Business Highlights

AP News
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Posted: Mar 03, 2011 7:14 PM
Business Highlights

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Shoppers show strength in February; gas hikes loom

NEW YORK (AP) _ Strong February sales at stores up and down the price spectrum, from J.C. Penney to Saks, show that a broad range of shoppers are feeling more comfortable about the economy.

The question is whether rising gas, food and clothing prices will reverse the trend this spring.

Retailers on Thursday reported surprisingly strong revenue gains for February. The International Council of Shopping Centers' index of 28 retailers rose 4.2 percent compared with the same month last year. That was well above the trade group's projections for a 2.5 percent to 3 percent increase.

The gain follows a 4.7 percent increase in January and the best holiday season since 2006. The figures are based on revenue at stores open at least a year, a key indicator of a retailer's health because it excludes the effects of stores that open or close during the year.

February started slowly for merchants because snowstorms kept some shoppers home. As the month went on, weather improved, perking up sales of spring clothing.

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UN: World food prices highest in at least 20 years

ST. LOUIS (AP) _ Prices for major crops climbed Thursday as a U.N. agency said food costs are now at their highest point since the agency began tracking them 20 years ago.

Global prices have surged 2.2 percent just in the past month, according to the U.N.'s Food and Agriculture Organization in Rome. The FAO's index, which measures the price of staple food items and big commercial crops like corn and soybeans, reached its highest level since 1990.

The price increases have been driven by cereals, meat and dairy products. After rising for eight months, global prices of corn, wheat and soybeans are near record levels set in 2008, when riots erupted in countries like Haiti and U.S. food prices jumped.

U.S. consumers are relatively shielded from the higher grain costs. Average incomes are higher in the United States than in most of the world. And the cost of grain represents only a small portion of the prices U.S. consumers pay for food products. Still, U.S. prices are expected to creep up later this year for items ranging from poultry to soda to wheat bread.

In the developing world, the effects have been dire. Higher food prices have pushed an estimated 44 million people into extreme poverty. Economists think the problem could worsen as governments curtail grain exports to increase their own stockpiles.

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Drop in jobless claims raises hopes for hiring

WASHINGTON (AP) _ The number of people filing for unemployment benefits sank last week to its lowest point in nearly three years, and retailers and other service companies posted strong results Thursday for last month.

On the eve of the government's February jobs report, the news suggests the economy may be about to take off despite growing concerns about inflation.

The stock market had its best day in three months. The Dow Jones industrial average rose more than 190 points, or 1.6 percent, erasing most of its losses since the unrest in Libya began.

And some analysts raised their forecasts for how many jobs the economy created last month. The consensus is 175,000, but many economists are now estimating 200,000 or more, and they expect the pace to hold for the rest of the year.

That would almost certainly bring the unemployment rate, now 9 percent, down steadily.

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ECB shocks markets with April rate hike hint

LONDON (AP) _ The European Central Bank's chief shocked markets Thursday by saying interest rates could be raised as soon as the next policy meeting in April _ far earlier than expected _ to fight inflation across the 17-nation eurozone.

Speaking after the bank left its main interest rate unchanged at the record low of 1 percent, President Jean-Claude Trichet said "strong vigilance" was warranted and that an interest rate increase next month was "possible" though "not certain."

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Grocer Kroger cautiously upbeat, says 4Q profit up

CINCINNATI (AP) _ The nation's largest traditional grocery chain says more households are buying most of their groceries at its stores while stretching out their spending over more trips as they face higher food and gas prices.

Kroger Co. on Thursday reported that its fourth-quarter profits and sales jumped, as the company saw increased customer loyalty and gained on the competition in most of its markets.

The grocer said shoppers are paying more at checkout as its food and dairy prices rise, and they made more trips to the store in the fourth quarter, though each transaction was worth less than a year earlier.

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Average rate on 30-year mortgage falls to 4.87 pct

NEW YORK (AP) _ The average rate on the 30-year fixed mortgage dropped this week, following lower yields on Treasury bonds.

