Update on the latest business

By The Associated Press | Posted - Mar. 3, 2014 at 11:31 a.m.



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WALL STREET-OPEN

Dow Jones industrial average drops 200 points as tensions rise over standoff in Ukraine

NEW YORK (AP) — Global stock markets are down sharply on tensions over Russia's military advance into Ukraine and the threat of sanctions by Western governments.

The Dow has been down more than 200 points this afternoon. The S&P 500 has been 15 to 20 points lower after closing at a record high Friday.

The Nasdaq has been off about 50 points.

Russia's benchmark stock index plunged 12 percent. Stocks were also sharply lower in Europe. Germany's DAX fell the most, 3.4 percent.

Gold and bond prices rose as investors shifted money into safer assets.

The price of crude oil rose 2 percent to $104 a barrel as traders worried about disruptions of Russian oil exports.

CONSUMER SPENDING

US consumer spending up 0.4 percent in January

WASHINGTON (AP) — Americans spent more in January, but the increase came from a surge in spending on heating bills during the harsh winter. Spending in areas such as autos and clothing declined.

Spending rose 0.4 percent in January after a 0.1 percent gain in December the Commerce Department said Monday. The December figure was revised down from a 0.4 percent increase.

Income grew 0.3 percent in January after no increase in December.

The overall spending increase in January reflected a 0.8 percent jump in spending on services, the effect of higher heating bills. It was the biggest increase in spending on services since October 2001.

Spending on durable goods such as autos fell 0.3 percent. And spending on nondurable goods, covering things like clothing and food, dropped 0.7 percent.

The chief economist at Pantheon Macroeconomics, Ian Shepherdson, sums up the report this way: "Spending looks great but is not."

AUTO SALES

GM, Ford, Toyota sales fall, weather blamed

DETROIT (AP) — GM, Ford and Toyota are reporting U.S. sales declines last month, as much of the nation was hit with snowstorms and frigid temperatures.

The country's three top automakers say the month began slowly, but that sales began to recover in the second half. It's a sign that there may not be a broader auto sales slowdown, as had been feared.

Chrysler and Nissan are reporting double-digit gains for the month, but they had to discount some of their key models. Volkswagen, which has been struggling in the United States, reported a 14-percent drop.

Dealer inventories have hit their highest level in five years, putting pressure on companies to clear their lots. To unload the inventory, automakers are offering more discounts. Incentives are the highest they've been in three years.

For February, GM says it sold just over 222,000 cars and trucks, led by the Chevrolet Cruze compact, with sales up almost 22 percent. But sales of the Chevy Silverado pickup fell 112 percent.

Ford sold nearly 184,000 vehicles, but sales of cars fell almost 14 percent. Toyota sales fell 4 percent.

ECONOMY-MANUFACTURING

US manufacturers grow as orders, stockpiles rise

WASHINGTON (AP) — U.S. manufacturing activity expanded more quickly last month as companies received more orders and boosted their stockpiles. But a measure of production fell to its lowest level in nearly five years, likely a casualty of severe winter weather.

The Institute for Supply Management, a group of purchasing managers, says its manufacturing index rose to 53.2 in February from 51.3 in January. The increase only partly reversed a five-point drop in January from December.

Still, any reading above 50 signals growth. A gauge of employment was unchanged, suggesting that factories kept their workforces flat.

The report coincided with data showing that China's manufacturing weakened in February and employers cut staff at the fastest rate in nearly five years. It was further evidence that growth in the world's second-largest economy is cooling.

CONSTRUCTION SPENDING

US construction up tiny 0.1 percent in January with strength coming from housing gain

WASHINGTON (AP) — U.S. construction spending showed a tiny increase in January as strength in housing helped to offset declines in nonresidential building and government projects.

The Commerce Department says construction spending edged up 0.1 percent in January, significantly slower than an upwardly revised 1.5 percent gain in December.

Home building was up 1.1 percent in January with single-family construction rising 2.3 percent and apartment building up 1 percent.

However, there was widespread weakness outside of housing. Non-residential construction fell 0.2 percent and office building was flat, with bad weather likely a factor in the weakness.

Total government construction was down 0.8 percent in January compared with December.

Construction spending totaled $943.1 billion in January at a seasonally adjusted annual rate.

BUFFETT-ECONOMY

Buffett says economy continues to grow steadily

OMAHA, Neb. (AP) — Investor Warren Buffett says the economy continues the steady improvement that began in fall of 2009 and he remains optimistic about the future.

Buffett appeared on the business cable channel CNBC Monday morning after releasing an upbeat annual letter to his Berkshire Hathaway shareholders over the weekend. Buffett is chairman and CEO of the Omaha, Neb., conglomerate.

Buffett says the reports he gets from Berkshire's 80-odd subsidiaries in a variety of industries show that the economy is growing at a moderate rate.

He notes that there's been little change in the growth rate since 2009, despite swings in investors' mood.

But Buffett says he doesn't make investment decisions based on the economy. He says he focuses on the prospects of the business in which he's investing, and the price.

EPA-CLEANER GASOLINE

Obama admin drives ahead with new cleaner gas rule

WASHINGTON (AP) — The Obama administration is moving forward with a dramatic reduction in sulfur in gasoline and tighter emissions standards for cars, arguing the move will eventually save thousands of lives per year.

