Beacon pays steep markup to buy back Channel buildings

Beacon Capital Partners is back in the game at the Channel Center in South Boston's humming Fort Point Neighborhood.

The Hub real estate investment firm purchased the properties at 7-9 Channel Center for $7.8 million and 10-20 Channel Center for $62 million from Southport, Conn.-based CV Properties, according to Registry of Deeds documents filed yesterday.

The combined $69.8 million acquisition is a portion of the Channel Center holdings that Beacon had sold to CV Properties at a loss in 2007 for $21.5 million, after the area's revitalization was too slow to take hold. It originally bought 16 former Boston Wharf Co. industrial warehouse buildings in 2000 for $40.5 million, according to published reports.

"Beacon was one of the earliest companies to see the value of the Fort Point area," said Vivien Li, president of the Boston Harbor Association.

"The fact that they're now coming back to the district really says something about how the area has now evolved toward Class A office space."

Beacon declined comment, and CV Properties did not return calls.

The Channel Center consists of about a dozen former warehouse buildings off A Street that include 209 condos and 89 Midway Studios artist live/work units.

The 7-9 Channel Center buildings are vacant and yet to be renovated. Tenants at 10-20 Channel Center include members-only online shopping site Rue La La and Cengage Learning.

CV Properties is currently building One Channel Center, a $225 million, 11-story office building that's pre-leased to State Street Bank and a 970-space parking garage slated to be completed next year.

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Owners make hay with Topsfield home

If you ask David Conley if he thinks he lives in a barn, he'll tell you that yes, in fact, he and his wife do call one home — a former cow barn on the old Eastgate dairy farm in Topsfield.

Conley, a custom woodworker, started converting the 1880s structure into a four-bedroom house in the late 1980s, after moving his business to the property in 1984. He still runs his business out of an adjacent 4,000-square-foot 1913 building where cows were milked. Conley has a shop in this concrete structure that has room for 15 vehicles on two levels. A potential buyer could run a business out of the garage, as cottage industry is allowed in Topsfield.

The barn's cavernous interior has been transformed into a two-level country-style home with large, open kitchen/dining/living spaces with 23-foot ceilings in the first-floor living areas. A wood catwalk crosses dramatically and offers nice views down to the first floor space. It also connects second-floor bedrooms with a walk-out deck on the other side of the house.

The 3,500-square-foot house at 26 East St., set on almost five acres, is on the market for $869,000.

Conley covered the exterior with cedar clapboard siding, but the interior was redone using most of the barn's original beams.

There's a large entry foyer with yellow Southern pine floors, which are featured throughout the first-floor living spaces. Conley milled all of the oak cabinetry in the kitchen, which also features an oak island with a breakfast bar. There's a stainless-steel Sub Zero refrigerator, a four-burner gas cooktop with a griddle and two General Electric wall ovens that were added two years ago.

The adjacent dining room has diagonally set wood floors and a built-in hutch built by the owner.

This space segues into a living room with a wood-burning fireplace set into an elaborate mantel. There's also a half bath on this floor with a newly added marble vanity top.

There are glass doors from the living area out to a large covered porch with vaulted ceilings and backlit crown molding. Down the steps, Conley built an "outdoor kitchen" with two built-in gas grills, a microwave, stainless steel cabinets and sink — and it's covered by a large umbrella.

The house's carpeted bedrooms also have a country feel with lots of oak trim and yellow pine cabinetry. The master bedroom has four large pine cabinets with track lighting overhead and an en-suite bathroom has a soaking tub, an oak vanity with two sinks, and a tile-lined walk-in shower with a marble sink. Other bedrooms are also decent-sized.

With an additional 4,000 square feet, the garage has lots of potential living space, and is ideal for a car enthusiast as it has its own mechanical bay with a lift. There's also a large exercise area.

The home has a laundry room with an LG washer and dryer bought several years ago. The house has late 1980s high-efficiency heating and cooling systems. The roof was redone in 2009.

The acreage around the home is professionally landscaped, with grass areas and big trees with trails beyond.

Broker: Lillian Montalto of Lillian Montalto Signature Properties at 978-815-6300

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Lexus revamp is remarkable

What's better than hopping out of your car after a five-hour drive and not having to stretch for a minute to get the blood flowing? That's how good you feel after a cruise in the 2013 Lexus LS 460.

Luxury performance and craftsmanship are Lexus hallmarks, and Toyota has redefined its flagship with a heavily updated model. Bolder body styling, a larger footprint and a major revamp of the interior — highlighted by soft leather, raised stitching, brushed aluminum and natural wood trim — announce this car as a worthy competitor to the Mercedes Benz 550, BMW 7 Series, Audi A8 and Jaguars.

The powerful 386 horsepower V-8 is mated to an eight-speed CVT where the shifts points are designed for comfort. But a quick turn of the drive mode selection knob on the console stiffens the suspension for a sports sedan-like driving experience. You also can select ECO mode to save some fuel. OK, so great gas mileage is not what this car is about, but we managed about 19 mpg on average and met the highway standard of 23 mpg.

Competing in the tough luxury sports sedan field, the LS doesn't have the true handling of the European entries. Not to fret though, as the all-wheel ride is very compliant without wallowing. The suspension is nicely tuned to absorb major road rumbles and the steering feedback is good, although a touch electronic. The thick Japanese wood steering wheel with leather trim makes maneuvering a snap. Upgraded 19-inch seven-spoked wheels wrapped around heavy-duty brakes bring this full-sized machine to a quick stop.

The workmanship carries over to the electronics, too. Well-placed intuitive controls are easy to use to control the stereo, cellphone and navigation. The 12-inch display screen is now operated by the mouse-controlled Remote Touch Interface as opposed to a touch screen.

