WASHINGTON — The Federal Reserve is expected to maintain its resolve to keep borrowing costs at record lows despite growing signs that the economy is strengthening.
The Fed will end a two-day meeting today with a policy statement and updated economic forecasts. Afterward, Chairman Ben Bernanke will hold a news conference.
Most analysts think policymakers will acknowledge the economy's improvements but leave the Fed's stimulative policies unchanged.
LISBON, Portugal — Portugal has raised 1.5 billion euros ($1.94 billion) in a debt auction that saw the bailed-out country's longer-term interest rate fall, suggesting investor jitters about the financial fate of Cyprus are not contaminating other frail eurozone nations.
The government debt agency said it sold 1.2 billion euros in 18-month Treasury bills Wednesday at a rate of 1.506 percent, down from 1.963 percent in January.
It paid a yield of 0.757 percent to sell 300 million euros of 3-month Treasury bills, slightly up from 0.737 last month.
Portugal needed a 78 billion euro rescue in 2011 when, after a decade of low growth and mounting debts, it was engulfed by the eurozone's financial crisis.
Austerity measures contributed to a 3.2 percent economic contraction last year and record unemployment of 17.2 percent.
RBS Citizens said this week it has launched its HealthCare Practice Banking Group, a team of bankers focused entirely on meeting the financial needs of medical and dental practice groups in Massachusetts, Connecticut and Rhode Island.
Products and services to be offered by the new practice group include lines of credit and term loans for equipment purchases, practice acquisitions, startups, renovations and expansions; commercial mortgage financing; and WorldPay merchant credit card processing services with next-day funding.
RBS Citizens said it will also provide assistance in creating efficient cash management processes to improve the cash flow of a practice, including the ability to make deposits directly from a medical or dental office via the RBS Citizens E-Z Deposit service.
The new Healthcare Practice Banking Group is led by Lisa Enright, and also includes former Wells Fargo executive Kathleen Ells and Citizens Bank Business Banking Relationship Manager Rich Rougier.
DALLAS — FedEx said Wednesday that third-quarter profit fell 31 percent as customers shifted to slower and less-expensive international air-shipping options, and it cut its forecast of full-year earnings.
The company says it will cut capacity to and from Asia starting next month and might retire some of its older airplanes.
FedEx shares fell $5.64, or 5.3 percent, to $100.82 in midday trading.
FedEx Corp. said its net income fell to $361 million, or $1.13 per share, in the three months ended Feb. 28. That's down from $521 million, or $1.65 per share, a year earlier.
Excluding costs of voluntary buyouts for some U.S. employees, the company says it would have earned $1.23 per share.
Revenue rose 4 percent to $11 billion.
Analysts were looking for $1.38 per share and revenue of $10.9 billion, according to FactSet.
The company's fiscal year ends in May. It expects adjusted earnings between $1.90 and $2.10 per share in its fourth quarter and $6 to $6.20 per share for the year. That is below analysts' forecasts of $2.12 and $6.35 per share, respectively.
Memphis-based FedEx is the world's second-biggest package-delivery company. It's seen as a gauge of the overall economy because so many consumers and a range of businesses use its shipping services.
Chairman and CEO Frederick W. Smith said the company's fiscal third quarter, which ended Feb. 28, was "very challenging" due to weakness in the global air freight business and customers picking slower, less-expensive ways to ship packages.
Smith said the company will respond by cutting capacity to Asia and directing less profitable shipments into "lower-cost networks." He said the company was studying whether the moves will let it retire older, less-efficient planes.
Executives said that the problem with the international airfreight business wasn't a lack of volume, but rather a faster-than-expected shift among customers from fast, premium service to cheaper delivery options.
"Our planes coming out of Asia were full — full of the wrong type of product," said David Bronczek, CEO of the company's Express business.
Taking their cue from the company, some analysts lowered their forecasts for future earnings. Jim Corridore of Standard & Poor's lowered his predictions for this year and next year but said the shares were still a value and would rise on good economic news.
Cowen Securities analyst Helane Becker said the air freight business "continues to bounce along a bottom" but results at FedEx's Express unit shouldn't get any worse as the company takes steps to fix it.
FedEx plans to cut annual costs $1.7 billion by 2016 with buyouts that will reduce its workforce by at least 10 percent by May 2014. The company said Wednesday that it will spend $450 million to $550 million in cash on the buyouts during the fiscal year ending in May, with "some additional costs" in the following 12 months.
FedEx lowered its capital-spending plan for the current year to $3.6 billion from $3.9 billion.
