Global markets hit by fears of growth slowdown

Fear is back in the market.

Investors are worried about slower economic growth in China, a gloomier outlook for U.S. corporate profits and an end to easy-money policies in the United States and Europe. They're also fretting over country-specific troubles around the world — from economic mismanagement in Argentina to political instability in Turkey.

Those fears converged this week to start a two-day rout in global markets that was capped by a 318-point drop in the Dow Jones industrial average Friday. It was the blue-chip index's worst day since last June. The Dow plunged almost 500 points over the two days.

The Dow finished down 2 percent at 15,879 Friday. The Standard & Poor's 500 index fell 38 points, or 2.1 percent, to 1,790. The Nasdaq composite fell 90 points, or 2.2 percent, to 4,128.

As investors shunned risk, small-company stocks fell even more than the rest of the market, and bond prices rose.

Despite the sell-off, U.S. stocks remain near all-time highs after surging 30 percent last year. The S&P 500 is 3 percent below its record high of 1,848 on Jan. 15.

U.S. stocks have not endured a correction — a drop of 10 percent or more over time — since October 2011.

The turbulence coincides with a global economic shift: China and other emerging-market economies appear to be running into trouble just as the developed economies of the United States and Europe finally show signs of renewed strength nearly five years after the end of the Great Recession.

The trouble began Thursday after a January survey showed a drop in Chinese manufacturing activity. Days earlier, China reported that its economic growth last year matched 2012 for the slowest pace since 1999.

"It is interesting how even a mild tremor in China's growth causes such anxiety around the world," said Eswar Prasad, professor of trade policy at Cornell University.

In Asia, Japan's Nikkei 225 slipped 1.9 percent Friday to close at 15,391.56; Hong Kong's Hang Seng shed 1.2 percent to 22,450.06; and Seoul's Kospi dropped 0.4 percent to 1,940.56.

Slower growth in China is bad news for countries that supply oil, iron ore and other raw materials to the world's second-biggest economy. Some of those countries, such as Indonesia and South Africa, were already struggling with an outflow of capital as rising U.S. interest rates drew investors to the United States.

Here's a look at the forces buffeting global financial markets:

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THE END OF EASY MONEY

Since the global financial crisis hit in 2008, the Federal Reserve has flooded markets with cash to push interest rates lower and encourage U.S. businesses and consumers to borrow and spend. But last month, as signs of growing economic strength emerged in the U.S., the Fed cut back — reducing its monthly bond purchases to $75 billion from $85 billion. It also said that it expected to reduce the bond-buying further "in measured steps" at upcoming meetings.

The Fed meets again Tuesday and Wednesday. Many economists expect the central bank to cut the purchases again — perhaps to $65 billion a month.

The scaling back of the Fed's easy-money policies has hit some emerging markets hard. When the Fed was pushing U.S. rates lower, emerging markets had seen an inflow of capital from investors seeking higher returns than they could get in the United States. Now investment is flowing back to America, hammering currencies in emerging markets.

The South African rand, Russian ruble, Turkish lira, and especially the Argentinian peso — which fell 13 percent Thursday — have been "trounced," said Jane Foley, a currency strategist at Rabobank. "Talk that the U.S. Federal Reserve will announce another reduction in its monthly bond purchases next week ... (is also) contributing to a loss of confidence in some emerging markets," she said.

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POLITICAL TURMOIL

In some countries, concerns over the local political or financial situation have worsened the market volatility dramatically. That was most obvious in Argentina, where the peso this week suffered its sharpest fall since the country's 2002 economic collapse. The government, running short of reserves it could use to buy the currency and keep it from falling, has let the peso drop instead. The country's economic fundamentals are grim: Inflation is believed to be running at about 25 percent to 30 percent.

The peso fell 16 percent in two days, easily the worst performer among emerging markets.

Turkey's national currency, the lira, hit multiple record lows in recent weeks as investors worried about the fallout of a corruption scandal that threatens to destabilize the government. Having a stable government for the past 10 years has been one of the key ingredients in the country's economic revival.

The lira hit an all-time low of 2.33 against the dollar on Friday — from around 2 per dollar in December — despite a $3 billion-intervention by the central bank in foreign exchange markets.

Beyond political problems, the countries that have seen their currencies fall most are those that rely heavily on exports of raw materials used in manufacturing. The Russian ruble was trading at 34.58 per dollar, from below 34 on Thursday. The South African rand weakened to 11.13 per dollar, from 10.98 the day before.

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CHINA AND GLOBAL GROWTH

Since the recession, the global economy has relied heavily on China and other emerging markets as the developed economies of the United States, Europe and Japan struggled.

But China's economy is decelerating. It grew 7.7 percent in October-December 2013 from a year earlier, down from the previous quarter's 7.8 percent growth. Factory output, exports and investment all weakened. On Thursday, the preliminary version of HSBC's purchasing managers' index of Chinese manufacturing fell to 49.6, the lowest reading since July's 47.7. Anything below 50 signals a contraction.

China's growth is still far stronger than the United States, Japan or Europe, but is down from the double-digit rates of the previous decade.

Many economists are troubled less by the slower growth numbers than by China's over-reliance on trade and investment instead of spending by its consumers.

"China, and the world at large, would benefit from its shift to a lower but more sustainable pattern of growth that is not so heavily dependent on investment-led growth fueled by bank credit," Cornell's Prasad said.

China's growth is slowing just as the world's rich economies begin to gain momentum.

The 17 countries that use the euro currency appear to be recovering from a debt crisis that tipped them into a double-dip recession in late 2011.

In the United States, households have reduced crippling debt levels and are in better shape to start spending again. The International Monetary Fund expects the U.S. economy to grow 2.8 percent this year, up from 1.9 percent in 2013, and for the eurozone economy to grow 1 percent in 2014 after contracting 0.4 percent in 2013 and 0.7 percent in 2012.

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CORPORATE PROFITS

In the U.S., the outlook for corporate profits has already been weakening, and the turmoil in emerging-market currencies could make matters worse.

About two-thirds of the 123 S&P 500 companies that have reported fourth-quarter earnings so far have beaten analysts' estimates, according to S&P Capital IQ, in line with the historical average. But the forecasts for income growth have been falling and could decline further.

As recently as this summer, analysts predicted earnings growth of more than 11 percent for the fourth quarter, but now they expect just half that — 5.9 percent.

Some companies are becoming more pessimistic, too. For the January-March quarter, seven out of every 10 that have talked about their prospects have cut projections, more than average, according to FactSet. The stocks have tanked as a result. Since United Continental lowered revenue estimates on Thursday, for instance, its stock has fallen 6 percent.

U.S.-based multinational companies posted some of the biggest declines on Friday as investors worried about overseas sales. Oracle and 3M have warned that their results could take a hit because of the strengthening dollar. Shares of the companies fell 3 percent.

Companies that rely on overseas sales will bring home fewer dollars if the dollar continues to appreciate against foreign currencies, especially in emerging markets that have been hammered this week. In Argentina, for example, the same amount of pesos buys fewer dollars today than it did last week.

On Tuesday, Europe-based consumer goods giant Unilever said fourth-quarter sales slowed because of weakness in emerging markets. The decline was mostly because of unfavorable currency moves.

"So when emerging markets sniffle," said Lawrence Creatura, a portfolio manager with Federated Investors, "large-cap companies can catch a cold."

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Associated Press writers Bernard Condon in New York, Toby Sterling in Amsterdam and Suzan Fraser in Ankara, Turkey, contributed to this story.

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Gillette’s sales clipped by furry fashion

Boston Red Sox left fielder Jonny Gomes' remarks this week that his straggly beard will be gone before the start of spring training likely was welcome news across town at Gillette's World Shaving Headquarters.