Interior peace and quiet continues to be a premium in the flagship. The cabin is spacious with enormous legroom and is sealed so tight that your ears pop when the doors thump closed. The backseat feels more like a living room with heated seats, and an available upgrade includes adjustable rear seats, DVD players and built-in massage.

Lexus really has poured safety features into this sedan with a blind-spot monitor, collision alarm and back-up camera with cross traffic alerts. Front-mounted Smart Stop Technology radar can help automatically slow the car down and at low speed bring it to a stop before banging bumpers. The parking assist comes in handy as the sweep of the roof does narrow the view out the rear.

The polished exterior features the iconic hourglass grille and the cat-like LED headlamps, which draw your eye along the tailored lines. This smart-looking sedan is an inviting presence parked at the golf club or in the front row at the office.

Base all-wheel-drive models start at $74,935 and our tester checked in at a delivered price of $82,010, which included an upgraded 19-speaker Mark Levinson stereo, climate-controlled front seats and wheels. Other cars in this class do have better gas mileage but this automobile is a must look and drive when shopping.

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Obama says not threatened by China focus on Africa

PRETORIA, South Africa — President Barack Obama says he doesn't feel threatened by the fact that other countries, led by China, are investing in Africa. In fact, Obama says the more countries that come to Africa, the merrier.

Obama says he's touring three African nations this week because the United States needs to increase its engagement with a continent that's showing promise and possibility.

He says such interaction is good for the U.S. regardless of what other countries do.

But he cautions that Africa must be wary of outside investment and always ask how it will benefit when other countries come seeking its natural resources or to make other investments.

Obama spoke Saturday during a news conference in South Africa with President Jacob Zuma.

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Obama: Make climate change a must for your vote

WASHINGTON — President Barack Obama is urging Americans to make climate change a political litmus test, asking them to declare they won't vote for any politicians who don't protect future generations from environmental devastation.

Obama says Americans are already paying the price for climate change, including in lost lives and hundreds of billions of dollars. He says America will be judged as a people and a nation by how it responds.

"If you agree with me, I'll need you to act," Obama says, appealing to Americans to spread the word to their family, friends and classmates. "Remind everyone who represents you, at every level of government, that there is no contradiction between a sound environment and a strong economy — and that sheltering future generations against the ravages of climate change is a prerequisite for your vote."

Obama's remarks in his weekly radio and Internet address, released Saturday but recorded at the White House prior to the start of Obama's weeklong trip to Africa, marks the start of a new phase for Obama's efforts on climate change: convincing the public to sell it for him.

Obama last week unveiled a national plan to combat climate change and prepare for its effects, bypassing Congress after years of frustrated efforts to get lawmakers to pass legislation to deal with the issue. At the core of Obama's plan are new controls on new and existing power plants that emit carbon dioxide — heat-trapping gases blamed for global warming. The program also will boost renewable energy production on federal lands, increase efficiency standards and prepare communities to deal with higher temperatures.

None of the measures in Obama's plan require Congress to act — a consideration that liberates the president but also poses risks if it's perceived as executive overreach. Republicans and some Democrats have already denounced the plan as a job-killing "war on coal," and opponents could try to undercut Obama's plan or hinder it through legal action if Americans don't seem to be on board.

"The question is not whether we need to act. The question is whether we will have the courage to act before it's too late," Obama says.

In the Republican address, Sen. Pat Roberts of Kansas says there are troubling, unanswered questions about the implementation of Obama's health care law.

"We must put an end to the fear and uncertainty," Roberts says. "Those 'bumps' and 'glitches' the president talks about? It's a train wreck, folks, and we have to get America out of the way."

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NASA launches sun-watching satellite from Calif.

VANDENBERG AIR FORCE BASE, Calif. — NASA launched a satellite late Thursday on a mission to explore a little-studied region of the sun and to better forecast space weather that can disrupt communications systems on Earth.

Unlike a traditional liftoff, the Iris satellite rode into Earth orbit on a Pegasus rocket dropped from an airplane that took off around sunset from the Vandenberg Air Force Base on California's central coast. About 100 miles off the coast and at an altitude of 39,000 feet, the airplane released the rocket, which ignited its engine for the 13-minute climb to space.

Mission controllers clapped after receiving word that Iris separated from the rocket as planned, ready to begin its two-year mission.

"We're thrilled," NASA launch director Tim Dunn said in a NASA TV interview.

The launch went smoothly, but there were some tense moments when communications signals were temporarily lost. Ground controllers were able to track Iris by relying on other satellites orbiting Earth. It also took longer-than-expected for Iris to unfurl its solar panels.

In a statement, NASA said it received confirmation that the satellite deployed its solar panels and was generating power.

Previous sun-observing spacecraft have yielded a wealth of information about our nearest star and beamed back brilliant pictures of solar flares.

The 7-foot-long Iris, weighing 400 pounds, carries an ultraviolet telescope that can take high-resolution images every few seconds.

Unlike NASA's Solar Dynamics Observatory, which observes the entire sun, Iris will focus on a little-explored region that lies between the surface and the corona, the glowing white ring that's visible during eclipses.

The goal is to learn more about how this mysterious region drives solar wind — a stream of charged particles spewing from the sun — and to better predict space weather that can disrupt communications signals on Earth.

"This is a very difficult region to understand and observe. We haven't had the technical capabilities before now to really zoom in" and peer at it up close, NASA program scientist Jeffrey Newmark said before the launch.

The mission is cheap by NASA standards, costing $182 million, and is managed by the space agency's Goddard Space Flight Center.

Engineers will spend a month making sure Iris is in perfect health before powering on the telescope to begin observations.

