US manufacturing shrinks for first time in 3 years
U.S. manufacturing shrank in June for the first time in nearly three years, adding to signs that economic growth is weakening.
Production and exports declined, and the number of new orders plunged, according to a monthly report released Monday by the Institute for Supply Management. The slowdown comes as U.S. employers have scaled back hiring, consumers have turned more cautious, Europe faces a recession and manufacturing has slowed in big countries like China.
The trade group of purchasing managers said its index of manufacturing activity fell to 49.7. That's down from 53.5 in May. And it's the lowest reading since July 2009, a month after the Great Recession officially ended. Readings below 50 indicate contraction.
Economists said the manufacturing figures were consistent with growth at an annual rate of 1.5 percent or less. That would be down from the January-March quarter's already tepid annual pace of 1.9 percent.
Airbus to build 1st US assembly plant in Alabama
In the battle to dominate the global aviation industry, European aerospace giant Airbus announced its first assembly plant in the United States on Monday, a symbolic and significant step in the competition with archrival Boeing.
The French-based company said the Alabama plant is expected to cost $600 million to build and will employ 1,000 people when it reaches full production, likely to be four planes a month by 2017. While Airbus had parts plants in the U.S. before, a full-fledged plane-making factory is a more significant presence and could help it boost its share of U.S. commercial and defense contracts.
The Airbus plant advances the company's strategy of expanding production outside its home base. The company, jointly run by French and German management and with plants in several European countries, wants to expand in China and India as well as the United States.
Boeing already has a big presence in Alabama, employing 2,700 people in defense and rocket operations.
Airbus planned to build refueling tankers for the U.S. Air Force in Alabama, but its parent company, the European Aeronautic Defense and Space Co., lost the contract to Boeing in 2011.
GlaxoSmithKline to pay $3 billion for health fraud
GlaxoSmithKline PLC will pay $3 billion and plead guilty to promoting two popular drugs for unapproved uses and to failing to disclose important safety information on a third in the largest health care fraud settlement in U.S. history, the Justice Department said Monday.
Accompanying the criminal case was a civil settlement in which the government said the company's improper marketing included providing doctors with expensive resort vacations, European hunting trips, high-paid speaking tours and even tickets to a Madonna concert.
The $3 billion combined criminal-civil fine will be the largest penalty ever paid by a drug company, Deputy Attorney General James M. Cole said. The corporation also agreed to be monitored by government officials for five years to attempt to ensure the company's compliance.
UK fraud office weighs prosecutions of Barclays
British prosecutors are examining whether they can bring criminal charges on top of the massive fines imposed on Barclays bank for a financial market manipulation scandal.
The announcement came hours after Barclays' chairman, Marcus Agius, resigned and accepted ultimate responsibility for the misbehavior between 2005 and 2009 which cost the company $453 million in fines by U.S. and British agencies.
Britain's Serious Fraud Office said it hopes to decide whether to pursue criminal charges within a month. It wasn't immediately clear whether the SFO was considering charges against the company as well as individuals.
The U.S. Justice Department said last week that individuals at Barclays could face prosecution but the company would not because of its cooperation in revealing how the bank and individual employees submitted false data on interbank borrowing rates.
Agius' departure boosted the bank's share price but also brought fresh demands that Chief Executive Bob Diamond also accept responsibility and resign.
Microsoft to take $6.2B charge for online ad biz
Microsoft is absorbing a $6.2 billion charge to reflect its inability to produce more revenue from an online ad service that it bought nearly five years ago. The charge could saddle Microsoft Corp. with a loss for its fiscal fourth quarter ending in June.
The software maker, which is based in Redmond, Wash., blamed the setback primarily on the disappointing performance of aQuantive. That's an online advertising service that Microsoft bought in 2007 for $6.3 billion. It was the most expensive acquisition in the company's 37-year history at the time, surpassed only by the $8.5 billion purchase of Skype last year.
The charge represents Microsoft's sobering acknowledgement that aQuantive didn't increase the company's online advertising revenue as much as management had anticipated. Since it bought aQuantive, Microsoft's online division has reported losses totaling nearly $9 billion.
The disheartening performance comes at the same time that Internet search leader Google has expanding its online ad empire, despite Microsoft's attempts to lure away Web surfers and marketers.
Dell wins bidding to buy Quest Software for $2.4B
Dell is buying Quest Software for $2.4 billion to expand its offerings as its personal computer business weakens in an era of smartphones and sleeker devices like the iPad. Buying Quest will more than double the size of Dell's software business.
