Business: Business digest

MANUFACTURING GROWTH SLOWS: Manufacturing activity growth slowed in April, an industry group reported, suggesting an economic recovery that roared out of the starting gate may be losing a bit of steam. The Institute for Supply Management said its index of business activity dipped to 53.9 in April from a revised 55.6 percent in March. Analysts had been expecting a reading of 55.0. An index number over 50 signifies growth.

CONSTRUCTION ACTIVITY SLUMPS: Construction activity fell 0.9 percent in March, the Commerce Department said, led by a sharp drop in spending on highways, hospitals, schools and other big government projects. The decline came after a 0.7 percent rise in February and was weaker than the 0.2 percent dip analysts expected. Most of the weakness in March came from a 5.6 percent decline in spending on big government projects, the report said.

ANDERSEN TALKS FALL APART: Talks broke down between Arthur Andersen and the creditors and shareholders of Enron, who had sued the firm for signing off on Enron's erroneous financial statements. The parties were unable to agree on how to divide any payment by Andersen, the New York Times reported. In a statement, Andersen expressed regret over the failure of the talks. Eric D. Green, who was asked by a federal judge in Houston to mediate the talks, declined to comment on the status of negotiations. Andersen proposed settling these lawsuits for $750-million several months ago, but the most recent settlement proposal was just $350-million, the result of the defection of clients.

Z-TEL DETAILS CUTS, PAYOUTS: Z-Tel Technologies Inc. eliminated the jobs of 160 employees last year and 350 last month, yet senior executives received sizable pay raises in 2001. According to the Tampa telephone company's annual proxy statement, the exception was chairman and chief executive D. Gregory Smith, who took a $7,400 pay cut last year, to a salary of $154,583. But he also received options on 400,000 shares of company stock, far more than the options on 100,000 shares he got the previous year.

NEW BOND RATES: New variable interest rates went into effect Wednesday for some issues of U.S. savings bonds. A 3.96 percent rate will apply to EE bonds issued in May 1997 or later, and a 3.74 percent rate to EE bonds issued from May 1995 to April 1997. Many bonds issued earlier still are earning a higher guaranteed minimum rate. For I bonds, an earnings rate of 2.57 percent will apply to bonds purchased now through October. Series E bonds issued from May 1941 through April 1962 and those issued from December 1965 through April 1972 have stopped earning interest, as have savings notes issued from May 1967 through October 1970. More information is available at www.savingsbonds.gov.

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