So far, most of tax cut is going down the gas tank
WASHINGTON (AP) _ Americans are earning and spending more, but much of the extra money is going down their gas tanks. Gas prices have drained more than half the extra cash Americans are getting this year from a cut in Social Security taxes.
Unlike some other kinds of spending, paying more for gas doesn't help the economy much. Most of the money goes overseas, and higher prices leave people with less money to buy appliances, computers, plane tickets and other things that can be postponed.
Consumer spending jumped 0.7 percent last month, and personal incomes rose 0.3 percent, the Commerce Department said Monday. Both gains reflected the cut of two percentage points in the Social Security tax, raising take-home pay.
They also illustrated how higher gas prices are stressing household budgets. After adjusting for inflation, spending rose just 0.3 percent. After-tax incomes fell 0.1 percent.
Consumer spending rose
WASHINGTON (AP) _ The Commerce Department said consumer spending rose at its fastest pace in four months in February, though some of the increase was driven by higher gas prices. The National Association of Realtors said more Americans signed contracts to buy homes in February than economists were expecting. Sales rose in every region but the Northeast, but remained below what is considered a healthy level.
EBay to buy GSI Commerce for $2.4 billion
SAN FRANCISCO (AP) _ Online marketplace operator EBay said Monday that it will pay $2.4 billion for GSI Commerce, which operates websites for retailers like Toys R Us and Bath & Body Works.
EBay Inc., which runs its namesake site where users buy and sell items through auctions and fixed-price "Buy it Now" formats as well as online payments service PayPal, hopes the acquisition will bolster its ability to connect buyers and sellers around the world. It could also help it become more of a threat to Amazon.com Inc.
GSI runs websites, packs and ships products and offers interactive marketing services to a variety of retailers. It has long-term contracts with 180 retailers, including Radio Shack, Ace Hardware and American Eagle Outfitters.
More people signed contracts to buy homes in Feb.
WASHINGTON (AP) _ More Americans signed contracts to buy homes in February, but sales were uneven across the country and not enough to signal a rebound in the housing market.
Sales agreements for homes rose 2.1 percent last month to a reading of 90.8, according to the National Association of Realtors' pending home sales index released Monday. Sales rose in every region but the Northeast.
Signings were 19.6 percent above June's index reading, the low point since the housing bust. Still, the index is below 100, which is considered a healthy level. The last time it reached that point was in April, the final month people could qualify for a home-buying tax credit.
Harry & David files for Chapter 11 protection
Fruit basket and gift seller Harry & David filed for Chapter 11 bankruptcy protection Monday, brought down by a weak economy and a proliferation of competitors.
The Medford, Ore., company agreed with a majority of its senior creditors on a reorganization plan that will eliminate "substantial" debt and provide financing to restructure its balance sheet, according to court documents.
Harry & David Holdings Inc., which grew out of an orchard business about a century ago, has been struggling as businesses slashed corporate gift budgets and consumers cut spending in the weak economy. It relies on discretionary spending that's often the first to get cut from household and business budgets. Online competitors have also grown significantly.
The retailer expects to continue operating during the reorganization process.
Japanese nuke utility apologizes again and again
TOKYO (AP) _ The utility behind Japan's biggest nuclear plant disaster can't seem to get much right.
The obviously harried officials from Tokyo Electric Power Co. have repeatedly announced botched radiation readings, corrected themselves over and over and indulged in seemingly endless rounds of apologies.
Every few days, Japan's nuclear safety industry scolds them to "to take steps to prevent a recurrence of similar mistakes."
The bumbling offers alarming insight into the embarrassing failure of crisis management at the nation's top utility, which rakes in 5 trillion yen ($60 billion) in annual sales.
Latest airfare increase fails over weekend
DALLAS (AP) _ The airlines' latest effort to broadly raise U.S. fares by $10 per round trip has crumbled as discount carriers like Southwest decided not to raise their prices.
After several successful price increases from December through February, two efforts to raise fares this month have died, raising questions about how much consumers are willing to pay for travel.
United and Continental started the push for another fare increase last week and were joined by Delta, American and US Airways. But low-cost airlines never went along, and by Monday afternoon US Airways joined other large airlines in dropping the fare hike, making the collapse complete.
It's unclear whether consumer demand is too weak to absorb more price increases, or whether the recent failed price hikes are merely a pause before fares rise again heading into the peak summer travel season.
Buffett's firm defends valuation of 5 stocks
OMAHA, Neb. (AP) _ Warren Buffett's company offered a strong endorsement of five stocks it holds as part of discussions with regulators, saying it believes Wells Fargo & Co., Kraft Foods Inc., Sanofi-Aventis, Swiss Re and US Bancorp are all undervalued.
Buffett's Berkshire Hathaway Inc. on Monday filed copies of letters it had exchanged with the Securities and Exchange Commission over the past several months.
Regulators had questioned whether Berkshire should write down the value of those investments because their stock prices had fallen since Buffett's company first bought the shares and remained below Berkshire's cost for more than a year. Berkshire resisted because company officials believe all five stocks will rebound and Berkshire has no immediate plans to sell them at the current lower prices.
NY Times begins charging for digital access
NEW YORK (AP) _ The New York Times began charging Monday for full access to its website and mobile services.
The third-largest U.S. newspaper is charging $15 every four weeks, or $195 a year, to read more than 20 articles a month on its website. That fee also covers a subscription on the newspaper's software for smartphones. The new fees kicked in at about 2 p.m. EDT.
Readers who want unlimited access on the website and the Times' software for Apple Inc.'s iPad tablet computer have to pay $20 every four weeks, or $260 annually. A digital subscription covering the website and both mobile options costs $35 every four weeks, or $455 annually.
The New York Times Co. is charging for digital access because online advertising revenue hasn't grown fast enough to offset losses in print ads.
By The Associated Press
The Dow Jones industrial average fell 22.71 points, or 0.2 percent, to 12,197.88. The broader S&P 500 index lost 3.61, or 0.3 percent, to 1,310.19. The Nasdaq composite fell 12.38, or 0.5 percent, to 2,730.68. Each index had been up more than 0.4 percent earlier in the day.
Benchmark crude dropped $1.42 on Monday to settle at $103.98 per barrel on the New York Mercantile Exchange. In London, Brent crude lost 84 cents to settle at $114.58 per barrel on the ICE Futures exchange.
In other Nymex trading for April contracts, heating oil gave up 3.03 cents to settle at $3.0412 per gallon and gasoline futures fell 2.19 cents to settle at $3.0276 per gallon. Natural gas fell 2.9 cents to settle at $4.374 per 1,000 cubic feet in the final day of trading on the April contract.