The deal capped off a bidding war that began last month when Quest revealed a mystery suitor had made an offer trumping a $2 billion sale that had been worked out with Insight Venture Partners in March. The secret bidder turned out to be Dell Inc., the second largest PC maker in the U.S. behind Hewlett-Packard Co.
Dell prizes Quest primarily for its nearly 1,300 engineers and its stable of software designed for businesses and government agencies. In particular, Dell is counting on Quest to help sell more servers, networking and storage products and computing services — all of which are typically more profitable than PCs these days.
Linde to buy US firm Lincare for $4.6 billion
Linde AG, a German-based company that specializes in industrial and medical gases including oxygen, said Monday it is looking to get a bigger slice of the growing health care market from its $4.6 billion cash purchase of U.S. home care company Lincare Holdings Inc.
Lincare shares jumped $7.32, or 21.5 percent, to close at $41.34.
Linde's CEO Wolfgang Reitzle said the deal would double sales for the company's North American gases division. Lincare provides respiratory therapy to patients in the home in 48 U.S. states and in Canada through 1,091 local centers and has 11,000 employees, according to its website. Its services include oxygen therapy, chemotherapy, managing feeding tubes, pain management, treatment of sleep apnea, and home ventilators.
China court: Apple pays $60M to settle iPad case
Apple has paid $60 million to settle a dispute in China over ownership of the iPad name, removing a potential obstacle to sales of the popular tablet computer in the key Chinese market.
Apple's dispute with Shenzhen Proview Technology highlighted the possible pitfalls for global companies in China's infant trademark system. It also posed a challenge for the communist government, which wants to attract technology investors to develop China's economy.
Apple Inc. says it bought the global rights to the iPad name from Proview in 2009 but Chinese authorities say the rights in China were never transferred. A Chinese court ruled in December that Proview still owned the name in China. Proview, which is struggling financially, asked Chinese authorities to seize iPads in an apparent effort to pressure Apple to settle.
Eurozone unemployment hits new record in May
Unemployment in the 17-country euro currency bloc hit another record in May as the crippling financial crisis pushed the continent toward the brink of recession, official figures showed Monday.
Eurostat, the EU's statistics office, said unemployment rose to 11.1 percent in May from 11 percent the previous month. May's rate was the highest since the euro was launched in 1999 and adds further urgency to the eurozone countries' plan to create economic growth and cut excessive government debt.
Liner QE2 to host visitors again as hotel in Dubai
The Queen Elizabeth 2's Dubai owners have outlined plans to turn the storied cruise liner into a dockside hotel that will keep many existing furnishings intact, ending years of speculation about the fate of the $100 million throwback.
A rare tour given to The Associated Press showed that while there's still work to be done, the conversion may convince future guests they've been transported back in time. Cruise lovers and history buffs have plenty of time to plan their trips to Gulf emirate, though. Officials say the conversion will take about 18 months, meaning the hotel likely won't open before the end of 2013.
The latest renovation effort is a comedown from a previous proposal to significantly overhaul the ship and convert it into a luxury hotel docked alongside one of the sheikdom's manmade palm-shaped islands. Developers shelved those more ambitious plans when Dubai's economy tumbled into crisis.
Twitter sees new record during Euro 2012 final
Twitter says its users fired off more than 15,000 tweets per second when Spain scored its fourth goal in Sunday's European Championship final, setting a sports-related record on the social networking site.
Twitter said it registered a total of 16.5 million tweets worldwide during the soccer match Sunday in Kiev, where Spain defeated Italy 4-0. It said total global traffic on its platform peaked at 15,358 tweets per second as Spain scored its fourth goal, a record for a sporting event.
By The Associated Press(equals)
The Dow Jones Industrial average closed down 8.70 points at 12,871.39.
The Standard & Poor's 500 and the Nasdaq composite index both finished slightly higher after hopping between small gains and losses. The S&P rose 3.35 to 1,365.51. The Nasdaq rose 16.18 to 2,951.23.
Benchmark U.S. crude dropped $1.21 to end the day at $83.75 per barrel.
In other futures trading, heating oil lost 3.4 cents to finish at $2.6759 per gallon while wholesale gasoline fell by less than a penny to end at $2.6239 per gallon. Natural gas was unchanged, ending at $2.824 per 1,000 cubic feet.
Brent crude dropped by 46 cents, or less than 1 percent, to finish at $97.34 per barrel in London.