Airlines collected $3.4B in bag fees in 2010
NEW YORK (AP) _ U.S. airlines collected $3.4 billion in bag fees last year. The 24 percent increase from 2009 shows how the airlines are increasingly reliant on charging for once-free services to make money.
The fees _ typically $50 round-trip for the first piece of checked luggage _ are one of the few bright spots for an industry that is caught between rising fuel costs and customers who expect rock-bottom airfares.
"If it weren't for the fees, the airlines would most likely be losing money," said Jim Corridore, airline analyst with Standard & Poor's.
That's little comfort to fliers who've felt nickel-and-dimed by the airlines over the past three years as fees have proliferated, and now face higher airfares and packed planes for travel this summer.
AP survey: Economists warn against more Fed action
WASHINGTON (AP) _ The best cure for the economy now is time. That's the overwhelming opinion of leading economists in a new Associated Press survey. They say the Federal Reserve shouldn't bother trying to stimulate the economy _ and could do damage if it did.
The economists are lowering their forecasts for job creation and economic growth for the rest of this year, mainly because of high oil prices. A batch of bleak data over the past month has suggested that the 2-year-old economic recovery is slowing.
The economists now expect the nation to create 1.9 million jobs this year, about 200,000 fewer than when they were last surveyed eight weeks ago. They expect the unemployment rate, now 9.1 percent, to be 8.7 percent at year's end. Before, they expected 8.4 percent.
Despite their gloomier outlook, 36 of the 38 economists surveyed oppose any further efforts by the Fed to invigorate growth.
AP analysis: States face long slog after recession
At statehouses around the country, the Great Recession is far from over: It could take years for many states to climb out of the hole and return to pre-downturn spending levels.
An Associated Press examination of 50 balance sheets shows state budgets and bank accounts still ravaged by a drop in tax revenue. Many states are also facing enormous long-term pension and health care obligations. At the same time, the payout of stimulus money from Washington that helped many states in their darkest hours has come to an end.
While some states saw a modest jump in tax collections this spring, the combined revenue projected by the 50 states in the coming fiscal year _ $734 billion _ is still down by about $34 billion, or 5 percent, from the 2007-08 fiscal year, when the recession began.
Investors withdraw $3B from stock funds in May
BOSTON (AP) _ Investors last month appeared to follow the adage "Sell in May," interrupting their recent return to the stock market.
They withdrew $2.7 billion more than they deposited into stock mutual funds in May, snapping a four-month string of net deposits that began in January, Strategic Insight said on Monday.
Bond funds and funds buying foreign stocks attracted net deposits, as investors became less confident about the U.S. stock market amid signs that the economic recovery is weakening, the New York-based fund industry consultant said.
Yet investors have put a net $39 billion into U.S. stock funds during the first five months of 2011. That marks a shift in sentiment after investors began withdrawing more than they deposited each month following the stock market meltdown in 2008, while bond funds attracted net deposits. That trend held up long after stock prices began to recover in March 2009.
Corporate buyout deals nudge indexes higher
NEW YORK (AP) _ A round of corporate deals helped the broad stock market eke out only its second day of gains this month.
Wendy's/Arby's Group Inc. rose nearly 1 percent after the company said it would sell control of its Arby's restaurant business to a private equity firm that owns several other quick-service franchises, including Moe's Southwest Grill and Auntie Anne's. And clothing maker VF Corp., whose brands include Wrangler and The North Face, jumped 10 percent after agreeing to buy the boot maker Timberland for more than $2.2 billion.
When big companies use their cash to make an acquisition, it signals a belief that there are values in the market, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
VF buying Timberland for more than $2.2B
NEW YORK (AP) _ Clothing and footwear maker VF Corp., whose brands include Wrangler, Nautica and The North Face, said Monday it will buy boot and clothing maker Timberland Co. for more than $2.2 billion as it seeks to expand its outdoor offerings.
