AP News

Business Highlights


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Big disconnect: Telecommunications companies abandon copper phone lines

MANTOLOKING, N.J. (AP) — Robert Post misses his phone line.

Post, 85, has a pacemaker that needs to be checked once a month by phone. But the copper wiring that once connected his home to the rest of the world is gone, and the phone company refuses to restore it.

In October 2012, Superstorm Sandy pushed the sea over Post's neighborhood in Mantoloking, N.J., leaving hundreds of homes wrecked, and one floating in the bay. The homes on this sandy spit of land along the Jersey Shore are being rebuilt, but Verizon doesn't want to replace washed-away lines and waterlogged underground cables. Phone lines are outdated, the company says.

Mantoloking is one of the first places in the country where the traditional phone line is going dead. For now, Verizon, the country's second-largest landline phone company, is taking the lead by replacing phone lines with wireless alternatives. But competitors including AT&T have made it clear they want to follow. It's the beginning of a technological turning point, representing the receding tide of copper-wire landlines that have been used since commercial service began in 1877.

The number of U.S. phone lines peaked at 186 million in 2000. Since then, more than 100 million copper lines have already been disconnected, according to trade group US Telecom. The lines have been supplanted by cellphones and Internet-based phone service offered by way of cable television and fiber optic wiring. Just 1 in 4 U.S. households will have a copper phone line at the end of this year, according to estimates from industry trade group US Telecom. AT&T would like to turn off its network of copper land lines by the end of the decade.

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Millions more immigrants under the Senate bill

WASHINGTON (AP) — Landmark immigration legislation passed by the Senate would remake America's workforce from the highest rungs to the lowest and bring many more immigrants into the economy, from elite technology companies to restaurant kitchens and rural fields.

In place of the unauthorized workers now commonly found laboring in lower-skilled jobs in the agriculture or service industries, many of these workers would be legal, some of them permanent-resident green card holders or even citizens.

Illegal immigration across the border with Mexico would slow, but legal immigration would increase markedly.

That's the portrait that emerges from recent analyses of the far-reaching bill passed last month by the Senate with the backing of the White House. Although the bill aims to secure the borders, track people overstaying their visas and deny employers the ability to hire workers here illegally, it by no means seeks to choke off immigration. Indeed, the U.S. population over the next two decades would be likely to increase by 15 million people above the probable level if no changes were made to immigration laws, according to the Congressional Budget Office.

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NTSB: Plane parts found in San Francisco Bay

SAN FRANCISCO (AP) — The Asiana jet that crashed at San Francisco International Airport left lower sections of its tail on a rocky seawall and in the bay, then scattered debris several hundred feet down the runway, the NTSB reported Monday in describing the plane's deadly path.

National Transportation Safety Board chairwoman Deborah Hersman said the lower portion of the plane's tail cone was found in rocks inside the seawall. A "significant piece" of the tail of the aircraft was in the water, and other plane parts were visible at low tide, she said.

Hersman said at a news conference that investigators have reviewed airport surveillance video to determine whether an emergency vehicle ran over one of two teenage girls killed in Saturday's crash but have not been able to reach any conclusions. She called the possibility a "very serious issue."

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Alcoa posts $119 million 2Q loss on restructuring costs

NEW YORK (AP) — Alcoa Inc.'s second-quarter loss widened due to weak aluminum prices, although the results were slightly better than expected after excluding restructuring and legal costs.

The company continues to see strong sales of aluminum products for automobiles and airplanes.

Alcoa said Monday that its loss in the April-through-June quarter was $119 million, or 11 cents per share. That compared with a loss of $2 million, or break-even on a per-share basis, a year earlier.

Excluding $195 million in special items such as restructuring expenses, Alcoa said that it would have earned 7 cents per share, a penny more than analysts expected.

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Stocks rise as earnings kick off; chipmakers fall

NEW YORK (AP) — Cautious optimism about corporate earnings sent the stock market higher Monday.

U.S. companies start reporting their second-quarter results this week, led by aluminum producer Alcoa. Other major companies that will report include JPMorgan and Wells Fargo.

Analysts predict that earnings growth for companies in the Standard & Poor's 500 index will come in at 3 percent in the second quarter. While that rate would be down from 5 percent in the first quarter, earnings are still expected to reach record levels.

