US consumer prices drop 0.1 pct. on cheaper gas

WASHINGTON — Cheaper gasoline lowered overall U.S. consumer prices slightly in October. But outside the steep drop at the pump, inflation stayed mild.

The consumer price index fell 0.1 percent last month, down from a 0.2 percent increase in September, the Labor Department said Wednesday. The October decline was due mainly to a 2.9 percent drop in gasoline costs, the largest since April. Over the past 12 months, overall prices have risen 1 percent, well below the Federal Reserve's inflation target of 2 percent.

PNC Bank chief economist Stuart Hoffman said the low inflation reading ensures that the Fed will continue its extraordinary measures to spur growth.

"From the Federal Reserve's perspective, inflation is too low, one reason why the central bank continues to provide massive stimulus to the economy," Hoffman said in a note to clients.

Excluding volatile energy and food costs, so-called core prices rose 0.1 percent in October from September and have risen just 1.7 percent over the past 12 months. The prices for new vehicles, clothing and medical care declined last month. But airfares rose a whopping 3.6 percent.

U.S. gasoline prices began falling in the spring and reached two-year lows earlier this month. The average price of a gallon of gas was $3.21, according to AAA's Daily Fuel Gauge Report.

The drop in fuel prices may be offset somewhat by slight increases in the cost of food, which rose 0.1 percent. That increase was driven by a 0.6 percent rise in the prices of meats, poultry, fish and eggs, the largest advance for any of the food categories.

Inflation has been modest over the past four years, with prices held down by the weak recovery from the Great Recession. High unemployment and modest wage hikes have made it difficult for Americans to spend more and retailers to charge more.

Low inflation gives the Fed more latitude to pursue its extraordinary stimulus to help drive economic growth. The Fed has been buying $85 billion a month in bonds to keep long-term interest rates low and encourage more borrowing and spending. It has also kept its key short-term interest rate near zero since late 2008.

Critics of the bond-buying program fear it will spark higher inflation in the future.

But a number of Fed officials have objected to slowing the program because inflation remains below 2 percent.

A small amount of inflation can be good for the economy, because it encourages consumers and businesses to spend and invest before prices rise further.

The Fed will release on Wednesday the minutes of its policymaker meeting that ended on Oct. 30. Economists expect the minutes to provide little insight into what steps the central bank will take next in terms of its bond buying and plans to keep the short-term interest rate it controls at nearly zero.

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Markets remain lackluster in run up to Fed minutes

AMSTERDAM — Markets got a modest lift Wednesday after tame U.S. inflation figures eased investor fears that the U.S. Federal Reserve will feel pressure to reduce its monetary stimulus soon.

U.S. consumer prices fell slightly in October, due to lower energy and housing prices, according to a Labor Department report Wednesday. Over the past 12 months, inflation has been just 1 percent, the smallest increase since late 2009.

"With limited inflation pressure and even perhaps a whiff of deflation, the Fed isn't likely to feel any urgency to pull in the reins on policy," said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

Following the inflation figures, stocks in Europe recovered some lost ground while the U.S. opened steadily.

In Europe, the FTSE 100 index of leading British shares was down 0.2 percent at 6,688 while Germany's DAX was a tad lower at 9,190. The CAC-40 in France was 0.3 percent lower at 4,260.

In the U.S., the Dow Jones industrial average was flat at 15,967 while the broader S&P 500 index rose 0.1 percent to 1,790.

The main focus later will be the publication of the minutes to the Fed's last policy meeting are published later in the U.S. trading session.

"Investors remain hesitant to enter the markets before tonight's minutes," said Max Cohen, a trader at Spreadex.

Earlier, Asian markets generally fell, though Hong Kong's Hang Seng added 0.2 percent to 23,700.86 and China's Shanghai Composite reversed losses to gain 0.6 percent to 2,206.61 after the Organization for Economic Cooperation and Development made positive remarks about the Chinese economy.

Seoul's Kospi was down 0.7 percent to 2,017.24. Australia's S&P/ASX 200 ceded 0.8 percent to 5,307.70. Japan's Nikkei 225 stock average shed 0.3 percent to 15,076.08, hurt by a rise in the yen.

Other markets drifted. Among currencies the euro was 0.1 percent lower at $1.3539 while the dollar fell 0.3 percent to 99.87 yen.

In the oil markets, the benchmark New York crude rate was up 45 cents at $93.34 a barrel.

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Lowe's 3Q results rise, lifts fiscal 2013 outlook

MOORESVILE, N.C. — Lowe's third-quarter net income increased 26 percent, as the home-improvement retailer was bolstered by the housing market's ongoing recovery.

