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Mandarin Oriental reopens with ‘limited’ operations

Written By Unknown on Rabu, 17 April 2013 | 23.14

The Mandarin Oriental on Boylston Street in Boston's Back Bay neighborhood, evacuated after Monday's Marathon bombings as a precaution, is allowing guests to return to retrieve their belongings, according to a spokeswoman.

Molly Kinsella, a spokeswoman for the hotel, said the Mandarin is open today with "limited operational services," but the restaurant, bar and spa are closed. The hotel is honoring existing reservations, but not accepting new ones. Guests and residents, who have been allowed to return, must enter through the Prudential Center.


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Weak earnings reports weigh on Wall Street

NEW YORK — Stocks are opening lower on Wall Street after several big companies including Bank of America reported financial results that fell short of what analysts were hoping for.

The Dow Jones industrial average fell 105 points, or 0.8 percent, to 14,652 shortly after the opening bell Wednesday. It rose 157 the day before.

The Standard & Poor's 500 index was down 16 points at 1,558, a decline of 1 percent.

The Nasdaq composite fell 35 points, or 1.1 percent, to 3,229.

Bank of America fell 4 percent to $11.80, the biggest percentage loss in the Dow, after reporting earnings that missed analysts' estimates.

Textron fell 11 percent to $26 after cutting its forecast for deliveries of corporate jets.

Toy maker Mattel jumped 4 percent to $44.61 after its net income quadrupled.


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Global markets weighed down by growth concerns

LONDON — Waning global growth concerns and disappointing U.S. corporate earnings weighed on markets Wednesday.

Economic indicators have, on the whole, been negative in recent weeks, particularly in Europe and the region's stocks have taken a hit. This week, Germany reported a drop in investor confidence, France said its deficits would be higher than expected, and unemployment rose in Britain.

The International Monetary Fund, meanwhile, lowered its outlook for the world economy, predicting that government spending cuts will slow U.S. growth and keep the euro currency countries in recession this year.

Analysts said another reason for the market's drop was market speculation that Germany could suffer a credit rating downgrade. Though several economists said it was unlikely, since the country's debt costs are at record lows, traders in Europe remained cautious.

By early afternoon in Europe, Germany's DAX was down 1.6 percent to 7,556.49 while France's CAC-40 lost 1.3 percent to 3,636.31. The euro was down 0.4 percent against the dollar to $1.3126.

"Once again, fear rather than optimism is the overriding factor affecting European traders, and early market rumors of a German debt downgrade have seen the DAX lead the way lower," said Alastair McCaig, market analyst at IG.

In Britain, the FTSE 100 was 0.5 percent lower at 6,274.54 after Tesco, the country's largest supermarket operator, reported a sharp drop in profits. The company blamed costs at its Fresh & Easy U.S. operations, which it is trying to sell. It also sounded negative about Asian markets, announcing it would pull out of Japan and take a more measured approach to growth in China.

Labor market figures for the U.K. were also negative, showing unemployment rose by 70,000 in the three months to February. The number suggests the British economy is unlikely to stage a significant recovery in coming months.

Wall Street opened lower as well after Bank of America reported disappointing earnings, causing its shares to drop 3.8 percent. The Dow was down 0.8 percent to 14,632.23 while the broader S&P 500 futures shed 1 percent to 1,558.03.

Corporate earnings reports had until Wednesday been one of the few bright spots for markets this week, so investors will look for improvements in reports from other big names — such as American Express and eBay — later in the day.

Another point of focus will be the Federal Reserve's Beige Book, a regular report that is expected to show that activity in the world's largest economy is still only gradual.

Earlier, Asian stock markets mostly closed higher.

Japan's Nikkei 225 rose 1.2 percent to 13,382.89 as the yen weakened again, helping its many exporting companies. The dollar was up 0.4 percent to 97.91 yen.

Hong Kong's Hang Seng fell 0.5 percent to 21,569.67. Australia's S&P/ASX 200 advanced 1.1 percent to 5,004.60. Benchmarks in Indonesia, Malaysia and the Philippines also rose. South Korea's Kospi rose less than 0.1 percent to 1,923.84.

Benchmark oil for May delivery was down $1.12 at $87.60 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 1 cent on Tuesday.

___

Pamela Sampson in Bangkok contributed to this report.