The beard fashion trend — championed by the Red Sox on the road to their World Series win, the "Duck Dynasty" crew, and hipsters, among others — has clipped Gillette's razor sales, parent company Procter & Gamble said yesterday.

While its global grooming sales increased 3 percent in the quarter that ended Dec. 31, razor sales fell in the United States.

"Trends come and go, and we are seeing a slight decline in wet shaving incidence in the U.S. right now driven by fashion," P&G spokesman Bryan McCleary said.

Chief financial officer Jon Moeller also placed blame on Movember, the annual event in which men are encouraged to grow moustaches during November to raise awareness of men's health issues, including prostate and testicular cancer.

Gillette's sales of non-disposable razors and blades declined 7.8 percent in the 12 weeks through Dec. 21, according to a recent report by JPMorgan & Chase analyst John Faucher, who attributed the drop to an "increased interest in facial hair."

But Gillette is turning to another trend to buoy razor sales.

"We are also seeing increased shaving below the neck, particularly among younger men 18-24, and have brought new innovation to the market to meet guys' holistic shaving needs," McCleary said.

A new Gillette Body razor will be released next month to cater to the "manscaping" needs of men who shave body areas including their groin, stomach, back, chest and underarms.

Herald wire services contributed to this report.

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Commission to rule on surrounding communities

The state Gaming Commission will hear Tuesday from nine cities and towns whose petitions for surrounding community status have yet to be accepted by the three casino operators vying for two gaming licenses.

Mohegan Sun, which wants to build at Suffolk Downs in Revere, hasn't come to an agreement with Everett, Lynn, Melrose or Somerville, but has accepted petitions by Cambridge, Malden, Medford and Saugus, according to documents released yesterday by the commission.

Wynn Resorts, which wants to build in Everett, has taken no action on petitions by Cambridge, Lynn, Melrose or Saugus, but has accepted ones by Chelsea and Somerville.

MGM, the sole applicant for the Western Massachusetts resort casino license, meanwhile, wants to build in downtown Springfield, but has reached no agreement with Hampden, Longmeadow or Northampton, although it has accepted West Springfield's designation as a surrounding community.

A surrounding community is entitled to negotiate with the casino operator for compensation for traffic and other potential impacts.

"Where there may be a disagreement, the commission will decide" next month, said Elaine Driscoll, a commission 
spokeswoman.

Communities that are not designated still may apply for compensation for unanticipated impacts in the future out of a mitigation fund that each of the casinos will contribute to and that the state will administer, Driscoll said.

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Care.com shares skyrocket to $24.30

Shares of Waltham-based Care.com shot up yesterday, marking a successful first day of trading for the Boston area's first tech IPO in a year and a half.

Care.com shares closed at $24.30, up nearly 43 percent from the IPO price of $17 per share. Coming out of the SEC-mandated quiet period, Care.com founder and CEO Sheila Lirio Marcelo said the company will continue to expand its membership and grow as a company.

"We're targeting 42 million households in the U.S. alone," Marcelo told Bloomberg TV after ringing the opening bell at the New York Stock Exchange. "We barely touched the surface."

Care.com, an online service that connects professionals with people who need family care, has 9.7 million members around the world.

Marcelo said her company would use the IPO to "raise the overall awareness (of Care.com) to help families and to take advantage of acquiring companies."

The company has made a number of significant acquisitions already, including German care site Besser Betreut. Marcelo said the family care industry is "fragmented," so acquisitions make sense going forward.

"There's ways for us to enhance our products and services so we can deliver more for our members," Marcelo said. "We're definitely interested in continuing to expand our overall offerings."

Right now, care.com users can find child, adult and senior, pet and home care.

Yesterday's closing price gave Care.com a market cap of $722.83 million.

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US citizen and local filmmaker detained in Egypt

CAIRO — An American translator and an Egyptian filmmaker were detained in Cairo and have been held for three days in an undisclosed location, their lawyer said Saturday.

Ahmed Hassan, a lawyer with the Hisham Mubarak Law Center, told The Associated Press that U.S. citizen Jeremy Hodge, 26, of Los Angeles, and Egyptian filmmaker Hossam Eddin el-Meneai, 36, were arrested Wednesday night at their apartment in the Dokki neighborhood of Cairo. Hassan said that officers at the local police station first acknowledged they were holding the two but later denied that they were in custody. It is not immediately clear why the two were detained.

The Interior Ministry declined to comment.

Hassan said he believes the two are being held by Egypt's National Security Agency, the country's domestic spy service. He said he has filed a report with authorities saying the two have been "kidnapped."

Hassan called the detentions part of a "wave of intimidation of journalists" in Egypt. There has been a rise in cases where citizens detain journalists and foreigners amid a growing nationalist fervor and panic over foreign plots to destabilize the country.

The U.S. Embassy in Cairo confirmed that a U.S. citizen was detained and that officials are "providing all appropriate consular assistance," declining to comment further.

Hodge is a freelance translator working in Egypt. His roommate el-Meneai is a filmmaker, originally from the restive Northern Sinai province where militants attack security and military forces.

A statement issued by friends of the two included text messages that Hodge sent after they were detained.

"They're asking Hossam about Sinai and his camera," Hodge wrote. "They're asking me how I know him, and where I learned my Arabic." In another text message, he wrote: "Hossam is being investigated, I'm waiting around."

Hodge suffers from asthma, his friends said. It is not clear if he has access to his medication.

In a separate incident, Egyptian artist and filmmaker Aalam Wassef was briefly detained along with a Swiss citizen on Friday, and was later released without charge, lawyers said. It was not immediately clear why the two were taken from Wassef's apartment that overlooks Tahrir Square, where rallies took place Saturday on the third anniversary of Egypt's 2011 uprising.

Wassef has made videos critical of the government and former autocrat Hosni Mubarak. He worked under a pseudonym when Mubarak was in power and began putting out videos under his own name after the autocrat's fall.

Three journalists working for satellite news broadcaster Al-Jazeera English also have been held since Dec. 29, with one of them spending long hours in solitary confinement. Authorities initially accused them of being part of a terrorist group, referring to the Muslim Brotherhood, and spreading false news about Egypt. They have yet to be formally charged.

Since July 2013, at least five journalists have been killed, 45 journalists assaulted, and 11 news outlets raided in Egypt, according to the Committee to Protect Journalists. The group also reported that at least 44 journalists have also been detained "without charge in pretrial procedures, which, at times, have gone on for months."

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Website woes seen months before launch

State officials overseeing the Health Connector website knew as early as February 2013 — some nine months before launch — that parts of the $69 million Obamacare gateway would probably be delayed, public records obtained by the Herald last night revealed.

"It opens another whole can of worms of questions about how early did these issues start," Joshua Archambault of the Pioneer Institute said about the Commonwealth Health Insurance Connector Authority Board. "At what point did they know it was not going to work on Oct. 1 and still decided to go live?"

University of Massachusetts Worcester spokesman Mark Shelton said the memos reveal just how closely the state has been monitoring the performance of CGI, the website's developer.

"The university, the Connector and the commonwealth have been actively managing this process since work began on this immensely complex project in 2010," he said. CGI declined to comment last night.

The latest documents reviewed by the Herald indicate that as early as February last year, state officials and CGI discussed "deferring some scope" of the website after the Oct. 1 launch, according to a memo from Dr. Jay Himmelstein of UMass Medical School to Peter Ihrig of CGI.

By late April, "CGI expressed concerns that it could not meet the February Plan timelines for code development, testing completion and go-live for October 1, 2013," according to the memo. On June 21, CGI was "at least two weeks behind and up to seven weeks behind its projected code development pace," the memo said.

