of every 10 metro areas, Pew found.

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Nissan pays bargain price for Mitsubishi stake, analysts say

Nissan is spending 237 billion yen ($2.2 billion) for a controlling stake in Mitsubishi Motors, as that company tries to recover from a scandal over fuel-economy ratings.

Analysts say Nissan is making the move because the price is right and Mitsubishi has sales and technology in areas where Nissan has little.

The deal, announced Thursday in Japan, comes as Mitsubishi’s stock value has fallen dramatically over revelations that the company cheated on Japanese fuel mileage tests. The cheating was discovered by Nissan, which has contracted to sell Mitsubishi mini-cars under the Nissan name.

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Across the world, luxury-home sales get a reality check

WASHINGTON (AP) — The global luxury housing market lost some of its sheen last year as financial markets became unsettled and many wealthy buyers began to look for less expensive homes.

“The return of realism,” is how Dan Conn, chief executive of Christie’s International Real Estate, described the global high-end market.

Sales in a sector whose average home prices start at $2.2 million slowed in 2015, increasing by 8 per cent, half its 2014 pace. The decline most likely reflects stability rather than weakness, according to a report released Thursday by Christie’s.

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RushCard to pay $19 million to users for last year’s outage

NEW YORK (AP) — RushCard, the prepaid debit card company owned by hip-hop mogul Russell Simmons, agreed to pay at least $19 million to compensate its users who were impacted by the company’s multi-day outage last year.

The technical fiasco caused tens of thousands of RushCard customers, who are largely poor and minorities, to be unable to access their money for as long as two weeks.

According to the agreement filed in a New York court as part of a class-action lawsuit, RushCard will pay at least $100 to each user who could not access their funds. That amount can increase to up to $500 if the customer can document related losses.

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Claims for jobless aid reach highest level since early 2015

WASHINGTON (AP) — The number of Americans applying for unemployment benefits rose last week to the highest level since February 2015, more sobering news for the labour market after a disappointing April jobs report.

The Labor Department reported Thursday that applications for jobless aid rose by 20,000 to a seasonally adjusted 294,000. The four-week average, a less volatile measure, rose by 10,250 to 268,250, the highest in nearly three months.

Jobless claims are a proxy for layoffs. Despite last week’s increase, they remain low. They have come in below 300,000 for 62 straight weeks, the longest streak since 1973.

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Average 30-year loan rate falls to 3.57 per cent, 3-year low

WASHINGTON (AP) — Long-term U.S. mortgage rates fell this week for a third straight week, posting new lows for the year. The benchmark 30-year rate reached a three-year low.

The low rates come amid the spring home buying season, luring prospective purchasers.

Mortgage buyer Freddie Mac said Thursday the average 30-year fixed-rate mortgage dipped to 3.57 per cent from 3.61 per cent last week. It’s far below its level a year ago of 3.85 per cent.

The average rate on 15-year fixed-rate mortgages eased to 2.81 per cent from 2.86 per cent last week.

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Kohl’s misses expectations as spring funk hits retailers

Kohl’s is joining the parade of gloomy reports from retailers.

The mid-price department store chain reported first-quarter results that missed analysts’ estimates, weighed down by hefty costs as sales dropped. It posted the biggest decline for a key revenue metric since 2009 when the economy was in a recession.

A lacklustre holiday season across much of the retail sector has become a spring funk. Macy’s Inc. and Gap Inc. both reported some weak revenue trends recently.

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Wal-Mart sharpens Amazon attack with 2-day delivery service

NEW YORK (AP) — Wal-Mart is sharpening its attack on Amazon.com.

The world’s largest retailer is trimming its free-shipping pilot program to two days from three, and it’s cutting a dollar off the membership price. Membership is now $49 per year.

The Bentonville, Arkansas, company began testing the new service last year in answer to Amazon Prime’s two-day shipping, a big part of its domination of the retail sector.

Amazon membership costs $99 a year, which comes with a bewildering array of perks, including household product subscriptions, one and two hour Prime Now delivery, streaming music and video, photo storage and more.

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Cheniere Energy names Jack Fusco as CEO

NEW YORK (AP) — Cheniere Energy has named Jack Fusco as CEO after the natural gas company’s previous CEO was forced out under pressure from activist investor Carl Icahn.

Fusco was most recently executive chairman of Calpine Corp., which generates electricity from natural gas. He was CEO of the Houston company from 2008 to 2014.

Cheniere’s CEO and co-founder Charif Souki, left in December months after Icahn boosted his stake in the company. Icahn and others questioned the ambitious growth track pursued under Souki.

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Report: US poultry workers forced to wear diapers on job

BOSTON (AP) — A report from international advocacy group Oxfam says poultry workers in the United States labour in a “climate of fear,” with some forced to wear diapers on the job.

It says many workers are afraid to ask for permission to go to the bathroom. The report says a worker at a Simmons Foods plant in Arkansas told Oxfam that she and many others resorted to wearing diapers. A Tyson Foods worker says in the report that many workers at his North Carolina plant “have to urinate in their pants.”

The companies expressed concern over the claims.

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Nordstrom shares tumble on slashed annual outlook, weak 1Q

NEW YORK (AP) — Nordstrom’s shares tumbled Thursday after the upscale department store slashed its annual sales and profit outlook.

The reduced guidance came as it reported that first-quarter earnings fell 64 per cent.

Nordstrom earned $46 million, or 26 cents per share, for the quarter ended April 30. Its net sales rose 2.5 per cent to $3.19 billion, but a key revenue measure was down 1.7 per cent.

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The Dow Jones industrial average added 9.38 points, less than 0.1 per cent, to 17,720.50. The Standard & Poor’s 500 index ticked down 0.35 points to 2,064.11. The Nasdaq composite index lost 23.35 points, or 0.5 per cent, to 4,737.33.

Benchmark U.S. oil gained 47 cents, or 1 per cent, to $46.70 a barrel in New York. Brent crude, the benchmark for international oil prices, rose 48 cents, or 1 per cent, to $48.08 a barrel in London. In other energy trading, wholesale gasoline was little changed at $1.58 a gallon. Heating oil was little changed at $1.39 a gallon. Natural gas lost 2 cents to $2.16 per 1,000 cubic feet.