The launch was delayed by a day so that technicians at the Air Force base could restore power to launch range equipment after a weekend outage cut electricity to a swath of the central coast.

The Pegasus, from Orbital Sciences Corp. of Dulles, Va., is a winged rocket designed for launching small satellites. First flown in 1990, Pegasus rockets have also been used to accelerate vehicles in hypersonic flight programs.

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Jeep owners worry about safety after recall deal

DETROIT — A deal between the government and Chrysler over Jeeps linked to deadly fires isn't sitting well with many Jeep owners and auto safety advocates.

In early June, after a nearly three-year investigation, the National Highway Traffic and Safety Administration recommended that Chrysler recall 2.7 million older Jeep SUVs because the fuel tanks could rupture, leak and cause fires in rear-end crashes.

But last week, after talks between outgoing Transportation Secretary Ray LaHood and Chrysler CEO Sergio Marchionne, the agency compromised, letting Chrysler limit the recall to about 1.5 million vehicles.

The agreement removed about 1.2 million Jeep Grand Cherokees, model years 1999 to 2004, from the recall, leaving some owners confused about the safety of their vehicles. Chrysler argued that those Jeeps have a different design than the ones it agreed to recall and are as safe as comparable models from other automakers.

The about-face has confused people like Els Sipkes, a photographer from near Charleston, S.C. Her 2000 Grand Cherokee isn't being recalled, although the government initially said it should be.

She says that every time she stops quickly, she checks her rear-view mirror. "It's in my mind that if a car crashes into the back of me, that I've got to be on my toes and I've got to get out," she said.

Chrysler won't comment on the recall, beyond the documents it filed with NHTSA outlining its case.

Sean Kane, a frequent critic of NHTSA who heads a safety research company in Massachusetts, said the number of vehicles cut from the Jeep recall is unusual. But the agency frequently negotiates the size of recalls with car companies, he said. For example, in the early 2000s, Ford negotiated a series of smaller recalls that held off a big one for vehicles with cruise control switches that caused fires, he said. But the company eventually recalled more than 10 million vehicles.

David Kelly, former NHTSA chief of staff and acting administrator under President George W. Bush, said Chrysler probably presented data justifying the smaller recall. "I am positive that the agency would never negotiate vehicles out of a recall if they felt they were unsafe," he said.

Yet critics say all the Jeeps should be recalled. And they question whether Chrysler's solution of adding a trailer hitch as an extra buffer in the back is enough to prevent deadly fires.

Under the recall Chrysler will, free of charge, install hitches on any Grand Cherokees from 1993-1998 and Libertys from 2002-2007 that don't already have them from the factory. About 65 percent of Jeeps from that era were sold without factory hitches, according to Ward's Automotive. Chrysler will inspect those with hitches purchased elsewhere and replace them if they have sharp edges that could puncture the gas tank.

The 1999-2004 Grand Cherokees are part of a "customer service campaign." Here, a Chrysler dealer will inspect a trailer hitch installed after the car was purchased and replace it if necessary. But Chrysler won't install a hitch on any vehicle that doesn't already have one.

Chrysler Group LLC, which is majority owned by Fiat SpA of Italy, hasn't disclosed how much the recall could cost, although hitches sell for about $200 each on websites.

On June 3, the government sent Chrysler a 13-page letter requesting a recall of all 2.7 million Grand Cherokees and Libertys in question. The letter included detailed statistics on crashes involving fuel tank fires in SUVs from model years 1993 to 2007. The agency said the data showed the Jeeps were more prone to fuel tank fires than similar models. The Jeeps have gas tanks behind the rear axle, a design that was fairly common when they were built but isn't used much anymore. NHTSA had evidence of 37 Jeep accidents that killed 51 people.

Chrysler argued that the vehicles were safe. The company said its data show the Jeeps are no more prone to fatal crashes than comparable vehicles such as the Ford Explorer, Chevrolet Blazer and Toyota 4Runner. But it agreed to the smaller recall, it says, to improve the Jeeps' safety.

When asked about the government's change of position, spokeswoman Karen Aldana said in an emailed statement that NHTSA let Chrysler remove the 1999-2004 Grand Cherokees from the recall because the design change made them safer than the older models. The agency's full analysis will be published when the investigation is completed, she said.

But NHTSA knew about the change to the Grand Cherokee's design long before it asked for the recall. Documents on NHTSA's website examined by The Associated Press show that Chrysler detailed the change in a November 2010 letter to the agency.

The recall deal came after outgoing Transportation Secretary Ray LaHood and NHTSA Administrator David Strickland met with Chrysler CEO Sergio Marchionne on June 9, and it was sealed in a June 18 telephone call, a Transportation Department spokesman confirmed.

Clarence Ditlow, director of the Center for Auto Safety, an activist group founded by Ralph Nader, said those events show the deal was made by political appointees and not by engineers. Ditlow's 2009 inquiry prompted NHTSA to investigate the Jeeps.

Ditlow is urging NHTSA to test the trailer hitches to see if they offer added safety. Ditlow said a hitch failed to protect 4-year-old Cassidy Jarmon of Cleburne, Texas, who died in a fire after her family's 1993 Grand Cherokee was rear-ended by a car in 2006. The hitch punctured the gas tank, he said. According to news reports, police estimated the Jeep was hit by a car traveling 52 mph.

NHTSA's abrupt position change even worries people who own a Jeep with a trailer hitch.

Soham Vaishnav, a pediatrician from Chicago who uses a wheelchair, had a hitch installed by U-Haul on his 2004 Grand Cherokee. But he's still not convinced it's safe to carry his children, ages 1 and 4. So Vaishnav and his wife are thinking of buying a new car.

"There's just not enough time after a fire starts," he said.

Some owners also fear the controversy will hurt resale values.