The July 1 memo concludes "there is a substantial and likely risk that CGI may be unable to deploy into production the scope of HIX/IES functionality on October 1, 2013."

Since launching on Oct. 1, the disastrous site has frustrated customers trying to enroll. Several key deadlines have been pushed back or bypassed with stopgap fixes. State officials, who have stopped paying CGI, have been forced to create manual workarounds to enroll Bay Staters by March 31.

But a later memo from Himmelstein dated Oct. 25 — three-and-a-half-weeks after the embarrassing launch — revealed exactly how consequential state officials feared the website failures could be. Himmelstein complained to CGI's Ihrig that the state had "already incurred substantial costs to develop and implement operational workarounds" for the site. He also warned CGI's failures could prevent Bay Staters from accessing Obamacare, "suffer harm" to the state's reputation and "incur additional costs."

Gov. Deval Patrick insisted on Nov. 14 the state site "gets better every day" and called the bugs and glitches "nothing unexpected." He also said the site's slow speed was "because there's been just a lot of demand for it."

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The Ticker

Experts: Target hackers will be tough to find

The hackers behind the recent Target data breach are likely a world away and nearly impossible to find.

That's the consensus among outside cybercrime experts­ as Target, the Secret Service and the FBI continue their investigation of the pre-Christmas data heist in which hackers stole about 40 million debit and credit card numbers and also took personal information — including email addresses, phone numbers, names and home addresses — for another 70 million people.

In the aftermath of the breach, millions of Americans have been left to wonder what has become of their precious personal information. The information can be used in a variety of nefarious ways. Criminals can attempt to use the credit card numbers and place charges on the original owners' accounts or they can use other pieces of personal information to steal people's identities and apply for new lines of credit.

Boston Morgan Stanley director No. 1

Peter Princi, a managing director, financial adviser in the Morgan Stanley's wealth management office in Boston, has been ranked No. 1 in On Wall Street Magazine's 2013 listing of Top 40 Advisers Under 40. This listing is a select group of individuals who are 39 years of age or younger, as of Dec. 31. Individuals are recognized based on their trailing 12-month production and assets under management. This listing also takes into consideration the overall business mix of practices and adherence to high standards of industry regulatory compliance.

"To be named to this annual listing is an impressive honor, and we are extremely proud to have Peter Princi represent Morgan Stanley on this list," commented Robert Malenfant, complex manager of Morgan Stanley's Boston Harbor Wealth Management office.

TODAY

• Labor Department releases weekly jobless claims.
• Freddie Mac, the mortgage company, releases weekly mortgage rates.
• National Association of Realtors releases existing home sales for December.
• Discover Financial, McDonald's Corp., Microsoft Corp., Nokia Corp., Southwest Airlines Co., Starbucks Corp., and United Continental Holdings Inc. report financial results.

FRIDAY

• Procter & Gamble and Samsung Eletronics report quarterly financial results before the market opens.

THE SHUFFLE

• Polaris Capital Management LLC, an investment management firm, announced that Jason Crawshaw, left, has joined the firm as a research analyst. In this role, Crawshaw will conduct fundamental analysis on global and international equities, capitalizing on his experience and tenure in both developed and emerging markets.
• The Massachusetts Society of CPAs has named Eileen P. McAnneny as its president and CEO. McAnneny was selected to lead the MSCPA after an extensive nationwide search led by the MSCPA's executive search committee and national search firm, Nonprofit Professionals Advisory Group.

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Chain targets part-timers

Target's decision to move its part-time workers from its own insurance program to Obama­care likely marks the opening of the floodgates for other com­panies to do the same, potentially pushing tens of thousands of Bay State part-timers onto government-sanctioned health care by this summer, experts said.

"Before June of this year, you're going to see a migration of 100,000 to 200,000 Massachusetts residents" said Bill Fields, an employer consultant, describing the expected shift from employer-sponsored insurance to the state Health Connector.

Target announced this week it will no longer provide health insurance for its part-time employees.

"Health-care reform is transforming the benefits landscape and affecting how all em­ployers, including Target, administer health benefits coverage," said Jodee Kozlack, Target's executive vice president of human resources, in a statement. "Our decision to discontinue this benefit comes after careful consideration of the impact on our stores' part-time team members and to Target, the new options available for our part-time team, and the historically low number of team members who elected to enroll in the part-time plan."

Target says fewer than 10 percent of its 361,000 part-timers are enrolled in its plan. The statement said if Target continued to offer health in­surance for part-time em­ployees, some workers could be disqualified from Obamacare subsidies they might otherwise be entitled to receive.

Fields predicted there could be a ripple effect.

"Once they see their neighbor doing it, you're going to see a lot of copycats," Fields said about companies that employ part-timers.

Jon Hurst, president of the Retailers Association of Massachusetts, said Romneycare prompted a similar trend.

"Around 2008 or 2009, we recommended to all of our members that they drop coverage for part-timers. It rapidly happened," Hurst said.

But Fields said he advises his clients to keep insurance for part-timers, and he said companies that do not are making a cold, fiscal decision.

"It's a bottom-line argument," Fields said. "You don't have the morals you normally have in these situations."

The total number of part-time employees in Massachusetts was not immediately available.

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Local life science companies flex muscles at conference

Life science com­panies — one of Massachusetts' key sectors — are coming off a week that showcased them at their strongest, according to local industry in­siders who attended the JP Morgan Healthcare Conference in San Francisco.

More than 240 biotech companies — many of them from Massachusetts — made presentations to about 500 investors at last week's conference, said Donna LaVoie, president and CEO of the LaVoie Group, a Cambridge health-care communications company.

About 25 companies already are in line to go public, said Bruce Booth, a partner at Atlas Venture in Cambridge, and by the end of the year, the number likely will reach 30.

"There is a shift," said Ron Renaud Jr., president and CEO of Idenix Pharmaceuticals in Cambridge. "We used to talk about (only) 15 or 20 profitable biotechs."

Immuno-oncology companies — those that focus on getting the immune system to attack a cancer — are among the hottest, Booth said.

But not every investor is waiting for an IPO, he said; the pharmaceutical industry is embracing innovative new start-ups, wanting to get involved with them at the earliest stages.

"The discussion is about launching these great new drugs," Booth said. "Many of them were born in small biotechs."

The "build-to-buy" struc­tured deal — one in which you create a company, already knowing who the buyer will be — is here to stay, he said.

"You know exactly what your return curve is." Booth said.

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Weekly applications for US jobless aid mostly flat

WASHINGTON — The number of Americans seeking unemployment benefits ticked up 1,000 last week to a seasonally adjusted 326,000, a level consistent with steady job gains.

The Labor Department says the four-week average, a less volatile measure, fell for the third straight week to 331,500. Both figures are close to pre-recession levels and suggest that companies are laying off few workers.

Still, hiring will also need to pick up to make a dent in the still-high 6.7 percent unemployment rate. Many economists forecast that job gains will pick up a bit this year.

"An array of surveys tell us labor demand is rising, and we remain of the view that the underlying trend in payroll growth is slowly picking up," said Ian Shepherdson, an economist at Pantheon Macroeconomics.

One sour note in the report: Nearly 1.4 million people who have been unemployed longer than six months lost benefits in the week that ended Jan. 4, the latest period for which figures are available. That's because an emergency program that provided extended benefits expired Dec. 28.

The number of recipients fell to 3.7 million from 4.7 million in the previous week. About 300,000 people began receiving unemployment benefits in the week ended Jan. 4.

The total number of beneficiaries was already declining as those out of work either found jobs or exhausted their benefits. More than 5.6 million people were receiving aid a year ago. The program peaked with just over 11 million recipients in early 2010, about six months after the Great Recession ended.