Its earnings were a penny per share short of Wall Street expectations, but revenue beat forecasts.

The Mooresville, N.C., company boosted its fiscal 2013 outlook again on Wednesday, but the earnings forecast was still below expectations.

Lowe's shares dropped almost 3 percent in premarket trading.

Home improvement companies have been benefiting from record-low interest rates and rising home prices, spurring customers to spend more to renovate their homes.

"The home improvement industry is poised for persisting growth in the fourth quarter and further acceleration in 2014," said CEO Robert Niblock.

But Lowe's has not been benefiting as much as its larger rival, Home Depot, which reported third-quarter results Wednesday that topped analysts' estimates and it lifted its outlook.

To boost results, the company has adjusted its pricing strategy, returning to offering what it says are permanent low prices on many items, instead of fleeting discounts.

The company also recently acquired Orchard Supply Hardware Stores for $205 million, a deal which was completed during the quarter, in order to expand in California.

Lowe's Cos. earned $499 million, or 47 cents per share, for the period ended Nov. 1. That's up from $396 million, or 35 cents per share, a year ago. Analysts polled by FactSet expected earnings of 48 cents per share.

Revenue rose 7 percent to $12.96 billion from $12.07 billion. Wall Street forecast $12.73 billion in revenue.

Sales at stores open at least a year, a key retail metric, rose 6.2 percent

Lowe's now expects full-year earnings of about $2.15 per share, up from prior guidance of $2.10 per share. Revenue is predicted to climb approximately 6 percent, from an earlier estimate of 5 percent. Based on 2012's revenue of $50.52 billion, the new forecast implies approximately $53.53 billion.

Analysts predict fiscal 2013 earnings of $2.20 per share on revenue of $53.09 billion.

Its shares fell $1.42, or 2.8 percent, to $49.02 in premarket trading about 45 minutes ahead of the market opening. Lowe's had 1,831 stores in the U.S., Canada and Mexico at the end of the third quarter.

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Deere profit beats estimates

MOLINE, Ill. — Deere & Co.'s fourth-quarter net income rose 17 percent after it raised prices for farm and construction equipment as it aims to keep its profits intact even as the farm economy slows.

Deere said declines in next year's revenue will be smaller than analysts have been expecting, and company shares rose almost 4 percent before the opening bell.

Deere makes tractors, combines, plows and other gear that farmers use to till and harvest crops, so its fortunes rise and fall with the farm economy. Farm gear and lawn tractors make up 82 percent of its equipment sales, with construction gear accounting for the rest.

Crop prices have been dipping after setting record highs, so farmers have less money in their pockets. Corn prices have plunged 44 percent in the past year. Deere projected further declines for corn, soybeans, and wheat. The declines will dampen demand, Deere said, especially for large farm equipment.

Deere predicted that equipment sales will fall 3 percent next year, which works out to revenue of $33.95 billion. It said fiscal 2014 net income would fall almost 7 percent to $3.3 billion.

That, however, is still better than the $3.07 billion expected on Wall Street.

For the quarter Deere earned $806.8 million, or $2.11 per share. That was up from $687.6 million, or $1.75 per share, a year earlier. The results were well ahead of the $1.90 per share profit expected by analysts surveyed by FactSet.

Equipment revenue fell 5 percent to $8.62 billion, matching analyst estimates. Deere sold fewer pieces of equipment, but prices rose on the gear it did sell, which is why profits were higher even though revenue fell.

Sales of agriculture and turf gear fell 4 percent in the most recent quarter, and Deere said they will fall 6 percent in the upcoming fiscal year. It predicted declines in the U.S. and Canada, South America, and Europe. It predicted slight gains for Asia.

Sales of construction and forestry gear fell 8 percent in the quarter. Deere said those sales should rise 10 percent in the year ahead as more houses are built. Global forestry sales will rise thanks to more activity in Europe, Deere said.

Shares of the Moline, Ill., company rose $3.09 to $85.90 in premarket trading.

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Poll: 'Just kidding' doesn't make online slurs OK

WASHINGTON — In a shift in attitude, most young people now say it's wrong to use racist or sexist slurs online, even if you're just kidding. But when they see them, they don't take much personal offense.

A majority of teens and young adults who use the Internet say they at least sometimes see derogatory words and images targeting various groups. They often dismiss that stuff as just joking around, not meant to be hurtful, according to a new poll from The Associated Press-NORC Center for Public Affairs Research and MTV.

Americans ages 14 to 24 say people who are overweight are the most frequent target, followed by gay people. Next in line for online abuse: blacks and women.

