WASHINGTON — As gasoline prices rose, Americans spent more in June than the previous month — despite falling incomes. For the rest of the year, economists expect falling wages and rising unemployment to act as a drag on spending.

Consumer spending is closely watched because it accounts for about 70 percent of total economic activity and has helped lift the economy out of previous recessions. While analysts expect the economy to grow in the second half of this year, consumers aren't likely to lead the way.

Americans boosted their spending 0.4 percent in June, the Commerce Department reported yesterday, the second consecutive monthly increase. But adjusting for inflation, spending fell 0.1 percent, following a flat reading in May. Inflation-adjusted spending hasn't increased since February, the department said.

LENDERS STALL IN AID TO HOMEOWNERS

WASHINGTON — The government's $50 billion program to ease the mortgage crisis is helping only a tiny fraction of struggling homeowners, and a list released yesterday showed which lenders are laggards.

As of July, only 9 percent of eligible borrowers had seen their mortgage payments reduced with modified loans. And the first monthly progress report showed that 10 lenders had not changed a single mortgage.

The report indicated that lenders such as Bank of America Corp. and Wells Fargo and Co. have lagged behind government expectations. Both banks received billions in federal bailout money.

BofA modified just 4 percent of eligible loans, and Wells Fargo 6 percent. Wachovia Corp., which was taken over by Wells Fargo in December, modified only 2 percent.

SEC MOVING TO BAN FLASH-ORDER TRADING

NEW YORK — The Securities and Exchange Commission is moving toward banning a trading practice that gives some brokerages a split-second advantage in buying or selling stocks.

SEC Chairwoman Mary Schapiro said in a statement that the agency is working to create a rule to ban the trades known as flash orders.

Flash orders give certain members of exchanges including Nasdaq, Direct Edge and BATS the ability to buy and sell order information for milliseconds before that information is made public. High-speed computer software can take advantage of that brief period to allow those members to get better prices and profits.

Sen. Charles Schumer, D-N.Y., a critic of the orders, said in a statement that Schapiro personally assured him the SEC would ban the practice. Last month, Schumer sent a letter to the SEC urging it to eliminate flash orders and said that if it didn't, he would write legislation to do so.

PEPSI BUYING ITS TOP 2 BOTTLERS FOR $7.8B

MILWAUKEE — PepsiCo Inc. said yesterday it is buying its two top bottlers for $7.8 billion in a bid to save money and get new products to market more quickly. The deals were sealed months after PepsiCo's first offers were rejected and 10 years after PepsiCo first spun off its largest bottler, Pepsi Bottling Group.

The company spun off its bottler a decade ago so it could concentrate more on the then-booming soft drink business. But in the years since, consumers have gravitated toward healthier options like juices and teas, leaving soft drink sales to slump.

That's why the maker of Gatorade and Pepsi wants to own Pepsi Bottling again, and along with it, PepsiAmericas.

The world's second-biggest drink maker said the deals will allow it to respond more quickly to the changing market because consumers tastes are changing so fast.