NEW YORK -- Microsoft ( MSFT - Get Report) is developing a new lineup of its Surface tablets, including a 7-inch version expected to go into mass production later this year, people familiar with the company's plans told The Wall Street Journal.

One person familiar with Microsoft's product plans told the newspaper that the 7-inch tablets weren't part of the company's strategy last year, but Microsoft executives realized they needed a response to the growing popularity of smaller tablets like Google's 7-inch Nexus, and Apple's 7.9-inch iPad Mini.

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T-Mobile USA raised its bid for MetroPCS ( PCS) in what it called its "best and final offer."

The announcement from T-Mobile parent Deutsche Telekom ( DT) was made late Wednesday.

Deutsche Telekom said the original offer had T-Mobile USA contributing $15 billion in shareholder loans to the combined company. The new offer reduces those loans to $11.2 billion, "significantly increasing the equity value of the combined company."

Chevron ( CVX - Get Report) said Wednesday its oil and gas production in the U.S. fell by 11,000 barrels a day, or 2%, in the first two months of the year compared with the year-earlier fourth quarter.

The oil giant said U.S. production slipped because of maintenance on production platforms in the Gulf of Mexico.

In its interim quarterly report, Chevron said international production declined 1%.

Chevron said the price it received for oil fell, but natural gas prices rose.

Analysts expect Chevron to earn $3.09 a share in the first quarter, down from $3.27 a share a year earlier.

Pier 1 Imports ( PIR - Get Report) is forecast by Wall Street to post quarterly earnings on Thursday of 60 cents a share.,

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Drugstore chain Rite Aid ( RAD - Get Report) is estimated to post a quarterly loss of 2 cents a share when it reports results on Thursday.

Outsourcing company iGate ( IGTE) is expected by analysts Thursday to post first-quarter earnings of 41 cents a share on revenue of $271.9 million.

-- Written by Joseph Woelfel

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