Business today

RETAIL SALES UP 1.1 PERCENT: Energized by warm weather and favorable incentives, shoppers splurged on cars, clothes and appliances last month, boosting retail sales by 1.1 percent. With consumers playing a key role in the economic recovery, the Commerce Department's stronger-than-expected sales figures offered a dose of good news Friday. In May, consumers took a breather and sent retail sales down by 1.1 percent. But in June, more aggressive incentives helped bring Americans back to automobile showrooms, pushing up sales by 3.4 percent. Excluding cars, overall retail sales rose by 0.4 percent in June.

TAX SHELTERS INVESTIGATED: Bill Simon, California's Republican gubernatorial nominee, is among the investors identified by the IRS as participants in tax shelters under federal investigation. The disclosure detailing the shelters was made in court documents in a legal confrontation with KPMG LLP. Other participants' names made public include: Gary Winnick, chairman of the bankrupt telecom giant Global Crossing Ltd.; Bob Shaye, chairman of New Line Cinema; and the late race car driver Dale Earnhardt. The issue could be politically potent in California, because it focuses new attention on Simon's refusal to release his federal and state income tax returns, as his opponent, Democratic Gov. Gray Davis, has done. KPMG maintained it has done nothing wrong.

SPRINT CUTS 1,200 JOBS: Sprint Corp. said Friday it will cut 1,100 employees and eliminate another 100 unfilled positions in an effort to cut costs. The cuts will come from the company's global markets division, which includes most of Sprint's struggling long-distance business. The company, which employs 80,000 people, did not say where the jobs would be cut. The cuts, which will occur through layoffs and normal attrition, are expected to occur over the next several weeks.

AOL SEEKS NEW CHIEF: AOL Time Warner Inc. is looking for a new leader for its struggling America Online division, where Bob Pittman, the media conglomerate's chief operating officer, was dispatched just three months ago to turn things around. AOL Time Warner spokeswoman Tricia Primrose declined to comment on speculation that the search for a replacement for Pittman as AOL chief could signal that Pittman was considering leaving the company. She said that the search was to be expected since Pittman's assignment to lead AOL was always meant to be on an interim basis.

US AIRWAYS PILOTS GET STOCK OFFER: US Airways pilots would receive as much as a 20 percent stake in the carrier in return for pay and benefit concessions under terms of a tentative agreement, their union said. The proposal for a new contract calls for pilots to receive 17.5-million restricted shares and options for 11.5-million shares in exchange for $465-million in concessions, the US Airways Air Line Pilots Association said in a message to members. US Airways this week received a conditional $900-million U.S. loan guarantee that will help the company raise $1-billion in financing if it wins concessions from work groups. The company and pilots are continue to negotiate on the full contract.

QWEST MAY RESTATE EARNINGS: Qwest Communications International Inc. is considering restating its 2001 financial results, which could reduce revenue by more than $1-billion, according to the Wall Street Journal. Richard Notebaert, Qwest's new chairman and chief executive, hasn't made a final decision, the newspaper reported on its Web site Friday. A spokesman for the Denver-based phone company declined to comment. Federal regulators are investigating Qwest's accounting practices. In addition to the investigations, Qwest has seen its debt balloon to $26-billion, its long-term credit rating drop from investment grade to "junk," and its stock price plummet.

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