The service sector's expansion slowed in June, though hiring and orders for new goods increased, according to the Institute for Supply Management's non-manufacturing index. The reading for June fell to 59.9 after hitting 65.2 in May and 68.4 in April. The index includes mostly service-related businesses, which account for the majority of overall U.S. economic activity.
Bank Accused of Helping Terrorists
The widow of a U.S. security guard killed by a roadside bomb in the Gaza Strip accused Arab Bank of laundering money to aid Palestinian suicide bombers as she sued it for $875 million. Courtney Linde and five other families are suing the Amman, Jordan-based lender in federal court in New York. The bank, which is the fourth-largest Arab lender by assets and has had an office in New York since 1983, denies wrongdoing.
Microsoft needs to avoid "big company ills" if it wants to beat competitors and boost its long-stagnant stock price, chief executive Steven A. Ballmer told employees in an annual memo. In the memo, which lays out the company's goals for its fiscal year that began July 1, Ballmer wrote that avoiding the pitfalls of corporate size involves more than building innovative products. The company also must make sure it isn't losing touch with -- or the faith of -- its customers, he wrote. In an interview with the Associated Press, Ballmer said Microsoft cannot be run like the start-up it once was. But, he said, "we have to avoid becoming a certain kind of big, process-bound bureaucracy."
The General Services Administration, citing "concerns about the way the contract was being used," confirmed that it will not renew Titan's contract to provide up to $250 million worth of counseling services for U.S. soldiers and their families. Titan's contract, paid for initially out of emergency funds appropriated by Congress for the war in Iraq, was good for one year, with an option for four more years. But the GSA cited concerns raised by its inspector general in an audit of the Titan contract in saying it would let the contract lapse next month. The San Diego-based defense contractor is also under investigation for allegedly bribing overseas officials, which led Lockheed Martin to pull out of a deal to buy Titan for $1.66 billion last month.
Tyco International's former top lawyer, Mark A. Belnick, is on trial as a scapegoat for others' failings, he earned the millions of dollars Tyco paid him, and prosecutors have yet to prove he committed a single crime, Belnick's defense lawyer, Reid H. Weingarten, said at trial. Prosecutors contend that Belnick committed grand larceny -- a crime punishable with up to 25 years in prison -- when he accepted an illegally awarded bonus of $17 million in cash and stock from Tyco's former chief executive officer, L. Dennis Kozlowski.
LaGuardia Airport in New York must extend limits on the number of flights it can handle for another year, regulators said. The cuts are meant to prevent delays from rippling through the air-traffic system, the Federal Aviation Administration said. A 10 percent cut in takeoffs and landings at LaGuardia began in 2001 and will continue until October 2005, the FAA said.
T-bill rates fell. The Treasury Department sold $18 billion of three-month bills at a 1.320 percent discount rate, down from 1.355 percent last week, and $16 billion of six-month bills at 1.630 percent, down from 1.725 percent. The new rates understate the actual return to investors -- 1.344 percent for three-month bills with a $10,000 bill selling for $9,966.60 and 1.666 percent for a six-month bill selling for $9,917.60.
Anthem's $17 billion purchase of California-based WellPoint Health Network will not be approved by California Insurance Commissioner John Garamendi unless the combined company pays as much as $600 million for health-care programs. Garamendi said he wants Anthem to pay as much for California programs providing health care to the poor as it will to WellPoint executives who will, he estimates, collect payouts of $200 million and $600 million under the agreement. The acquisition was approved by shareholders of both companies last month and has won regulatory approval in every state except California. The combined company would surpass UnitedHealth Group as the largest U.S. health insurer.
Comcast promoted cable unit president Stephen B. Burke to chief operating officer, expanding his responsibilities to include running the company's E! Entertainment Television and Outdoor Life television networks. He was president of Walt Disney Co.'s ABC broadcast network before coming to the Philadelphia cable television operator in 1998.
Delta Air Lines is preparing to ask its pilots for more concessions in wages, benefits and other areas, as the airline works to avoid bankruptcy. About 300 Delta pilots retired in June, and 250 to 280 retired in September. The Atlanta-based airline had already previously asked its pilots to take a 30 percent wage reduction and forgo a 4.5 percent raise they received in May to achieve $850 million in annual savings. Delta and its pilots union are preparing new wage concession proposals and are expected to submit them in the next few weeks.
ABB units were fined $10.5 million after pleading guilty to bribing Nigerian officials to win contracts for oil exploration, the Justice Department said. ABB Vetco Gray and ABB Vetco Gray UK pleaded guilty in federal court in Houston. The fines will also partially resolve a civil complaint against ABB by the Securities and Exchange Commission.
Journal Register, which owns 23 daily newspapers including the New Haven Register in Connecticut, is buying 21st Century Newspapers -- owner of four daily newspapers in Michigan and 87 non-daily publications -- for $415 million in cash. After the deal is closed later this year, Trenton, N.J.-based Journal Register will own 27 dailies and 327 non-daily publications.
Guta Bank, one of Russia's largest banks, suspended operations, telling customers in notes left on doors of branches that it could not make payments from checking or savings accounts. The St. Petersburg branch shut down its automated teller machines and suspended client services indefinitely, the news agency Interfax reported. Guta's closing could indicate that a liquidity crisis that has troubled the country's smaller banks is spreading to larger banks.
Total shut down oil and gas production in Nigeria in the face of a threatened labor strike that raised management fears that there could be violence. Elf Nigeria, a subsidiary of the Franco-Belgian multi-national oil company, stopped production of the 235,000 barrels of oil and 187 million cubic feet of natural gas it normally produces each day. The shutdown accounts for roughly 10 percent of Nigeria's 2.5 million barrels of daily oil production.
Dell computers running a version of the open-source Linux operating system will be sold online in Europe by Questar of Milan. The Optiplex desktops, starting around $575, will come with Lindows' Linspire operating system in English or Italian and will include Dell technical support.
The United States has resumed sharing financial information with Mexico with the aim of trying to catch money launderers, drug dealers and terrorist financiers. Such sharing was suspended in April after confidential Treasury Department information was published in Mexican newspapers. The Treasury Department said Mexico has since taken steps to safeguard sensitive financial information it receives from foreign countries.
Dominion Virginia Power parent Dominion Resources said it will pay $49 million for two in-state power plants from which it currently purchases energy. A 310-megawatt plant in Chesapeake will be purchased from NRG Energy, and an 80-megawatt plant in Hurt will be acquired from Multitrade of Pittsylvania County.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.