Business Highlights

AP News
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Posted: May 27, 2011 5:42 PM
Business Highlights

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Gas tanks are draining family budgets

NEW YORK (AP) _ There's less money this summer for hotel rooms, surfboards and bathing suits. It's all going into the gas tank.

High prices at the pump are putting a squeeze on the family budget as the traditional summer driving season begins. For every $10 the typical household earns before taxes, almost a full dollar now goes toward gas, a 40 percent bigger bite than normal.

Households spent an average of $369 on gas last month. In April 2009, they spent just $201. Families now spend more filling up than they spend on cars, clothes or recreation. Last year, they spent less on gasoline than each of those things.

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April consumer spending shows weak gain

WASHINGTON (AP) _ Consumers spent more in April but much of the increase was eaten up by higher food and energy prices. After discounting for the jump in prices, spending barely budged and after-tax incomes were flat for a second straight month.

Consumer spending rose 0.4 percent, reflecting a surge in the category that covers food and gasoline, areas which showed big price gains last month, the Commerce Department reported Friday. Excluding price changes, spending rose a much smaller 0.1 percent.

Incomes rose 0.4 percent but after-tax incomes adjusted for inflation were flat for a second straight month.

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Natural disasters probably won't bruise US economy

WASHINGTON (AP) _ The tornadoes and floods that have devastated parts of the South and Midwest have also hammered the local economies _ flooding farmlands, suspending factory work and disrupting energy production.

Yet for the U.S. economy overall, the damage will likely be scant. At most, the disasters might knock one-tenth of 1 percentage point off national economic growth in the April-June quarter, Wells Fargo economist Mark Vitner estimates.

"It's so small, you aren't going to notice it," said Patrick Newport, an economist at IHS Global Insight.

Others caution, though, that the tornado season hasn't ended yet, and the hurricane season has yet to arrive. Further major disasters could begin to weigh on the U.S. economy.

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Contracts to buy homes fall to a 7-month low

WASHINGTON (AP) _ The number of people who signed contracts to buy homes fell sharply in April, hitting its lowest point since fall and renewing fears that a recovery in the housing market is far off.

An index of sales agreements for previously occupied homes sank 11.6 percent last month to a reading of 81.9, the National Association of Realtors said Friday. A reading of 100 would be considered healthy.

The last time the index reached at least 100 was in April 2010. That was the final month when people could qualify for a home-buying tax credit of up to $8,000.

Signings are still nearly 8 percent above June's reading of 75.9, the lowest figure since the housing bust.

Contract signings are considered a reliable indicator of the housing market's direction. That's because there's usually a one- to two-month lag between a sales contract and a completed deal.

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Greek leaders fail to agree on austerity measures

ATHENS, Greece (AP) _ The European Union's top finance official urged political leaders in debt-ridden Greece to quickly agree on further austerity measures, but a new government bid to reach a consensus on that issue failed Friday.

EU Monetary Affairs Commissioner Olli Rehn said cross-party talks in Athens must continue, despite the main opposition conservatives' refusal to endorse more cutbacks.

The commissioner's warning came after Greek conservative leader Antonis Samaras refused to bend to EU pressure after a three-hour crisis meeting involving the heads of all Greece's major political parties.

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G-8: Nations, banks to give $40B for Arab Spring

DEAUVILLE, France (AP) _ Rich countries and international lenders are aiming to provide $40 billion in funding for Arab nations trying to establish true democracies, officials said at a Group of Eight summit Friday.

Officials didn't fully detail the sources of the money, or how it would be used, but the thrust was clearly to underpin democracy in Egypt and Tunisia _ where huge public uprisings ousted autocratic regimes this year _ and put pressure on repressive rulers in Syria and Libya.

The overall message from President Barack Obama and the other G-8 leaders meeting in this Normandy resort appeared to be warning autocratic regimes in the Arab world that they will be shut out of rich-country aid and investment, while new democracies are encouraged to open their economies.

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Google, PayPal tussle over mobile payment secrets

SAN FRANCISCO (AP) _ Google Inc.'s ambitious plan to supplant credit cards with smartphones has thrust the Internet search leader into a legal tussle with online payment pioneer PayPal, which contends Google stole its ideas by hiring away two key executives.

PayPal painted a picture of betrayal and corporate espionage in a lawsuit filed late Thursday in a California state court, just hours after the unveiling of the "Google Wallet" payment service in New York.

The 28-page complaint alleges the service evolved from research that eBay Inc.'s PayPal had been working on for the past decade.

PayPal fingers two central culprits in the intellectual heist _ one of its former executives, Osama Bedier, and former eBay executive Stephanie Tilenius.

In its response Friday, Google contends it merely identified talented candidates to run its mobile payments service and then made them offers that proved too tempting to refuse.

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Skype says some users had problems signing in

NEW YORK (AP) _ Internet phone service Skype says a small percentage of its 170 million users have been unable to sign in to its service, a problem that it expects to fix with a software update.

Skype said on its website the trouble stemmed from corrupted data affecting computers using Windows, Linux or Macintosh operating systems.

The company, which is based in Luxembourg, said it released a new version of Skype for Windows late Thursday to deal with issue. On Friday, it released a version for Mac. Linux users were told to delete a file manually.

Skype said individuals using its service on cellphones, televisions or other non-computer devices were unaffected.

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By The Associated Press(equals)

The Dow Jones industrial average rose 38.82 points, or 0.3 percent, to 12,441.58. The Standard & Poor's 500 index rose 5.41 points, or 0.4 percent, to 1,331.10. The Nasdaq composite rose 13.94 points, or 0.5 percent, to 2,796.86.

Benchmark crude for July delivery added 36 cents to settle at $100.59 per barrel on the New York Mercantile Exchange. In London, Brent crude fell 2 cents to $115.03 per barrel on the ICE Futures Exchange.

In other Nymex trading, heating oil for June delivery added nearly a penny to settle at $3.0014 per gallon and gasoline futures for June delivery increased 2.39 cents to settle at $3.0313 per gallon. Natural gas for July delivery increased 15.8 cents to settle at $4.518 per 1,000 cubic feet.