US economy shrinks 0.1 percent, 1st time in 3½ years
WASHINGTON (AP) — The U.S. economy unexpectedly shrank from October through December, the first quarterly drop since 2009 and a reminder of the economy's vulnerability as automatic cuts in government spending loom.
The Commerce Department said the economy shrank at an annual rate of 0.1 percent mainly because companies restocked at a slower rate and the government slashed defense spending. Those trends partly reflected uncertainty late last year about the fiscal cliff, which Congress averted in a deal reached Jan. 1.
Economists say those factors could prove temporary, and the likelihood of another recession appears remote. Still, the sharp slowdown from the 3.1 percent annual growth rate in the July-September quarter, also driven by a drop in U.S. exports, raised concerns about 2013.
Fed says growth pause temporary, keeps up stimulus
WASHINGTON (AP) — The Federal Reserve said Wednesday that the U.S. economy "paused" in recent months because of temporary factors and reaffirmed its commitment to try to stimulate growth by keeping borrowing costs low for the foreseeable future.
The Fed took no new action at its two-day policy meeting. But it stood behind aggressive steps it launched in December to try to reduce unemployment, in a statement released after the meeting.
In December, the Fed said it would keep its key short-term interest rate at a record low at least until unemployment falls below 6.5 percent. Unemployment is currently 7.8 percent. And the Fed said it would keep buying $85 billion a month in Treasurys and mortgage bonds to try to keep borrowing costs low and encourage spending.
BlackBerry launches long-awaited comeback campaign
NEW YORK (AP) — A new generation of more versatile BlackBerry smartphones is finally about to hit the market after excruciating delays allowed mobile devices made by Apple, Samsung and others to build commanding leads in a market that is redefining society.
BlackBerry maker Research in Motion Ltd. formally unveiled its long-awaited line-up of revamped smartphones and software Wednesday at simultaneous events held in New York, Toronto, London, Paris, Dubai, Johannesburg, Jakarta and Delhi.
In a move underscoring the stakes riding on its make-or-break product line-up, the Canadian company used the occasion to announce it is changing its name to BlackBerry — a pioneering brand that has lost its cachet since Apple's 2007 release of the iPhone reset expectations for what a smartphone should do.
Boeing sticks to production plans, battery for 787
Boeing is sticking with plans to speed up production of its 787 and sees no reason to change the lithium-ion battery design at the center of the troubled plane's problems, its CEO said Wednesday.
Boeing's full-speed-ahead approach comes even as it became clear that airlines were replacing 787 batteries more often than Boeing had expected. A fire and emergency landing earlier this month, both involving the batteries, prompted regulators to ground Boeing's newest and highest-profile plane.
Airlines have been replacing 787 batteries at a rate that's "slightly higher" than Boeing had expected, CEO Jim McNerney said on Wednesday. None of the replacements have been for safety concerns, he said, and noted that replacing batteries in planes is not uncommon.
Green thumb? Washington state looks for pot consultant
TACOMA, Wash. (AP) — Wanted: A green thumb with extensive knowledge of the black, or at least gray, market.
As Washington state tries to figure out how to regulate its newly legal marijuana, officials are hiring an adviser on all things weed: how it's best grown, dried, tested, labeled, packaged and cooked into brownies.
Sporting a mix of flannel, ponytails and suits, dozens of those angling for the job turned out Wednesday for a forum in Tacoma, several of them from out of state. The Liquor Control Board, the agency charged with developing rules for the marijuana industry, reserved a convention center hall for a state bidding expert to take questions about the position and the hiring process.
GOP lawmakers see automatic cuts as leverage
WASHINGTON (AP) — There's a growing sense of resignation that the county's political leaders will be unable or unwilling to find a way around looming automatic spending cuts despite fresh signs the trims would threaten the recovering economy.
