Business Highlights
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Median CEO pay rises to $9.7 million in 2012
NEW YORK (AP) — CEO pay has been going in one direction for the past three years: up.
The head of a typical large public company made $9.7 million in 2012, a 6.5 per cent increase from a year earlier that was aided by a rising stock market, according to an analysis by The Associated Press using data from Equilar, an executive pay research firm.
CEO pay, which fell two years straight during the Great Recession but rose 24 per cent in 2010 and 6 per cent in 2011, has never been higher.
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A divided Fed wrestles with when to slow bond buys
WASHINGTON (AP) — The Federal Reserve is torn over when to slow its aggressive efforts to stimulate the economy.
Its uncertainty burst into view Wednesday, when Chairman Ben Bernanke testified to Congress in the morning and the Fed in the afternoon released the minutes of its last policy meeting.
Stock prices gyrated through the day as investors struggled to determine whether the Fed might soon pull back — even gradually — on its extraordinary efforts.
The Fed is buying the bonds to try to ease long-term borrowing costs, encourage borrowing and accelerate growth. And it's said it will maintain its pace of bond purchases until the job market improves substantially.
Economists don't expect the Fed to curtail the bond purchases next month. But Paul Ashworth, chief U.S. economist for Capital Economics, said the September meeting is a real possibility.
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College fossil-fuel divestment movement builds
SWARTHMORE, Pa. (AP) — Student activists at more than 200 colleges are trying a new tactic in hopes of slowing the pace of climate change: They are asking their schools to stop investing in fossil fuel companies.
The Fossil Free campaign argues that if it's wrong to pour pollution into the air and contribute to climate change, it's also wrong to profit from it. The strategy, modeled after anti-apartheid campaigns of the 1980s, aims to limit the flow of capital to fossil fuel companies by making their stocks morally and financially unattractive. In theory, that could lead to a slowdown in how much fossil fuel is burned and indirectly speed investments in renewable energy.
The students say it's hard for colleges and universities to ignore the arguments when scientists are teaching classes about the threats of climate change, and when the core mission of such institutions is to prepare young people for the future.
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US home sales tick up to highest in 3 1/2 years
WASHINGTON (AP) — Sales of previously occupied U.S. homes ticked up last month to the highest level in three and a half years, helped by a jump in the number of houses for sale.
The National Association of Realtors said Wednesday that sales rose to a seasonally adjusted annual rate of 4.97 million, up from 4.94 million in March.
Home sales have risen 9.7 per cent in the past 12 months, evidence that the housing market is still improving. But sales have been roughly flat since November. The supply of available homes remains tight and many potential buyers aren't able to get loans.
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IRS official Lerner: 'I did nothing wrong'
WASHINGTON (AP) — The Internal Revenue Service official at the centre of the storm over the agency's targeting of conservative groups told Congress on Wednesday that she had done nothing wrong in the episode, and then invoked her constitutional right to refuse to answer lawmakers' questions.
In one of the most electric moments since the IRS controversy erupted nearly two weeks ago, Lois Lerner defended herself during a brief appearance before the House Oversight and Government Reform Committee. The committee is investigating the agency's improper targeting of tea party and other conservative groups seeking tax-exempt status from 2010 to 2012, and Lerner oversees the IRS office that processes applications for that designation.
"I have done nothing wrong," said a stern-looking Lerner, sitting next to three other witnesses and reading from a written statement. "I have not broken any laws. I have not violated any IRS rules or regulations and I have not provided false information to this or any other committee."
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US auto factories cutting back on summer downtime
DETROIT (AP) — The Detroit automakers are largely forgoing the traditional two-week summer break at their factories and speeding up production to meet buyers' growing demand for new cars and trucks.
Ford Motor Co. said Wednesday that 21 of its North American factories will shut for only one week this summer. That includes the Chicago plant that makes the Ford Explorer SUV and the Mexican plant that makes the Fusion sedan.
General Motors will idle its factories only for short periods, while Chrysler plans a two-week break at just four of its ten North American assembly plants. Both GM and Chrysler are rolling out critical new models.
The three Detroit carmakers traditionally shut factories for 14 days around July 4 to do maintenance and change the machinery for new models. But they don't have that luxury this year. U.S. demand for new cars and trucks has been strong, up 7 per cent through April, led by soaring demand for full-size pickup trucks as home construction rebounds. And after closing more than two dozen factories during the recession, U.S. automakers need to use their remaining capacity to its fullest.
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HP's slumps deepens in 2Q as earnings fall 32 pct
SAN FRANCISCO (AP) — Hewlett-Packard's slump is deepening as the world's largest personal computer maker scrambles to meet the growing demand for more versatile and less expensive mobile devices.
The latest evidence of Hewlett-Packard Co.'s continuing downfall came in a quarterly earnings report released Wednesday. The results included the seventh consecutive decline in HP's quarterly revenue compared with the same period the previous year. HP's 10 per cent decrease in revenue during the three months ending in April was the largest drop so far during the slump.
Most of the erosion has occurred under the leadership of Meg Whitman, a former CEO at eBay Inc. and defeated California gubernatorial candidate, who was hired to run HP in September 2011. Whitman has repeatedly warned that HP's revenue might not start growing at an acceptable rate for another year or two as she cuts costs, overhauls the company's product line and pushes into more profitable niches in business software, data analysis and storage and technology consulting.
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Lowe's 1Q profit rises, but results miss Street
NEW YORK (AP) — Lowe's said Wednesday that its first-quarter net income rose nearly 3 per cent, but results fell short of expectations as rainy weather hurt spring gardening sales.
The No. 2 home improvement retailer's results stood in contrast to those reported a day earlier by Home Depot. Lowe's larger rival reported an 18 per cent rise in net income, bolstered by the improving housing market. Lowe's was hurt more by the rainy and cool spring.
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Target's 1Q profit drops 29 per cent on weak sales
NEW YORK (AP) — Target Corp. reported a 29 per cent drop in first-quarter profit as unusually cool spring weather and financial pressures chilled customers' appetite for spending.
The company, based in Minneapolis, also on Wednesday cut its annual profit outlook, sending its stock down.
Target is the latest in a string of companies including rival Wal-Mart Stores Inc. that say bad weather and financial pressures like the higher payroll tax have squeezed business in the first couple months of the year.
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Evian giving its water bottle a makeover
NEW YORK (AP) — Evian is giving itself a facelift to keep up with its sleek, young competitors on store shelves.
The water, which is owned by French food and beverage company Danone, is unveiling a new bottle for the first time in 14 years as it looks to reinvigorate its image and win back market share in the premium water category. Instead of the contoured bottle that has long defined the brand, the new look has cleaner lines, reminiscent of the cylinder-like shape of the Smartwater bottle.
Evian's makeover comes at a critical time, given the brand's languishing sales performance in an industry where looks play such a big role.
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By The Associated Press(equals)
The Dow Jones industrial average ended the day down 80.41 points, or 0.5 per cent, to 15,307.17. The Nasdaq composite was down 38.82 points at 3,463.30, or 1 per cent. The Standard and Poor's 500 fell 13.81 points to 1,655.35, a decline of 0.8 per cent.
Benchmark crude for July delivery declined $1.90 to close at $94.28 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for many international oil varieties, dropped $1.31 to $102.60 a barrel on the ICE Futures exchange in London.
Wholesale gasoline fell 3 cents to $2.82 a gallon. Heating oil lost 6 cents to $2.87 a gallon. Natural gas was flat at $4.19 per 1,000 cubic feet.
