Business news in brief

— QUOTE OF THE DAY

“A lot of people look to UPS as a bellwether of the economy and what are they saying? Well, maybe things aren’t as good as we initially thought.”

Kevin Sterling, BB&T Corp. analyst Article, 1D

U.S. 30-year mortgage rate hits 3.53%

WASHINGTON - The average U.S. rate on the 30-year fixed mortgage rose this week to its highest level in four months but remains low by historical standards.

Mortgage buyer Freddie Mac, the Federal Home Loan Mortgage Corp., said the rate on the 30-year loan increased to 3.53 percent. That’s up from 3.42 percent last week and the first time the rate has exceeded 3.50 percent since September.

The average for the 15-year fixed mortgage advanced to 2.81 percent from 2.71 percent last week.

Mortgage rates tend to track the yield on the 10-year Treasury note. It rose to 1.99 percent Thursday, up from 1.85 percent a week ago.

Strong fourth-quarter earnings and positive reports on housing have pushed stocks higher. That lowered demand for Treasurys, considered safe investments.

  • The Associated Press

Obama allows jobs council to expire

WASHINGTON - President Barack Obama let his jobs council expire this week without renewing its charter, winding down one source of input from the business community even as unemployment remains stubbornly high.

When Obama formed his Council on Jobs and Competitiveness in January 2011, unemployment was hovering above 9 percent. Two years later, more than 12 million people in the U.S. are out of work. The unemployment rate has fallen to 7.8 percent, but both Republicans and Democrats agree that’s still too high.

A provision in the executive order that established the council said it ended Thursday. A White House official said the president did not plan to extend it.

Officials said the president always intended for the council to fulfill its mission and then wind down, and said Obama would continue to seek input from business leaders about ways to accelerate job-creation and economic growth. Among the steps Obama plans to pursue are expedited permits for infrastructure projects, as well as programs to spur entrepreneurship and work-force development.

  • The Associated Press

U.S. tests Anheuser, Modelo merger

WASHINGTON - The Justice Department filed a lawsuit Thursday to stop Anheuser-Busch InBev’s proposed $20.1 billion purchase of Mexican brewer Grupo Modelo, which would unite the ownership of popular beers Budweiser and Corona.

The government said the deal could lead to higher beer prices in this country because it would substantially reduce competition in the U.S. beer market, particularly in 26 metropolitan areas. It said the merged firm would control nearly half of the beer sales in the U.S.

In response, Anheuser-Busch InBev promised a court fight to preserve its deal.

Americans spent at least $80 billion on beer last year.

Anheuser-Busch InBev’s Bud Light is the best-selling beer in the nation and Modelo’s Corona Extra is the best-selling import.

The Justice Department’s lawsuit in federal court in Washington, D.C., seeks to prevent the merger and to continue competition between the firms.

Bill Baer, the assistant attorney general in charge of the department’s antitrust division, said Anheuser-Busch In-Bev would be able to increase beer prices to U.S. consumers if the merger were to go through.

Anheuser-Busch InBev is the largest U.S. brewer and Modelo is the third-largest. Together, the two firms control about 46 percent of annual sales in the U.S.

MillerCoors, the second-largest beer company, accounts for 29 percent of nationwide sales.

U.S.-based Anheuser-Busch was purchased by Belgium-based InBev in 2008. The combined company is already the world’s biggest brewer and makes Budweiser, Beck’s and Stella Artois, among others. Its purchase of Grupo Modelo would have given the combined company annual sales of $47 billion and 150,000 workers in 24 countries.

  • The Associated Press

Cod limits slashed in New England

PORTSMOUTH, N.H. - The New England Fishery Management Council on Wednesday approved a year-to year cut of 77 percent on the Gulf of Maine cod limit and 61 percent for Georges Bank cod.

The cuts come on top of a slew of other reductions, ranging from 10 to 71 percent, on the catch of other bottom-dwelling ground fish species, such as haddock and flounder.

The cuts, in effect May 1, are expected to be backed by federal managers at the National Oceanic and Atmospheric Administration. The agency’s top federal fisheries regulator, John Bullard, acknowledged the reductions will be devastating. But he said the fish stocks are struggling and the industry’s steady decline must be reversed.

The new low limits reduce the cod catch to just a fraction of what it once was and prevent fishermen from landing enough of the plentiful species, such as haddock and pollock. That’s because fishermen can’t pull up the healthier ground fish without catching too much of the cod that swim among them.

Scientific Games buys gaming firm

Scientific Games Corp. agreed to buy WMS Industries Inc. for $1.5 billion, the biggest deal in the leisure and recreational-products industry in almost two years, to create a global supplier of video-lottery and gaming machines.

The offer of $26 a share is 59 percent higher than WMS’s closing price Wednesday. The transaction was approved by both boards unanimously, the companies said Thursday in a statement.

With the deal, Scientific Games, which is 38 percent owned by billionaire Ron Perelman, a director since 2003, is expanding its offering of gaming machines for casinos. The New York-based provider of lottery instant tickets and lottery systems plans to share manufacturing, software and customer services with WMS to help save money.

Scientific Games shares fell 4 percent to close at $8.89. Shares of WMS, based in Waukegan, Ill., jumped $8.38, or 51 percent, to close at $24.75. Competitors International Game Technology and Bally Technologies Inc. also advanced, gaining as much as 2.9 percent and 4.7 percent, respectively.

Business, Pages 30 on 02/01/2013

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