The productivity of America's workers in the opening quarter of 2004 grew at a brisk 3.8 percent annual rate, faster than previously thought, the Labor Department reported. It marked the best showing since the third quarter of 2003. Unit labor costs, meanwhile, rose at a 0.8 percent pace in the first quarter, following a 1.7 percent rate of increase in the fourth quarter. Unit labor costs is a measure of how much companies pay workers for every unit of output they produce. The recent rise in these costs, should they continue, could put pressure on companies' profit margins, analysts say. Separately, the Labor Department said initial claims for unemployment benefits fell last week by a seasonally adjusted 6,000, to 339,000, and the Commerce Department said orders to U.S. factories fell 1.7 percent in April.
Ford Hit With $368.6 Million Verdict
Ford must pay $246 million in punitive damages, as well as $122.6 million in actual damages, to a California woman who was paralyzed when her Explorer sport-utility vehicle rolled over, a jury in San Diego ruled. The total judgment is the second-largest ever against an automaker, according to Bloomberg data. The woman said that the Explorer's design made it prone to roll over during common evasive maneuvers and that the roof didn't protect her.
Time Warner settled lawsuits filed by America Online and CompuServe subscribers who complained that they couldn't stop getting billed after they canceled service. Terms of the settlement weren't disclosed. Subscribers will receive a refund for the number of months they were billed after they tried to end their service, said Seth Lesser, an attorney representing the customers. The company admits no liability.
Retailers reported upbeat same-store sales results in May, among them Wal-Mart Stores (up 5.9 percent), Costco Wholesale (16 percent), Limited Brands (3 percent), Nordstrom (9.4 percent), Federated Department Stores (2.9 percent) and Talbots (8.1 percent). The major exception was Sears, Roebuck, which reported a larger-than-expected decline of 3.7 percent.
Viacom has no plans to sell its Infinity radio unit because it contributes about $1 billion in operating profit annually to the third-biggest U.S. media company, said Leslie Moonves, Viacom co-president. The company may seek to sell one or two lagging stations out of Infinity's 183 stations, Moonves said. Moonves was promoted to co-president of Viacom on Tuesday after Mel Karmazin, who ran Infinity when it was an independent company, resigned as president.
Former Symbol Technologies executives, including former president Tomo Razmilovic, chief financial officer Kenneth Jaeggi and five others, were charged with securities fraud for allegedly inflating profit by more than $200 million. Five former managers have already pleaded guilty to conspiracy charges. The company, a leading maker of bar-code scanners and wireless networks, has agreed to pay $139 million in fines and restitution, including $37 million to settle a Securities and Exchange Commission case alleging a pattern of fraud between 1998 and 2003.
Halliburton said the Army Corps of Engineers withheld payment of $17 million from it in the second quarter in connection with the company's contract to revive Iraqi oil production. Payment will be delayed until the company can provide a revised estimate of total costs for work it was assigned by the government, Halliburton said in a filing with the Securities and Exchange Commission. Halliburton also said the amount being withheld by the Pentagon related to food service in Iraq has increased to $172 million from $159.5 million two weeks ago. The company said it continues to bill the government for work in Iraq and cooperate with auditors to reconcile differences between the number of meals ordered for soldiers and civilian workers and the actual number served.
Treasury Secretary John W. Snow said time is running out for Congress to boost the government's statutory borrowing limit. The Treasury predicted last month that it would reach the $7.384 trillion ceiling between August and October. Congress must approve any increase. Since President Bush took office in January 2001, the ceiling has been lifted a combined $1.4 trillion.
Gasoline futures trading in May reached a record for any month, according to the New York Mercantile Exchange. Oil refiners, speculators and other traders bought and sold about 1.2 million contracts during the month. Each contract specifies the delivery of 42,000 gallons of gasoline. The previous high was 1.105 million contracts in October 2002, exchange spokeswoman Nachamah Jacobovits said.
Microsoft chief executive Steven A. Ballmer will assume oversight of the small-business software unit, the only division that didn't exceed revenue forecasts last quarter. Ballmer has in the past stepped in to run ailing units, including the wireless-software division and MSN.
The Children's Place Retail Stores said it is in discussions to buy and operate Walt Disney Co.'s retail store chain in the United States and Canada. Children's Place said the companies haven't entered a formal agreement or letters of intent.