LONDON — Britain's Treasury chief unveiled another tough budget Wednesday despite weaknesses in the economy that have raised fears of a third recession in a little more than four years.
Though he offered beer drinkers a tax break — no doubt a popular move among some — and provided incentives for home-buyers and investments in infrastructure projects, George Osborne's plan showed the Conservative-led government remains convinced that debt-reduction measures are the best way forward for Europe's third-largest economy.
"We are slowly but surely fixing our country's economic wrongs," he said.
That's not a view shared by all. After three years of austerity, the country is borrowing more than Osborne initially thought and growing far slower than anticipated.
Ed Miliband, leader of the Labour Party opposition, said the budget was "more of the same" from a government that has failed to revive the economy following its deepest recession since World War II and presided over the loss of the country's triple A credit rating from Moody's Investors Service.
"Today, the chancellor joined Twitter," Miliband said. "He could have got it all in 140 characters: Growth down. Borrowing up. Families hit. And millionaires laughing all the way to the bank. Hashtag: downgraded chancellor."
While insisting that his approach was the only way to tackle the economy's problems head on, Osborne conceded that the forecasts from the independent Office for Budget Responsibility were more downbeat than the last set less than four months ago.
The growth forecast for this year, for example, was halved to just 0.6 percent, providing Osborne with even less room to maneuver as a flat-lining economy keeps a lid on revenues and maintains the upward pressure on welfare spending. And though growth in 2014 is expected to triple to 1.8 percent, down from the previous 2 percent prediction, it's still below the country's long-run average and a fairly uncomfortable backdrop to the expected election the following year.
The economy shrank by 0.3 percent in the last three months of 2012, and many analysts have predicted another contraction in the first quarter of 2013. That would put the U.K. back into a recession — technically defined as two consecutive quarters of economic contraction.
Osborne admitted that the recovery was taking "longer than anyone hoped," and that problems in Europe were holding Britain back. The 17 European Union countries that use the euro account for around 40 percent of British exports and many of them are in recession, some of them severe.
"We are still very exposed to what happens on the continent," he said.
Osborne said that some government departments will be ordered to free up 2.5 billion pounds ($3.77 billion) that will be diverted to infrastructure projects, including public housing. The Conservatives' coalition partners, the Liberal Democrats, have been pushing for more projects funded by borrowing in the hope of supporting economic growth.
Just hours before the key speech, figures showed unemployment increasing by 7,000 between November and January to 2.52 million. The increase was caused by more 18-24 year olds becoming unemployed. Despite the rise, the rate remained at 7.8 percent, compared with 8.3 percent a year ago.
In a reminder of the struggles the austerity programs have brought, thousands of public workers have gone on strike — even as Osborne delivered his speech in the early afternoon.
The Trade Union Conference, an umbrella organization for unions with 6.2 million members, said the increase in capital spending that is expected to be presented in the budget isn't enough to kick-start the economy, boosting growth by just 0.06 percent.
Underlining the gravity of the day, Osborne made his first venture into Twitter, choosing to take his message directly to voters. He also posted a picture of himself signing papers beside the scarlet briefcase that symbolizes budget day in Britain.
By early afternoon, he had registered two Tweets — but had some 28,000 followers. Unfortunately for Osborne, he also found himself bombarded by disparaging comments.
PARIS — A lawyer for IMF chief Christine Lagarde says French investigators have searched her Paris home as part of an inquiry into her role in a $400 million arbitration deal in favor of a tycoon.
The lawyer, Yves Repiquet (eev ruh-PEE-kay), says Lagarde has nothing to hide and welcomed Wednesday's search as another step in proving her innocence.
Lagarde was France's finance minister when magnate Bernard Tapie won a 2008 settlement with a state-owned bank over the mishandled sale of Adidas in the 1990s. Critics said the settlement was too generous.
Questions about the settlement began before Lagarde was appointed head of the Washington-based International Monetary Fund after her predecessor, Dominique Strauss-Kahn, quit to face charges he tried to rape a New York hotel maid. The charges against Strauss-Kahn were dropped.
NICOSIA, Cyprus — Cypriot officials rushed Wednesday to find new ways to stave off financial ruin, including asking Russia for help, after Parliament rejected a plan to contribute to the nation's bailout package by seizing people's bank savings.
Tuesday's rejection of the plan to take a slice of all deposits above 20,000 euros ($25,888) has left the country's bailout in question. Without the bailout, the Cypriot banking sector would collapse, devastating the economy and potentially causing the country to leave the euro.
That could roil global financial markets as well as endanger deposits in the country even further.
