The fast-spreadingpain from Spain

June 3, 2012

Spain’s economic crisis deepened, pushing it closer to an international bailout that U.S. and European officials worry could destabilize the global economy. ¶ Spain’s economy minister said the euro’s future will be played out in coming weeks in Italy and Spain, as data showed record levels of capital leaving his country. ¶ Spain is nationalizing the Bankia conglomerate of savings banks. ¶ Euro-area unemployment hit a record 11 percent in April and March. ¶ The euro zone has given hundreds of billions in low-interest bailout loans to Greece, Ireland and Portugal and set up emergency funds.Yet those steps have not extinguished the risk that the currency union may crack apart. European Central Bank President Mario Draghi warned that he considered the structure “unsustainable,” and said the region’s governments must surrender far more budget and regulatory power to a central authority if the currency union is to be saved.

Business

Amazon.com will begin collecting 7 percent sales tax in New Jersey on July 1, 2013, in a deal that could generate $40 million a year in tax revenue for the state, Gov. Chris Christie (R) said.

General Motors, the largest U.S. automaker, said it expects to cut its pension obligation by $26 billion by offering lump-sum payments to about 42,000 retirees and shifting its plans to a unit of Prudential Financial.

British oil giant BP said it is considering selling its 50 percent stake in its Russian joint venture TNK-BP, in a deal that could fetch at least $15 billion. Mikhail Fridman, the CEO of TNK-BP unexpectedly announced his resignation.

Chesapeake Energy said it drilled the largest oil gusher in the company’s 23-year history at a “significant” discovery in the Anadarko Basin of Texas and Oklahoma. The Thurman Horn 406H well in the Hogshooter formation produced 5,400 barrels of crude a day during its first eight days of operation.

Google, which withdrew its search engine from China in 2010 during a row over censorship, started notifying its users in the country — who access a Chinese-language version of the site in Hong Kong — when they type words or phrases that may disrupt connections to its sites.

Dewey & LeBoeuf, the law firm that advised the Los Angeles Dodgers on restructuring, filed for bankruptcy after its chairman was ousted and almost all partners quit as creditors began suing for unpaid bills. The firm listed debt of $245 million and assets of $193 million in a Chapter 11 filing.

Southwest Airlines plans to offer international service out of Houston’s Hobby airport by 2015 with the city council’s adoption of a $100 million plan to expand the airport.

Visa said its card transactions in the United States fell by 3 percent overall in April and the amount Americans rang up on their charge cards remained flat for most of May.

Apple CEO Tim Cook is giving up $75 million in dividends on restricted stock that the company is awarding to all of its employees. In an SEC filing, Apple said Cook requested that his restricted stock units not receive dividends. The shares are not normally eligible to receive dividends, so Apple’s decision is a perk for its employees.

Procter & Gamble, the maker of Tide Pods, will create a new double-latch lid to deter children from accessing and eating the brightly colored detergent packets, the company said.

Google is giving away restaurant ratings compiled by its recently acquired Zagat as part of an expansion of its listings for local businesses. Google bought Zagat for $151 million in September to compete against Yelp’s popular online rating service.

Kayak Software will reportedly delay its initial public offering following Facebook’s post-IPO descent. The online travel service postponed its roadshow for the offering.

Facebook shares slid to $27.21, a new low, as nervous investors fled the company’s stock, concerned about the social network’s long-term business prospects.

Groupon shares retreated to $9.69 on Friday as the largest daily coupon Web site’s lock-up period expired, permitting insiders to sell shares.

Leap Wireless International will offer the iPhone through its Cricket Communications division, becoming the first prepaid carrier in the United States to sell Apple’s smartphone.

SunTrust Mortgage agreed to pay $21 million to settle a federal lawsuit alleging racial discrimination in its lending practices.

A Chicago frequent flier is suing United Airlines for taking away some of his lifetime perks as a Million Miler, someone who has flown at least 1 million miles with the airline. George Lagen says United breached a contract with him when the airline combined its frequent-flier program with that of Continental Airlines after the airlines merged — and lowered his status. “The result is a severe cut in benefits including fewer bonus miles for flights,” the suit says.

Deals

Talbots, the struggling women’s clothing chain, is being taken private by Sycamore Partners for about $193.3 million in cash, an abrupt turnaround after buyout talks appeared to stall last week.

Kellogg completed its $2.7 billion purchase of Pringles from Procter & Gamble. Kellogg chief executive John Bryant said buying Pringles gives the company a “truly global snack platform.”

FedEx said it will buy Rapidao Cometa Logistica e Transportes, a Brazilian transportation company, its third acquisition since rival UPS announced its purchase of TNT Express in Europe this year. The terms were not disclosed.

Economy

Gains in U.S. jobs slowed sharply in May to 69,000, well below the 150,000 projected. The jobless rate rose to 8.2 percent from 8.1 percent. The data fueled concerns about a global slowdown. Treasuries rallied, pushing 30-year bond yields to a record low. U.S. 10-year note yields dropped below 1.5 percent for the first time on the news.

The Dow Jones industrial average wiped out its 2012 advance as American employers added the fewest workers in a year, the unemployment rate rose while manufacturing in the United States, Europe and China disappointed.

Americans’ confidence in the economy suffered the biggest drop in eight months as worries about weak job growth, housing and stock markets rattled them again. The Conference Board said its consumer confidence index stands at 64.9, down from a revised 68.7 in April.

Home prices rose in March in most major U.S. cities for the first time in seven months, according to the Standard & Poor’s/Case-Shiller index.

U.S. taxpayers reporting adjusted gross income exceeding $200,000 who paid no U.S. income taxes increased in 2009 to 0.53 percent from 0.51 percent, meaning that one in 189 high earners avoided taxation, an IRS study found.

Washington

President Obama signed legislation to reauthorize the Export-Import Bank. The bank provides low-interest, government-backed loans to foreign entities that buy American-made goods. Its financing authority was raised to $120 billion and will grow to $140 billion.

John L. “Jack” Hayes, director of the National Weather Service, retired after an investigative report found that senior staff members had misdirected millions of dollars.

Transitions

Brazil’s soccer team beat the United States, 4-1, before 67,619, the largest crowd ever to watch a U.S. match in the Washington area.

An apple-green 1962 Ferrari 250 GTO made for race driver Stirling Moss has become the world’s most expensive car, selling in a private transaction last month for $35 million.

— From news service and staff reports

.google
in race for domain names

The search giant applied for the Internet identifiers “.google,” “.docs” and “.youtube” with the planned expansion of the domain-name system. It has also applied for other domain suffixes that “we think have interesting and creative potential.” The rush for top-level domain names comes amid a controversial decision in 2008 to expand the Web’s suffixes.

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