"It kind of depreciates the car's value because people would be wary of buying them," said Charles Mangan, a recent college graduate from South Carolina who is moving to New York City. Mangan hopes to sell the 2004 Grand Cherokee he bought used four years ago. His SUV isn't part of the recall, but he's thinking of paying to get a trailer hitch installed.

Newer Grand Cherokees and Libertys aren't as risky as the old ones. Chrysler moved the fuel tank in front of the axle in a 2005 redesign, which helped meet stricter government rear-crash safety requirements imposed that year. The change also brought easier back-seat access and more storage space. The Liberty's tank was moved forward in the 2008 model year.

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Microsoft wants to disclose data on FISA orders

WASHINGTON — Microsoft is asking a court to let it disclose data on national security orders the company has received under the Foreign Intelligence Surveillance Act.

Microsoft made the request in a motion with the secretive Foreign Intelligence Surveillance Court. The motion was dated June 19 but wasn't unsealed until this week.

The company's motion comes after Google filed a similar motion asking that it be allowed to disclose the number of data requests that come from secret orders approved by the court.

Google and Microsoft were among several U.S. Internet companies identified as giving the National Security Agency access to data on its customers under the program known as PRISM. Microsoft says it wants to correct misimpressions about what it provides to the government.

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Online pharmacy crackdown shutters 1,677 websites

U.S. and international regulators have seized more than $41 million in illegal medicines worldwide and shut down 1,677 websites as part of their ongoing fight against counterfeit drugs sold over the Internet.

The U.S. Food and Drug Administration said Thursday it used federal court warrants to seize website domain names and post messages letting visitors know that people who traffic in counterfeit drugs may face severe penalties under federal law. The message also offers a link to a site — www.fda.gov/BeSafeRx — that explains the risks of fake online pharmacies.

Experts say the Internet is filled with illegitimate, professional-looking sites that peddle drugs. The FDA launched a campaign last fall to warn consumers that the vast majority of online pharmacies do not follow laws or pharmacy industry standards and their products could harm or even kill.

The moves the agency announced Thursday took place as part of Operation Pangea VI, a weeklong crackdown organized by the international police agency Interpol that ended Sunday.

Investigators visited the websites and used undercover IDs to order the drugs. They received counterfeit drugs that were not approved by the FDA. Some arrived with no directions for use and in strengths and quantities not available in the United States. Some also had different ingredients than the real drugs, which can be very dangerous to the patients taking them.

"You essentially have no idea what it is that you would be buying and what you would be taking," said John Roth, director of the FDA's Office of Criminal Investigation.

Illegal medicines found online include the diabetes treatment Avandaryl. They also include versions of the impotence drugs Levitra and Viagra called "Levitra Super Force" and "Viagra Super Force" that are not approved by the FDA.

Online sales of those erectile dysfunction treatments can be especially enticing to patients who may be too embarrassed to visit a drugstore to buy the drug in person.

Roth said consumers should watch for red flags that indicate an online pharmaceutical website may not be legitimate. They include sites that offer steep discounts from a drug's regular price, those that don't require a prescription to fill your order or ones that contact you through a spam email.

"This is a constant struggle for us, but one of the most important things we can do is educate the consumers about what a legitimate website looks like," he said.

A January study by the National Association of Boards of Pharmacy, which accredits online pharmacies, found that only 257 of 10,275 online pharmacy sites it examined appeared legitimate.

Last year, Operation Pangea V resulted in the arrests of about 80 people and the seizure of $10.5 million in medicines. In addition more than 18,000 illegal pharmacy websites were shuttered.

Roth said there were no arrests in the latest operation, but the investigation is continuing.

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Former New York, LA top cop Bill Bratton to NBC

NEW YORK — NBC News has hired former New York police commissioner and Los Angeles top cop Bill Bratton as a news analyst.

Bratton, who also ran Boston's police department in a busy law enforcement career, will specialize in criminal justice policy, domestic intelligence gathering and the role of law enforcement in counterterrorism. NBC said Thursday that Bratton will also appear on MSNBC.

He joins a protege in the media. John Miller, who worked for Bratton in New York and Los Angeles, is a busy analyst and reporter at CBS News.

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Salem State University to purchase historic diner

SALEM — A diner that's listed on the National Register of Historic Places and was a former haunt of Red Sox legend Johnny Pesky will soon be owned by Salem State University.

The school announced on Wednesday that it's reached an agreement to purchase Salem Diner for $600,000.

The Salem News reports that the real estate closing is expected in the next few weeks.

Salem State president Patricia Meservey said the purchase was a chance to enhance the South Salem neighborhood and preserve a piece of local history.

Plans for the diner are uncertain, though a school spokeswoman said it could continue to be a restaurant.

The diner was built in Merrimac in 1941. It became known a few years ago as a regular breakfast spot for Pesky.

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Feds tout Innovation District

Boston's growing Innovation District is an example for other cities that want to develop a cutting-edge startup culture, a federal official said yesterday.

Winslow Sargeant, chief counsel for the Small Business Administration's office of advocacy, said Boston is "a Mecca for people from all over the world to launch out and build the next big company." He credited the city's Innovation District initiative, which he said has created a community of entrepreneurship and creativity.

"This ecosystem of innovation brings together entrepreneurs to share ideas and bring their vision to the marketplace. It presents a successful model and an ideal avenue for the public and private sectors to partner together for economic success," he said.

The Innovation District initiative, announced in 2010, has brought more than 4,000 jobs to the waterfront area, according to Nicole Fichera, the Innovation District manager for the Boston Redevelopment Authority.

She said the Hub has been approached by many cities that are working on similar initiatives for guidance, including some as far away as China and the Netherlands.