Political party leaders met at the central bank to discuss an alternative plan to raise the 5.8 billion euros ($7.5 billion) the country needs to qualify for 10 billion euros in rescue loans from its fellow euro countries and the International Monetary Fund.
They also discussed not raising the full 5.8 billion domestically, with the rest potentially coming from other sources, such as Russia. Cyprus' finance minister was in Moscow to ask for support, possibly in the form of an extension on an existing loan.
"We will be here until some kind of agreement is reached," said Michalis Sarris in Moscow.
Cypriot President Nicos Anastasiades held talks with European and IMF officials but issued no statement on the result. The eurozone and IMF officials must sign off on any Plan B the Cypriots come up with if it is to be approved as part of the bailout.
Anastasiades called a meeting of his cabinet ministers for later Wednesday. The ministers would likely draft a bill to limit the amount of money leaving the country, according to a banking official who spoke on condition of anonymity as they were not authorized to discuss the situation.
The ministers would also try to create a so-called "bad bank," a fund in which the dump the nonperforming investments of the country's two largest banks, which lost billions on bad Greek debt.
Cyprus is running on borrowed time, literally.
The ECB is keeping the Cypriot banks alive by allowing them to draw on emergency support from the local central bank. But the ECB has said it would cut off that aid if there was no bailout deal soon and it became clear the banks had no hope of becoming solvent again.
Under the initial bailout plan conceived in Brussels last weekend, other eurozone countries and the IMF would give Cyprus 10 billion euros ($12.9 billion) in rescue loans if the country raised 5.8 billion euros ($7.5 billion) through the one-off bank deposit seizures.
The plan was initially to take 6.75 percent of deposits up to 100,000 euros and 9.9 percent on those above that threshold. That caused outrage, leading the government to propose an amended version that would have spared deposits up to 20,000 euros. But that new plan also failed to win over Cypriot lawmakers.
The European Commission, the executive arm of the European Union that is involved in the bailout talks, said in a statement that it was Cypriot authorities that had wanted to extend the seizures to deposits below 100,000 euros.
But doing so would have required increasing the size of the confiscations on larger deposits, something Cyprus apparently refused to do. The government is worried about scaring away large depositors, who could put a strain on the island's financial system if they were to pull their money out quickly.
The central bank's deputy governor, Spyros Stavrinakis, said no decision had been taken on when banks, which have been shut since the weekend, would reopen, and that a new plan has not yet been presented to the country's euro partners and IMF.
The banks remained shut for the third day running to avoid a bank run, and there are growing expectations they may not reopen until next week — certainly not until Cypriot authorities come up with a credible financial package.
In Nicosia, residents waited anxiously to see what lay in store for them.
Avetis Bahcecian has been running his Armenian restaurant in Nicosia for years. Now, with the uncertainty swirling around Cyprus, he's worried about his business.
"Whatever they do, they have to do it quickly because this uncertainty is hurting business," the 41-year-old said as he kneaded dough to make lahmacun, a traditional Armenian pizza-style food. "Our business is down by 40 percent in the last couple days."
ATMs have been dispensing cash and debit and credit cards have been working, so Cypriots have not faced any immediate cash shortage for day-to-day living.
As uncertainty grew over the country's future, even the country's influential Orthodox church offered to help.
Its head, Archbishop Chrysostomos II, said the church was willing to mortgage its assets to invest in government bonds. The church has considerable wealth, including property, stakes in a bank and a brewery.
"The wealth of the church is at the disposal of the country," Chrysostomos said.
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David McHugh in Frankfurt, Germany, contributed to this report.
Swedish home furnishings giant Ikea plans an expansion in Stoughton, where it has operated its only Massachusetts store since November 2005.
The build-it-yourself furniture chain's proposal calls for increasing the warehouse area of its 357,000-square-foot store by almost 58,575 square feet and starting construction by this fall.
The addition would reconfigure and extend the store's self-serve furniture area where shoppers collect flat-packed furniture to take home that day. Ikea also plans to expand and shift customer service functions to the new part of the store and enlarge its home delivery area and "as-is" section.
"IKEA is thrilled with the success of IKEA Stoughton," store manager Frank Briel said in a statement. "But, as its customer base and sales continue to grow — along with the product assortment we offer — the size of the store's warehouse capacity now is less than ideal."
The expansion, which requires permitting approvals, also would allow the store to increase stock on hand, which would result in transport savings passed on to consumers, according to Ikea, which has a U.S. base in Conshohocken, Penn.
The store would remain open during the work, which is targeted for completion in the fall of 2014.
"This project may require some flexibility by our customers, but we are confident it will create an enhanced shopping experience with access to a bigger product selection and greater quantities of each item," Briel said.
