BUSINESS BRIEFS
Economy boosted by overseas sales of U.S. products
Associated Press
WASHINGTON — The fragile economy improved slightly at the beginning of the year and could grow a bit stronger in the current quarter as extra cash from tax rebates spurs people to buy more. Still, it's not out of danger yet.
The economy grew at a 1 percent annualized rate in the first quarter, helped in large part by stronger sales of U.S. products overseas, the Commerce Department reported yesterday.
That was a tad stronger than the government's previous estimate of 0.9 percent growth for the quarter. And, the new reading was better than the anemic 0.6 percent growth rate logged in the final three months of last year.
Nonetheless, the two quarters together marked the slowest growth in five years. The economy has been bruised by housing, credit and financial problems. That led consumers during the first quarter alone to boost their spending at the weakest pace since the 2001 recession.
DISCOVER BEATS WALL ST. FORECAST
NEW YORK — Discover posted a healthier quarterly profit yesterday than Wall Street expected — no thanks to the lending business, however.
The card company benefited between March and May not from issuing credit, but rather from milking its third-party payments business — which processes ATM and debit transactions and other banks' cards — and selling its British card business.
The trend toward plastic, whether it's credit or debit, appears to be the saving grace right now for companies like Discover, as customers fall behind on their debt payments and trim their spending.
Discover's third-party payments segment produced transaction volume of $29.4 billion, up 33 percent from a year ago. Since then, Discover has signed on many new financial institutions to use its card network. The company also saw transaction volumes rise at already existing issuers.
GM SHARES FALL TO 33-YEAR LOW
DETROIT — Shares of General Motors Corp. plunged to their lowest price in more than 33 years, and Ford shares hit another 52-week low yesterday as analysts continued to speculate about just how bad things will get for U.S.-based automakers.
GM shares were off $1.38, or 10.8 percent, to close at $11.43, after tumbling as low as $11.21 earlier in the session.
The low price for the day tied the low reached on Dec. 30, 1974, according to the University of Chicago's Center for Research in Security Prices. The center adjusts prices for stock splits.
Ford shares hit a 52-week low of $4.94 in early trading before recovering to close at $5.07, still down 17 cents, or 3.2 percent. They have traded as high as $9.70 over the past year.
YAHOO HAS NEW PECKING ORDER
SAN FRANCISCO — Yahoo Inc. is setting up a new chain of command amid the turmoil triggered by the embattled Internet icon's snub of Microsoft Corp.'s $47.5 billion takeover bid.
Under the new pecking order announced yesterday, Yahoo executive vice presidents Hilary Schneider and Ash Patel are being given expanded responsibilities over the Sunnyvale-based company's products and sales teams.
Schneider, a former newspaper executive, has been moving up the ranks since she joined Yahoo in September 2006.
Patel has played a key role in developing many of Yahoo's most popular products, including its finance section and instant messaging service, since joining the company 12 years ago.
Yahoo also is reorganizing its technology division in an effort to use its computing power more effectively and improve the coordination between its product developers and engineers.
This is the third time in 19 months that Yahoo has redrawn its management chart as it tries to snap out of a financial malaise that has ravaged its stock price, jeopardized its independence and demoralized employees.
