Business Highlights

AP News
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Posted: Jun 03, 2011 6:02 PM
Business Highlights

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Few jobs added in May; unemployment up to 9.1 percent

WASHINGTON (AP) _ Employers in May added the fewest jobs in eight months, and the unemployment rate inched up to 9.1 percent. The weakening job market raised concerns about an economy hampered by high gas prices and the effects of natural disasters here and abroad.

The key question is whether the meager 54,000 jobs added last month mark a temporary setback or are evidence of a more chronic problem. That total is far lower than the previous three months' average of 220,000 new jobs per month.

Private companies hired only 83,000 new workers in May _ the fewest in nearly a year.

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Stocks post fifth straight week of losses

Evidence is piling up that the economic recovery has lost some of its vigor. That has deflated a stock market rally and pushed indexes down for five straight weeks, the longest losing streak since mid-2008.

So, what's next? Don't hold out hope for more help from the government, analysts say. Another round of stimulus spending isn't in the cards; the Fed has already slashed interest rates near zero and has said it will end its bond-buying program on schedule at the end of this month.

With high gas prices crimping consumer spending and companies still reluctant to hire, investors may have to settle for a stock market and an economic recovery that plod slowly along.

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Trade group says US service sector grew in May

WASHINGTON (AP) _ The U.S. economy's service sector, which employs 90 percent of the nation's work force, grew in May for an 18th straight month, posting slightly faster growth than in April.

The Institute for Supply Management said Friday its index tracking the health of service companies increased to 54.6 in May compared from 52.8 in April.

In February, the index hit a five-year high with a reading of 59.7, but it fell in March and April as the service sector was battered by the sharp jump in energy prices. Any reading over 50 indicates expansion in the service sector.

Analysts said while the rise in May was welcome, it still showed the economy facing significant headwinds. The Labor Department reported Friday that the unemployment rate rose to 9.1 percent in May as payroll growth slowed to 54,000 jobs, the slowest in eight months.

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Obama: US economy still facing challenges

TOLEDO, Ohio (AP) _ Faced with a dismal new jobs report, President Barack Obama said Friday that the economy faces challenges ahead and "bumps on the road to recovery." But at an event to celebrate the resurgence of the auto industry he made no mention of the dour economic news that threatened to obscure his optimistic message.

Obama's visit to a Chrysler plant in politically important Ohio came after the Bureau of Labor Statistics reported that employers in May added the fewest jobs in eight months _ a meager 54,000 _ and the unemployment rate inched up to 9.1 percent.

Normally Obama talks about the monthly jobs numbers the day they're released, but he never mentioned them directly Friday _ an omission immediately noted by Republicans who see the economy as Obama's greatest weakness heading into the 2012 campaign.

The president focused instead on the turnaround in the auto industry and how the government has recouped much more money than anticipated from the capital it sunk into Chrysler and General Motors two years ago to save them from collapse.

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Wal-Mart announces $15 billion buyback

FAYETTEVILLE, Ark. (AP) _ Wal-Mart Stores Inc. unveiled a $15 billion share buyback program Friday as it sought to reassure shareholders at its annual meeting that the world's largest retailer is still growing.

The buyback will replace a previous $15 billion repurchase plan begun a year ago. The company bought back 244 million shares worth $12.9 billion under that program.

The news comes after the company increased in March its dividend in its current 2012 fiscal year from $1.21 to $1.46 per share, an increase of 21 percent that returned $1.3 billion to shareholders.

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Greece recommended for next batch of bailout

ATHENS, Greece (AP) _ Greece is poised to receive the next installment of its bailout facility, and will likely get further rescue loans to prevent it from defaulting on its massive debts, European officials said Friday.

Debt inspectors from the European Union and the International Monetary Fund said Greece should receive the next 12 billion euro tranche of its existing 110 billion euro bailout as long as additional austerity and privatization measures are deemed sufficient. Greece also had to accept unprecedented outside interference in the way it runs its government services.

As the international debt inspectors concluded the near month-long mission in Athens, Jean-Claude Juncker, who chairs the group of 17 eurozone finance ministers, said he expected Greece to get additional help, on top of the existing rescue loans, as long as it fulfills its promises.

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Spotlight falls on Sony's troubled cybersecurity

LONDON (AP) _ Another massive data breach at Sony has left hackers exulting, customers steaming and security experts questioning why basic fixes haven't been made to the company's stricken cybersecurity program.

Hackers say they managed to steal a massive trove of personal information from Sony Pictures' website using a basic technique which they claim shows how poorly the company guards its users' secrets. Security experts agreed Friday, saying that the company's security was bypassed by a well-known attack method in which rogue commands are used to extract sensitive data from poorly constructed websites.

"Any website worth its salt these days should be built to withstand such attacks," said Graham Cluley, of Web security firm Sophos. Coming on the heels of a massive security breach that compromised more than 100 million user accounts associated with Sony's PlayStation and online entertainment networks, Cluley said the latest attack suggested that hackers were lining up to give the company a kicking.

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By The Associated Press(equals)

A weak employment report spurred another stock sell-off Friday, two days after the Dow Jones industrial average had its worst drop in nearly a year. The Dow lost 97.29 points, or 0.8 percent, to close at 12,151.26.

The Standard & Poor's 500 index fell 12.78, or 1 percent, to 1,300.16. The Nasdaq composite fell 40.53, or 1.5 percent, to 2,732.78. Each index lost 2.3 percent for the week.

Despite a gloomy unemployment report, benchmark West Texas Intermediate crude on Friday settled just about where it began the day: down 18 cents at $100.22 per barrel. Oil has hovered around the $100 mark since early May.

In other Nymex trading for July contracts, heating oil added 1.28 cents to settle at $3.0567 per gallon and gasoline futures added 2.54 cents to settle at $2.9931 per gallon. Natural gas dropped 8.7 cents to settle at $4.707 per 1,000 cubic feet.

In London, Brent crude gained 30 cents to settle at $115.84 per barrel on the ICE Futures exchange.