Sargeant, who grew up in Dorchester and graduated from Northeastern University, said Boston has become a great place to start a business: "If someone wants to start a company or if someone wants to explore what it takes to, there are people that they can talk to and places they can go to network with others."

Among the biggest benefits of Boston are the startup incubators and accelerators that offer shared work spaces. Sargeant met with many of them yesterday, including representatives from the Cambridge Innovation Center, MassChallenge and Bolt.

"These magic things happen that you can't really quantify" when entrepreneurs share work spaces, said Ben Einstein, founder of Bolt.

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‘One Greenway’ to break ground

A pair of apartment and condo buildings on the border between Chinatown and the Rose Kennedy Greenway — a project expected to break ground next month — will be called "One Greenway," developers said yesterday.

The 362-unit residential project at Kneeland and Hudson streets includes a 312-apartment North Building and 50-unit affordable condo South Building with green space in the middle.

"It's helping to reconnect Chinatown with the Leather District," said Sean Sacks of New Boston Fund.

The project also will include a 137-space garage and 10,000 square feet of retail and community space.

"I don't think demand for housing in the downtown has ever been greater," said Sacks.

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PayPal looks to conquer space (payments)

NEW YORK — PayPal wants to explore space — or at least begin to figure out how payments and commerce will work beyond Earth's realm once space travel and tourism take off.

PayPal, which is eBay Inc.'s payments business, says it is launching an initiative called PayPal Galactic with the help of the nonprofit SETI Institute in Mountain View, Calif., and the Space Tourism Society, an industry group focused on space travel. Its goal, PayPal says, is to work out how commerce will work in space.

Questions to be answered include how commerce will be regulated and what currency will be used. PayPal's president, David Marcus, said the company is very serious about the idea. He says that while space tourism was once the stuff of science fiction, it's now becoming a reality.

"There are lots of important questions that the industry needs to answer," he said. There are regulatory and technical issues, along with safety and even what cross-border trade will look like when there are not a lot of borders.

"We feel that it's important for us to start the conversation and find answers," Marcus added. "We don't have that much time."

PayPal is no stranger to outer space. One of its founders, Elon Musk, heads the privately held space company Space Exploration Technologies Corp., better known as SpaceX. And James Doohan, best known for his role as "Scotty" on "Star Trek," was PayPal's first official spokesman when it launched in 1999.

PayPal said it plans to hold an event announcing the venture at the SETI Institute in Mountain View on Thursday.

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US unemployment benefit applications fall to 346K

WASHINGTON — The number of Americans seeking unemployment benefits fell 9,000 to a seasonally adjusted 346,000 last week, evidence that the job market is still improving modestly, despite signs of slower growth.

The four-week average, a less volatile figure, declined 2,750 to 345,750, the Labor Department said Thursday. That's near the five-year low of 338,000 that the average touched last month.

Applications are a proxy for layoffs. Since March, they have fluctuated between 340,000 and 360,000, a level consistent with steady hiring. Employers added 175,000 jobs in May, almost matching the average monthly gain for the past year. The unemployment rate was 7.6 percent, down from 8.2 percent a year earlier.

Steady job gains could help the economy expand later this year. Growth was only 1.8 percent at an annual rate in the first quarter, the government said Wednesday, down from a previous estimate of 2.4 percent.

The main reason for the lower estimate was consumers spent less than previously thought.

A separate report Thursday showed that consumer spending rose 0.3 percent in May, after falling by the same amount in April. Incomes rose 0.5 percent, the most in three months, the Commerce Department said.

Still, the report revised spending lower in several months earlier this year, causing some economists to lower their forecasts for the April-June quarter.

Nearly 4.6 million people received unemployment benefits in the week ended June 8, the latest data available. That's about 23,000 more than in the previous week.

Slower growth could mean the Federal Reserve may delay its plans to slow its monthly bond purchases, economists said. Those purchases are intended to keep long-term interest rates low.

Chairman Ben Bernanke rattled financial markets last week when he said the Fed would slow its purchases if the economy continued to strengthen. But the Fed may not be able to follow through until growth accelerates from the first quarter's pace. Some economists think that may not happen until the final three months of the year.

Some economic reports this week have been encouraging. U.S. factories are fielding more orders. Higher home sales and prices are signaling a steady housing recovery.

Spending at retail businesses rose in May, a sign that solid job growth has encouraged Americans to open their wallets. And the improving job market has lifted consumer confidence to its highest point in 5½ years.

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Microsoft to unveil latest Windows adjustments

SAN FRANCISCO — Microsoft is giving people a peek into Windows 8.1, a free update that promises to address some of the gripes people have with the latest version of the company's flagship operating system.

Although the preview version of Windows 8.1 is meant for Microsoft's partners and other technology developers, anyone will be able to download it for free starting Wednesday, exactly eight months since desktops, laptops and tablets with Windows 8 went on sale. The version of the Windows 8.1 update meant for the general public will come out later in the year, though a specific date hasn't been announced.

Many of the new features have been shown off already. A three-day Build conference, which starts Wednesday in San Francisco, will give Microsoft developers a chance to learn more about the new system and try it out. It also will give the company a chance to explain some of the reasoning behind the update and sell developers on Microsoft's ambitions to regain relevance lost to Apple's iPad and various devices running Google's Android software.

There's also speculation that Microsoft could show off a new, smaller version of its Surface tablet computers. One of the new features in Windows 8.1 is the ability to work well on smaller-screen devices.

Windows 8, which was released Oct. 26, was meant to be Microsoft's answer to changing customer behaviors and the rise of tablet computers. The operating system emphasizes touch controls over the mouse and the keyboard, which had been the main way people have interacted with their personal computers since the 1980s.

But some people have been put off by the radical makeover.

