Economy slowed by high gas prices, bad weather
WASHINGTON (AP) _ The economy slowed sharply in the first three months of the year. High gas prices cut into consumer spending, bad weather delayed construction projects and the federal government slashed defense spending by the most in six years.
The 1.8 percent annual growth rate in the January-March quarter was weaker than the 3.1 percent growth in the previous quarter, the Commerce Department reported. And it was the worst showing since last spring when the European debt crisis slowed growth to a 1.7 percent pace.
Federal Reserve Chairman Ben Bernanke and other economists say the slowdown is a temporary setback. They generally agree that gas prices will stabilize and the economy will grow at a 3 percent pace in each of the next three quarters.
Exxon earns nearly $11B in 1Q, best since `08
NEW YORK (AP) _ Exxon earned nearly $11 billion in the first quarter, a performance likely to land it in the center of the national debate over high gasoline prices.
The world's largest publicly traded company said Thursday that higher oil prices boosted profits 69 percent from a year ago. The result was Exxon's best since earning a record $14.83 billion in 2008's third quarter.
Wall Street had been expecting sharply higher earnings for oil companies. Oil prices rose 17 percent in the quarter. But huge oil profits will aggravate drivers with gasoline prices averaging $3.89 per gallon nationally. President Obama wants to cut into some of those earnings by eliminating $4 billion in taxpayer subsidies for oil companies.
Shoppers should get ready to pay more at register
CINCINNATI (AP) _ Households reeling from gasoline near $4 also face bigger bills for everything from changing their babies' diapers to wiping their noses to treating themselves to ice cream.
Major makers of everyday consumer products and groceries say they have to raise prices to offset soaring costs for their fuel and the materials and ingredients that go into their products.
Retailers are trying to pass that along at the cash register, adding pressure on a sluggish U.S. economic recovery.
The list of companies saying this week that they are raising prices is long: Kimberly-Clark Corp. (Huggies diapers, Kleenex facial tissue); Procter & Gamble Co. (Pampers diapers, Gillette shavers); Unilever PLC (Dove soap, Ben & Jerry's ice cream); Colgate-Palmolive (toothpaste, soap); and PepsiCo Inc. (soft drinks, Frito-Lay snacks).
Microsoft's fiscal 3Q earnings surge 31 percent
NEW YORK (AP) _ Microsoft Corp.'s latest quarterly earnings rose 31 percent even as sales of its Windows operating system sagged.
The fiscal third-quarter results released Thursday exceeded analyst estimates.
Still, it marks the second straight quarter that revenue in Microsoft's Windows division has dropped from the previous year. That may heighten investor worries that Microsoft's highly profitable franchise of licensing software for personal computers may be heading into a gradual decline. The company faces threats from the iPad and other tablet computers that rely on rival operating systems made by Apple Inc. and Google Inc.
PepsiCo 1Q net income down, costs up
NEW YORK (AP) _ PepsiCo Inc. sold more of its snacks and drinks in the first quarter to help deliver earnings that met Wall Street's expectations.
The maker of Frito-Lay snacks, Tropicana juice and other products, however, says it is still struggling with higher commodity costs and the impact of a tough economy and reiterated its soft full-year earnings outlook.
PepsiCo's earned $1.14 billion, or 71 cents per share, for the quarter. That's down 20 percent from the $1.43 billion, or 89 cents per share, last year, due largely to a gain in the prior year.
Viacom 2Q earnings jump, boosted by `Jersey Shore'
NEW YORK (AP) _ "Jersey Shore" and an improved advertising market contributed to a sharp increase in Viacom Inc.'s net income for the latest quarter.
The media company also got a boost from a strong slate of movies _ both at the box office and on DVDs. Hit movies included two Oscar nominees for best picture, "True Grit" and "The Fighter," which were still in theaters following releases in December.
Viacom's net income for the January-March period grew 53 percent to $376 million, or 63 cents per share. It was $245 million, or 40 cents per share, a year earlier.
