Business Briefs for July 13

Companies promise 400 jobs for incentives

Two companies seeking government incentives say they would create more than 200 jobs apiece in Hillsborough County, including one that would pay an average wage topping $80,000, according to county records.

However, at this point the companies are only considered economic prospects, and there's no assurance the companies will create the jobs locally.

Today, the Hillsborough County Commission is set to consider whether to qualify a cloud computing software development firm for $530,000 in tax refunds, and the Tampa City Council will consider the issue a day later. The two governments would split the refund bill 50-50 if the company locates in Tampa, but Hillsborough County would pick up the full cost if it locates in the unincorporated county. The unnamed company proposes to expand its existing headquarters and create 265 jobs, at an average wage of at least $81,488.

The Hillsborough County Commission also is expected to decide today whether to qualify an international retailing firm for the tax refund program, and the Tampa City Council will take up the issue a day later.

The company proposes to open a new office administrative services unit in the county, creating 203 jobs at an average wage of $46,833. It could be eligible for up to $121,800 in tax refunds from the city and county over four years.

Trade deficit largest in more than 2½ years

The U.S. trade deficit surged in May to the highest level in more than 2 1/2 years, driven wider by a big increase in oil imports and a decline in exports.

The Commerce Department said Tuesday that the deficit increased 15.1 percent to $50.2 billion in May. That's the largest imbalance since October 2008.

Exports declined 0.5 percent to $174.9 billion. Imports rose 2.6 percent to $225.1 billion.

The deficit is running at an annual rate of $563.2 billion. That's 12.6 percent higher than the 2010 imbalance. A higher trade deficit subtracts from overall economic growth because it means consumers are purchasing more foreign-made goods and fewer products made by U.S. workers.

Settlements likely will hurt bank earnings

The largest U.S. banks — from JPMorgan Chase to Bank of America — have been busy settling lawsuits with investors in the second quarter, casting a pall over their upcoming financial results.

Banks will start reporting earnings Thursday, with the healthiest of the large banks, JP Morgan Chase & Co.

Most Wall Street analysts fear that second-quarter earnings will be hurt by settlements with investors over poor-quality mortgage and municipal bonds. There's also been a slowdown in trading of stocks, bonds and other securities, which has led several banks to cut jobs. Investment bank Goldman Sachs Group Inc. has already informed the New York Department of Labor that it plans to eliminate 230 jobs beginning in September.

Motorists driving less, but gas prices rise

Gasoline prices are rising again even though drivers in the U.S. have bought less gas for four months in a row.

Oil, which is used to make gasoline, is higher as well. On Tuesday, benchmark West Texas Intermediate crude for August delivery gained $2.28, or 2.4 percent, to settle at $97.43 per barrel on the New York Mercantile Exchange.

"If you look at the macro-economic headlines, we should be closer to $67 (per barrel) than $97" for WTI, analyst Stephen Schork said. But many traders "are going to keep pushing things to see how far they go."

Traders point to the effect of international currency markets on the price of oil. The dollar fell on Tuesday and helped push up the price of oil, because oil is priced in dollars and becomes less expensive for buyers with foreign currency as the dollar weakens. But poor jobs data, the growing U.S. trade deficit, a festering credit crisis in Europe and other recent troublesome reports about the economy could have pulled prices down just as easily, analysts said.

Cigna moving headquarters to Conn.

Cigna announced Tuesday that it will change its corporate headquarters from Philadelphia to a Connecticut community where it already has corporate offices in exchange for a $50 million package of state tax credits and other incentives.

The announcement came the same day that Gov. Dannel P. Malloy said Cigna is the first company to be awarded state economic assistance under a new program that attempts to make Connecticut more economically attractive to new and existing companies. The health service and financial company is expected to receive tax credits, job training grants and other incentives, under the "First Five" initiative.

Cigna's U.S. operations have been based in Philadelphia since 1982.

S&P maintains watch on Expedia

Standard & Poor's Ratings Services said Tuesday that it is keeping its credit ratings for Expedia Inc. under review for a possible downgrade pending completion of the online travel company's plan to spin off its TripAdvisor unit into a separate, publicly traded company.

S&P reaffirmed a BBB- corporate credit rating for Bellevue, Wash.-based Expedia.

Should Expedia go forward with the TripAdvisor spinoff as contemplated, S&P said it would likely affirm the rating at BBB- but the agency added that any changes in the plan that favor shareholders over debtholders could cause it to reevaluate.

GM invests $130 million in Midwest plants

General Motors Co. says it will invest an additional $130 million in three plants in the Midwest.

GM is investing $115 million in its Toledo, Ohio, and Bedford, Ind., plants so they can supply cars with eAssist, an optional system designed to improve fuel economy by 25 percent.

GM is debuting eAssist this summer on the Buick LaCrosse. It will be offered on the Chevrolet Malibu starting next year.

The company is also investing $15 million in a Wyoming, Mich., plant for other engine components.

The money is part of the $2 billion GM has pledged to invest in 17 U.S. facilities over the next 18 months.

The company says the investment will create or retain 4,000 total jobs.

From staff and wire reports