US service sector expanded at much slower pace
WASHINGTON (AP) _ The U.S economy's service sector grew last month at the slowest pace since August, renewing concerns that more expensive gas and food may be weakening growth.
Service companies, which employ 90 percent of the nation's work force, still expanded for the 17th straight month. But their growth slowed considerably because of a sharp drop in demand for their services, the Institute for Supply Management said Wednesday.
The private trade group of purchasing executives said its index of service-sector activity dropped to 52.8 last month. That's down from 57.3 in March and a five-year high of 59.7 in February. Any reading over 50 indicates expansion.
AP analysis: Economic stress drops to 3-month low
WASHINGTON (AP) _ Lower unemployment, bankruptcies and foreclosures in March reduced the nation's economic stress to its lowest point this year, according to The Associated Press' monthly analysis of conditions around the country.
More than 85 percent of the nation's 3,141 counties and every state but two _ Louisiana and South Dakota _ enjoyed better conditions in March than in February, the AP's Economic Stress Index showed.
Manufacturing activity, a major driver of economic growth since the recession ended in June 2009, has helped ease hardship in the Great Lakes states and Indiana over the past 12 months _ more than in any other region.
By contrast, Louisiana, Iowa and the Mountain states of Idaho and Montana have suffered the sharpest increases in stress, year over year.
Intel redesigns transistors for faster computers
SAN FRANCISCO (AP) _ Intel Corp. said Wednesday that it has redesigned the electronic switches on its chips so that computers can keep getting cheaper and more powerful.
The switches, known as transistors, have typically been flat. By adding a third dimension _ "fins" that jut up from the base _ Intel will be able to make the transistors and chips smaller. Think of how skyscrapers address the need for more office space when land is scarce.
The company said the new structure will let chips run on less power. That gives Intel its best shot yet at cracking the growing markets for chips used in smartphones and tablet computers. Intel has been weak there because its current chips use too much power.
Dunkin' Donuts parent co. files for IPO
NEW YORK (AP) _ The parent company of Dunkin' Donuts and Baskin-Robbins says it plans to go public through an initial public offering worth an estimated $400 million, confirming weeks of Wall Street speculation.
Dunkin' Brands Group Inc. didn't say how many shares it will offer or when the offering will take place. But the company, based in Canton, Mass., did say in a regulatory filing that it believes it sees "significant opportunity" to expand in foreign markets and outside the Northeast U.S., where it is concentrated.
Dunkin' plans to use the proceeds from the offering plus a term loan to pay off about $475 million in debt and will use the rest for working capital and general corporate purposes.
Demand for gasoline in US continues to decline
NEW YORK (AP) _ Gasoline demand continues to fall in the U.S. as pump prices keep climbing.
Reports from government and industry groups show motorists have been cutting back on the amount of gas they put into their tanks for more than a month. That could signal trouble for the economy since Americans typically cut spending on other activities before they do less driving.
Since January, the national average for a gallon of regular unleaded has risen 91 cents, or 30 percent, to $3.98. The main reason is a 20 percent gain in the price of oil this year. Gas rose more than 30 cents in April alone, as refinery problems led to an unusually big drop in supplies.
Gas is now above $4 per gallon in 13 states and Washington D.C.
Freddie Mac posts first quarterly gain in 2 years
WASHINGTON (AP) _ Freddie Mac reported earning $676 million in the January-March quarter, the first time the bailed-out mortgage giant has posted a quarterly gain in nearly two years.
The government-controlled company requested no additional federal aid after receiving $13 billion over the past four quarters.
CEO Charles Haldeman attributed the net income to cost savings but did not elaborate.
The government rescued McLean, Va.-based Freddie Mac and sibling company Fannie Mae from the brink of failure in September 2008. The government estimates the bailouts will cost taxpayers as much as $259 billion.
Kellogg 1Q net income falls on higher costs
PORTLAND, Ore. (AP) _ Kellogg Co.'s first-quarter net income fell 12 percent as the world's biggest cereal maker dealt with higher ingredient costs and spent more on marketing and new products.
The food maker, like much of the industry, is trying to maintain profitability as costs for ingredients and fuel soar. It has tried to pass on some of the cost increases to its customers.
Kellogg, however, said the quarter doesn't fully reflect the impact of its price increases. The company raised the low end of its full-year revenue outlook on Wednesday, saying it expects to benefit from higher prices and stronger sales.
Ralcorp rejects $4.9B bid from ConAgra Foods
NEW YORK (AP) _ ConAgra Foods Inc. made a $4.9 billion bid for Ralcorp Holdings Inc., which the maker of Post cereal and store-brand products rejected Wednesday.
ConAgra has made two offers to acquire RalCorp in an effort to expand its business into private-label products.
Ralcorp said the $86-per-share bid from ConAgra is not in shareholders' best interests. It followed an $82-per-share offer in March that Ralcorp also refused.
The latest offer is a 3.2 percent premium over Ralcorp's most recent closing stock price of $83.33 but well below what some analysts estimate it could fetch.
Apple updates iPhone to address privacy worries
SAN FRANCISCO (AP) _ Apple is updating the iPhone to reduce the amount of time the device stores information about its users' whereabouts.
The software released Wednesday follows through on Apple's recent promise to revise a feature that logged iPhone users' movements for up to a year. Apple says the location data won't be kept for more than a week after the changes to the iPhone's operating system are installed.
Apple Inc. faced a backlash from privacy watchdogs and some indignant iPhone owners after researchers showed how the surveillance technology could be abused at conference last week.
Apple, the world's most valuable technology company, denied it was spying on iPhone users. But it acknowledged a software bug could cause potential privacy problems, prompting the latest tweaks to the iPhone's operating system
Pepsi to raise its dividend 7 percent
PURCHASE, N.Y. (AP) _ Soft-drink giant PepsiCo Inc. says it is boosting its annual dividend payout by 7 percent, to $2.06 per share from $1.92.
The next quarterly payout, now at 51.5 cents instead of 48 cents, will be paid June 30 to shareholders of record June 3.
Dividends are payouts that companies give to shareholders. When a company raises its dividend, that's usually a sign of cash strength. Pepsi has raised its dividend every spring since at least 1998, according to data compiled by FactSet.
By The Associated Press(equals)
The Dow Jones industrial average fell 83.93 points, or 0.7 percent, to close at 12,723.58 on Wednesday. The Standard & Poor's 500 index fell 9.30 points, or 0.7 percent, to 1,347.32. The Nasdaq composite index fell 13.39, or 0.5 percent, to 2,828.23.
Benchmark crude for June delivery lost $1.81 to settle at $109.24 per barrel on the New York Mercantile Exchange. In London, Brent gave up $1.26 to settle at $121.19 per barrel on the ICE Futures exchange.
In other Nymex trading for June contracts, heating oil lost 4.78 cents to settle at $3.143 per gallon and gasoline futures fell less than a penny to settle at $3.3225 per gallon. Natural gas gave up 9.4 cents to settle at $4.644 per 1,000 cubic feet.