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Mattel 1Q profit rises, Monster High sales climb

NEW YORK — Move over Barbie. Mattel said Wednesday its first-quarter net income more than quadrupled helped by strong sales of dolls like Monster High, Disney Princess and American Girl.

Results beat expectations and shares rose more than 4 percent in morning trading after briefly hitting its highest level in 15 years.

The fashion doll category has been one of the toy industry's strongest, helped by new entrants such as Monster High — a doll line based on the offspring of famous monsters — which has grown to the No. 2 doll category in just three years of existence, according to Mattel.

Barbie is still the No. 1 doll in the sector, but Mattel's results show that other doll brands are gaining steam.

Barbie sales slipped 2 percent, hurt by the stronger dollar. It's the third straight quarter of domestic revenue decline for the famous 54-year-old fashion doll. Mattel declined to give specific sales figures, but said Monster High results drove its total girls brand category up 56 percent worldwide. American Girl sales rose 32 percent.

"As we look at Barbie it's a very competitive category," said CEO Bryan Stockton. "The total fashion doll category is growing and Barbie is holding her own."

The first-quarter is the seasonally smallest for toy makers — accounting for just 17 percent of annual sales, with ad spending at a minimum — coming after the busy holiday quarter. The latest earnings increase was helped by comparison with a period that included a big charge a year ago.

"We continue to see the first quarter as our pre-season and we remain focused on a strong 2013 and delivering in the all-important holiday season," Stockton said.

BMO Capital Markets analyst Gerrick Johnson noted that "hotter" toy brands, like Monster High drove results rather than basics like Barbie, Hot Wheels or Fisher-Price, which all had slightly lower sales.

"That doesn't bode well for Hasbro, which has few 'hot' products," he said. Mattel's smaller rival Hasbro Inc. reports results on Monday.

El Segundo, Calif.-based Mattel said net income for the January-to-March quarter totaled $38.5 million, or 11 cents per share. That's up from $7.8 million, or 2 cents per share, a year ago.

Analysts polled by FactSet expected earnings of 8 cents per share.

The prior-year period's results were weighed down by costs tied to its $680 million acquisition of HIT Entertainment, the company behind Thomas the Tank Engine and Bob the Builder.

Revenue climbed 7 percent to $995.6 million from $928.4 million. Wall Street expected $984.2 million.

The company saw solid sales across North America and overseas. American Girl gross sales increased 32 percent, while worldwide gross sales of other girls' brands — which includes Monster High — surged 56 percent.

Barbie's worldwide gross sales dipped 2 percent, marking the fourth time sales have fallen in the past five quarters. Sales for the Wheels category, which includes the Hot Wheels, Matchbox and Tyco R/C brands, also fell 2 percent. For the Fisher Price brands, sales declined 7 percent.

Mattel also said Wednesday that it declared a second-quarter dividend of 36 cents per share. The dividend will be paid on June 14 to shareholders of record on May 23. The company anticipates an annualized dividend of $1.44 per share, which would be a 16 percent increase over last year's annualized dividend.

Mattel shares rose $1.93, or 4.5 percent, to $44.91 in morning trading Wednesday after rising as high as $45.37 earlier in the session. FactSet said that was its highest price since March 1998.

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AP Writer Michelle Chapman contributed to this report


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Samsung Galaxy S 4 sales start next week in US

NEW YORK — U.S. carriers have started nailing down prices for Samsung's new flagship phone, the Galaxy S 4, which goes on sale starting next week.

AT&T Inc. has started taking pre-orders, and says phones will be shipped starting April 30. It's charging $200 for the base model, with 16 gigabytes of memory, under a two-year contract. Staples says it will start selling the AT&T model on April 26.

Sprint Nextel Corp. starts taking pre-orders Thursday, and says in-store sales start April 27. It charges $250 for the base model, or $150 if the buyer is coming over from another carrier

T-Mobile USA starts taking pre-orders next Wednesday and in-store sales start May 1. It's charging $150 down and $20 per month for two years under its new installment plans.

Verizon Wireless has said it will sell the phone, but hasn't announced a release date or price. Smaller carriers U.S. Cellular, Leap Wireless' Cricket and C Spire will also sell the phone.

The S 4 is the successor to the Galaxy S III, which has been the biggest competitor to Apple Inc.'s iPhone.

The Galaxy S 4 has a slightly bigger screen, a larger battery and a faster processor than its predecessor.


