NEW YORK (AP) — Apple Inc. warned Wednesday that the blockbuster sales growth of the last five years is slowing drastically, as iPhone sales are starting to plateau.
The outlook sent Apple shares plunging by 10 percent, wiping out a year's worth of gains.
Analysts said the warning suggested that Apple can no longer sustain its growth without some completely new product. Its last revolutionary product launch was the iPad in 2010.
Unions suffer sharp decline in membership
WASHINGTON (AP) — Union membership plummeted last year to the lowest level since the 1930s as cash-strapped state and local governments shed workers and unions had difficulty organizing new members in the private sector despite signs of an improving economy.
Government figures released Wednesday showed union membership declined from 11.8 percent to 11.3 percent of the workforce, another blow to a labor movement already stretched thin by battles in Wisconsin, Indiana, Michigan and other states to curb bargaining rights and weaken union clout.
Overall membership fell by about 400,000 workers to 14.4 million, according to the Bureau of Labor Statistics. More than half the loss, about 234,000, came from government workers, including teachers, firefighters and public administrators.
Feds: 3 nabbed for widespread Gozi computer virus
NEW YORK (AP) — A computer virus that spread to more than a million computers worldwide, including some at NASA, and produced at least $50 million in illegal profits or losses to victims should be a "wake-up call" for banks and consumers unaware of the threat posed by Internet criminals, a prosecutor said Wednesday.
U.S. Attorney Preet Bharara and George Venizelos, head of the New York FBI office, warned of the growing threat to financial and international security as they announced that a 2½-year probe had resulted in three arrests, two of them overseas, and the seizure of vast amounts of computer-related evidence that will take months or years to fully analyze. They said the Gozi virus had infected 40,000 computers in the United States since 2005, including 190 at the National Aeronautics and Space Administration, along with computers in Germany, Great Britain, Poland, France, Finland, Italy, Turkey and elsewhere.
Debt crisis averted — but spring fight still ahead
WASHINGTON (AP) — Retreating with a purpose, Republicans sped legislation through the House on Wednesday to avert the imminent threat of a government default but pointing the way to a springtime budget struggle with President Barack Obama over Medicare, farm subsidies and other benefit programs.
The current legislation, which cleared the House on a bipartisan vote of 288-144, would permit Treasury borrowing to exceed the limit of $16.4 trillion through May 18. As it passed, Speaker John Boehner pledged that Republicans would quickly draft a budget that would wipe out deficits in a decade, and he challenged Democrats to do the same.
The Democratic-controlled Senate is expected to approve the debt bill as early as Friday. The White House welcomed the legislation rather than face the threat of a first-ever default at the dawn of the president's second term in the White House, and spokesman Jay Carney pointedly noted a "fundamental change" in strategy by the GOP.
IMF sees modest 2013 improvement for world economy
WASHINGTON (AP) — The International Monetary Fund is projecting a modest rise in global economic growth for 2013, but also warning that problems in the eurozone and the United States could derail momentum.
The report Wednesday, an update of the fund's World Economic Outlook, largely tracked the initial estimate from October, revising global growth down slightly by one-tenth of a percentage point, to 3.5 percent. The world economy grew 3.2 percent in 2012, according to IMF estimates.
McDonald's plans 'Fish McBites' to boost sales
NEW YORK (AP) — McDonald's used the Dollar Menu to help lift its profit in the latest quarter. Now the world's biggest hamburger chain is turning to a pipeline of new menu items to boost slumping sales, starting with "Fish McBites."
The Oak Brook, Ill.-based company is betting that it will be able to beat back intensifying competition and economic pressures with the lineup, which executives said includes new burgers, chicken entrees and breakfast offerings that are performing well in test markets. The Fish McBites, which will come in three sizes and use the same Alaskan pollock as in the Filet-O-Fish, are set to be launched as a limited-time menu addition in February.
The stepped-up offerings come after McDonald's managed to eke out a higher profit for the October-to-December period with a series of short-term maneuvers, such as touting its Dollar Menu, pushing back the two-week availability of its popular McRib to the second half of December when sales comparisons from a year-ago were tougher, and urging franchisees to stay open on Christmas.
Coach shares plunge on tough holiday quarter
NEW YORK (AP) — Shares of Coach Inc. plunged Wednesday after the upscale handbag seller said a challenging economy and heavy price-cutting by competitors weighed on its fiscal second-quarter results.
The muted holiday results offer more evidence that the shopping season was tough as shoppers grappled with the economic uncertainty brought on by the European recession and U.S. "fiscal cliff" negotiations.
Coach is considered a bellwether for upper-middle-income shoppers who trade up to luxury goods, so the latest snapshot raises concern about their spending, as well as that of the wealthy.
US Airways 4Q profit doubles as planes are fuller
US Airways' net income doubled in the fourth quarter and executives said the strong demand the airline is seeing is often a precursor to higher fares.
Fuller planes made the difference in the last three months as revenue set a record.
Airlines successfully raised fares five times last year but have struggled to do so lately. Two attempts led by United this month failed after other airlines didn't match the increases. For US Airways one measure of fares — called yield — declined very slightly in the fourth quarter.
Netflix's stock soars on big 4Q subscriber gains
SAN FRANCISCO (AP) — Netflix's Internet video service warded off stiffer competition to add 2 million U.S. subscribers during the final three months of the year, producing an unexpected profit for the company.
The fourth-quarter performance announced Wednesday validates investors' recent confidence in Netflix Inc. Its volatile stock had surged by more than 30 percent since early December. The stock soared another $34.49, or 33 percent, to $137.75 in after-hours trading after the numbers came out. If the shares trade similarly in Thursday's session, it will propel Netflix's stock to a new 52-week high.
The surge in new customers gave Netflix 27.1 million U.S. subscribers who stream movies and TV shows to Internet-connected devices.
US officials defend handling of Boeing 787 mishaps
WASHINGTON (AP) — Obama administration officials struggled Wednesday to defend their initial statements that the Boeing 787 Dreamliner is safe while promising a transparent probe of mishaps involving the aircraft's batteries.
Transportation Secretary Ray LaHood stood by his Jan. 11 assertion that the 787, Boeing's newest and most technologically advanced airliner, was safe. At that time LaHood and the head of the Federal Aviation Administration, Michael Huerta, declared the plane fit to fly despite a battery fire in one plane.
Five days later, following another battery mishap that led to the emergency landing of a 787 in Japan, LaHood and Huerta ordered United, the lone U.S. carrier with 787s, to ground the planes. Authorities in Europe and elsewhere — including Chile, Poland, Ethiopia, Qatar and India — swiftly followed suit. Two Japanese airlines voluntarily grounded their planes before the FAA's order.
By The Associated Press(equals)
The Dow Jones industrial average rose 67.12 points to close at 13,779.33. The Standard & Poor's 500 index added 2.25 points to 1,494.81, while the Nasdaq composite rose 10.49 points to 3,153.67.
Benchmark oil dropped $1.45, or 1.5 percent, to finish at $95.23 per barrel. Brent crude, used to price international varieties of oil, rose 38 cents to end at $112.80 per barrel on the ICE Futures exchange in London.
Natural gas was flat at $3.55 per 1,000 cubic feet. Wholesale gasoline was unchanged at $2.83 per gallon. Heating oil rose 1 cent to $3.08 a gallon.