Although Microsoft has said it has sold more than 100 million Windows 8 licenses so far, some analysts have blamed the lackluster response to the operating system for a steep drop in PC sales in the first three months of the year, the worst drop since tracking by outside research firms began in 1994.

Among the complaints: the lack of a Start button on the lower left corner of the screen. In previous versions of Windows, that button gave people quick access to programs, settings and other tasks. Microsoft replaced that with a tablet-style, full-screen start page, but that covered up whatever programs people were working on, and it had only favorite programs. Extra steps were needed to access less-used programs. Settings, a search box and other functions were hidden away in a menu that had to be pulled out from the right. How to do that changed depending on whether a mouse or touch was used.

And while Microsoft has encouraged people to use the new tablet-style layout, many programs — including Microsoft's latest Office software package — are designed for the older, desktop mode. People were forced into the tablet layout when they start up the machine and had to manually switch the desktop mode each time.

Windows 8.1 will allow people to start in the desktop mode automatically. In that mode, it is restoring a button that resembles the old Start button. Although the Start button will now take people back to the new tablet-style start screen, rather than the old Start menu, the re-introduction of the familiar button may make it easier for longtime Windows users to get accustomed to the changes.

Other new features of Windows 8.1 include more options to use multiple apps. People will get more options to determine how much of the screen each app takes while showing up to four different programs, rather than just two. The update will also offer more integrated search results, showing users previews of websites, apps and documents that are on the device, all at once.

Although Microsoft is addressing much of the criticisms with Windows, it is positioning the update as more than just a fix-up job. From its perspective, the tuneup underscores Microsoft's evolution into a more nimble company capable of moving quickly to respond to customer feedback while also rolling out more innovations for a myriad of Windows devices — smartphones, tablets or PCs.

It's crucial that Microsoft sets things right with Windows 8.1 because the outlook for the PC market keeps getting gloomier. IDC now expects PC shipments to fall by nearly 8 percent this year, worse than its previous forecast of a 1 percent dip. IDC also anticipates tablets will outsell laptop computers for the first time this year.

The growing popularity of tablets is now being driven largely by less expensive devices with display screens measuring 7 inches to 8 inches diagonally. Microsoft built Windows 8 primarily to run on tablets with 10-inch to 12-inch screens, an oversight that Microsoft is also trying to fix with Windows 8.1.

Microsoft has said the company was working with other manufacturers to make smaller tablets, but it has yet to confirm reports that it is making its own. A smaller Surface with an 8-inch screen would be significantly smaller than its current, 10.6-inch models and would put the Surface in closer competition with Apple's iPad Mini, Google's Nexus 7 and Amazon's Kindle Fire HD.

Such a device would coincide with Intel Corp.'s recent release of a new chip line called Haswell. The company says Haswell chips offer a 50 percent improvement in battery life over the previous generation when playing back high-definition video.

In an indication that Microsoft Corp. is clearing out inventory of a Surface tablet running the lightweight Windows RT operating system, the company is effectively cutting the price of that by including a keyboard cover for free. The cover sells for $120 or $130 on its own.

Microsoft also said this month that it would give buyers of the RT version of Surface the Outlook email and calendar program at no extra charge — joining other Office freebies Excel, Word and Power Point — and sweetening the offer for the device that is priced starting at $499. That will come as part of the Windows 8.1 update.

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Review: Ouya brings indie games to your TV

The ongoing explosion in independently developed, low-budget video games has been a boon for players who travel. Whether I'm on the road with an iPad, an Android smartphone or a laptop, I know there's a huge library of games to play.

When I get home, though, I want to play on a bigger screen. That's where the Ouya comes in. It promises to deliver the best in inexpensive indie gaming on a high-resolution screen, through a small device that runs the Android operating system designed for phones and tablets.

Ouya costs just $100 — a few hundred dollars less than what you'd pay for a major game console. Thousands of gamers and game developers got Ouyas over the past few months after contributing at least $95 to Ouya's creators through the group-fundraising site Kickstarter. The device went on sale more broadly on Tuesday.

Ouya runs Google's Android system and is built around Nvidia's Tegra 3 processor, used mostly in smartphones and other mobile devices. That should make it easy to port over the thousands of games already made for Android phones and tablets, but for now you're limited to software specifically designed for Ouya. Nearly 180 games are available so far through Ouya's online store, with many more expected.

Each game has a version you can download for free. If you like what you see, you can download a full version for a few bucks. By contrast, games for one of the big three consoles can cost as much as $60 each — usually with no free trial.

The device itself is a cube measuring 3 inches on each side, with slightly rounded corners on the bottom. The controller is a bit chunkier. It resembles what's available with Microsoft's Xbox and Sony's PlayStation, with two exceptions: The Ouya controller has a touchpad in the middle (although none of the games I sampled took advantage of it), and its grips are longer, each accommodating an AA battery. One controller comes with the Ouya, and extra ones cost $50 each.

Setup is easy once you connect the Ouya to your high-definition television set using a supplied HDMI cable. When you turn on the console, it automatically searches for Wi-Fi connections. You can also connect to the Internet through an Ethernet cable, which you have to provide yourself. Once connected, you need to create an account and supply credit card information.

Then you're taken to a simple menu with four options: play, discover, make and manage. "Make" takes you to an area for potential game developers, while "manage" lets you tinker with system settings.

"Discover" takes you to Ouya's game store. You can find games by genre, such as role-playing, sim/strategy and "meditative." You can also check out showcases such as "couch gaming with friends."

Download speeds aren't bad; it took about 20 minutes for me to transfer a 725-megabyte file over Comcast high-speed Internet. Smaller games are, of course, much faster. The device has 8 gigabytes of internal storage, and you can add more by connecting an external hard drive to the Ouya with a USB cable.