The figures show that only about one-third of those out of work now receive aid. That's low by historical standards. The figure is usually closer to half.

More than 10 million people were unemployed in December. Benefits are available only to those who lose their jobs through no fault of their own. Those who quit or were fired for performance reasons or who have started looking for work after finishing school don't qualify for benefits.

President Barack Obama and congressional Democrats pushed to extend the emergency program for another three months. But they couldn't reach agreement with Republicans, who wanted to cut spending to offset the $6 billion estimated cost. The extended benefits had been available since 2008.

The program provided up to 47 extra weeks of aid, paid for by the federal government. It offered payments averaging $256 a week to people who had exhausted their state benefits, which typically last for six months.

Economists predict that the expired benefits will cause the unemployment rate to fall by as much as a quarter of percentage point in early 2014. The decrease will likely happen because many of the former recipients will give up on their job searches, which are required in order to receive benefits.

As a result, they will no longer be counted as unemployed. The government counts people as unemployed only if they are looking for work.

The unemployment rate fell last month to 6.7 percent from 7 percent. Much that decrease came from 347,000 unemployed workers leaving the workforce. A mere 74,000 jobs were created in December, after average monthly gains of 214,000 new jobs in the previous four months.

There are signs that economic growth is accelerating. Consumer confidence and retail spending have picked up in the October-December quarter. Orders to U.S. manufacturers rose in November, a sign that businesses are investing more on factory-made items such as machinery, computers and electrical goods. Factory output rose for a fifth straight month in December.

The economy is still far from healthy. Income rose at a slower pace than spending last month, which means Americans are spending more but saving less. And sales of existing homes have dropped for three straight months, held back by higher prices and mortgage rates.

Still, many economists have become more optimistic about the October-December quarter. Several are predicting a solid annual growth rate of 3 percent or more. That's up from estimates a month ago of as low as 1.5 percent.

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Greenfield hospital declares labor impasse

GREENFIELD, Mass. — Baystate Franklin Medical Center in Greenfield has declared an impasse in its 28 months of negotiations with nurses and announced it will immediately put into effect changes it has sought through contract talks.

The move outraged the nurses' union, which said it will file a complaint with the National Labor Relations Board. Nurses will meet this week to discuss their options, including the possibility of a strike.

The changes include a 3.25 percent wage and bonuses up to $1,000. The hospital will also start transitioning to paying overtime on a weekly basis rather than a daily basis, a major sticking point in negotiations.

Hospital President Chuck Gijanto tells The Recorder (http://bit.ly/1fbFkLr ) negotiations are "hopelessly deadlocked."

Nurses say management is unjustly taking away their right to negotiate a settlement.

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Information from: The (Greenfield, Mass.) Recorder, http://www.recorder.com

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Subcompact cars fare poorly in new crash tests

DETROIT — Subcompact cars fared poorly in new crash tests performed by an insurance industry group.

None of the 12 minicars tested got the highest rating of "good" from the Insurance Institute for Highway Safety. The Chevrolet Spark was the only car that earned the second-highest rating of "acceptable." Six of the cars — including the segment's best-seller, the Nissan Versa — got the lowest rating of "poor."

All of the cars were from the 2013 or 2014 model years.

"Small, lightweight vehicles have an inherent safety disadvantage. That's why it's even more important to choose one with the best occupant protection," said Joe Nolan, IIHS's senior vice president for vehicle research.

The institute's small overlap test, which was introduced in 2012, mimics what happens when a car's front corner collides with another vehicle or an object like a utility pole. In the test, 25 percent of a vehicle's front end on the driver's side strikes a rigid barrier at 40 mph.

The test differs from the U.S. government's frontal crash test, in which a car strikes a rigid barrier head-on at 35 mph.

IIHS says hitting only part of the front end makes it harder for cars to manage the energy from a crash. In several of the subcompacts, the structures collapsed, which can exacerbate injuries because the air bags, seats and other parts get knocked out of position.

In the test of the Honda Fit, for example, the steering column pushed so far into the vehicle that the dummy's head slid off the air bag and hit the instrument panel. IIHS said the Fit was one of the worst performers in terms of potential injuries to the driver.

Honda responded that the 2015 Fit, which goes on sale in a few months, should earn a top score on the small offset test. The recently redesigned Honda Civic, which is one size up from the Fit, is among five small cars with "good" ratings on the test. A four-door Civic is around 300 pounds heavier and 18 inches longer than the current four-door Fit.

The current Fit does get top scores in the institute's other four tests, including measurements of roof strength and side impact protection.

IIHS said the Fiat 500 was also one of the worst performers. The crash force ripped the door hinges off the 500, causing it to fall open during the test.

Spokesman Eric Maybe said the Fiat 500 meets all government safety requirements and, like the Fit, gets "good" ratings in all four of the institute's other crash tests.

Cars with "marginal" ratings were the Kia Rio, Mazda2, Toyota Yaris and Ford Fiesta. Cars with "poor" ratings — in addition to the Fit, the Fiat 500 and the Versa — were the Toyota Prius C, Mitsubishi Mirage and Hyundai Accent.

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AP Exclusive: New regs sought for child car seats

WASHINGTON — Child car seats would for the first time have to protect children from death and injury in side-impact crashes under regulations the government is proposing, The Associated Press has learned.

The National Highway Traffic Safety Administration seeks to upgrade standards for child seats for children weighing up to 40 pounds to include a new test that simulates a side crash. The agency estimates the standards will prevent the deaths of about five children and injuries to 64 others each year.

NHTSA Acting Administrator David Friedman is scheduled to announce the proposal Wednesday.

Under the proposal, the new tests will simulate a "T-bone" crash, where the front of a vehicle traveling 30 mph strikes the side of a small passenger vehicle traveling at 15 mph. The tests will position the car seat on a sled, with another sled ramming the side of the sled with the seat, rather than using actual vehicles since the aim isn't to test the crash worthiness of specific vehicles, NHTSA officials said.

Research shows that many child deaths and injuries in side-impact crashes involve a car carrying children that is stopped at an intersection, usually at a light or stop sign, officials said. When the car begins to accelerate to go through the intersection, it is struck in the side by a vehicle traveling at a higher rate of speed on the cross street.

The side-impact test — the first of its kind — simulates both the acceleration of the struck vehicle and the vehicle's door crushing inward toward the car seat. Besides using a 12-month-old child dummy already approved under NHTSA standards, the proposed test will also utilize a to-be-developed side-impact dummy representing a 3-year-old child.

"As a father of two, I know the peace of mind this proposed test will give parents," Transportation Secretary Anthony Foxx said in a statement. The test "will give parents and car seat makers important new data on how car seats perform in side crashes."

Friedman called car seats "an essential tool for keeping young children safe in vehicles and have a proven track record of saving lives."

Safety advocates have long sought tougher standards for car seats to protect against side-impact crashes.

"I think this is terrific," said Joan Claybrook, who was the NHTSA administrator during the Carter administration and later president of Public Citizen. She noted that today's passenger vehicles have eight air bags, in part to protect adults from side-impact crashes. "We have an absolute moral obligation to protect children as well," she said.

NHTSA's estimates of the number of lives that will be saved and injuries prevented by the proposed standards are "very, very conservative," Claybrook said.

The public will have 90 days to comment on the proposed regulations after they are published this week. The regulations won't be made final until after the agency has reviewed the comments and answered any important issues that may be raised. That typically takes months and sometimes years, although NHTSA officials said they hope to move quickly.

The proposal includes giving car seat manufacturers three years to make any adjustments to meet the new requirements. That window doesn't begin until the regulations are made final.