Chrysler to repay $7.5B of government bailouts
DETROIT (AP) _ Chrysler will soon repay $7.5 billion in bailout money from the U.S. and Canadian governments, another sign that the company is recovering from its near collapse two years ago.
The company will pay back that government debt later this quarter using money from new bank loans and an upcoming bond sale. Chrysler has been negotiating a loan refinancing deal with Morgan Stanley, Goldman Sachs, Citigroup and Bank of America. Details could be disclosed on Monday.
The refinancing would allow Chrysler to repay a big chunk of the bailout from the U.S. and Canada that helped the company get through bankruptcy in 2009. It would also help the automaker save millions by lowering interest payments and bolster its case for a public stock offering as early as the end this year.
Exelon to buy Constellation in $7.9B deal
NEW YORK (AP) _ Exelon Corp. agreed to buy Constellation Energy Group Inc. for $7.9 billion Thursday, the latest in a string of acquisitions in the electric power industry.
Exelon CEO John Rowe, the longest-serving utility CEO in the country, has long been a proponent of consolidation. He has failed three times since 2003 to acquire a smaller rival. Now the market conditions appear to be on his side.
CEO: J&J learned recall lessons, will bounce back
NEW BRUNSWICK, N.J. (AP) _ Johnson & Johnson's chief executive told shareholders at their annual meeting Thursday that the company will come back "stronger than ever" after addressing quality problems that led to an astounding string of product recalls.
William Weldon, who became CEO in 2002, said the series of "disappointing recalls" troubled him and employees and meant thousands of parents could not get medicines they needed for their children.
Since September 2009, the company has had about two dozen recalls of prescription and nonprescription medicines, replacement hips, contact lenses and diabetes test strips, including tens of millions of bottles of children's and adult Tylenol and Motrin.
More people applied for unemployment benefits
WASHINGTON (AP) _ More people sought unemployment benefits last week, the second rise in three weeks, a sign of the slow and uneven jobs recovery.
Applications for unemployment benefits jumped 25,000 to a seasonally adjusted 429,000 for the week ending April 23, the Labor Department said Thursday. That's the highest total since late January.
The four-week average of applications, a less volatile measure, rose to 408,500, its third straight rise and the first time it has topped 400,000 in two months. Applications near 375,000 are consistent with sustained job creation. Applications peaked during the recession at 659,000.
More people signed contracts to buy homes in March
WASHINGTON (AP) _ More Americans signed contracts to buy homes in March, but sales were uneven across the country and were not enough to signal a rebound in the housing market.
Sales agreements for homes rose 5.1 percent last month to a reading of 94.1, according to the National Association of Realtors' pending home sales index released Thursday.
Signings are about 24 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 federal home-buying tax credit of up to $8,000.
Rate on 30-year fixed mortgage fell to 4.78 pct.
NEW YORK (AP) _ Fixed mortgage rates dipped this week, with the rate on the 30-year loan staying under 5 percent and the 15-year loan falling below 4 percent.
Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.78 percent from 4.80 percent the previous week. It hit a 40-year low of 4.17 percent in November.
The average rate on the 15-year fixed mortgage slipped to 3.97 percent from 4.02 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.
By The Associated Press(equals)
The Dow Jones industrial average rose 72.35, or 0.6 percent, to 12,763.31. The S&P 500 rose 4.82 points, or 0.4 percent, to 1,360.48. The Nasdaq composite gained 2.65, or 0.1 percent, to 2,872.53.
The Russell 2000 index rose again, a day after reaching a record high. The index of small companies rose 3.24, or 0.4 percent, to 861.55.
Benchmark West Texas Intermediate crude added 10 cents to settle at $112.86 per barrel on the New York Mercantile Exchange after rising as high as $113.97. In London, Brent crude fell 11 cents to settle at $125.02 on the ICE Futures exchange.
Natural gas rose 15.7 cents to settle at $4.633 on the Nymex. In other trading, heating oil lost less than a penny to settle at $3.2459 per gallon, and gasoline futures rose 1.14 cents to settle at $3.3696 per gallon.