Investors and traders will search for evidence that companies are increasing revenues, not just cutting costs to boost profits. Sales growth is predicted to fall 0.3 percent in the second quarter.

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Studies: Cyberspying targeted South Korea, US military

SEOUL, South Korea (AP) — The hackers who knocked out tens of thousands of South Korean computers simultaneously this year are out to do far more than erase hard drives, cybersecurity firms say: They also are trying to steal South Korean and U.S. military secrets with a malicious set of codes they've been sending through the Internet for years.

The identities of the hackers, and the value of any information they have acquired, are not known to U.S. and South Korean researchers who have studied line after line of computer code. But they do not dispute South Korean claims that North Korea is responsible, and other experts say the links to military spying add fuel to Seoul's allegations.

Researchers at Santa Clara, California-based McAfee Labs said the malware was designed to find and upload information referring to U.S. forces in South Korea, joint exercises or even the word "secret."

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US consumer borrowing up as credit card use rises

WASHINGTON (AP) — Americans increased their borrowing in May at the fastest pace in a year. Borrowing in the category that includes credit cards reached its highest point since the fall of 2010.

Increased borrowing typically means that consumers are feeling more confident.

Americans stepped up their borrowing by $19.6 billion in May compared with April, the Federal Reserve said Monday in its monthly report on consumer credit. That was the biggest jump since a $19.9 billion rise in May 2012.

Total borrowing reached a record $2.84 trillion.

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White House projects shrinking deficit

WASHINGTON (AP) — The White House said Monday that the federal budget deficit for the current fiscal year will shrink to $759 billion. That's more than $200 billion less than the administration predicted just three months ago.

The new figures reflect additional revenues generated by the improving economy and take into account automatic, across-the-board spending cuts that the White House had hoped to avert.

The White House projected that economic growth would be slightly slower in the coming years than it forecast in April. The report said the automatic spending cuts that kicked in during March will slow down economic growth this year from the 2.6 percent increase it forecast for the fourth quarter of this year to a 2.4 percent increase.

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Companies move ahead with Bangladesh safety accord

NEW YORK (AP) — A group of primarily European retailers and clothing makers said Monday that it plans to inspect clothing factories in Bangladesh that make garments for the companies within the next nine months and will concentrate renovations on those that pose the biggest safety threat.

The group of 70 companies includes Swedish retailer H&M, Italian clothing maker Benetton and French retailer Carrefour. Under the companies' agreement, they are required to pay administrative costs for the inspections, training and other programs. And they're also responsible for ensuring that "sufficient funds are available to pay for renovations and other safety improvements."

The details of the legally binding five-year pact come after negotiating with worker rights' groups and other organizations on how the plan should be carried out. The plan, announced in mid-May, initially had about 30 companies signing on. The plan covers anywhere from 800 to about 1,000 of the 5,000 garment factories in Bangladesh.

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ISS recommends vote for Dell founder's offer

NEW YORK (AP) — A top proxy advisory firm is recommending that Dell shareholders vote in favor of a deal that would allow the company's founder and an investment firm to buy the computer maker and take it private.

Michael Dell and Silver Lake Partners have offered to buy Round Rock, Texas-based Dell Inc. for $13.65 per share, or a total of $24.4 billion. Michael Dell believes he can turn the company around by taking it private and diversifying into niches, such as business software, data storage and consulting.

But Carl Icahn, a billionaire investor and Dell's second-largest shareholder, says he wants Dell to remain publicly traded and boost value for shareholders by buying back $16 billion in stock.

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By The Associated Press=

The Dow Jones industrial average rose 88.85 points, or 0.6 percent, to close at 15,224.69. The Standard & Poor's 500 index gained 8.57 points, or 0.5 percent, to end at 1,640.46. The Nasdaq composite rose 5.45, or 0.2 percent, to 3,484.83.

Benchmark crude for August delivery slipped 8 cents to $103.14 on the New York Mercantile Exchange. Brent crude dropped 29 cents to $107.43 a barrel on the ICE futures exchange in London.

Wholesale gasoline dropped 1 cent to $2.88 per gallon. Natural gas rose 12 cents to $3.74 per 1,000 cubic feet. Heating oil fell 1 cent to $2.98 per gallon.


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