Business Highlights

AP News
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Posted: May 06, 2011 6:02 PM
Business Highlights

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Businesses now hiring at fastest pace since 2006

WASHINGTON (AP) _ American companies are on a hiring spree.

Businesses delivered a jolt of strength to the economy by creating 268,000 jobs in April, the biggest monthly total in more than five years. The gains were solid across an array of industries, even beleaguered construction.

It was the third month in a row of at least 200,000 new jobs. The private sector has added jobs for 14 consecutive months. Even a slight rise in the unemployment rate to 9 percent appears to be a quirk.

The job growth was better than economists expected and perhaps the strongest sign yet that what they call a "virtuous cycle" has taken hold: When people spend more, corporate earnings rise, leading to more hiring and then more spending.

Companies have added more than 200,000 jobs for three months in a row.

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AP IMPACT: CEO pay exceeds pre-recession level

NEW YORK (AP) _ In the boardroom, it's as if the Great Recession never happened.

CEOs at the nation's largest companies were paid better last year than they were in 2007, when the economy was booming, the stock market set a record high and unemployment was roughly half what it is today.

The typical pay package for the head of a company in the Standard & Poor's 500 was $9 million in 2010, according to an analysis by The Associated Press using data provided by Equilar, an executive compensation research firm. That was 24 percent higher than a year earlier, reversing two years of declines.

Executives were showered with more pay of all types _ salaries, bonuses, stock, options and perks. The biggest gains came in cash bonuses: Two-thirds of executives got a bigger one than they had in 2009, some more than three times as big.

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Gas price to drop as oil joins commodities plunge

NEW YORK (AP) _ Just shy of $4 a gallon, average U.S. pump prices are about to start falling and could hit $3.50 by summer.

You probably won't see a change at the gas station this weekend. But relief will come soon because oil prices fell 15 percent this week, the steepest decline in two and a half years. Oil hit a two-year high of $114.83 in Monday trading. It closed Friday at $97.18.

The plunge was part of a sharp sell-off across in commodities this week. Analysts say investors _ demonized as "speculators" by some market watchers _ got nervous that oil, metals and grains had risen over the past few months to unrealistic heights.

Their rush to sell knocked silver prices down 28 percent, sugar down 13 percent and natural gas down 10 percent.

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Consumers borrowed more on credit cards in March

WASHINGTON (AP) _ Consumers used their credit cards more in March, marking only the second increase in the more than two years since the height of the financial crisis.

The Federal Reserve said Friday that consumers increased their total borrowing by $6 billion in March, the sixth consecutive monthly gain. Consumers borrowed more to finance car loans for the eighth straight month. And a category of borrowing that includes credit card use rose for only the second time since August 2008.

More frequent credit card purchases could be a sign that consumers are feeling more confident about the economy.

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Warner Music being sold for $1.3B amid music drop

LOS ANGELES (AP) _ Warner Music Group Corp., the world's third-largest recording company with such artists as Eric Clapton, Michael Buble and Paramore, is being sold for about $1.3 billion as a global decline in CD sales weighs down the industry.

Len Blavatnik's Access Industries is paying $8.25 a share and will take on about $2 billion in Warner debt and $320 million in cash. The total values the company at about $3 billion.

The deal, announced by the companies Friday, comes as U.S. recorded music sales are half what they were about a decade ago. Gains in digital sales have started to flatten, and CD sales continue to fall.

That means Blavatnik will have to cut staff and other expenses further and hope that a new wave of innovation will carry digital music sales higher.

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Fannie Mae reports $8.69 billion loss for Q1

WASHINGTON (AP) _ Mortgage buyer Fannie Mae reported a loss of $8.7 billion for the January-March quarter, and asked for an additional $8.5 billion in federal aid.

The new request is more than three times the $2.6 billion in government aid it sought in the final three months of last year.

The loss was caused by declining home prices around the country, Fannie Mae said. It said prices declined on average 1.8 percent, leading more homeowners to default on loans that the mortgage giant had guaranteed.

The government rescued Fannie Mae and sibling company Freddie Mac in September 2008 to cover their losses on soured mortgage loans. It estimates the bailouts will cost taxpayers about $259 billion.

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Berkshire Hathaway's 1Q profit down 58 percent

LOS ANGELES (AP) _ Warren Buffett's Berkshire Hathaway Inc. says its first-quarter profit tumbled 58 percent from a year ago due to insurance losses from major disasters in Japan, Australia and the U.S.

Berkshire reported net income of $1.5 billion, or $917 per Class A share, for the three months ended March 31. That's down from net income of $3.6 billion, or $2,272 per Class A share, a year ago.

Revenue rose to $33.7 billion, up from $32 billion last year.

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Greece denies report it's seeking to leave euro

ATHENS, Greece (AP) _ Finance ministers from several European countries met Friday amid concerns over Greece and Portugal, as Greek and other European Union officials vehemently denied a German online magazine report that Athens was considering leaving the eurozone.

The Greek Finance Ministry categorically rejected the report by Spiegel Online, which said Athens was considering withdrawing from the EU's joint currency. The report, which sent the euro tumbling, added that the eurozone's finance ministers were holding a secret crisis meeting in Luxembourg Friday night to discuss the issue.

The euro tumbled to $1.4470 from $1.4530 late Thursday. It had traded at $1.4942 on Wednesday, its highest level since December 2009.

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Sony CEO apologizes for massive data breach

TOKYO (AP) _ Sony Corp. Chief Executive Howard Stringer apologized for "inconvenience and concern" caused by the security breach that compromised personal data from more than 100 million online gaming accounts.

In a blog post late Thursday, the head of the Japanese technology giant sought to reassure customers, saying the company is focused on investigating and fixing the hacker attack.

Stringer said there is "no confirmed evidence" that stolen information has been misused.

He acknowledged criticism that Sony was slow to inform customers of the embarrassing breach, calling the issue a "fair question." As soon as the company discovered the potential scope of the problem, it suspended the network and hired technical experts to help, he said.

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By The Associated Press(equals)

The Dow Jones industrial average gained 54.57 points, or 0.4 percent, to close at 12,638.74. The Standard & Poor's 500 index rose 5.10, or 0.4 percent, to 1,340.20. The Nasdaq composite rose 12.84, or 0.5 percent, to 2,827.56.

Benchmark West Texas Intermediate for June delivery fell $2.62 to $97.18 per barrel on the New York Mercantile Exchange. In London, Brent crude dropped $1.67 at $109.13 per barrel on the ICE Futures exchange.

In other Nymex trading for June contracts, heating oil fell 4.12 cents at $2.8457 per gallon and gasoline futures dipped 0.53 cent to $3.0901 per gallon. Natural gas dropped 3.4 cents to $4.297 per 1,000 cubic feet.