Business Highlights

The Associated Press


Stanford gets 110 years for role in $7 billion swindle

HOUSTON (AP) â¿¿ Former jet-setting Texas tycoon R. Allen Stanford, whose financial empire once spanned the Americas, was sentenced Thursday to 110 years in prison for bilking investors out of more than $7 billion over 20 years in one of the largest Ponzi schemes in U.S. history.

U.S. District Judge David Hittner handed down the sentence during a court hearing in which two people spoke on behalf of Stanford's investors about how his fraud affected their lives.

Prosecutors had asked that Stanford be sentenced to 230 years in prison, the maximum sentence possible after a jury convicted the one-time billionaire in March on 13 of 14 fraud-related counts. Stanford's convictions on conspiracy, wire and mail fraud charges followed a seven-week trial.


Europe crisis spreads as Merkel resists big steps

MILAN (AP) â¿¿ A growing number of European countries are being squeezed by a financial vise just days before a Greek election that could escalate the region's political and economic turmoil.

The rise of Italian and Spanish borrowing costs to alarming levels on Thursday heaped pressure on leaders to prevent Europe's debt crisis from engulfing its largest countries. No grand solution appears imminent.

German Chancellor Angela Merkel opposes solutions that many experts are pushing that would increase costs for Berlin.

Merkel has found herself isolated from the leaders of Spain, Italy and France, who want the 17 countries in the euro currency union to move quickly to bind their governments' finances and debt.


Low prices, weak hiring raise odds of Fed action

WASHINGTON (AP) â¿¿ The U.S. job market is flagging, and consumer prices are barely rising. The picture sketched by data released Thursday has made some economists predict the Federal Reserve will announce some new step next week to boost the economy.

Applications for unemployment benefits rose last week, pointing to a fourth straight month of sluggish hiring in June. And consumer prices were pulled down in May by a plunge in gas prices.

Weak job growth raises pressure on the Fed because part of its mission is to boost employment. And mild inflation gives policymakers more leeway to act. If inflation were threatening to accelerate, Fed policymakers might feel compelled to raise interest rates.


American drivers turn to smaller, better engines

DETROIT (AP) â¿¿ Back when gas was cheap, Americans bought cars with V-8 engines like the Big Block, Cobra Jet and Ramcharger. Acceleration was all that mattered, even in family cars that never made it to full throttle.

The 427-cubic inch Chevrolet Tri-Power was the siren song of the gearhead, sending Corvettes roaring down the highway at up to 140 mph.

But now, thanks to government regulation and gas-price gyrations, the motors that move the nation's cars and trucks are shrinking.

Whether they drive hulking pickups or family sedans, Americans are increasingly choosing smaller engines that use less fuel, especially four-cylinder models that offer more horsepower than was possible just a few years ago.

More than half the new cars and trucks sold in the U.S. through May had four-cylinder motors. That's up from 36 percent in 2007, and it's the highest sales percentage since at least 1998, when the J.D. Power and Associates consulting firm started keeping track.


NYC ban on big sodas could face legal test

NEW YORK (AP) â¿¿ If New York City bans big sodas, what's next on the list? Large slices of pizza? Double-scoop ice cream cones? Tubs of movie-theater popcorn? The 16-ounce strip steak?

The proposed crackdown on super-sized drinks could face a legal challenge from those who oppose the first-in-the-nation rule and fear the city isn't going to stop with beverages.

Mayor Michael Bloomberg wants to bar restaurants, movie theaters, sports arenas, food carts and delis from selling sodas and other sugary drinks in servings larger than 16 ounces, saying it is a way to fight obesity in a city that spends billions of dollars a year on weight-related health problems.

Whether that's legal, though, is a matter of dispute and may be tested.


US current account deficit widens to $137.3 billion

WASHINGTON (AP) â¿¿ The U.S. current account trade deficit grew this winter to its widest imbalance in three years. A big increase in imports of oil, cars and machinery and a drop in U.S. earnings on overseas investments drove the increase.

The deficit in the current account jumped 15.7 percent to $137.3 billion in the January-March quarter. That's up from $118.7 billion in the final three months of last year, the Commerce Department reported Thursday.

The current account is the broadest measure of trade. It tracks investment flows and the sale of merchandise and services between nations.


US rate on 30-year mortgage rises to 3.71 percent

WASHINGTON (AP) â¿¿ Average rates on fixed mortgages rose this week, the first increase in seven weeks. But mortgage rates remain near historic lows, boosting prospects for home sales this year.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 3.71 percent. That's up from 3.67 percent last week, the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, rose to 2.98 percent. That's up from 2.94 percent last week, also a record low.


Government expands probe of Jeep gas tank fires

DETROIT (AP) â¿¿ Government safety regulators have expanded an investigation into gas tank fires in older-model Jeep Grand Cherokees.

The National Highway Traffic Safety Administration said Thursday that it has added Cherokee and Liberty models to the probe, which began nearly two years ago.

The probe now covers an estimated 5.1 million vehicles and is focused on the SUVs' gas tanks, which are mounted between the bumper and rear axle. The tanks can be damaged in a rear-impact crash and leak, causing fires. The agency says 15 people have died in 26 Grand Cherokee fires.


Kroger more upbeat after loyal customers boost 1Q

NEW YORK (AP) â¿¿ The Kroger Co. is forecasting a rosier year after its customer-loyalty programs helped boost its first-quarter net income.

The nation's largest traditional grocery store operator said Thursday that its targeted discounts and coupon mailings, which are based on purchase histories, are enticing more customers to return to its stores.

The aggressive courtship comes at a time when Kroger and other grocery sellers and big-box retailers are struggling to manage their costs for products, which have ballooned as a result of higher fuel and commodity prices.

Rather than taking risk scaring off customers by passing on those costs entirely, Kroger is focusing on cutting expenses and boosting customer traffic.


Nokia cuts 10,000 jobs, streamlines to save costs

HELSINKI (AP) ⿿ Nokia says it will slash 10,000 jobs and close plants as the ailing cellphone maker fights fierce competition, and gave a grim outlook for most of the year, causing its shares to plummet 18 percent to close at ⿬1.83 ($2.30).

The Finnish company also on Thursday announced personnel changes and said it has agreed to sell its luxury phone brand, Vertu.

The measures, aimed at additional cost savings of ⿬1.6 billion ($2 billion) by the end of next year, will shut down research and development facilities in Ulm, Germany, and Burnaby, British Columbia. Nokia said it will also close its main Finnish manufacturing plant in Salo, with 850 layoffs, but will keep its research and development center there.


By The Associated Press(equals)

The Dow Jones industrial average jumped 155.53 points to close at 12,651.91 Thursday. The Standard & Poor's 500 rose 14.22 points to 1,329.10. The Nasdaq composite gained 17.72 points to 2,836.33.

Benchmark crude rose $1.21 to $83.84 per barrel Thursday in New York. Brent crude, which is used to price international varieties, gained 21 cents to $96.92 per barrel in London.

In other trading, natural gas prices skyrocketed after the Energy Department reported that natural gas in storage grew by 67 billion cubic feet to 2.944 trillion cubic feet for the week ended June 8. Natural gas futures rose 27 cents to $2.459 per 1,000 cubic feet.

Heating oil rose 1 cent to $2.62 per gallon and gasoline futures gained 1 cent to $2.66 per gallon.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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