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Google mail and other services 'disrupted'

NEW YORK — Google's mail and application services are unavailable to some users. The company says it's investigating the problems, but doesn't know their cause.

Google's apps status dashboard shows that its Mail, Drive file storage service and office-application services are "disrupted." Its administrator control panel, which lets companies manage their Google applications, is completely down.

The disruptions started affecting people worldwide around 8 a.m. Eastern time.

Google Inc. says it's "working hard to restore normal operation."


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Canada central bank leaves interest rate unchanged

TORONTO — The head of Canada's central bank is leaving Canada's key interest rate unchanged at 1 percent.

Bank of Canada Governor Mark Carney reiterated in a statement on Wednesday that the rate will need to remain low for some time before a rate hike is considered. It is one of Carney's final announcements before leaving to become the governor of the Bank of England.

The bank lowered its 2013 economic growth forecast for Canada to 1.5 percent from 2 percent.

CIBC World Markets economist Avery Shenfeld says the bank might not raise the rate until early 2015.

Carney, a Canadian, will become the head of the Bank of England on July 1. He is the first foreigner to be tapped for the position since it was founded in 1694.


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New England unemployment rate at 7 percent

PROVIDENCE, R.I. — The unemployment rate in New England ticked down in February to 7 percent, well below the national average.

The New England Information Office of the U.S. Bureau of Labor Statistics said Wednesday that the average jobless rate in the six-state region fell one-tenth of 1 percentage point from January. A year ago, the New England rate was 7.2 percent.

The national rate in February was 7.7 percent. That's down six-tenths of 1 percentage point from a year ago.

Three states had February rates significantly below the U.S.: Vermont's was 4.4 percent, New Hampshire's was 5.8 percent and Massachusetts' was 6.5 percent. Maine's rate of 7.3 percent was also below the national rate.

Rhode Island and Connecticut, meanwhile, had higher rates, 9.4 percent and 8 percent, respectively.


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American expects flights to return to normal

DALLAS — American Airlines is promising to run a near-normal operation on Wednesday, and that would be just fine for the tens of thousands of passengers who were stranded by a mammoth technology meltdown at the nation's third-biggest airline.

On Tuesday, American and sister airline American Eagle canceled about 1,000 flights and delayed at least 1,100 more, according to flight-tracking services.

That means American and Eagle canceled or delayed nearly two-thirds of their scheduled flights after they lost access to a computer system that's used for everything from issuing boarding passes to determining how much fuel to pump into the plane.

It was a public-relations nightmare for American, which is preparing to merge with US Airways and become the world's biggest carrier. Passengers took to social media sites to criticize the airline, which for hours could only apologize and say that it was trying to fix the problem.

American posted a video apology from CEO Tom Horton that provided the airline's most detailed explanation of the outage.

"As you'd imagine, we do have redundancies in our system," Horton said, standing in front of employees and banks of computer monitors in the airline's control center in Texas, "but unfortunately in this case we had a software issue that impacted both our primary and backup systems."

The man who will lead American in a few months, US Airways CEO Doug Parker, has said he would prefer to convert his planes and employees to American's computer system rather than the other way around.

US Airways declined to comment on whether Tuesday's breakdown would cause Parker to rethink his plans.

The computer outage began snarling operations around midmorning. Eventually the Federal Aviation Administration issued a so-called ground stop for American Airlines jets around the country.

Flights already in the air were allowed to continue to their destinations, but planes on the ground from coast to coast could not take off. And travelers could do little to get back in the air until the computer system was restored.

By late afternoon, American resumed international flights and those from its major hub airports. It scrambled during the evening to put planes and crews in position to get off to a good start on Wednesday morning.

"Despite the magnitude of today's disruption, we are pleased to report that we expect our operation to run normally with only a small number of flight cancellations" on Wednesday, said Andrea Huguely, a spokeswoman for American. She said American would add flights to accommodate stranded passengers.

American blamed the outage on a loss of access to computer networks that are used for flight reservations and many other functions. Airlines commonly rely on such systems to track passengers and bags, monitor who boards planes, and update flight schedules and gate assignments. The computers are also used to file flight plans and tell employees which seats should be filled to ensure that the plane is properly balanced.

American's system is hosted by Sabre Holdings, a one-time division of American that was spun off into a separate travel-reservations technology company. American said the outage wasn't Sabre's fault, and other airlines that use Sabre didn't experience problems.

