U.S. hiring outlook improves, but economy still weak
WASHINGTON — The outlook for the U.S. job market brightened a little Thursday after the government said fewer people applied for unemployment benefits last week and surveys of private companies showed hiring increased in June.
The economy is still far from healthy. U.S. service companies grew more slowly last month. Retail sales figures were disappointing. And central banks in Europe and China cut their interest rates, an indication that they expect weaker growth ahead.
But despite all the gloom, American factories and service firms kept hiring in June. Economists say that suggests many companies are less worried that the spring slump will endure.
After weak June, retailers to sweat out summer
NEW YORK — Retailers could be sweating it out this summer.
Shoppers, worried about jobs and the economy, pulled back on spending in June, slowing sales for most retailers to the weakest pace since 2009. And that could leave merchants on edge, wondering if Americans will spend more when the back-to-school season starts in late July.
The June results, based on revenue at stores opened at least a year, are considered an indicator of a retailer's health. Only a small group of chain stores report monthly sales figures. But the results offer a snapshot of consumer spending, which accounts for 70 percent of all economic activity.
The figures have shown an uneven recovery. Discounters and high-end stores, for example, notched stronger growth last month. But for most, sales were disappointing.
As U.S. economy steadies, bank closings become rarer
WASHINGTON — Fewer U.S. banks are failing than at any time since the financial crisis erupted in 2008. The healthier banking industry is helping sustain an economy slowed by lackluster hiring, weak manufacturing and Europe's debt crisis.
Banks have benefited from low interest rates, higher account fees and more mergers. The recovery from the financial crisis has helped, too. It means more people and businesses can take out and repay loans.
Banks remain generally cautious about lending. And their rebound has yet to drive a robust economic recovery from the recession that officially ended three years ago. But the banks' gains have allowed them to make gradually more loans and keep the economy from slowing further. Bank loans rose at a 2.1 percent annual rate in the first three months of 2012 and at a 4.6 percent rate since then, according to the latest Federal Reserve data.
European Central Bank cuts rates to new low
FRANKFURT, Germany — The European Central Bank cut its benchmark interest rate to a record low Thursday to spark economic growth but gave little sign it would take further action soon to ease Europe's financial crisis.
By cutting its key refinancing rate by a quarter percentage point to 0.75, a move that was widely expected, the ECB sought to give Europe's sagging economy a lift by making it cheaper for businesses and consumers to borrow.
Financial markets were underwhelmed, though, and even ECB President Mario Draghi conceded during a press conference that the impact of the rate cut could be "muted" given the low demand for credit in the slow economy. Analysts noted that interest rates were already low, that banks remain wary of lending to each other and that businesses and consumers see little reason to take on more debt.
Malware may knock thousands off Internet on Monday
WASHINGTON — Despite repeated alerts, tens of thousands of Americans may still lose their Internet service Monday unless they do a quick check of their computers for malware that could have taken over their machines more than a year ago.
The warnings about the Internet problem have been splashed across Facebook and Google. Internet service providers have sent notices, and the FBI set up a special website.
People whose computers are still infected Monday will lose their ability to go online, and they will have to call their service providers for help deleting the malware and reconnecting to the Internet.
Walgreen plans new acquisition, June sales fall
Walgreen Co. took another step Thursday in its push to grow through acquisitions when it announced the $438 million purchase of a regional chain that operates USA Drug, Super D and May's drugstores.
The Deerfield, Ill., company also said monthly sales fell once again in June, as a split with pharmacy benefits manager Express Scripts Holding Co. continued to hurt business.
Walgreen plans to buy 144 stores in a chain focused on the mid-South. The acquisition will help it expand to smaller communities where USA Drug has developed operational expertise.
China cuts key interest rate for 2nd time in month
BEIJING — China cut its key lending rate Thursday for a second time in one month in a new effort to reverse its deepest economic slump since the 2008 global crisis.
The central bank cut the rate on a one-year loan by 0.31 percentage points to 6 percent. It said banks will be allowed to offer discounts to borrowers of up to 30 percent below that benchmark, an increase from the 20 percent discount previously allowed.
The slowdown in the world's second-largest economy raises the risk of job losses and unrest at a politically awkward time for the ruling Communist Party. It is trying to enforce calm ahead of a once-a-decade handover of power to younger leaders.
Greece's new FinMin: Some reforms off track
ATHENS, Greece — Greece is falling short of some of the commitments it has made in return for billions of euros of rescue money, the country's new finance minister admitted Thursday after meeting representatives of the country's financial rescuers for the first time.
After months of political turmoil that led to a hiatus in the implementation of reforms as Greece struggled through two inconclusive elections, the country's international debt inspectors from the European Central Bank, European Commission and International Monetary Fund have returned to Athens for the first time in over three months to inspect the status of the debt-ridden country's finances.
The new government, led by Prime Minister Antonis Samaras, has said it will seek to persuade the country's rescue creditors to ease some of the strict terms of its bailout.
UK Parliament votes for committee probe of banks
LONDON — British lawmakers voted Thursday to allow a parliamentary committee to investigate the banking industry in the wake of an interest rate manipulation scandal at Barclays, rejecting opposition calls for a lengthier external inquiry led by a judge.
Following a noisy and bitter debate at the House of Commons, legislators voted 330 to 226 in favor of establishing a Parliamentary committee to carry out the study, intended to learn lessons from the rate fixing scandal.
Parliament has been stirred into action by the rate-setting scandal disclosed last week that cost Barclays $435 million in fines and has added fuel to public anger at the banking industry, whose executives face mounting accusations of being overpaid and unethical.
By The Associated Press(equals)
The Dow Jones industrial average fell 47.15 points, or 0.4 percent, to 12,896.67. The Standard & Poor's 500 fell 6.44 points, or 0.5 percent, to 1,367.58. The Nasdaq composite index rose 0.04 point to 2,976.12.
Benchmark U.S. crude lost 44 cents to end the day at $87.22 per barrel in New York — a slight drop following a jump of nearly $10 a barrel in less than a week.
Brent crude, which comes from the North Sea, rose by 93 cents Thursday to end at $100.70 per barrel in London. Brent crude helps set the price for oil imported into the U.S. that is used to make gasoline.
In other futures trading, heating oil added nearly a penny to end at $2.768 per gallon, and wholesale gasoline rose 4.19 cents to finish at $2.7648 per gallon. Natural gas rose by 4.6 cents to finish at $2.9450 per 1,000 cubic feet.