By The Associated Press___ How to fix US debt without hurting fragile economy WASHINGTON (AP) â¿¿ An ax is scheduled to hit the federal budget Friday. Unless the White House and Congress reach a budget deal by then, automatic cuts will carve $85 billion from authorized spending through Sept. 30 and $1.2 trillion over the next decade. The cuts in defense spending, unemployment benefits and other programs could slow an already struggling economy. And they would leave unaddressed the biggest long-term threats to the government's finances â¿¿ rising bills for Medicare and Social Security. Economists say there's a better way. Shrinking the federal debt doesn't have to mean either hurting the economy now or ignoring the spending burdens of the future. Economists widely agree that policymakers should delay deep cuts such as the ones slated to take effect Friday until the economy has strengthened. But they say lawmakers should come up with a realistic long-term plan to fix the debt as soon as possible. ___ Wireless connections creep into everyday things BARCELONA, Spain (AP) â¿¿ A car that tells your insurance company how you're driving. A bathroom scale that lets you chart your weight on the Web. And a meter that warns your air conditioner when electricity gets more expensive. Welcome to the next phase of the wireless revolution. The first wave of wireless was all about getting people to talk to each other on cellphones. The second will be getting things to talk to each other, with no humans in between. So-called machine-to-machine communication is getting a lot of buzz at this year's wireless trade show. Some experts believe these connections will outgrow the traditional phone business in less than a decade. ___ Apple CEO promises investors 'great stuff' to come CUPERTINO, Calif. (AP) â¿¿ Apple CEO Tim Cook sought to reassure shareholders worried about the company's sagging stock price that the iPhone and iPad maker is on the verge of inventing more breakthrough products that will prove it hasn't lost its creative edge.
The company is working as hard as ever, and we have some great stuff coming," Cook told shareholders Wednesday before taking their questions during Apple's annual meeting at its Cupertino, Calif., headquarters.True to Apple's secretive nature, Cook didn't provide any further product details, although at one point he said the company is considering entering other categories besides its popular line of digital music players, smartphones and tablet computers. ___ Orders jump for key US long-lasting factory goods WASHINGTON (AP) â¿¿ Orders for U.S. factory goods that signal business investment plans jumped last month by the most in more than a year, suggesting companies are confident about their business prospects. The Commerce Department said Wednesday that orders for so-called core capital goods, which include industrial machinery, construction equipment and computers, rose 6.3 percent in January from December. A sharp fall in demand for commercial aircraft caused overall durable goods orders to drop 5.2 percent, the first decline since August. Orders for commercial aircraft are volatile from month to month and can cause large swings in the overall figure. Boeing reported orders for only two planes in January, down from 183 in December. Orders for defense equipment also plummeted by the most in more than 12 years. ___ US pending home sales rise to highest since 2010 WASHINGTON (AP) â¿¿ A measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than 2 Â½ years. The increase suggests sales of previously occupied homes will continue rising in the coming months. The National Association of Realtors said Wednesday that its seasonally adjusted index for pending home sales rose 4.5 percent last month to 105.9. That's the highest since April 2010, when a homebuyer's tax credit was about to expire. There is generally a one-to-two-month lag between a signed contract and a completed sale.
___Bernanke defends Fed's low-interest-rate policies WASHINGTON (AP) â¿¿ Facing criticism from Republican lawmakers, Chairman Ben Bernanke stood behind the Federal Reserve's low-interest-rate policies Wednesday and sought to reassure members of Congress that the central bank has a handle on the risks. In his second day of testimony on Capitol Hill, Bernanke told members of the House Financial Services Committee that the Fed's bond purchases are needed to boost a still-weak economy and that they have helped create jobs for average Americans. The bond purchases are intended to lower long-term interest rates. That encourages more borrowing and spending, which generates growth. ___ Penney reports another massive loss in 4Q NEW YORK (AP) â¿¿ Boy, it just wasn't J.C. Penney's year. The mid-priced department store chain on Wednesday reported another much larger-than-expected loss in the fiscal fourth quarter on a nearly 30 percent plunge in revenue in the latest sign that shoppers aren't happy with the changes it's made in the past year. The results mark a full year of massive quarterly losses and revenue declines that have missed Wall Street estimates since J.C. Penney Co. began a turnaround strategy that included ditching most of its coupons and sales events in favor of everyday low prices, bringing in hipper designer brands such as Betsy Johnson and remaking outdated stores. ___ Target 4Q hurt by Canada investment, weak holiday NEW YORK (AP) â¿¿ Target is drawing its bull's-eye on Canada in 2013. Its investment in a Canadian launch this year and weaker-than-expected holiday sales caused Target Corp.'s net income to fall 2 percent in the fourth quarter of last year. But the second largest discounter in the U.S. said its foray into Canada, policy of matching competitors' prices and new designer lines will help its business this year. The big-box retailer, known for its cheap but trendy merchandise, pulled out all the stops to lure in cautious shoppers during the winter holiday season, which runs from November through December. It launched a line of gifts created by 24 high profile designers in partnership with luxury department store Neiman Marcus and offered to match prices of online competitors such as Amazon.com, Walmart.com, Bestbuy.com and Toysrus.com.
___Hostess sale of Wonder bread nears completion NEW YORK (AP) â¿¿ Wonder bread could start appearing in school lunchboxes again soon. A person familiar with the situation says a bid by Flowers Foods to buy Wonder and several other bread brands from bankrupt Hostess was met with no qualifying competing offers. The individual requested anonymity because the auction process is private. Hostess hasn't been making any of its cakes and breads since late November, when the company announced it was going out of business and closed its plants following years of financial struggles. The shuttering included the loss of about 18,000 jobs. ___ Italy turmoil raises questions about ECB backstop ROME (AP) â¿¿ Why have Italy's muddled election results spooked global investors so much? Because they raise unsettling questions about the availability of the financial safety net that has kept Europe from catastrophe for the past six months. That safety net is a crucial offer from the European Central Bank to buy unlimited quantities of struggling countries' bonds. The big catch was that participating countries had to commit to austerity measures â¿¿ such as spending cuts and tax increases to lower their deficits. And if there's any clear message from the Italian elections, it's that voters rejected austerity. ___ By The Associated Press(equals) The Dow Jones industrial average rose 175.24 points, or 1.2 percent, to 14,075.37. The Standard and Poor's 500 index gained 19.05 points, or 1.3 percent, to 1,515.99. The Nasdaq composite rose 32.61 points, or 1 percent, to 3,162.26. Benchmark oil for April delivery rose 13 cents to finish at $92.76 a barrel on the New York Mercantile Exchange. Brent crude, used to price many kinds of oil imported by U.S. refineries, fell 84 cents to end at $111.87 per barrel on the ICE Futures exchange In London.
Wholesale gasoline was down 9 cents to finish at $3.11 a gallon. Heating oil fell 4 cents to end at $2.99 a gallon. Natural gas fell 2 cents to finish at $3.43 per 1,000 cubic feet.