An eighth former HealthSouth executive escaped prison time, receiving two years of probation and a $5,000 fine, as a judge rejected government claims that her actions in falsifying a stock sale resulted in $27 million in losses. The defense contended that Catherine Fowler's actions were an insignificant part of a broader fraud, which has been estimated at $3.4 billion, and didn't result in losses to anyone. Fowler has agreed to testify against fired HealthSouth chief executive Richard M. Scrushy.
A former Home Depot subcontractor claims in a lawsuit that he was fired after telling the company's general counsel in August 2001 that he and other subcontractors were being overpaid, usually by $20 a job but sometimes by as much as 20 percent over the actual cost, for window and kitchen installations. Home Depot called subcontractor Raymond L. Hammond's lawsuit "patently frivolous."
Insurance for an average U.S. home will probably rise 2.8 percent this year, the smallest increase in five years, as insurance companies become more profitable and competition intensifies, the Insurance Information Institute said. Homeowners will probably pay an average of $608 to insure their property, compared with $591 last year, the group said.
Cendant, the largest U.S. travel and real estate services company, plans to sell its entire stake in Jackson Hewitt Tax Service in an initial public stock offering that may raise as much as $750 million.
The Commerce Department said it will cut duties on $4.6 billion in Canadian lumber imports to as low as 13 percent from about 27 percent. The new rates, a preliminary step due to take effect by the end of the year, could lead to refunds on tariffs collected over the past two years on imported Canadian lumber. A series of rulings against the United States by the World Trade Organization and panels set up by the North American Free Trade Agreement forced the United States to recalculate its duties.
Mortgage rates dipped this week. Rates on benchmark 30-year, fixed-rate mortgages declined to 6.28 percent, down from 6.32 percent last week, but up from 5.26 percent a year ago, Freddie Mac said. Rates for 15-year, fixed-rate mortgages fell to 5.63 percent, compared with 5.69 percent last week and 4.66 percent a year ago.
Four Democratic lawmakers asked Homeland Security Secretary Tom Ridge to reconsider awarding a border security systems contract worth as much as $10 billion to a group led by Accenture, which is based in the tax haven of Bermuda. Reps. Rosa L. DeLauro (Conn.), Lloyd Doggett (Texas), Louise M. Slaughter (N.Y.) and Marion Berry (Ark.) said in a letter that Accenture's tax status helped its group beat out offers by U.S.-based companies, including Computer Sciences Corp. and Lockheed Martin. Accenture spokeswoman Roxanne Taylor said the company, which pays U.S. taxes on income from its U.S. operations, is being unfairly targeted.
Hyatt and T-Mobile announced a deal to put Wi-Fi Internet access in nearly all of Hyatt's 200-plus hotels and resorts by 2005. Wi-Fi will be available in the lobby and select guest rooms at most Hyatt hotels by the end of 2004, officials for the Chicago-based hotel company said. Guests who aren't already subscribers to T-Mobile's Wi-Fi service can expect to pay $9.99 a day.
Marks & Spencer Group, Britain's largest clothing retailer, rejected a proposed takeover offer from Philip Green, the billionaire owner of British fashion chains including Top Shop and Dorothy Perkins. Green, 52, offered roughly $12.8 billion in cash and a 25 percent stake in Revival Acquisitions, a company formed to make the bid. Stuart Rose, who was appointed chief executive of London-based Marks & Spencer on Monday, said on a conference call that the proposal is "not worthy of consideration."
Argentina's biggest creditor group threatened to block the government's latest proposal to restructure about $100 billion of defaulted debt, saying a rebounding economy is giving the government enough revenue to improve its offer. Nicola Stock, co-chairman of the Global Committee of Argentina Bondholders, said the group would seek support from other investors to get the 50 percent of bondholders needed to halt an agreement. The committee represents 44 percent of holders, Stock said.
The European Central Bank kept interest rates unchanged at 2 percent for a 12th straight month, sticking to its watch-and-wait stance as it sizes up uncertain prospects for growth and the impact of higher oil prices on the economy.
General Dynamics, a Falls Church-based defense contractor, said it extended the employment contract of chairman and chief executive Nicholas Chabraja through April 2008. The previous agreement with Chabraja, 61, would have ended on Dec. 31, 2005.
The Freddie Mac Foundation, the philanthropic arm of the big mortgage-buyer, said it appointed Freddie Mac chief executive Richard F. Syron as the charity's chairman.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.