"I see things like that all the time," says Vito Calli, 15, of Reading, Pa. "It doesn't really bother me unless they're meaning it to offend me personally."

Even then he tries to brush it off.

Calli, whose family emigrated from Argentina, says people tease him online with jokes about Hispanics, but "you can't let those things get to you."

He's typical of many young people surveyed. The majority say they aren't very offended by slurs in social media or cellphone text messages — even such inflammatory terms as "bitch" or "fag" or the N-word.

Yet like Calli, most think using language that insults a group of people is wrong. The high school sophomore says he has tried, with difficulty, to break his habit of calling anything uncool "gay" or "retarded."

Compared with an AP-MTV poll two years ago, young people today are more disapproving of using slurs online.

Nearly 6 in 10 say using discriminatory words or images isn't all right, even as a joke. Only about half were so disapproving in 2011.

Now, a bare majority say it's wrong to use slurs even among friends who know you don't mean it. In the previous poll, most young people said that was OK.

But the share who come across slurs online has held steady. More than half of young users of YouTube, Facebook and gaming communities such as Xbox Live and Steam say they sometimes or often encounter biased messages on those platforms.

Why do people post or text that stuff? To be funny, according to most young people who see it. Another big reason: to be cool. Less than a third said a major reason people use slurs is because they actually harbor hateful feelings toward the groups they are maligning.

"Most of the time they're just joking around, or talking about a celebrity," Jeff Hitchins, a white 24-year-old in Springfield, Pa., said about the insulting references to blacks, women and gays that he encounters on the Vine and Instagram image-sharing sites. "Hate speech is becoming so commonplace, you forget where the words are coming from, and they actually hurt people without even realizing it."

Some slurs are taken more seriously than others. Racial insults are not that likely to be seen as hurtful, yet a strong majority of those surveyed — 6 in 10 — felt comments and images targeting transgender people or Muslims are.

Almost as likely to be viewed as mean-spirited are slurs against gays, lesbians and bisexual people, and those aimed at people who are overweight.

Maria Caprigno, who has struggled with obesity since childhood, said seeing mean images on Facebook stings. But she thinks the online world reflects the rest of U.S. society.

"It's still socially acceptable to comment on someone's weight and what someone is eating," said Caprigno, 18, of Norwood, Mass. "We need to change that about our culture before people realize posting stuff like that online is going to be offensive to someone."

Erick Fernandez of West New York, N.J., says what people share online reflects the influence of song lyrics and music videos and movies.

Fernandez, 22, said he was "probably very loose" about that himself before he was chosen for a diversity summer camp in high school that explained why phrases like "That's so gay" are hurtful. Now a college student, he routinely sees insulting language for women and people of color bandied about online.

"I try to call some of my friends out on it but it's really to no avail," Fernandez said. "They brush it off and five minutes later something else will come out. Why even bother?"

In the poll, young people said they were less likely to ask someone to stop using hurtful language on a social networking site than face to face.

Alexandria Washington said she's accustomed to seeing men who wouldn't say offensive things to her in person post pictures of "half-naked women in sexual positions," followed by demeaning comments and slurs like "whore" and "ratchet."

"They'll post anything online, but in person it's a whole different story," said Washington, 22, a graduate student in Tallahassee, Fla.

There seems to be a desensitizing effect. Those who report more exposure to discriminatory images and words online are less likely to say it's wrong than those who rarely or never encounter it.

Context is crucial, too. Demeaned groups sometimes reclaim slurs as a way of stripping the words of their power — like the feminist "Bitch" magazine or gay rights activists chanting "We're here, we're queer, get used to it!"

Washington, who is African-American, said that on most days she doesn't come across racial slurs on social media. But she stumbles upon bigoted words when race is in the news, such as surrounding President Barack Obama's re-election, and finds them hurtful in that serious context.

Likewise, Calli, the high school student originally from Argentina, said he could stomach almost any name-calling but gets upset when someone uses a falsehood to denigrate immigrants.

Jeffrey Bakken, 23, a producer at a video game company in Chicago, said the bad stuff online, especially slurs posted anonymously, shouldn't overshadow what he sees as the younger generation's stronger commitment to equal rights for minorities and gays than its elders.

"Kids were horrible before the Internet existed," Bakken said. "It's just that now it's more accessible to the public eye."

The AP-NORC Center/MTV poll was conducted online Sept. 27-Oct. 7 among a random national sample of 1,297 people between the ages of 14 and 24. Results for the full sample have a margin of sampling error of plus or minus 3.7 percentage points. Funding for the study was provided by MTV as part of "A Thin Line" campaign to stop digital abuse.

