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Image 21 of The Courier Journal, March 30, 2012

Part of Porter, Jean

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Time: 03-29-2012 THE TICKER DOW NASDAQ S&P 500 stt 13,145.82 3,095.36 1,403.28 +19.61 -9.60 -2.26 MONEY & MARKETS NEXT PAGE GAS COSTS HOW MUCH Average price per gallon of regular gas in Louisville $3.98 $3.98 $4.05 26 27 March 28 SOURCES: AAA (Data from Oil Price Information Service with Wright Express) THE COURIER-JOURNAL BUSINESS WATCH NEWS FROM THE REGION Zone: KY Edition: 1 Page Name: B 8 Color: KY Go to courier-journal.com/mobile for daily market news or stock quotes. Last ’11 quarter best in 18 mos. WASHINGTON — The U.S. economy grew at an annual rate of 3 percent in the final three months of 2011, the best pace in a year and a half. But that growth has likely slowed in the current quarter. Businesses have been restocking shelves more slowly and ship- ping fewer durable manufactured goods. And Europe’s debt crisis and weaker growth in Asia have slowed demand for U.S. exports. Stronger hiring in the first two months of 2012 likely hasn’t offset those weaknesses. That’s because Americans’ pay has barely kept pace with inflation even as gas prices have spiked. So consumer spending, which drives about 70 percent of economic activity, probably hasn’t increased much from the end of last year. Most economists expect growth to pick up later this year as more hiring lifts the economy. The Commerce Department reported no change Thursday in its previous growth estimate for the October-December quarter. The 3 percent annual rate was the most robust since spring 2010. Slower growth in exports than previously estimated was offset by stronger business investment. Still, economists expect growth has probably slowed to 2 percent or less in the current January-March quarter. A key reason for that is businesses haven’t been restocking shelves as fast as they did at the Wild Turkey starts on packaging facility Kentucky Gov. Steve Beshear joined community leaders and officials from Gruppo Campari at the company's Wild Turkey Distillery in Lawrenceburg on Thursday to break ground on a 125,000-squarefoot packaging facility. The facility will allow Wild Turkey to have full control of its entire production, from distilling to aging to bottling. The project will create up to 62 new jobs, a news release said. — From staff and wire reports Submit items by e-mail to businessnews@courier-journal.com Q&A SPENDING & SAVING Q: What does it mean when someone says a credit card has a fixed APR? A: A fixed or fixed-rate APR sets an annual percentage rate — the amount you pay in interest when you borrow on the credit card — that does not fluctuate with changes to an index. The Consumer Financial Protection Bureau says this does not mean that the interest rate will never change, but the issuer generally must notify you before the change occurs and in most circumstances can apply the higher rate only to transactions you make after you get the notice. FRIDAY MARCH 30, 2012 end of 2011. Many had cut inventories in the summer, fearing that the economy was on the verge of another recession. When that didn’t happen, many boosted restocking. Inventory building was a key driver of growth in the October-December quarter. One bright spot is that hiring has picked up. The economy has added an average of 245,000 jobs per month from December through February. The jobless rate has fallen by nearly a full percentage point since the summer to 8.3 percent, its lowest level in three years. Best Buy to close stores, cut jobs A subsidiary of Seattlebased Amazon.com is considering putting a customer service center that would employ 550 people in Winchester, Ky., about 20 miles east of Lexington. Kentucky is offering AMZN wacs Inc. $10.25 million in tax incentives from the state and Clark County if Amazon follows through. Amazon would also get a $250,000 economic development bond grant to help offset the $20 million cost of the facility. The grant is contingent on Amazon creating the 550 jobs within three years and paying employees at least $15 an hour on average, according to the Kentucky Economic Development Finance Authority, which approved the awards Thursday. The 70,000-square-foot center would house a customer service call center and email operations, as well as technical support. Researchers at the University of Louisville have developed a way to track regional activity in logistics and distribution — an increasingly important part of Louisville’s economy. The Logistics and Distribution Index signals whether activity in the sector is expanding or contracting. The index was developed by Sunderesh Heragu, director of U of L’s Logistics and Distribution Institute; industrial engineering professor Gail DePuy; and doctoral student Erin Gerber of Louisville. Eventually, the researchers plan to gauge logistics activity nationally. B8 Market news on your cell Amazon subsidiary eyes Winchester, Ky. Index to track regional logistics, distribution Black Yellow Magenta Cyan Report: Economy grew 3% Associated Press 29 PubDate: 03-30-2012 Business By Martin Crutsinger $3.98 $3.97 25 21:11 User: mstollhaus Retailer thinks small is better By Michelle Chapman Associated Press A worker operates the pump at a PetroChina gas station in China’s Sichuan province. PetroChina, formed just 13 years ago by the Chinese government, now outranks Exxon Mobil in oil output. AP Chinese firm tops Exxon in oil output PetroChina pumps 2.4 million barrels a day By Chris Kahn Associated Press NEW YORK — A big shift is happening in Big Oil: An American giant now ranks behind a Chinese upstart. Exxon Mobil is no longer the world’s biggest publicly traded producer of oil. For the first time, that distinction belongs to a 13-year-old Chinese company called PetroChina. The Beijing company was created by the Chinese government to secure more oil for that nation’s booming economy. PetroChina announced Thursday that it pumped 2.4 million barrels a day last year, surpassing