Data suggest US economy growing only modestly
WASHINGTON (AP) — A spate of data Thursday painted a mixed picture of the U.S. economy: Demand for long-lasting manufactured goods fell, and slightly fewer people signed contracts to buy homes. At the same time, the job market looked only a little better.
Taken together, the reports suggest the economy is growing only modestly and not quickly enough to spur much hiring.
Yet a peek beneath the headlines, and a separate report on applications for unemployment aid, suggested that the economy is sturdier than it might appear. The GDP revision was mostly a result of the Midwest drought, and the drop in orders for long-lasting goods was mostly attributable to a plunge in volatile aircraft orders.
Want some taste with that ice cream?
NEW YORK (AP) — Nonfat cheese that tastes like plastic. Low-calorie soda that leaves a bitter aftertaste. Sugar-free brownies that crumble like Styrofoam.
Dieters have learned an important lesson: When you take the fat and calories out of your favorite treats, you sometimes have to say goodbye to the taste, too.
But snack brands like Dreyer's/Edy's ice cream, Hershey's chocolate and Lay's potato chips are trying to solve this age-old dieter's dilemma by rolling out so-mid-calorie goodies that have more fat and calories than the snacks of earlier diet crazes but less than the original versions. They're following the lead of soda companies like Pepsi and Dr Pepper that introduced mid-calorie drinks last year.
Asia's budget airline boom bypasses China
HONG KONG (AP) — When businesswoman Ren Hong flew home after a recent trip to Beijing on state-owned Air China, she was hoping for a decent inflight meal to tide her over until she got back to the spicy cuisine of her native Sichuan province.
The airline's meager offering, which was little more than "just bread," was a galling experience for Ren who wondered why the carrier didn't cut both the pretense of full service and the price of the ticket.
Her gripe highlights how Chinese travelers have been left out of the massive budget airline boom that has swept Asia. From almost none a decade ago, the region now has more than 50 low cost carriers. The rise of budget carriers in Asia follows similar expansion in Europe and North America in previous decades.
But in China, where the government still keeps tight control of the rapidly growing airline industry, three big state-owned carriers dominate. Aviation authorities' efforts to shield them, as well as keep the industry from growing too rapidly and compromising safety, mean travelers like Ren pay up to twice as much.
Public Citizen: State drug fraud cases on the rise
WASHINGTON (AP) — Federal and state prosecutors have collected more than $30 billion from drug companies for alleged fraud and illegal marketing over the last 20 years, according to a new report by consumer advocacy group Public Citizen.
The report shows that state attorneys are increasingly following the lead of federal prosecutors in seeking multimillion-dollar settlements with drugmakers such as GlaxoSmithKline and Eli Lilly & Co. Analysis by Public Citizen found that state governments have collected $3.7 billion from drugmakers since 2009, or roughly six times more money than in the previous 18 years combined.
Overcharging state health plans like Medicaid was the most common allegation, while unapproved drug marketing was the most costly, the group says.
Contracts to buy US homes fell slightly in August
WASHINGTON (AP) — The number of Americans who signed contracts to buy previously occupied homes fell in August from a two-year high in July.
The National Association of Realtors said Thursday that its index of sales agreements dropped 2.6 percent last month to 99.2. In July, the index rose to 101.9. That was the highest level since April 2010, when the market benefited from a federal home-buying tax credit.
A reading of 100 is considered healthy. The index is 10.7 percent higher than it was a year ago. The index bottomed at 75.88 in June 2010 after the tax credit expired.
Rate on 30-year mortgage hits record low 3.40 percent
WASHINGTON (AP) — Average U.S. rates on fixed mortgages fell again to new record lows. The decline suggests the Federal Reserve's stimulus efforts may be having an impact on mortgage rates.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.40 percent. That's down from last week's rate of 3.49 percent, which was the lowest since long-term mortgages began in the 1950s.
The average on the 15-year fixed mortgage, a popular refinancing option, fell to 2.73 percent, down from the record low of 2.77 percent last week.
European carmakers braced for grim future
PARIS (AP) — European carmakers were preparing for a future of labor strife, lower sales and more financial uncertainty as they set out their latest models at the Paris Auto Show on Thursday.
France's Peugeot, Citroen and Renault see the event as a chance to show off their newest cars and prototypes to a hometown crowd, but European executives seemed just as preoccupied with the factories they believe must close to cope with a shrinking market.
The latest data show new passenger car registrations in the European Union dropped 8.9 percent in August, the 11th consecutive monthly decline. And the industry is bloated — there are too many factories to build a dwindling number of cars.
Discover 3Q profit slips, but tops Street view
BOSTON (AP) — Discover Financial Services on Thursday reported a slight earnings decline in its fiscal third quarter, but the result easily beat Wall Street expectations as credit card use increased and more customers paid off their card balances on time.
Those gains helped offset higher expenses, including a legal bill from a settlement with regulators, and shares of Discover rose over 7 percent.
The Riverwoods, Ill.-based company reported net income of $621 million, or $1.21 per share, for the quarter ended Aug. 31, after paying preferred shareholders.
Nike 1st quarter net income falls
BEAVERTON, Ore. (AP) — Nike said Thursday its fiscal first-quarter net income fell 12 percent as higher sales of its clothing and footwear brands were offset by increased costs and ad spending.
Results beat expectations but shares fell 2 percent in aftermarket trading as investors worried about a slowing of futures orders, which indicate future demand.
Nike, like other consumer products makers, is facing high costs for materials and labor, as well as an uncertain economy in Europe and a slowdown in China. The Beaverton, Ore.-based company has raised prices and cut costs in response.
Tempur-Pedic buying Sealy for about $228.6 million
NEW YORK (AP) — Mattress rivals Tempur-Pedic and Sealy are becoming bedfellows.
Tempur-Pedic, the 20-year-old leader in foam mattresses, is buying more-than-a century-old rival Sealy for about $228.6 million in cash.
The acquisition comes as competition has increased in the mattress industry, with makers stepping up their marketing and promotions to help lure cost-conscious consumers into making big purchases.
Campbell closing plants as soup consumption falls
NEW YORK (AP) — Campbell Soup Co. is closing two U.S. plants and cutting more than 700 jobs as it looks to trim costs amid declining consumption of its canned soups.
The world's largest soup maker said Thursday that it will close a plant in Sacramento, Calif., that has about 700 full-time workers. The plant, which makes soups, sauces and beverages, was built in 1947 and is the company's oldest in the country. That also means it has the highest production costs of Campbell's four U.S. soup plants.
Campbell also plans to shutter a spice plant in South Plainfield, N.J. that has 27 employees. Production will be shifted to the company's other spice plant in Milwaukee.
By The Associated Press(equals)
The Dow Jones industrial average climbed 72.46 points, or 0.5 percent, to close at 13,485.97. The Standard & Poor's 500 index, after five days of declines, closed up 13.83 points, or just shy of 1 percent, at 1,447.15. The Nasdaq composite index rose 42.90 points to 3,136.60.
Benchmark oil gained $1.87, or 2.1 percent to finish at $91.85 per barrel in New York. Brent crude, which is used to price international varieties of oil, gained $1.97 to close at $112.01 on the ICE Futures Exchange in London.
Heating oil rose 5.1 cents to close at $3.157 per gallon. Wholesale gasoline gained 6.3 cents to finish at $3.14 per gallon. Natural gas added 8.2 cents to end at $3.297 per 1,000 cubic feet, a high for the year.