On one side are conservative Republicans, outnumbered and frustrated, who see the painfully large cuts as leverage in their battle to force Democrats into concessions on the budget. On the other side are President Barack Obama and his Democratic allies, who are pressing to replace some of the cuts with new tax revenues.
The predictable deadlock — and looming cuts of $85 billion this budget year alone — has the potential to slam the economy, produce sweeping furloughs and layoffs at federal agencies and threatens hundreds of thousands of private sector jobs.
Chrysler now a rising star among automakers
DETROIT (AP) — In just three years, Chrysler has gone from government ward to rising star.
The No. 3 U.S. automaker made $1.7 billion last year thanks to big gains for its much-improved cars and trucks, and it's expecting profits to reach $2.2 billion this year.
It's a big improvement over 2011, when Chrysler earned $138 million. And it's even more remarkable considering that Chrysler was in bankruptcy and living on taxpayer loans just three years ago.
Toyota recalls 1.29 million vehicles for air bags, wipers
TOKYO (AP) — Toyota is recalling over one million cars around the world for faulty air bags and defective windshield wipers.
The move comes just days after Toyota regained its spot as the world's No. 1 automaker from U.S. rival General Motors Co., with global vehicle sales that climbed to a record 9.748 million vehicles. The company is now recalling 907,000 cars, mostly Corollas, due to air bags that can improperly inflate when the vehicle's electronic signals damage a chip in the part that controls the air bags. It also is recalling 385,000 Lexus IS luxury cars with wipers that can get stuck if there is heavy snowfall.
Initially, the Japanese automaker had said there were no accidents related to either problem, but Toyota Motor Corp. spokesman Naoto Fuse said Wednesday that two crashes were reported in the U.S. related to the air bag problem. Toyota had not been able to confirm them and Fuse said it is unclear whether anyone was injured in the two crashes. Toyota has confirmed 18 cases in the U.S. of abrasion-type injuries from the air bag problem, he said. In total, the automaker has received 46 reports of problems involving the air bags from North America, and one from Japan, and 25 reports of problems related to the windshield wipers.
Next in BP spill saga: civil trial worth billions
NEW ORLEANS (AP) — Now that a $4 billion plea deal has resolved BP's criminal liability for the massive Gulf of Mexico oil spill nearly three years ago, the company will turn its focus to a trial that could potentially cost it billions of dollars more in civil penalties.
At the conclusion of a hearing Tuesday that included emotional testimony and a BP executive's apology, a federal judge agreed to let the London-based oil giant plead guilty to manslaughter charges for the April 2010 deaths of 11 workers on the Deepwater Horizon rig and pay the record amount of criminal penalties.
What the plea deal approved by U.S. District Judge Sarah Vance doesn't resolve, though, is the federal government's civil claims against BP.
Facebook 4Q results surpass expectations
NEW YORK (AP) — Facebook delivered fourth-quarter results above Wall Street's expectations on Wednesday and sought to show that it has finally transformed into a "mobile company."
Its stock price fluctuated sharply in after-hours trading, as investors weighed lower net income and growing expenses against an increasing user base and higher advertising revenue.
Facebook Inc., the world's largest social media company, earned $64 million, or 3 cents per share, in the October-December period. That's down from $360 million, or 14 cents per share, a year earlier when it was still a privately held company.
By The Associated Press(equals)
The Dow Jones industrial average fell 44 points, or 0.3 percent, to close at 13,910.42. The Standard & Poor's 500 fell 6 points, or 0.4 percent, to 1,501.96. The Nasdaq composite fell 11 points to 3,142.31.
Brent crude, used to price international varieties of oil, gained 54 cents to end at $114.90 a barrel on the ICE Futures exchange in London. Oil rose 37 cents to finish at $97.94 per barrel on the New York Mercantile Exchange.
Wholesale gasoline rose 6 cents to $3.03 per gallon. Natural gas rose 8 cents to $3.34 per 1,000 cubic feet. Heating oil was up about a penny at $3.12 a gallon.