At airports, customers whose flights were canceled couldn't rebook on a later flight. Passengers already at the airport were stuck in long lines or killed time in gate areas.

"Tensions are high. A lot of people are getting mad. I've seen several yelling at the American agents," said Julie Burch, a business-meeting speaker who was stuck at Dallas-Fort Worth International Airport waiting for a flight to Denver. "Nobody can tell us anything."

Terry Anzur, a TV news consultant from Los Angeles who was also stranded in Dallas, said American Airlines gate employees were doing everything the old-fashioned, manual way because their computers were useless.

"No one at the counter can do anything. They can't check people in," Anzur said. "The airline is at a dead halt."

Theoretically, an airline could do the same work as the reservation system manually for any one flight. But doing it for hundreds of flights isn't practical. American and Eagle operate about 3,300 flights a day.

Now, if the reservations systems go down, "most airlines would be pretty much without the ability to fly more than a very limited number of flights," said Scott Nason, American's former technology chief and now a consultant.

Nason said airlines find and fix the problem, but the next time something else causes an outage. One time, a possum chewed through a cable in Tulsa, Okla., bringing down the whole system. Another time, a worker in the airline's data center used a metal tool instead of an insulated, rubber-coated one — a short-circuit crashed much of the system, he said.

Brent Bowen, a professor of aviation technology at Purdue University, said massive system failures are inevitable as airlines grow increasingly reliant on technology.

"As those systems get bigger and more complex, at some point you're going to have a systemic failure," Bowen said. He added that financially strapped airlines may have underinvested in technology during the past decade, making the computer systems more vulnerable. AMR has lost more than $10 billion since 2001 and filed for bankruptcy protection in late 2011.

American's problems on Tuesday were reminiscent of what United Airlines passengers endured for several days last year. After merging with Continental, United experienced computer glitches in the combined reservation system. On one day in August, 580 United flights were delayed, and its website was shut down for two hours. Another outage in November delayed 636 flights.

The problems prompted an apology from United Continental Holdings Inc. CEO Jeff Smisek, who acknowledged that his airline had frustrated customers and would need to work to win them back.

American began making amends by offering to book people who needed to travel Tuesday on other airlines and pay for the fare difference. For those who wanted to delay their trips, American offered refunds or waivers from the usual fee for changing a reservation.

But for several hours, the airline wasn't able to process those changes and refunds — because the computers were down.

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Associated Press Airlines Writers Scott Mayerowitz in New York and Joshua Freed in Minneapolis contributed to this report.

___

David Koenig can be reached at http://www.twitter.com/airlinewriter


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High court limits suits over foreign abuses

WASHINGTON — The Supreme Court has limited the ability of foreign victims of human rights abuses to use American courts to seek accountability and monetary damages for their suffering.

The justices unanimously agreed Wednesday to shut down a lawsuit filed by Nigerians against Royal Dutch Petroleum, or Shell Oil, over claims that the company was complicit in murder and other abuses committed by the Nigerian government against its citizens in the oil-rich Niger Delta in the 1990s.

The suit is one of several pending claims against U.S. and international companies that invoke the 1789 Alien Tort Statute. Human rights lawyers have used the law to sue individuals who allegedly took part in abuses and, more recently, companies that do business in the United States as well as places where abuses occur.

While all the justices agreed that the Nigerians claims could not go forward, the court split sharply on the issue of whether the 224-year-old law generally could be used to sue over claimed human rights abuses in another country. Chief Justice John Roberts, writing for five justices, said that it could not.

Roberts said the law does not allow claims "seeking relief for violations of the law of nations occurring outside the United States."

Justice Stephen Breyer, in a separate opinion for four justices, agreed that the Nigerians' claims must not be accepted, but said he would leave the courthouse door open to lawsuits where alleged abuse "adverserly affects an important American national interest." Breyer said that category "includes a distinct interest in preventing the United States from becoming a safe harbor...for a torturer or other common enemy of mankind."

Energy and mining companies have been among the most frequent targets of these lawsuits in recent years following efforts by the military in Indonesia, Nigeria and elsewhere to clamp down on protests against oil and gas exploration and development.

The Alien Tort Statute, adopted in part to deal with piracy claims, went unused for most of American history until rights lawyers dusted it off beginning in the late 1970s. The Supreme Court cautiously endorsed the use of the law in 2004, but left unanswered precisely who could be held liable and in what circumstances.


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