Once you have your game, clicking "play" on the home page takes you to your personal library. Compared with the sometimes daunting menus on the Microsoft's Xbox 360 and Sony's PlayStation 3, Ouya's displays are clean and elegant.

The offerings on the Ouya store vary wildly in quality and ambition. Android is an open platform, so anyone can write software for it. That means you have professionally executed games such as the beloved "You Don't Know Jack" competing head-to-head with the sloppy trivia game "Quizania." Some popular console games, including "The Bard's Tale" and "Final Fantasy III," have been adapted for the Ouya, but it isn't the place for blockbuster titles such as the latest "Call of Duty" and "Grand Theft Auto."

More prevalent are games that have been cult hits on PCs and smartphones, including "Canabalt," ''Saturday Morning RPG" and "Organ Trail." There are a few Ouya exclusives, including the 3-D puzzler "Polarity" and the multiplayer archery game "TowerFall."

Ouya offers high-resolution displays in 1080p, comparable to the PlayStation 3, Xbox 360 and Nintendo's Wii U. Most of the Ouya's offerings are fairly low-def, though, and if you're looking for the wide-screen majesty of "The Elder Scrolls V: Skyrim" or "BioShock Infinite," you won't find it here. If your video-game habit dates back to the 1970s, you'll notice a distinct retro feel to the Ouya's library. That's not a complaint; there's something refreshing about taking on a simple running-and-jumping game such as "Canabalt" after you've survived a grueling epic like Sony's PS3 hit "The Last of Us."

Indeed, some of the more satisfying indie releases of the last few years — say, "Fez," ''Hotline Miami" or "Monaco: What's Yours Is Mine" — have combined old-school graphics with game play that's more sophisticated than most big-budget console releases offer. Nothing currently on Ouya matches the quality of those games, but if the system can attract that level of talent, it will be a console to be reckoned with. If you're a hardcore gamer, it won't replace your Xbox or PlayStation, but for $100 it's a worthy supplement.

___

About Ouya:

The $100 device plays games designed for it on high-definition screens. Although it runs the Android operating system used in smartphones and tablets, games need to be specifically adapted to work on Ouya. Nearly 180 games are available through Ouya's online store.

Initially available only to people who made donations through Kickstarter, Ouya is now sold through Ouya's website as well as Amazon.com, Target, Best Buy and GameStop.

___

Online:

Ouya: http://www.ouya.tv

___

Follow Lou Kesten on Twitter at http://twitter.com/lkesten

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Pardoned financier Marc Rich dies in Switzerland

GENEVA — He was a wheeler-dealer pardoned by another consummate dealmaker, a working-class Jewish boy who left Belgium to escape the Nazis and rose to become the billionaire "King of Commodities."

Marc Rich's connections to the rich and powerful not only made him fabulously wealthy but when he was indicted for fraud, racketeering and tax evasion on a grand scale, they helped secure him a pardon from Bill Clinton, hours before the U.S. president left office.

That triggered a political firestorm from critics who alleged Rich bought his pardon through donations that his ex-wife had made to the Democratic Party.

Rich died Wednesday of a stroke at a hospital in Lucerne, near his home for decades. He was 78, and his Israel-based spokesman Avner Azulay said he would be buried Thursday in a kibbutz in Israel.

Throughout his storied career at the pinnacle of high finance, Rich was known as a man who could deliver the big deals thanks to personal relationships he had forged with powerful figures around the world.

In a rare 1992 interview with NBC, Rich said that in his business, "we're not political...That's just the philosophy of our company."

Yet Rich cultivated contacts with powerful politicians — in the Middle East as well as the United States — and used those ties to make billions, often when it seemed all doors were closed.

During the Arab oil embargo of the 1970s, Rich used his Middle East contacts to purchase crude oil from Iran and Iraq and made a fortune selling it to American companies.

In 1981, Rich and a partner bought 20th Century Fox and three years later he sold his interest to Rupert Murdoch for $250 million.

But in 1983, while he was in Switzerland, Rich was indicted by a U.S. federal grand jury on more than 50 counts of fraud, racketeering, trading with Iran during the U.S. Embassy hostage crisis and evading more than $48 million in income taxes.

At the time it was the largest tax evasion case in U.S. history and could have earned him more than 300 years in prison.

Although the Swiss refused to arrest or extradite Rich, he stayed on the FBI's Most Wanted List, narrowly escaping capture in Finland, Germany, Britain and Jamaica, until Clinton granted him a pardon on Jan. 20, 2001 — the day he handed over the keys to the White House to George W. Bush.

Last-minute presidential pardons are not uncommon in the United States, but this one raised a furor. Critics believed the case showed that justice means one thing for ordinary people and another for powerful insiders.

Rich had other advocates, however.

For years influential Israelis, including ex-Prime Minister Ehud Barak and the former chief of the Mossad spy agency, Shabtai Shavit, had been urging Clinton to pardon Rich, who over two decades had contributed up to $80 million to Israeli hospitals, museums, symphonies and to the absorption of immigrants.

Moreover, Federal Election Commission records showed that Rich's ex-wife, songwriter Denise Rich, had donated $201,000 to the Democratic Party in 2000.

At the time, Rich's lawyers were urging the U.S. to drop the tax evasion case. When the Justice Department refused to negotiate, Rich's attorneys turned to Clinton.

Federal authorities investigated but found no evidence of wrongdoing. Election officials also dismissed a complaint accusing Denise Rich of donating campaign money and furniture to Hillary Clinton in exchange for the pardon.

Bill Clinton also denied any wrongdoing and said he acted on advice by prominent legal experts not connected to the trader.