___

Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy

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Maine seafood company owner pleads guilty

PORTLAND, Maine — The owner of a Maine seafood company has pleaded guilty to instructing an employee to make cash withdrawals to avoid Treasury Department reporting requirements, money used to bypass lobster coop purchasing rules.

The Portland Press Herald (http://bit.ly/1dTRR7O ) reports that John Price, owner of J.P.'s Shellfish in Eliot, pleaded guilty in federal court on Tuesday to 12 counts of structuring cash transactions.

Prosecutors say the 58-year-old Kittery man had an office manager make bank withdrawals from 2008 to 2010 for less than $10,000 to avoid detection.

Employees then used the cash to pay a dock worker at the Spruce Head Fisherman's Coop in South Thomaston for lobsters. The dock worker's side transactions were made without Coop approval.

Price remains free on $10,000 bail pending sentencing in May. His lawyer refused comment.

___

Information from: Portland Press Herald, http://www.pressherald.com

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Stocks are mixed in early trading

NEW YORK — Stocks are mixed in early trading Wednesday as investors pore over the latest batch of company earnings reports. IBM dropped after its revenue fell short of forecasts from financial analysts. Chipmaker AMD also plunged.

KEEPING SCORE: The Standard & Poor's 500 was up less than a point at 1,844 as of 10:03 a.m. Eastern. The Dow Jones industrial average fell 20 points, or 0.1 percent, to 16,394. The Nasdaq composite gained four points, or 0.1 percent, to 4,231.

BIG BLUES: IBM fell $5.16, or 2.7 percent, to $183.16 after the computing company reported lower-than-expected revenue in the fourth quarter. Revenue fell 5.5 percent, hurt by a drop at IBM's hardware business. Profit rose 6 percent and adjusted earnings beat Wall Street predictions, however. The company has reported declining revenues for seven straight quarters, according to analysts at RBC Capital.

HANDBAGS: Coach fell $3.50, or 6.7 percent, to $49.03 after the company reported a lower quarterly profit, citing weakness in women's bags and accessories in North America.

SMALL IS BEAUTIFUL: Much like last year, small companies are again outperforming their larger counterparts. While the S&P 500 has moved sideways since the start of year, and is down 0.3 percent this month, the Russell 2000, an index that tracks smaller companies, is up 1.2 percent. The Nasdaq is up 1.4 percent.

THE CHIPS FALL: Advanced Micro Devices plunged 44 cents, or 10.6 percent, to $3.73 after the company said late Tuesday that it expected its first-quarter revenue to fall 13 percent to 19 percent from the fourth quarter. That would translate into first-quarter revenue ranging from $1.29 billion to $1.38 billion, mostly below Wall Street's predictions.

AMONG THE GAINERS: TE Connectivity jumped $3.73, or 6.9 percent, to $60.28 after the electronics company reported earnings that beat analysts' expectations and posted a strong earnings outlook for the second quarter.

TREASURIES AND COMMODITIES: The yield on the 10-year Treasury note climbed to 2.85 percent from 2.83 percent late Tuesday. The price of oil rose 94 cents, or 1 percent, to $95.93 a barrel. Gold was little changed from Tuesday at $1,241.50 an ounce.

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Stock futures move higher before opening bell

NEW YORK — U.S. stock futures rose Tuesday as investors assessed the latest round of company earnings. Delta Air Lines climbed in premarket trading after its earnings beat analysts' forecasts.

KEEPING SCORE: Dow Jones industrial average futures were up 78 points to 16,475 about 30 minutes before the opening bell. Standard & Poor's 500 index futures were up eight points to 1,842, and the Nasdaq futures gained 20 points to 3,605.

MILE HIGH: Delta gained 3.2 percent before the opening bell after reporting a better-than-expected fourth-quarter profit as fares and traffic rose. The airline's president said that demand was strong and forecast that profit margins would increase in the current quarter.

TELECOMMUNICATIONS : Verizon climbed 0.5 percent after it reported fourth-quarter earnings of $5.1 billion, more than analysts forecast. The company lost $4.2 billion in the same period a year earlier.

TREASURIES AND COMMODITIES: The yield on the 10-year Treasury note rose to 2.84 percent from 2.82 percent on Friday. The price of oil edged up 33 cents, or 0.3 percent, to $94.87 a barrel. Gold fell $13.30, or 1.1 percent, to $1,238 an ounce.

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Group: Japan's dolphin roundup biggest in 4 years

TOKYO — Japanese fishermen have finished killing about 40 dolphins targeted for their meat as part of a larger group trapped recently in what activists say was the biggest roundup they have witnessed in the last four annual hunts.

Sea Shepherd, best known for its anti-whaling activities, said that of roughly 250 captured dolphins, the fishermen first selected 52 to keep alive for sale to aquariums and other customers. They included a rare albino calf and its mother.

Of the rest, about 40 were killed, one became stuck in a net and drowned, and the others were released, it said.

A video released Tuesday (http://apne.ws/1hIC1xm) by Sea Shepherd shows dozens of fishermen on boats surveying the dolphins after they were confined to a cove with nets. Divers can be seen holding the dolphins selected for sale and guiding them to nets hanging off the boats.

While other dolphins have been killed since the hunting season began in September, Sea Shepherd said the 250 herded into the cove last Friday was the largest group it has seen since it began monitoring the hunt.

The annual hunt in the village of Taiji received high-profile criticism when U.S. Ambassador to Japan Caroline Kennedy tweeted last weekend that she was deeply concerned about the practice.

The fishermen say the hunt is part of their tradition and call foreign critics who eat other kinds of meat hypocritical.

A Japanese government spokesman defended the annual dolphin hunt on Monday, saying it is carried out in accordance with the law.

The hunt was the subject of the Academy Award-winning 2009 film "The Cove."

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Delta 4Q profit rises after traffic, fare gains

MINNEAPOLIS — Higher fares and growing traffic helped Delta Air Lines Inc. post a bigger-than-expected profit on Tuesday.

Delta's yield — a key measure of what each passenger pays to fly one mile — rose 4 percent for the quarter. Airlines tried about a dozen fare increases last year, although most failed when competitors didn't match them.

Delta President Ed Bastian said demand for air travel is "solid," and Delta expects to see "significant margin expansion" in the current quarter.

Bastian also said the airline industry is showing restraint in how much flying it adds. The view on Wall Street has been that reining in growth will give airlines more power to raise fares. Delta expanded flying just 1 percent last year. It said it expects to grow 2 percent to 3 percent in the upcoming quarter.

Not counting a non-cash adjustment for taxes, Delta earned $558 million, or 63 cents per share, for the quarter that ended Dec. 31. Revenue rose 5.5 percent to $9.08 billion. Both figures were better than Wall Street analysts expected, not counting one-time items.

Including a one-time, $8 billion accounting benefit related to taxes, Delta's net income ballooned to $8.48 billion, or $9.89 per share.

In the year-earlier quarter, Delta earned $7 million, or a penny per share, after Superstorm Sandy hurt profits.

Delta said its Trainer refinery near Philadelphia lost $46 million for the quarter because of tighter margins between the cost of crude oil and the market price for refined products like gasoline and diesel fuel. Delta said the same pricing issues helped reduce the price of jet fuel, though, reducing its overall fuel expense.

Delta shares rose $1.04, or 3.4 percent, to $32.11 in premarket trading.

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China seized 60,000 piracy suspects last year

BEIJING — Chinese police seized almost 60,000 suspects involved in intellectual property infringement cases with a total estimated value of 173 billion yuan ($28 billion) in 2013, state media reported Tuesday.

