Business Highlights

AP News
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Posted: Apr 05, 2011 6:11 PM
Business Highlights

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Service sector expanded in March at slower pace

The U.S. service sector expanded in March for the 16th straight month, although growth slowed from the previous month's pace, which was the fastest in more than five years.

The Institute for Supply Management, a private trade group, said Tuesday that its index of service-sector activity dropped to 57.3 last month, from 59.7 in February. That's the first decline in seven months. Still, any reading above 50 indicates expansion.

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Fed members raise specter of higher interest rates

Federal Reserve officials raised concerns last month that a big jump in energy prices could weaken the economy and unleash inflation, prompting a few to suggest the possibility of tightening credit this year.

Such a move usually involves boosting interest rates, although the minutes from the Fed's closed-door meeting on March 15 did not specify that. The minutes, which were released Tuesday, also did not note which members raised the prospect of a change in policy, or how many.

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Diamond stacks up with $1.5B deal to buy Pringles

NEW YORK (AP) _ Diamond Foods Inc. took its biggest bite yet of the snack business with a $1.5 billion deal to buy the Pringles brand from Procter & Gamble Co.

The deal is the biggest in a stack of acquisitions for Diamond and will more than triple the size of the maker of Emerald nuts and Pop Secret popcorn.

Adding Pringles will make it a distant second in the snack business to PepsiCo's Frito-Lay, which controls nearly half of the market.

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Nasdaq OMX to rebalance index; Apple weighting cut

NEW YORK (AP) _ Nasdaq OMX Group Inc. on Tuesday announced a rebalancing of the Nasdaq-100 Index next month that will significantly reduce Apple Inc.'s weighting in the index.

The Nasdaq-100 Index is made up of the 100 largest non-financial stocks listed on the Nasdaq stock market. It is one of the most widely watched market indexes, used as a barometer for the growth of large-cap U.S. stocks, with a weighting toward technology companies.

The index is tracked by mutual funds and exchange-traded funds. The rebalancing, which takes effect May 2, means that fund managers will have to shift their holdings to reflect the new weighting.

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KB Home 1Q loss widens on fewer home deliveries

LOS ANGELES (AP) _ KB Home said Tuesday that its fiscal first-quarter loss widened, as the homebuilder delivered fewer homes and net orders declined.

But the Los Angeles company said it is encouraged by higher traffic at the beginning of spring selling season.

The company had a loss of $114.5 million, or $1.49 a share, for the three months ended Feb. 28. That compares with a loss of $54.7 million, or 71 cents a share, a year ago.

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Southwest finds cracks in more planes

DALLAS (AP) _ Southwest Airlines Co. said Tuesday it finished inspecting 79 older planes and found that five of them have cracks in the aluminum skin.

That's two more than the airline found by Monday afternoon.

Boeing said Tuesday it is directing Southwest and other airlines that own certain older 737s to conduct electromagnetic inspections of a portion of the roof once the planes have made a certain number of trips.

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China central bank raises key interest rates

BEIJING (AP) _ China raised key interest rates Tuesday for the fourth time since October as it tries to dampen high inflation.

The People's Bank of China, the country's central bank, said the quarter-percentage-point increase lifts the one-year lending rate to 6.31 percent and the rate for one-year bank deposits to 3.25 percent.

The series of rate hikes reflects concerns about overheating and excess liquidity in the Chinese economy that are driving up prices, especially of food.

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Portugal rating cut again, deepening debt crisis

LISBON, Portugal (AP) _ Portugal's financial woes deepened Tuesday after Moody's downgraded its credit rating for the second time in less than a month, further fueling fears the debt-laden country will have no option but to seek an international financial rescue package soon.

The Moody's decision was another grim milestone in Portugal's yearlong battle to avoid the same fate as Greece and Ireland, who last year were both forced to seek foreign help after months of financial turmoil.

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By The Associated Press(equals)

The Dow Jones industrial average fell 6.13 points, or less than 0.1 percent, to 12,393.90. The S&P 500 index was down 0.24 at 1,332.63. The Nasdaq composite gained 2, or 0.1 percent, to 2,791.19.

Benchmark West Texas Intermediate crude for May delivery gave up 13 cents to settle at $108.34 per barrel on the New York Mercantile Exchange. In London, Brent crude added $1.23 to settle at $121.89 per barrel on the ICE Futures exchange.

In other Nymex trading for May contracts, heating oil added 1.36 cents to settle at $3.1850 per gallon and gasoline futures gained 3.25 cents to settle at $3.2013 per gallon. Natural gas lost 5.8 cents to settle at $4.231 per 1,000 cubic feet.