The oil and gas industry warns the Environmental Protection Agency rules are unnecessary and will drive up gas prices. The rules will also add to the cost of buying a car.

The rules have been in the works for years but are being finalized Monday. They'll start taking effect in 2017. The administration says it has built flexibility in so that refineries and others have time to adapt.

The EPA says gas prices should increase by only less than a penny. But an oil industry study puts the increase at 6 cents to 9 cents a gallon.

SUNKEN PIPELINE FEARS

Sunken Great Lakes oil pipeline raises spill fears

TRAVERSE CITY, Mich. (AP) — Environmental activists and some members of Congress are concerned about two oil pipelines beneath a waterway linking Lakes Michigan and Huron.

The pipes owned by Enbridge Energy Partners cross the bottom of the Straits of Mackinac in northern Michigan, a popular resort area. They're part of a line that carries oil between North Dakota and several Upper Midwestern states.

The lines were laid in 1953. The company says they've never leaked and are safe.

But critics fear they could rupture the same way another of Enbridge's lines did in 2010, spilling 843,000 gallons of crude into the Kalamazoo River in southwestern Michigan.

Enbridge has signed an agreement with Michigan Technological University to conduct sonar inspections of the lines with an underwater robot.

BUFFETT-OIL TRAINS

Buffett says rail tank cars need upgrades for oil

OMAHA, Neb. (AP) — Investor Warren Buffett says it's clear that railroad tank cars carrying crude oil need to be updated because oil from certain regions has the potential to be more dangerous than previously thought.

Buffett appeared on CNBC Monday after releasing his letter to Berkshire Hathaway shareholders Saturday. Buffett owns BNSF railroad and a manufacturer of tank cars.

Buffett says the crude oil from the Bakken oil field in North Dakota and Montana and the Eagle Ford oil field in south Texas has proven more volatile than anticipated.

That volatility may have contributed to several fiery derailments in the past year, including one in Lac-Megantic, Quebec, last summer that killed 47 people.

New safety rules being drafted by federal regulators may not be completed until later this year.

COAL ASH SPILL-NC VIOLATIONS

NC cites 5 Duke Energy plants for lacking storm water permits

RALEIGH, N.C. (AP) — North Carolina regulators have cited five more Duke Energy power plants for lacking required storm water permits after a pipe collapse at one of the company's coal ash dumps caused a massive spill, coating 70 miles of the Dan River in toxic sludge.

The state Department of Environment and Natural Resources said Monday that Charlotte-based Duke had been issued formal notices of violation for not having the needed permits, which are required to legally discharge rainwater draining from its plants into public waterways.

Two other violations were issued Friday against the Dan River Steam Station, site of the Feb. 2 spill. State regulators indicated they had been aware since at least 2011 that some Duke facilities lacked the required storm water permits, yet took no enforcement action until after last month's disaster.

DARDEN-OUTLOOK

Bad weather bites Olive Garden, Red Lobster

ORLANDO, Fla. (AP) — The parent company of Olive Garden and Red Lobster says bad winter weather, along with expenses related to its plan to split off its Red Lobster chain, will hurt its third-quarter net income.

Darden Restaurants Inc., which is based in Orlando, Fla., said Monday that it expects to earn about 82 cents per share for the quarter ended Feb. 23. Analysts, on average, expect a profit of $1.02 per share, according to FactSet.

Darden says the exceptionally rough winter weather reduced earnings in the quarter by about 7 cents per share. Legal, financial advisory and other costs related to the plan to either spin off or sell Red Lobster lowered its profit by 6 cents per share.

In premarket trading Monday, its shares fell $1.33, or 3 percent, to $49.73.

MEN'S WEARHOUSE-JOS A BANK

Men's Wearhouse, Jos A. Bank to exchange info

NEW YORK (AP) — Men's Wearhouse and Jos. A. Bank Clothiers Inc. are moving a bit closer to a possible combination, announcing they are exchanging certain confidential information with each other.

Men's Wearhouse Inc. said Monday that it's also received a draft merger agreement from Jos. A. Bank.

The news comes four days after Jos. A. Bank, based in Hampstead, Md., rejected the latest acquisition bid from Men's Wearhouse. The offer of $63.50 per share was increased from Men's Wearhouse's prior bid of $57.50 per share. The Houston company has said it may raise the bid to $65 per share, if some conditions are met.

Shares of Jos. A. Bank rose 63 cents to $62.72 in premarket trading. Men's Wearhouse's stock was unchanged.

FORBES-BILLIONAIRES

Gates back on top of Forbes' billionaire rankings

NEW YORK (AP) — Microsoft co-founder Bill Gates is back on top of the list of the world's richest people after a four-year hiatus.

Forbes magazine announced its ranking of the world's billionaires Monday.

Gates, who led the list for 15 of the past 20 years, won the spot back from Mexican telecom mogul Carlos Slim Helu, who had topped the list for the past four years. Gates' net worth is estimated at $76 billion; Helu follows at $72 billion.

Spanish clothing magnate Amancio Ortega, known for the Zara retail chain, maintained his third-ranked spot and came out ahead of famed U.S. investor Warren Buffett, who ranked fourth. Larry Ellison of Oracle came in fifth.

Forbes says a record 1,645 billionaires made the list this year, with an average net worth of $4.7 billion.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

The Associated Press

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