The expansion plans of Ikea, whose Stoughton property is located on 27 acres along Route 24, are scheduled to be vetted tomorrow night at a joint public hearing of the Stoughton Planning Board and Board of Appeals.
Ikea has 340 stores in 41 countries, including 38 in the United States.
Last July, after more than 10 years of planning, Ikea backed out of building a 350,000-square-foot Somerville store on a 12-acre property in Assembly Square. Federal Realty Investment Trust, the Maryland-based developer of the adjacent $1.5 billion Assembly Row mixed-use project, announced in December that it was buying the property for undisclosed terms, with plans to build a grocery store, residential units and office space there.
BOSTON — Gov. Deval Patrick is calling for swift ratification by the Legislature of a revised casino compact with the Mashpee Wampanoag tribe that would provide the state with 17 percent of gambling revenues from a proposed tribal casino in Taunton.
Patrick and tribal chairman Cedric Cromwell announced the signing of the compact on Wednesday. It replaces an earlier agreement calling for the tribe to hand over 21.5 percent of gambling proceeds to Massachusetts. The federal Bureau of Indian Affairs rejected the earlier deal, saying the revenue sharing figure was too high and would violate the spirit of an Indian gaming law that says casino profits should primarily benefit a tribe's members.
The new compact also stipulates that the state would receive no revenue at all from the Mashpee if another casino operated by a commercial developer were to open in southeastern Massachusetts.
The state's gaming commission has scheduled a hearing for Thursday as it considers whether to open the region to commercial bidders. The state's 2011 expanded gambling law gave preference in the region to a federally-recognized Indian tribe, but also authorized the commission to open the process to commercial developers if it concluded that a tribe was unlikely to get the necessary approvals to go forward with a casino.
"We are pleased to see this next step in expanded gaming take place and I urge the Legislature to ratify the agreement quickly," Patrick said. "A gaming facility will bring needed jobs and economic opportunity to the region."
The Bureau of Indian Affairs must also sign off on the new compact within 45 days. Patrick has said that he "vetted" key details with federal officials, an indication that he believes the revised compact will pass muster with the agency.
The deal includes other changes from the earlier compact. For example, it drops a provision that would have offered the tribe assistance in securing new hunting and fishing rights, which the bureau had said fell outside the scope of gaming issues.
The revised compact would also run for a term of 20 years, as opposed to the 15-year term of the earlier agreement.
Mashpee tribal chairman Cedric Cromwell said he believed the new compact, which was approved Tuesday night by the tribal council, would get the backing of the federal government.
"We look forward to breaking ground in the next year on a development that will bring thousands of jobs and significant economic benefits to our tribe, the people of Taunton and the entire Southeastern Massachusetts region," Cromwell said.
Under the agreement, Massachusetts would receive 17 percent of the tribe's gaming revenues if the casino winds up being the only gambling facility in the southeast region.
If a slots parlor were to open in the region, the revenue sharing agreement would drop to 15 percent. Two of the four bidders for the sole slots parlor license allowed under the state law are also in the southeastern part of the state.
But if the gaming commission were to approve a commercial license in the region — and the Mashpee were still able to build a casino outside of the state-approved process — the tribe would not be required to hand over any of its gambling profits to Massachusetts.
In the unlikely possibility that no other resort casinos are built in Massachusetts, the revenue-sharing figure would rise to 21 percent. The state law allows for up to three regional casinos.
The tribe still faces other legal and regulatory hurdles before it can begin construction, including a requirement that the federal government take the Taunton land into trust.
Some lawmakers from southeastern Massachusetts have been pushing the gaming commission to allow commercial developers to bid for the regional license. They say the region could fall behind other parts of the state in casino development and lose out on jobs and economic development if the tribe encounters further delays.
WASHINGTON — The Food and Drug Administration is warning doctors that a compounding pharmacy is recalling syringes of the Roche drug Avastin after receiving reports of eye infections among patients.
The FDA say Georgia-based Clinical Specialties has received five reports of eye infections from physicians who used the drug to treat macular degeneration, a common vision disorder that affects seniors.
The compounding pharmacy is recalling 40 lots of Avastin distributed to doctors' offices in Georgia, Louisiana, South Carolina and Indiana since December.
Avastin is approved as a cancer drug, but it contains the same active ingredient as Lucentis, another Roche drug approved for macular degeneration. For years, compounding pharmacies have repackaged Avastin into small vials for use by eye doctors. Repackaged injections of Avastin cost about $50, compared with $2,000 for Lucentis.