The survey was conducted by GfK using KnowledgePanel, a probability-based online panel. Respondents are recruited randomly using traditional telephone and mail sampling methods. People selected who had no Internet access were given it for free.

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Associated Press Director of Polling Jennifer Agiesta and AP News Survey Specialist Dennis Junius contributed to this report.

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Online:

http://www.apnorc.org/projects/Pages/the-digital-abuse-study-experiences-of-teens-and-young-adults.aspx

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Follow Connie Cass on Twitter at https://twitter.com/ConnieCass

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Stocks edge higher after retail spending increases

NEW YORK — Stocks are edging mostly higher on Wall Street after the government reported a surprisingly large increase in U.S. retail sales last month.The pickup of 0.4 percent suggests shoppers weren't put off by the government shutdown in October. It was the biggest increase in four months.

The Standard & Poor's 500 index was up a point, or 0.1 percent, to 1,789 in the first few minutes of trading Wednesday.

The Dow Jones industrial average was flat at 15,967. The Nasdaq composite was up seven points, or 0.2 percent, to 3,937.

J.C. Penney jumped 10 percent after reporting a jump in sales leading up to the holiday shopping season.

Lowe's lost 4 percent after its earnings fell short of Wall Street's forecast.

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US retail sales rise solid 0.4 percent in October

WASHINGTON — Consumers shrugged off the 16-day partial government shutdown and spent more on autos, clothing and furniture in October, boosting U.S. retail sales by the most in four months.

Sales rose 0.4 percent, up from a flat reading in September, the Commerce Department said Wednesday. Overall sales were slightly held back by a steep drop in gasoline prices. Excluding sales at gas stations, retail spending rose an even stronger 0.5 percent.

Core sales, a category that excludes volatile spending on autos, building supplies and gas, also rose 0.5 percent, up from a 0.3 percent gain in September.

The retail sales gain indicates that consumers stepped up spending at the start of the October-December quarter. Their spending accounts for 70 percent of economic activity.

Economists were encouraged by the solid October gain.

"This release provides yet more evidence that, despite the shutdown, the economy is gaining momentum," said Paul Dales, senior U.S. economist at Capital Economics.

Dales said a strong start to the October-December quarter could mean that consumer spending will grow at an annual rate of 2 percent to 2.5 percent this quarter. That would mark a sharp improvement from the 1.5 percent annual growth in consumer spending in the July-September quarter.

Economists say they think cheaper gas will help boost sales during the crucial holiday shopping season. Gas prices have fallen sharply since Labor Day and now are around $3.21, the lowest level in nearly two years.

A sharp drop in auto sales caused largely by a calendar quirk had dampened retail sales in September. Labor Day weekend auto sales were counted in August. But in October, auto sales 1.3 percent, reversing September's 1.2 percent decline.

In October, sales at department stores rose 0.5 percent after having fallen 0.6 percent in September. There were also solid sales gains at furniture stores, electronics and appliance stores and specialty clothing stores.

In addition to the drop at gas stations, sales at building supply stores fell 1.9 percent in October.

Growth in consumer spending slowed from July through September and economists have been concerned that spending may remain lackluster given weak income growth and the lingering impact of higher federal taxes at the start of the year.

Unemployment remains still high at 7.3 percent, and those Americans who have jobs are not seeing much in the way of pay increases. That's contributed to their more cautious mood.

But in one encouraging sign, hiring has picked up in recent months. The economy created 204,000 jobs last month, many more than expected. Employers have added an average of 202,000 jobs per month from August through October. That's up sharply from an average of 146,000 in May through July.

The overall economy grew at an annual rate of 2.8 percent in the July-September quarter, faster than expected, and up from 2.5 percent growth in the April-June quarter. But much of the growth came from an increase in business stockpiling. Without a corresponding increase in spending, many economists think companies will cut back on restocking in the October-December quarter, which would slow economic growth.

Most analysts have said they think the economy is growing at a weak annual rate below 2 percent in the current quarter. But some say the solid October retail sales may cause them to boost their estimates for the fourth quarter. Dales said he thinks the economy will grow at an annual rate between 2 percent and 2.5 percent this quarter.

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Frederick Sanger, double Nobel winner, dies at 95

LONDON — British biochemist Frederick Sanger, who twice won the Nobel Prize in chemistry and was a pioneer of genome sequencing, has died at the age of 95.

His death was confirmed Wednesday by the MRC Laboratory of Molecular Biology — which Sanger helped found in 1962.

