Business digest

JOBLESS CLAIMS DROP: New claims for unemployment benefits dropped to a 15-month low last week, suggesting that companies are reducing layoffs. For the week ending June 29, new applications for unemployment insurance fell by a seasonally adjusted 11,000 to 382,000, the Labor Department reported. Economists viewed the decline as an encouraging sign that the pace of layoffs was stabilizing, but said it would take time for companies to feel more secure and step up hiring.

FACTORY ORDERS RISE: Orders to factories rose by 0.7 percent in May, the third month in a row, the Commerce Department said. Computers, machinery and metal products were among the categories posting gains in orders, while cars and household appliances showed declines.

SUIT AGAINST AUTOWAY HONDA DISMISSED: A Pinellas-Pasco circuit judge dismissed a lawsuit Wednesday against Autoway Honda in Clearwater, saying an unhappy customer got exactly what he paid for. At a hearing, Judge W. Douglas Baird said Autoway's documents clearly showed that Largo resident Charles Gibson paid $1,610 for an extended warranty and $270 for a service contract for the 2002 Civic he bought in March. Although the price was combined in the finance agreement, the judge said, "The bottom line to the consumer ... is the same. The documents are clear that this is what happened." Gibson's attorneys had argued that the price of the extended warranty was overstated by $270 on the finance agreement. The plaintiff's attorneys plan to file an amended complaint.

CIGAR CHALLENGE HEADS TO TRIAL: A Cuban company's challenge to General Cigar Co.'s use of the Cohiba brand name in the United States will be resolved by trial, General Cigar said. U.S. District Judge Robert Sweet in New York ordered lawyers for General Cigar, which is based in Tampa and New York, and Empresa Cubana del Tabaco, known as Cubatabaco, to appear in September to schedule a trial. Cubatabaco claims it owns the right to the Cohiba name under international treaties, even though it never registered for a U.S. trademark.

FPL GETS LOANS FOR R.I. PLANT: FPL Group Inc., owner of Florida's biggest utility, got $425-million in loans to build a power plant in Rhode Island that will run on natural gas and begin producing electricity by the fourth quarter. FPL Energy LLC, a subsidiary that generates power outside of Florida, announced the syndication of financing for the 535-megawatt power plant under construction in Johnston, R.I. FPL Group's largest unit is Florida Power & Light Co., which sells power to 4-million customers in Florida.

US AIRWAYS, UNION REACH DEAL: US Airways Group Inc. and a union representing 160 flight dispatchers reached a tentative agreement on pay and other concessions to help the carrier avoid bankruptcy. US Airways declined to disclose details of the agreement, which must be approved by employees represented by Transport Workers Union of America, or the annual savings it would produce. The airline is seeking concessions from all labor groups to win government support for a $900-million loan guarantee. Separately, US Airways failed to persuade Continental Airlines Inc. to become its partner. Continental broke off talks about sharing passengers and frequent-flier programs after determining that an agreement wouldn't be reached in the "near future," spokeswoman Julie King said, ending several months of talks. US Airways wants to ally with another U.S. carrier to help its loan guarantee bid.

LEISURE AIR FARES INCREASE: American Airlines, United Airlines and Delta Air Lines Inc. raised leisure fares $20 per round trip in at least the fourth attempt since mid-April to boost ticket prices and help stem losses. Northwest Airlines Corp., which often has been the spoiler in increase attempts, doesn't plan to follow the latest price rise, said spokesman Kurt Ebenhoch. Leisure fares generally are bought at least a week before travel, require a Saturday stay and have more restrictions than higher-priced tickets usually purchased by business travelers.

FORD EXPANDS ZERO FINANCING: Ford Motor Co. is expanding its zero percent financing offer a day after it and General Motors Corp. brought back the incentives. Ford said Wednesday it is offering no-interest financing on 36-month loans on every vehicle in its product line except for the Ford Escape and Thunderbird. Its promotion launched Tuesday had offered no-interest financing on a limited number of models. GM and the Chrysler Group of DaimlerChrysler AG have also launched summer promotions offering zero percent financing on a broad selection of their vehicles.

ANDERSEN CONSULTING OUTSTRIPS AUDITS: Arthur Andersen LLP's customers in the Standard & Poor's 500 Index last year paid the firm more than twice as much for services such as consulting and tax advice than they gave Andersen for financial audits. The 84 S&P 500 clients that Andersen had at the start of this year paid the firm $185-million for audits and $416-million for other work, the latest proxy filings show. Accounting firms are being pressed by lawmakers and regulators to separate their audit and consulting operations following Enron Corp.'s collapse. "Accounting firms have paid less attention to the need to challenge corporate management, in part because of their desire to obtain consulting business," said David Ruder, Northwestern University law professor and a former chairman of the Securities and Exchange Commission.

XEROX SUED OVER RETIREMENT LOSSES: A lawsuit filed against Xerox Corp. alleges that the company misled employees about the soundness of its stock, causing them to lose millions of dollars in their retirement plans. The lawsuit, filed in U.S. District Court in Hartford, Conn., followed the copier and printer company's announcement that it would restate billions of dollars in revenue from 1997 through 2001. Xerox had used improper accounting techniques to accelerate the recognition of equipment revenue. The lawsuit seeks class action status to represent more than 50,000 participants in the company's retirement plan. Bill McKee, a Xerox spokesman, said company officials had not seen the lawsuit and could not comment.

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