More than 90 million tons of counterfeit and substandard goods were confiscated last year, and 1,260 criminal networks smashed, the official Xinhua News Agency said, citing Ministry of Public Security official Gao Feng.

Gao also said that during a campaign against the sale of fake drugs online, police seized a record 300 million pills worth 2.2 billion yuan ($360 million).

China's rampant piracy and widespread production of bogus goods is a major irritant in its relations with trading partners.

Gao said that Chinese police had cooperated with Interpol, the World Customs Organization and law enforcement authorities from countries including the United States, Britain and France.

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Materials stocks lead an early gain on Wall Street

NEW YORK — Materials companies are leading an early gain on the stock market.

Dow Chemical jumped 6 percent after the hedge fund Third Point said it had taken a large stake in the company and will press for a spinoff of one of Dow's divisions. Other companies that make basic materials also rose.

Delta increased 3 percent after reporting a better-than-expected profit in the fourth quarter as fares and traffic rose. The airline's president said demand was strong.

The Dow Jones industrial average rose 30 points, or 0.2 percent, to 16,489 in the first few minutes of trading Tuesday.

The Standard & Poor's 500 index gained nine points, or 0.5 percent, to 1,848. The Nasdaq composite rose 29 points, or 0.7 percent, to 4,226.

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East Timor, Australia argue over oil treaty deal

THE HAGUE, Netherlands — East Timor asked the United Nations' highest court Monday to order Australia to turn over documents and data its agents seized from the impoverished nation's lawyer last month ahead of arbitration in a multibillion-dollar treaty dispute.

The International Court of Justice opened three days of hearings into East Timor's request for the U.N. panel to order Australia to immediately turn over the seized documents pending the outcome of a case challenging the legality of Australia's raid on the lawyer's office in Canberra.

Monday's hearing was the latest step in a high-stakes legal battle pitting resource-rich Australia against its tiny and impoverished northern neighbor over the oil and gas under the sea that divides them.

East Timor lawyer Elihu Lauterpacht urged judges to deliver "a clear, firm and severe condemnation of what Australia has done" and order Canberra to seal all the documents and data and turn them over to the court.

Australian Security Intelligence Organization agents last month raided the Canberra homes of lawyer Bernard Collaery and a former spy who intended to testify in hearings at the Permanent Court of Arbitration that Australia allegedly bugged the East Timorese Cabinet ahead of sensitive oil-and-gas revenue-sharing negotiations.

East Timorese Minister of State Agio Pereira said the Australian agents also seized the spy's passport, preventing him from traveling to The Hague to testify in the arbitration case. The spy cannot be identified for legal reasons.

Pereira said the documents relate to East Timor's challenge to the validity of a bilateral treaty struck with Australia in 2006 over sharing seabed oil and gas reserves worth billions of dollars.

East Timor argues that the 2006 treaty is invalid because Australia had illegally bugged government offices and listened to confidential discussions relating to the negotiations.

"It is simply unconscionable that one party to negotiations or litigation should be able to place itself by these means in such a position of advantage over the other," Lauterpacht told the court Monday.

Australian Attorney General George Brandis, who authorized the ASIO raids, would not comment on the case Monday because the dispute was before the court. Australia is presenting its case Tuesday.

Brandis had previously said he told ASIO that none of the seized information was to be shared with lawyers representing Australia in The Hague.

Australia negotiated the treaty after East Timor, an impoverished half-island nation, broke away from Indonesia in 1999. Indonesia had previously struck a similar agreement to share the seabed.

Rulings by the International Court of Justice are final and legally binding.

____

McGuirk reported from Canberra.

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Japan defends dolphin hunt after US criticism

TOKYO — A Japanese government spokesman defended an annual dolphin hunt Monday, after U.S. Ambassador Caroline Kennedy tweeted that she was deeply concerned by the inhumanity of the practice.

Chief Cabinet Secretary Yoshihide Suga told a news conference that dolphin fishing in Japan is carried out appropriately in accordance with the law.

"Dolphin fishing is a form of traditional fishing in our country," he said, responding to a question about Kennedy's criticism. "We will explain Japan's position to the American side."

Kennedy tweeted on Saturday, "Deeply concerned by inhumaneness of drive hunt dolphin killing." She added that the U.S. government opposes such fishing.

Drive hunt refers to the practice of herding the dolphins into a cove, where they are trapped and later killed.

The hunt in the fishing village of Taiji in western Japan has come under international criticism and was the subject of the Academy Award-winning 2009 film "The Cove."

The fishermen in Taiji say the hunt is part of their village tradition and call foreign critics who eat other kinds of meat hypocritical.

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Hyundai to sponsor Tate Modern exhibitions

LONDON — Autos will help fund art in a long-term sponsorship deal announced Monday between Hyundai Motor Co. and Britain's Tate Modern gallery.

Tate director Nicholas Serota said the South Korean carmaker would fund commissions for the gallery's Turbine Hall — "the symbolic heart of the building" — until 2025. The first exhibition will open next year.

Hyundai Vice-Chairman Euisun Chung said the deal was an "inspiring collaboration bringing together two different industries — art and cars."

Neither side disclosed the value of the deal, which succeeds a sponsorship arrangement between Tate and Unilever PLC.

Britain's most popular art gallery, Tate Modern opened in 2000 inside a disused power station and now attracts more than 5 million visitors a year, anchoring a revitalized cultural quarter on the south bank of the River Thames in London.

Its centerpiece is a vast 500-foot by 115-foot (150-meter by 34-meter) hall that once held machinery, which has been the site of installations by artists including Louise Bourgeois, Olafur Eliasson and Ai Weiwei.

Serota said Hyundai had also given the gallery funds to buy nine works by Korean avant-garde artist Nam June Paik.

He said the deal was symbolic of Tate's expanding international reach. It operates four galleries in Britain and has partnerships with institutions around the globe.

Tate Modern is currently building an extension that will open in 2016, linked to the existing building by a bridge over the Turbine Hall.

British Culture Secretary Maria Miller said Tate had become "one of the best-loved brands in the world."

"Little wonder that commercial organizations want to be associated with such success," she said.

Serota said Hyundai's corporate partnership would help Tate open "a new chapter" but wouldn't influence its artistic priorities.

"There is no sense in which any of the exhibitions at the Tate have ever been determined by the sponsorship," he said.

___

Online: http://www.tate.org.uk/

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Poland considering air transport holding company

WARSAW,Poland — The Polish government is considering creating a holding company that will own the troubled state-run LOT airline, the short-range carrier Eurolot, ground services and an airport.

Treasury Minister Wlodzimierz Karpinski told Polish agency PAP on Monday that the new company could be listed on Warsaw's stock exchange.

He said the plan under consideration was inspired by the success of a similar one by the Czech Republic.

Karpinski said the move is not intended to sort out the financial problems of LOT, which is restructuring.

LOT closed 2013 with a loss of some 20 million zlotys ($5 million). The European Commission is reviewing the restructuring plan to decide whether to allow some 100 million euros of government aid the airline received in 2012.

LOT is almost 93 percent state-owned.

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German auto club under pressure in vote scandal

BERLIN — Germany's main automobile club apologized on Monday and conceded that its image as a trusted institution has taken a knock after a top official admitted to manipulating the figures in a poll on the nation's favorite car.

ADAC says it is Europe's biggest auto club with more than 18 million members, offering breakdown help, safety tests and many other services.

Last week, it angrily denied a report in the Sueddeutsche Zeitung newspaper that voting in a poll of readers of its monthly magazine on Germany's favorite car was tampered with — before announcing over the weekend that communications chief Michael Ramstetter had admitted to the manipulation and quit.

It said the number of votes submitted was inflated, but the ranking itself wasn't changed. German automaker Volkswagen's Golf was the winner of the most recent vote.