VF plans to make Timberland part of its outdoor and actions sports business, and it said Timberland's headquarters will remain in Stratham, N.H. With the addition of Timberland, VF's outdoor and action sports business, which also includes Vans, Jansport, Eastpak and other brands, will make up 50 percent of the company's total revenue. They expect that to grow to 60 percent by 2015.
VF is offering $43 for each Timberland share, a premium of 43.4 percent to Timberland's closing price last week.
Wendy's agrees to sell Arby's to equity firm
NEW YORK (AP) _ The marriage of square burgers and roast beef sandwiches is about to end.
Wendy's/Arby's Group Inc. said Monday that it will sell a majority stake in its struggling Arby's brand to Roark Capital Group, the Atlanta private equity firm. The move marks the end of a short-lived union between the two fast-food chains, and represents a role reversal. Arby's started as the suitor in the relationship, and ended up on the chopping block.
In an interview with the Associated Press, Wendy's/Arby's Group CEO Roland Smith said that the 2008 combination of the two fast-food chains had "absolutely not" been a failure.
Wendy's/Arby's shares ended trading Monday up 4 cents at $4.56 as investors signaled modest pleasure with having more clarity about the company's future. But the shares remain well below $5.90, their price on the day the combination was announced in September 2008.
Perkins parent files for bankruptcy protection
NEW YORK (AP) _ Restaurant owner Perkins & Marie Callender's Inc. on Monday filed for Chapter 11 bankruptcy protection, brought down by tough competition, the weak economy and rising food costs.
The owner of the Perkins Restaurant & Bakery and the Marie Callender's chains said in the filing it plans to shutter 65 stores and cut 2,500 jobs, or about 20 percent of its workforce of 12,350.
The company cited the weak economic climate, particularly in Florida and California, where many of its restaurants are located, for the bankruptcy filing.
Documents filed with the United States Bankruptcy Court in Delaware indicated the company could not afford to build new restaurants and upgrade existing ones, so it lost traffic to better funded restaurant competitors.
Google strikes deal to add Admeld to arsenal
SAN FRANCISCO (AP) _ Google Inc. has struck a deal to buy Admeld, a service that helps websites make more money from online advertising.
The agreement announced Monday positions Google to add another potentially valuable weapon to its advertising arsenal. Google already sells the most advertising on the Internet. The company's total ad revenue is expected to surpass $30 billion this year _ greater than the entire U.S. newspaper industry.
For that reason, the proposed acquisition of Admeld may face more regulatory scrutiny than most deals of its size do.
Financial terms of the Admeld agreement weren't disclosed, an indication that Google isn't paying a high enough price for the proposed acquisition to be considered a major financial event.
By The Associated Press
The Dow Jones industrial average gained 1.06 points, or less than 0.1 percent, to close at 11,952.97. The Standard and Poor's 500 inched up 0.85 point, less than 0.1 percent, to 1,271.83. The Nasdaq composite lost 4.04, or 0.2 percent, to 2,639.69
All three indexes are down more than 4 percent over the past month because of concerns that the U.S. economy is stalling. Stocks have fallen since late April following dismal reports on the housing market, manufacturing and jobs. On Friday, the Dow fell below 12,000 for the first time since March. The Dow and S&P index last gained on Thursday, following news that U.S. exports hit a record in April.
Benchmark West Texas Intermediate crude dropped $1.99, or 2 percent, to settle at $97.30 per barrel on the New York Mercantile Exchange. Oil is now at its lowest level since May 17.
Brent crude, which is used to price many international oil varieties, rose 32 cents to settle at $119.10 per barrel on the ICE Futures exchange. Brent supplies are expected to tighten because of production problems in the North Sea
In other Nymex trading for July contracts, heating oil was nearly unchanged, settling at $3.1058 per gallon, and gasoline futures dropped 2.09 cents to settle at $2.9968 per gallon. Natural gas lost 11.1 cents to settle at $4.646 per 1,000 cubic feet.