WASHINGTON - The worst economic growth in four years is raising concern that troubles in the U.S. housing market will spread and throw the country into a recession before the year is out.
The economy practically crawled at a 1.3 percent pace in the opening quarter of 2007, the Commerce Department reported Friday. That was even weaker than the sluggish 2.5 percent rate in the closing quarter of last year.
The main culprit in the slowdown: the housing slump, which made some businesses act cautiously. The bloated trade deficit also played a role.
Consumers largely carried the economy in the first quarter. But will they stay resilient in light of the troubled housing market, fallout from risky mortgages and rising energy prices?
Friday's report brought some of these uncertainties to the fore. For now, though, economists believe the risk of a recession is low. Former Federal Reserve Chairman Alan Greenspan has put the chance of a recession this year at one in three.
SAN ANTONIO - Edward Whitacre Jr., the blunt-talking Texan who led AT&T Inc.'s growth from the smallest of the Baby Bells into the nation's largest telecommunications company, announced Friday he will retire as chairman and chief executive in June.
He'll be replaced in both roles on June 3 by Chief Operating Officer Randall Stephenson, 47.
Stephenson, who has been the chief operating officer since 2004, rose through the ranks of AT&T and its predecessors. Formerly the chief financial officer, Stephenson is credited with overseeing the company's drive to reduce debt, which allowed it to make an aggressive string of acquisitions, most recently the $86 billion purchase of BellSouth.
Whitacre, 65, had another year on his contract, but Patrick Comack, an analyst for Zachary Investment Research, said Whitacre's decision to leave sends him out on top.
NEW YORK - Stocks finished a strong week mostly flat Friday as investors tried to reconcile a weaker-than-expected estimate of first-quarter economic growth with fresh evidence that corporate profits remain robust. A modest advance in the Dow Jones industrials sent the blue chips to their third record close in as many days.
A Commerce Department report that the U.S. gross domestic product grew at an annual rate of 1.3 percent in the first quarter - its slowest pace in four years - unnerved some investors Friday and seemed to run counter to a parade of strong earnings reports that sent major indexes sharply higher during the week.
The government data also showed that pricing pressures were rising - stirring concern that U.S. consumers may curb spending.
Keeping stocks afloat, however, was another round of robust earnings reports - notably from Microsoft Corp., one of the 30 companies that make up the Dow.
FRANKFURT, Germany - The euro climbed to an all-time high against the dollar Friday as weak U.S. growth figures reinforced fears of a widening economic disparity between Europe and the United States.
The surge will not be kind to Americans visiting Europe this summer, who will pay more for hotel rooms in Rome, entrance fees at the Louvre and chocolates in Belgium.
The euro hit $1.3682, shooting past its previous high of $1.3667 from December 2004.
The 13-nation currency then settled back to $1.3643 in late New York trading, still up from its $1.3601 level from late Thursday.
NEW YORK - Oil prices pushed above $66 a barrel Friday after Saudi Arabia announced the arrests of 172 Islamic militants, some of whom planned to attack oil fields.
Light, sweet crude for June delivery rose sharply after vacillating between gains and losses this morning. It settled up $1.40 at $66.46 a barrel on the New York Mercantile Exchange.
Brent crude settled 76 cents higher at $68.41 a barrel on the ICE Futures exchange in London.
Gasoline futures settled up 7.1 cents on the Nymex at $2.3613 after falling earlier.
SAN RAMON, Calif. - Coming off three straight years of record profits, Chevron Corp. on Friday reported its earnings surged yet again to start 2007 as the oil company cashed out of a Netherlands venture and cashed in on lucrative refining margins that have contributed to high gasoline prices.
The 18 percent increase in Chevron's first-quarter profit delivered another reminder of the oil industry's moneymaking prowess while motorists dig deeper into their pocketbooks to fuel their cars. The economic disparity has renewed calls for a windfall tax on the industry to help raise money for alternative energy.
Chevron earned $4.7 billion, or $2.18 per share, during the first three months of the year, compared with net income of $4 billion, or $1.80 per share, at the same time last year.
The San Ramon-based company turned a higher profit despite a 12 percent decline in revenue, to $48.2 billion during the period.
MIAMI - Burger King Holdings Inc. said Friday it swung to a profit in the third-quarter, fueled by sales of new sandwiches at the second-largest hamburger chain.
Net income for the quarter ended March 31 totaled $34 million, or 25 cents per share, versus a loss of $12 million, or 11 cents per share, during the year-ago period.
Revenue at the Miami-based company grew 9 percent to $539 million, from $495 million a year ago.
Analysts polled by Thomson Financial expected net income of 22 cents on revenue of $535 million.
Same-store sales rose 3.2 percent at company-owned and franchise restaurants. About 90 percent of Burger King restaurants are owned by franchisees.
HOUSTON - Waste Management Inc., the nation's largest garbage hauler, said Friday its first-quarter profit rose 19 percent, helped by revenue growth at its commercial collection and landfill businesses and improved cost controls. Its share price rose sharply.
Profit rose to $222 million, or 42 cents per share, from $186 million, or 34 cents per share, a year ago, even as revenue fell slightly to $3.19 billion from $3.23 billion a year earlier.
The company said it incurred an after-tax charge of $6 million, or 1 cent per share, in the most recent quarter related to restructuring.
Results topped Wall Street projections for earnings of 36 cents per share on $3.16 billion of revenue, according to analysts polled by Thomson Financial.
Volume at Waste Management's collection business fell about 5.2 percent in the first quarter, while income from operations grew 16 percent, the company said.
TRENTON, N.J. - The Food and Drug Administration rejected Merck & Co.'s request to market a successor to its withdrawn arthritis drug Vioxx in the United States, the drugmaker said Friday.
The decision was widely expected, after a panel of FDA advisers two weeks ago voted 20-1 against approving the drug, Arcoxia.
Arcoxia is in the class of anti-inflammatory drugs called Cox-2 inhibitors, which are touted as less likely to cause stomach bleeding or other dangers, but they have been linked to heart risks. It is the same class of drugs as Vioxx, which has become a poster child for drug safety problems.
Merck pulled Vioxx from the market in September 2004 after research showed it doubled risk of heart attacks and strokes. That triggered an avalanche of lawsuits - more than 27,000 so far - and a nosedive for Merck's stock price, which has since rebounded.
Despite the safety concerns in the United States, Arcoxia is on sale in 63 other countries.