Ramstetter "made a full confession to having, in an incredibly brazen way, manipulated upward the number of votes ... this year and, he says, in recent years too," ADAC chief Karl Obermair said at a televised news conference in Munich. He says the official took "sole and full responsibility" for what happened, but didn't say what Ramstetter's motive was.

ADAC did not specify how inflated the numbers were, but the Sueddeutsche Zeitung said they were exaggerated by ten times.

"We are sorry for this incident; it shakes the ADAC the core because we were viewed as one of the most trustworthy and serious organizations in Germany," Obermair said. "This reputation is certainly tarnished."

He pledged a full investigation, with help from outside experts.

Obermair's apology and pledge came amid mounting pressure, including from government officials. The Justice Ministry, which is also responsible for consumer protection, pressed it to clear up the matter.

"Anyone whose evaluations have an influence on people's buying habits has a special responsibility to consumers," Justice Minister Heiko Maas said, adding that ADAC "must now do justice to its responsibility."

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AP: Borgata ends fake chip-tainted NJ poker match

ATLANTIC CITY, N.J. — Saying they have confirmed that one or more people used "a significant number of counterfeit chips" at an Atlantic City poker tournament, state casino regulators on Saturday canceled the tainted match and ordered all prize money frozen until an investigation is complete.

The New Jersey Division of Gaming Enforcement canceled the first event of the Borgata Winter Poker Open. It had suspended the game Friday after suspicions about the use of fake chips arose.

No charges have been filed in the case.

"Thus far, investigators have found that one or more tournament entrants improperly introduced a significant number of counterfeit chips into the tournament, gaining an unfair advantage and compromising the integrity of play for the event," Tom Ballance, the Borgata's president and chief operating officer said Saturday.

"It is extremely unfortunate that the criminal actions of these individuals can have a detrimental impact on more than 4,000 other entrants," he said. "We fully understand and regret the disappointment this cancellation causes our valued customers, and we will work diligently with DGE investigators to resolve the situation as quickly as possible. The integrity of our games and the confidence of our players is of the utmost importance to us."

Ballance said the Borgata has thoroughly examined its remaining stock of chips, which were cleared by investigators for use in dozens of other events in the poker tournament, which will be played as scheduled.

It was not immediately clear what would happen with the entrance fees paid by people who participated in the tainted match. The Borgata said the state ordered "that all unpaid prize money be held in trust until more details and resolution can be determined."

New Jersey State Police said Saturday the investigation is ongoing and that no arrests had been made.

The event under scrutiny is the tournament's Big Stack, No Limit Hold 'Em event. It began on Tuesday and had a $560 buy-in. There were 27 people remaining in the contest when play was suspended.

Joe Lupo, the casino's senior vice president, said concerns arose during play Thursday night. The tournament was scheduled to resume at noon on Friday, but he said it was suspended before that could happen. He would not say what raised concerns about the integrity of the game, saying it was part of the ongoing investigation.

Customers wanting to participate in the tournament go to a registration area at the Borgata, pay the $560 entry fee, and go to a table, where they are given 20,000 chips to use in the poker games. By sneaking fake chips onto the table or otherwise introducing them into the game, a cheating player would benefit by having more chips than he or she had paid for, and is able to last longer in the game. The tables are watched by multiple security cameras, but casino and state officials would not discuss what, if any, evidence they have uncovered of cheating during the games.

The 18-day series of tournaments is a regular feature at the Borgata. The casino's website said the championship event, which starts Sunday, Jan. 26., would include a $3 million prize guarantee.

The investigation does not involve Internet gambling, which began late last year and which the Borgata has dominated in the early going.

___

Wayne Parry can be reached at http://twitter.com/WayneParryAC

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De Blasio expands NYC paid sick leave law

NEW YORK — New York City Mayor Bill de Blasio touted an expansion of the city's paid sick leave law Friday, the first legislative accomplishment of his administration and a muscular display of the new, left-leaning government running the nation's largest city.

More than half a million New Yorkers will receive paid sick days thanks to the bill, which will be fast-tracked through the City Council. The new speaker of the council, Melissa Mark-Viverito, stood with de Blasio outside a Brooklyn restaurant to announce the legislation, long a dream of liberal politicians and activists, but her presence seemed indicative of more.

Mark-Viverito is the liberal de Blasio's ideological match and a partner at the controls of government. She leads a council that largely shares de Blasio's beliefs and appears poised to rubber-stamp much of his agenda, a sharp contrast between the often contentious relationship between the council and the previous mayor, Michael Bloomberg.

Mark-Viverito, who was elected speaker last week by her council colleagues, is a longtime ally of de Blasio. The mayor took the unusual step of lobbying council members to choose her, a practice that some critics felt undermined the government's system of checks-and-balances.

De Blasio made it clear that on this issue, the mayor and the council were speaking with one voice.

"This City Hall is going be on the side of working families all over this city," he said. "We're going to work hard and we're going to work together — both sides of City Hall — to make sure that this will be one city where everyone rises together."

The winding history of the paid sick legislation, which was first discussed more than four years ago, offers a window into the changed relationship between council and mayor. Bloomberg, a Republican-turned-independent who held pro-business policies, opposed the paid sick legislation for fears that it would burden small businesses. He pressured then-Speaker Christine Quinn, a sometimes ally, to stall the legislation over the cries of several elected officials.

One of those was de Blasio, then the public advocate, who turned paid sick days into a campaign issue in last year's mayoral race. Under intense pressure from the left during the Democratic primary that she was also running in, Quinn eventually caved, offering a watered-down version of the bill that mandated that businesses with 15 or more employees offer at least five sick days a year.

That bill was to go into effect in April. It will now be superseded by the new legislation, which will be introduced at a council meeting next week and is assured of passage. The new bill requires businesses that employ more than five workers to offer the same five sick days a year to be used if the employee or a family member falls ill.

The expansion also removes exemptions for the manufacturing sector, eliminates a provision that would have allowed some businesses to not offer coverage until 2015 and gets rid of measures that could have stalled the implantation of sick days based on certain citywide economic benchmarks. The new law would bring New York closer in line to cities that already have paid sick days legislation, like Seattle and San Francisco.

"Under this legislation, the lives of over a half-million New Yorkers will be immeasurably better," de Blasio said outside a restaurant in the Bushwick neighborhood. "Families will be stronger and more stable because they will have paid sick leave coverage."

Some small businesses have feared that having to pay employees for sick days would produce an economic hardship. A leading business group, the Partnership for New York City, offered a measured endorsement of de Blasio's plan.

"Our hope is that these amendments to the current law will expand protection to more workers who need it, but avoid undue hardship on employers," said Kathy Wylde, head of the organization.

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Tech industry: Obama's NSA reforms 'insufficient'

SAN FRANCISCO — Technology companies and industry groups took President Barack Obama's speech on U.S. surveillance as a step in the right direction, but chided him for not embracing more dramatic reforms to protect people's privacy and the economic interests of American companies that generate most of their revenue overseas.

"The president's speech was empathetic, balanced and thoughtful, but insufficient to meet the real needs of our globally connected world and a free Internet," said Ed Black, president of the Computer & Communications Industry Association, a group that represents Google, Microsoft, Facebook and other technology companies upset about the NSA's broad surveillance of online communications.

On Friday, the president called for ending the government's control of phone data from hundreds of millions of Americans and ordered intelligence agencies to get a court's permission before accessing such records. He also issued a directive that intelligence-gathering can't be employed to suppress criticism of the United States or provide a competitive advantage to U.S. companies.