The laboratory praised Sanger, who died in his sleep Tuesday at Addenbrooke's Hospital in Cambridge, as an "extremely modest and self-effacing man whose contributions have made an extraordinary impact on molecular biology."

Sanger was one of just four individuals to have been awarded two Nobel Prizes; the others being Marie Curie, Linus Pauling and John Bardeen.

Jeremy Farrar, director of the Wellcome Trust, called Sanger "the father of the genomic era."

Sanger first won the Nobel Prize in 1958 at the age of 40 for his work on the structure of proteins. He had determined the sequence of the amino acids in insulin and showed how they are linked together.

He later turned his attention to the sequencing of nucleic acids and developing techniques to determine the exact sequence of the building blocks in DNA.

That work led to Sanger's second Nobel Prize, awarded jointly in 1980 with Stanford University's Paul Berg and Harvard University's Walter Gilbert, for their work determining base sequences in nucleic acids.

Venki Ramakrishnan, deputy director of the MRC Laboratory, said it would be "impossible to overestimate the impact" Sanger had on modern genetics and molecular biology.

Sanger was born on Aug. 13, 1918, in Gloucestershire, southwestern England. While he initially planned to study medicine like his father, he switched fields and earned a degree in natural sciences from Cambridge University 1939. A conscientious objector in World War II, he went on to earn a PhD working on protein metabolism from the same university.

In addition to the Nobel Prizes, Sanger was made a fellow of the Royal Society in 1954, Commander of the Order of the British Empire in 1963 and the Order of Merit in 1986.

Sanger declined a knighthood, however, because he preferred not to be called "sir," according to the laboratory he helped found.

According to The Sanger Institute, when he was asked if he would mind an institute being named after him, Sanger agreed — but said "It had better be good."

Sanger is survived by three children — Robin, Peter and Sally.

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Follow Cassandra Vinograd at http://twitter.com/CassVinograd

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German official cautions over more ECB stimulus

FRANKFURT, Germany — Germany's top central banker said it's too soon for the European Central Bank to talk about a further shot of stimulus for the struggling eurozone economy.

Jens Weidmann said the ECB only this month loosened monetary policy with an interest rate cut to a record low of only 0.25 percent.

"I don't think it's a good idea to announce the next round right away," he said in an interview with Die Zeit newspaper made available Wednesday.

Weidmann's warning follows remarks by ECB executive board member Peter Praet last week that the ECB could take the additional step of purchasing financial assets such as bonds — if the bank thought the economy was threatened by deflation, a corrosive, chronic fall in prices. Deflation undermines growth and investment as people hold off on purchases as goods become cheaper. It also makes debts harder to pay.

Deflation concerns have ratcheted up in recent weeks after inflation in the 17-country eurozone fell to 0.7 percent in the year to October, well below the ECB's target of keeping prices increases just below 2 percent.

In theory, pumping money into the eurozone economy could help ease those deflation concerns and help the eurozone recovery from recession. Other central banks including the U.S. Federal Reserve and the Bank of England have made such purchases with newly created money to lower interest rates and spur growth.

The ECB, the chief monetary authority for the eurozone, had until recently said little about using the bond-purchase stimulus tool, or "quantitative easing" in economic jargon.

Last week, the Wall Street Journal quoted Praet as saying the bank could purchase assets if its mandate to maintain price stability was threatened.

If the price stability mandate is at risk, Praet said, then "we are going to take all the measures that we think we should take to fulfill that mandate." That includes "outright purchases that any central bank can do."

The idea of quantitative easing faces resistance in Germany, Europe's largest economy. Many in Germany are skeptical of central bank measures seen as potentially inflationary, or as bailing out troubled euro member governments that won't take steps themselves to improve growth.

Weidmann is only one vote however on the 23-member ECB rate-setting council, a post he holds as head of Germany's national central bank, the Bundesbank.

Weidmann said that Europe's troubles over slow growth, uncompetitive eurozone member economies and too much debt "certainly cannot be solved through the money printing press."

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US creates economic advisory team for Puerto Rico

SAN JUAN, Puerto Rico — The U.S. is sending a team of federal officials to help Puerto Rico manage an economic crisis as the island braces for its eighth year of recession.

A U.S. administration official said Wednesday that the team will be composed of officials from the departments of Education, Health and Human Services, and Housing and Urban Development, as well as the Environmental Protection Agency.

They will travel to Puerto Rico starting in December to work with the island's government on how to best maximize federal funds in those areas to help boost its economy. The officials will work in an advisory capacity and no additional federal funds are planned beyond current allocations.

The team was created by a presidential task force that previously worked with Puerto Rico on political status issues.

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