Freddie Mac said Thursday the average rate on the 30-year loan slipped to 4.87 percent from 4.95 percent. It hit a 40-year low of 4.17 percent in November.

The average rate on the 15-year fixed home loan fell to 4.15 percent from 4.22 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.

Mortgage rates tend to track the yield on the 10-year Treasury note. Investors are putting more money into Treasurys, concerned that Libya's uprising will keep oil prices above $100 a barrel and hurt consumer spending. That has lowered those yields.

Low mortgage rates haven't been enough to boost housing. Fewer homebuyers signed contracts to purchase homes in January, the second straight month of waning demand, the National Association of Realtors said Monday.

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Wendy's/Arby's Group 4Q loss narrows

NEW YORK (AP) _ Wendy's/Arby's Group Inc. trimmed expenses in the fourth quarter, helping to narrow its loss as it looks to sell its struggling Arby's business.

The fast-food chain, which is looking at raising prices to deal with rising beef costs, is ramping up efforts to increase sales at Wendy's. This includes the national launch of a new cheeseburger line named for founder Dave Thomas and the expansion of its breakfast menu in more markets.

Wendy's/Arby's, based in Atlanta, is hoping the burgers and other new products, combined with restaurant modernization and expansion plans, will be enough to draw in customers.

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Wal-Mart raises dividend 21 percent, to $1.46

BENTONVILLE, Ark. (AP) _ Wal-Mart Stores Inc. said Thursday that it is increasing its annual dividend 21 percent, to $1.46 from $1.21.

The world's largest retailer said it will pay quarterly dividends of 36.5 cents in April, June, September and January in fiscal 2012, which ends Jan. 31. The next dividend will be paid on April 4 to shareholders of record on March 11.

President and CEO Mike Duke said the company was able to boost its dividend because of its earnings performance in fiscal 2011 and its strong financial position.

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BP withholds majority of 2010 bonus payments

LONDON (AP) _ BP is blocking bonuses to executives who were responsible for operations in the Gulf of Mexico during last year's disastrous well blowout, including former CEO Tony Hayward and the former head of exploration and production, Andy Inglis.

The British oil company's annual report also revealed Thursday that new CEO Bob Dudley decided to forgo his 2010 bonus but two other directors will receive payouts linked to their performance in separate divisions.

BP PLC said the board's remuneration decisions for 2010 were dominated by the scale and impact of the Gulf spill, which began with the April 20 explosion on the Deepwater Horizon rig that killed 11 workers and led to the worst oil spill in U.S. history.

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Research firm says tablet growth hurts PC demand

STAMFORD, Conn. (AP) _ Market research firm Gartner Inc. has reduced its PC shipment forecast for this year and next, predicting the growing popularity of tablet computers such as Apple Inc.'s iPad will cut into the demand for consumer laptops.

Gartner said Thursday that it expects global PC shipments of 387.8 million in 2011, up 10.5 percent from 2010. Previously, Gartner predicted 15.9 percent growth.

In 2012, Gartner now thinks 440.6 million PCs will be shipped, up 13.6 percent from 2011. Its earlier estimate called for 14.8 percent growth.

Gartner said that while consumer laptop shipments have climbed an average of 40 percent annually in the past five years, the availability of Internet access on various mobile devices means that consumers are not as tied to laptops for getting on the Web.

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By The Associated Press

The Dow Jones industrial average gained 191.40 points, or 1.6 percent, to 12,258.20. The Dow is still below where it was trading on Feb. 18, before a three-day plunge caused by a surge in oil prices as the unrest in Libya deepened.

The Standard & Poor's 500 index rose 22.53, or 1.7 percent, to 1,330.97.

Benchmark West Texas Intermediate for April delivery fell 32 cents to settle at $101.91 per barrel on the Nymex.

In other Nymex trading for April contracts, heating oil fell less than a penny to settle at $3.049 per gallon and gasoline futures lost less than a penny to settle at $3.026 per gallon. Natural gas gave up 4 cents to settle at $3.778 per 1,000 cubic feet.

In London, Brent crude fell $1.56 to settle at $114.79 per barrel.