Americans' income and spending rose in January
WASHINGTON (AP) -- Americans' incomes rose sharply in January and spending shot up even more quickly as mild weather and deep discounts lured people into stores and malls.
The Commerce Department reported today that incomes, which include wages, interest and government benefits, grew by 0.6 percent, following a 0.4 percent rise in December.
Spending, meanwhile, increased by 0.7 percent in January, up from a 0.4 percent gain in the month before.
The increases in both income and spending were the biggest since September whey they rose by 1.1 percent and 0.8 percent, respectively. January's performance was largely in line with analysts' expectations.
Manufacturing slide slows
NEW YORK (AP) -- The nation's manufacturing activity continued its decline in February, but at a slower rate than in recent months, a key industry group said today.
The National Association of Purchasing Management said its index of business activity rose to 41.9 in February from 41.2 in January. The reading on the widely-followed index supported the contention Wednesday by Federal Reserve Chairman Alan Greenspan that the economy showed some signs of strengthening in the early months of 2000.
The NAPM said that while the February reading means the overall economy contracted for the second consecutive month, the uptick in the index and its components might signal that the decline has reached its low point.
The new figure was roughly in line with analysts' expectations and marked the seventh straight month of contraction in the manufacturing sector.
A purchasing managers' index above 50 signifies growth in manufacturing, while a figure below 50 means contraction. A level below 42.7 also generally indicates a contraction in the overall economy.
The upturn in manufacturing followed a January figure that showed manufacturing at its lowest level since early 1991.
Corning cutting 825 jobs
CORNING (Bloomberg) -- Corning Inc., the world's No. 1 maker of optical fiber and cable for telecommunications networks, said it's cutting 825 jobs in its second-biggest unit as demand for fiber-optic components slows.
The cuts involve 2.1 percent of Corning's workforce of 40,000 and will be divided between two plants in Benton Park, Pennsylvania, and Erwin Park, New York, spokesman Paul Rogoski said. He couldn't say immediately if Corning will take a charge to cover costs of the reductions.
A sharp drop in spending by telecommunications companies has sparked a rash of job cuts at equipment and components suppliers this year. Lucent Technologies Inc. and Nortel Networks Corp., two of Corning's main customers, each slashed 10,000 jobs, citing a lack of demand for equipment amid the slowing U.S. economy.
Two Cendant execs indicted
NEWARK, N.J. (AP) -- Two former executives falsely inflated the value of a company involved in the merger that created Cendant, leading to a massive stock fraud scandal, federal authorities charged Wednesday.
Walter Forbes, former chairman of Cendant, and E. Kirk Shelton, an executive vice president, were charged with fraudulently overstating the income of the former CUC International Corp., a Stamford, Conn.-based direct marketing firm that sold memberships in discount buying clubs.
CUC merged with Parsippany-based HFS Inc., franchiser of brand names such as Ramada, Avis and Century 21, in December 1997 to form Cendant. Four months later the company's market value plummeted by $14 billion in a single day after it disclosed that Cendant had overstated operating income for 1997 by as much as $170 million.
U.S. loses WTO steel ruling
GENEVA (AP) -- The World Trade Organization ruled Wednesday that the United States had acted illegally in deciding to increase duties on Japanese steel imports.
The increased duties were put in place in June 1999 after U.S. steel companies complained that Japanese hot-rolled steel was being "dumped" at below-market prices.
The WTO ordered the United States to "bring its measures into conformity" but rejected a suggestion by Japan that they should order Washington to remove the duties immediately. The U.S. has 60 days to appeal.
In other business news
WorldCom, the nation's second-largest provider of long distance service, on Wednesday laid off about 6,000 U.S. employees, or roughly 7 percent of its worldwide work force, as part of a restructuring announced last year, a company source said.
Philip Morris Cos. said it will buy back as much as $10 billion in stock over the next three years to lift the shares' price.
Interstate Bakeries' credit rating was cut one notch to "Ba1," a junk rating, by Moody's Investors Service as the maker of Hostess and Wonder baked products struggles with higher fuel and labor costs.
Royal Ahold, which owns Tops Markets, increased its credit commitment to Internet grocer Peapod Inc. to $50 million from $20 million. Peapod warned last week it could run out of cash by year's end.