In addition, the president directed Attorney General Eric Holder and Director of National Intelligence James Clapper to consider whether new privacy safeguards could be added to online data gathering. Although those activities are only meant to target people outside the U.S. as part of national security investigations, information on Americans sometimes gets swept up in the collection.

Eight of the world's best-known technology companies underscored their common interest in curbing the NSA by releasing a joint, measured critique of Obama's proposal. They applauded the commitment to more transparency and more privacy protections for non-U.S. citizens, but also stressed that the president didn't address all their concerns.

"Additional steps are needed on other important issues, so we'll continue to work with the administration and Congress to keep the momentum going and advocate for reforms consistent with the principles we outlined in December," said the statement from Google, Apple, Yahoo, Microsoft, Facebook, Twitter, LinkedIn and AOL.

In his speech, Obama also directed Holder and Clapper to look into new restrictions on the length of time the U.S. can hold data collected overseas and the extent to which that data is used. He added that the U.S. won't spy on regular people who don't threaten national security.

But nothing he said is likely to diminish the potential losses facing the U.S. technology industry, said Daniel Castro, a senior analyst for the Information Technology and Innovation Foundation, a Washington D.C. think tank.

The ITIF estimates that the doubts raised by the NSA spying could cost U.S. companies as much as $35 billion over the next three years.

In the aftermath of recent NSA leaks, the companies set aside their competitive differences to come together and urge Obama to curtail the NSA's online snooping and lift restrictions that prevent companies from publicly disclosing specifics about how frequently they are asked to turn over their users' personal information in the name of national security.

Obama did agree to at least one major concession to the technology industry by pledging "to make public more information than ever before about the orders they have received to provide data to the government." The companies are hoping greater transparency will show that the U.S. government has only been demanding information about a very small fraction of their vast audiences.

But the promise of more disclosure didn't satisfy two different groups focused on online privacy and other digital rights.

"Far more needs to be done to restore the faith of the American people and repair the damage done globally to the U.S. reputation as a defender of human rights on the Internet," said Greg Nojeim, senior counsel at the Center for Democracy & Technology.

Cindy Cohn, legal director for the Electronic Frontier Foundation believes there's still a long way to go. "Now it's up to the courts, Congress, and the public to ensure that real reform happens, including stopping all bulk surveillance — not just telephone records collection," she said.

Recent revelations about how much information the U.S. government has been vacuuming off the Internet threaten to undercut the future profits of technology companies that depend on the trust of Web surfers and corporate customers.

U.S. Internet companies are worried that more people, especially those living outside the U.S., will use their products less frequently if they believe their personal data is being scooped up and stored by the U.S. government.

Less online traffic would result in fewer opportunities to sell the ads that bring in most of the revenue at companies such as Google, Facebook and Yahoo. There is also concern that foreigners will be reluctant to do business with a wide range of U.S. companies that sell online storage and software applications that require an Internet connection.

Obama's proposal made "progress on the privacy side, but it doesn't address the economic issues," Castro said. "I don't see anything in the speech that will prevent companies in other countries from using what the NSA is doing to gain a competitive advantage over the U.S. companies."

__

Ortutay reported from New York.

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Chestnut Hill attracts hip Back Bay shops

Newbury Street has long been the marquee address for posh brands to make their Boston debut. But lately a stretch of Boylston Street in Chestnut Hill is giving the Back Bay a run for its money with a slew of chic retailers opening new, bigger spaces.

The Street, 55 Boylston St.

Jonathan Adler

Slated to open in March, the new boutique is twice as big as the brand's original store on Newbury (2,600 square feet). The full collection of home decor from the offbeat designer will be available.

Exclusive Chestnut Hill perk: Custom-designed rugs, pillows and throws — and if none of Adler's fabrics suit your fancy, bring in your own for a fully personalized creation. jonathanadler.com

Skoah

Stylize blogger Peter Dziedzic just opened his third outpost of Canadian "skin care gym" Skoah. After expanding to Newbury Street last year, the Chestnut Hill location rounds out the trifecta of prestigious Boston addresses. The 1,007-square-foot space has three treatment rooms and a brow bar.

Exclusive Chestnut Hill perk: Find a sink in the product area — you can try on a product, rinse off and try again!

Intermix

Intermix's Newbury Street store is already a haven for fashionistas to try on designer duds (the shop is a favorite of Bruins wives, including Krista Ference). The 2,000-square-foot Chestnut Hill store opened in mid-November to rave reviews.

Exclusive Chestnut Hill perk: The buyers tailor their merchandise to the neighborhood, so expect to find a preppy-chic mix of items from designers such as Rag & Bone, Yigal Azrouel, Helmut Lang and more.

200 Boylston St.

Equinox

Boston's best-looking folks are already members of this luxe health club, which has locations in the Financial District and Back Bay. But when the new 33,000-square-foot club opened last month, city gym rats got a reason to trek out to the 'burbs for the signature classes, the spa and the shop stocked with Kiehl's products.

Exclusive Chestnut Hill perk: The gym is home to the company's first-ever barre studio.

Sweetgreen

Two Georgetown University grads united in 2007 to open an affordable, sustainable, healthy salad eatery that would actually, you know ... taste good. Last year the pair opened a spot on the other Boylston Street in Back Bay, and now they make the move to Chestnut Hill later this spring.

Exclusive Chestnut Hill perk: The storefront has a retractable front wall (at 20 feet tall!) that will open for outdoor seating in warmer months.

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Boston company Global Rescue guarding U.S. skiers at Sochi

The U.S. Ski and Snowboard Association is relying on a Boston company to get its team members out of a tight spot in the event of a terrorist attack or other crisis at next month's Winter Olympics in Sochi, Russia.

"When something does happen, it's our personnel who are going to respond," said Dan Richards, CEO of Global Rescue. "We're helping them prepare for not only medical but security (services)."

A company that describes itself as "AAA for your body," Global Rescue has been providing medical services for USSA for eight years, but will be bulking up to deal with any potential security concerns during the Sochi games.

They will have "up to a half dozen aircraft" to assist with medical and security-related evacuations, the company said.

"A disruption will involve hundreds of thousands of people wanting to go from one place to another," Richards said of a terrorist attack. "We have created plans that would create a mechanism for doing that."

Global Rescue's security team, made up of Special Forces veterans, has been involved in the 2006 Winter Olympics in Turin, Italy, and 2010 Winter Olympics in Vancouver, Canada, as well as other major crises, including the Arab Spring and the Fukushima earthquake, but Sochi is unique, Richards said.

"You've got this challenging environment and you've got this geo-political environment," Richards said.

Global Rescue's plans include taking into account the mountains that surround Sochi, and the Black Sea to the west of the city, he said.

"Global Rescue is a great company and we've had a long and productive relationship," USSA spokesman Tom Kelly said in an email. He declined to answer questions regarding security or "any details of our relationship."

U.S. Olympic team officials did not return calls for comment.

Concerns over the safety of the Games have increased in recent weeks, due to an ongoing conflict between Islamic insurgents and Russian security forces in the North Caucasus region, roughly 340 miles from Sochi. A rebel leader has called on his followers to attack the Winter Olympics.

Mark Galeotti, an NYU professor and Russian security expert, said the chances of an attack are higher because of the political dynamic in Russia.

"The games have become such a pet project of (Russian President Vladimir) Putin's. Frankly, the insurgents would suffer a major blow to their morale and credibility if they didn't try to hit the games, whether directly or indirectly," Galeotti said.

Galeotti said he believes Russian authorities — who have committed as many as 63,000 police and military and $2 billion to increase security — will deter a direct attack on the Olympics.

"The greatest risk is probably in other southern Russian cities," Galeotti said. "I doubt the Olympic teams ought to have any special concerns."

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