Exxon by 100,000. The company has grown rapidly over the past decade by squeezing more from China’s aging oil fields and outspending Western companies to acquire more petroleum reserves in places like Canada, Iraq and Qatar. It’s motivated by a need to lock up as much oil as possible. The company’s output increased 3.3 percent in 2011 while Exxon’s fell 5 percent. Exxon’s oil production also fell behind Rosneft, the Russian energy company. PetroChina’s rise highlights a fundamental difference in how the largest petroleum companies plan to supply the world as new deposits become tougher to find and more expensive to produce. Every major oil company has aggressively pursued new finds to replace their current wells. But analysts say Western oil firms like Exxon Mobil have been more conservative than the Chinese, mindful of their bottom line and investor returns. With oil prices up 19 percent in 2011, they still made money without increasing production. PetroChina Co. Ltd. has a different mission. The Chinese government owns 86 percent of its stock and the nation uses nearly every drop of oil PetroChina pumps. Its appetite for gasoline and other petroleum products is projected to double between 2010 and 2035. “There’s a lot of anxiety in China about the energy question,” says energy historian Dan Yergin. “It’s just growing so fast.” While PetroChina sits atop other publicly traded companies in oil production, it falls well short of national oil companies like Saudi Aramco, which produces nearly 8 million barrels a day. And Exxon is still the biggest publicly traded energy company when counting combined output of oil and natural gas. PetroChina ranks third behind Exxon and BP in total output of oil and natural gas. MINNEAPOLIS — In order to grow, Best Buy is shrinking. The largest U.S. specialty electronics retailer for years expanded quickly by opening bigbox stores across the country. But shoppers have started using the hulking stores as showrooms where they can test out products before buying them cheaper elsewhere. To revamp the struggling chain, Best Buy said Thursday it plans to close 50 of its U.S. big box stores, cut 400 corporate jobs and trim $800 million in costs. The company, which has about 1,400 U.S. locations, also plans to open 100 smaller and more profitable Best Buy Mobile stores throughout the country. “How do we position the company so we’re where our customers need us to be?” chief executive Brian Dunn asked Thursday in a call with analysts. “We’re clearly going to have more doors and less square footage.” Best Buy said it would announce details about specific store locations and timing for closings once they are finalized. To better compete, Best Buy is shaking up its business. In addition to closing some of its big box stores, the company said it will focus on what sets it apart from its rivals: Trained sales staff that can help shoppers get the most out of their tablets, TVs and other electronic devices, including tech support from its “Geek Squad” service and repair unit. But even as the Best Buy announced its changes Thursday, the Minneapolis-based company also posted a $1.7 billion fiscal fourth-quarter loss that’s partly due to restructuring charges. Despite the loss, Best Buy’s adjusted results for the quarter topped Wall Street’s expectations. But as investors worried that Best Buy’s restructuring didn’t go far enough, its shares slid nearly 7 percent to close Thursday at $24.77. Buckner food maker considers expansion By Chris Otts cotts@courier-journal.com The Courier-Journal The Carriage House Companies, a food industry manufacturer in Buckner, is considering a $96.8 million expansion to add and upgrade production lines — a move projected to result in 225 new jobs. If it follows through with the expansion, Carriage House — owned by RH Financial Corp. of St. Louis — could collect up to $10 million in tax incentives over 10 years from the state and Oldham County. The company makes “wet goods” such as pancake and waffle syrups, barbeque sauce and salsa, according to documents from the Kentucky Economic Development Finance Authority, which approved the award on Thursday. The new jobs are projected to pay an average wage of $22.97 an hour, a figure including the value of employee benefits. The finance authority on Thursday approved awards for four other local companies considering expansions. Like Carriage House, the companies will not get the money unless they follow through with their plans. According to state documents and Greater Louisville Inc., the metro chamber of commerce, the companies are: » Atlas Machine and Supply, a century-old Louisville manufacturer, is considering a $1.2 mil- lion expansion that would create 18 jobs paying an average of $30 an hour, including benefits. Atlas, owned entirely by Rich Gimmel, could collect up to $270,000 from the state and Louisville metro government. » Cinetic Sorting Corp., which designs and builds material handling systems, is considering a $385,135 expansion that would mean 10 new jobs paying an average of $43 an hour, including benefits. Cinetic could collect up to $200,000 from the state and metro government. » LINAK makes electric linear actuators used in hospital beds, adjustable desks and other motorized devices. The company, based in Denmark, is considering a $2.9 million expansion that would mean 30 new jobs paying an average of $21 an hour, including benefits. LINAK could collect up to $300,000 from the state and metro government. LINAK was also approved for $36,000 in sales tax rebates for construction materials and building fixtures. » Vogt Power International, which designs and makes heat recovery steam generators, is looking to hire 45 engineers at its Louisville headquarters and invest more than $500,000 in equipment. The jobs would pay an average hourly wage of $43, including benefits. Vogt Power could collect $550,000 from the state and metro government. Reporter Chris Otts can be reached at (502) 582-4589.

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