Nevertheless, the current U.S. attorney general Eric Holder, who was deputy attorney general under Clinton, told a House committee weeks after the president's decree that if he had known all the facts of the case, "I would not have recommended to the president that he grant the pardon."

Rich was born in Antwerp, Belgium, on Dec. 18, 1934. His Jewish family fled from the Nazis to the United States, where he went to school and college in New York.

After dropping out of college, Rich went to work for the commodity traders Phillips Brothers, now called Phibro, in New York. He quickly got the knack of trading and in 1967 was sent by the company to work in Madrid, where he met Pincus "Pinky" Green, his future partner.

In 1973, Rich and Green left the company after arguing over the size of their bonuses. They set up Marc Rich and Co., based in the Swiss town of Zug, whose low taxes have made it one of the world's oil trading centers.

Business boomed. Rich specialized in acting as a middle man for purchases in global trouble spots — such as Iran, apartheid-era South Africa or Cuba and Libya during U.S. trade embargoes.

Rich and Green were the first traders to use short-term purchases, now known as the spot market, to make big money, quickly. Buying large volumes when the price was low, they were able to control the market when prices rose.

With Rich in Switzerland, his companies pleaded guilty to the U.S. charges, paying fines of about $130 million.

"It's an unfortunate situation," Rich told NBC. "But the question is, was there crime? And I'm saying I don't think so."

He added that as Marc Rich and Co. was a Swiss company, it was legal for the firm to do business with Ayatollah Ruhollah Khomeini's Iran.

Rich worked on making himself popular by becoming a major philanthropist, giving money to the arts and charities in the hope of building good contacts and guarding against extradition. He renounced his U.S. citizenship and became a citizen both of Israel and Spain.

But he earned the hatred of U.S. labor unions during the 1990-92 Ravenswood Aluminum Corp. strike in West Virginia.

His company was a part-owner of Ravenswood Aluminum, whose workers accused Rich of locking 1,500 steelworkers out of the plant when their contract expired and hiring replacement workers without negotiating.

The union won the 20-month labor battle, but not before union members picketed outside Rich's Swiss offices.

In 1993, Rich sold his own company — which was then renamed Glencore, now the world's largest commodity trader — and set up a new firm, Marc Rich and Co. Holding, also based in Zug.

Although a Russian firm, Crown Resources, tried to buy its commodities unit in 2001, the buyout fell through and Rich remained active in the trading business.

After spending several years in Zug, Rich moved to "La Villa Rose" on the shores of Lake Lucerne in nearby Meggen. He also owned property in the swish ski resort of St. Moritz and in Marbella, on the south coast of Spain.

Rich married for a second time, to German-born Gisela Rossi, in 1998. They divorced in 2005. Rich had two daughters, Ilona Schachter-Rich and Danielle Kilstock Rich.

___

Reid reported from Berlin. Ian Deitch in Jerusalem and and Geir Moulson in Berlin contributed to this report.

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San Francisco paper sues rival over low ad rates

SAN FRANCISCO — The San Francisco Examiner filed a lawsuit Tuesday alleging that the city's dominant daily newspaper, the San Francisco Chronicle, has slashed advertising prices to stifle competition.

The suit claims Chronicle owner The Hearst Corp. and officials at the paper took advantage of its greater corporate resources to "selectively and secretly" target Examiner advertisers with "below-cost and discriminatory offers designed to injure the Examiner."

The two newspapers shared business operations and revenues from 1965 until 2000, when then-Examiner-owner Hearst acquired the Chronicle and sold the Examiner to a local family.

The suit alleges the Chronicle charged significantly higher rates for ad space as expected after selling the Examiner, but reversed course when the new Examiner owners, San Francisco Newspaper Company LLC, took over in 2011.

Attorneys said the Chronicle began using the tactic when the new group, which unlike its immediate predecessors, had significant experience operating major newspapers, took over the Examiner and brought the threat of heightened competition.

"It started happening just as new ownership came in," Examiner attorney Ralph C. Allredge said in a telephone interview.

The suit claims that the Chronicle charged less than $1,000 for space that its public rate lists said cost between $59,000 and $92,000 per page.

The Examiner alleges the intention behind the lowered rates was clearly to harm the competition.

"In many cases," the lawsuit says, "these discounts were specifically conditioned on the advertiser agreeing to purchase advertising services exclusively from Hearst and requiring it to stop doing business with the Examiner."

The suit seeks damages it says will be determined at trial, and an injunction keeping the Chronicle from charging below cost for advertising and from keeping prices secret.

At issue is the same state law behind a suit involving San Francisco's alternative weeklies, where a jury in 2008 found the SF Weekly engaged in predatory price-cutting on advertisements in order to thwart competition from the rival Bay Guardian. The Guardian was awarded $21 million in damages but later settled for a smaller undisclosed amount.

Allredge was also the lead attorney for the Guardian in that lawsuit, and both weeklies now belong to the same owners as the Examiner.

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US economy grows at slower 1.8 pct. rate in Q1

WASHINGTON — The U.S. economy grew at an annual rate of 1.8 percent in the first three months of the year, significantly slower than first thought. The steep revision was mostly because consumers spent less than previously estimated, a sign that higher taxes could be having a deeper impact on growth.

The Commerce Department revised its growth estimate for the January-March quarter down from a 2.4 percent annual rate. The revised rate was still faster than the 0.4 percent rate in the October-December quarter.

Economists had thought growth in the April-June quarter would be 2 percent or less, although the revision will likely change those estimates. They had also expected growth to strengthen in the second half of this year.

The Federal Reserve last week said that it would begin to slow its bond purchases later this year and end them next year if the economy continues to strengthen. The Fed's bond purchases have helped keep long-term interest rates low. The revision also may alter that plan, if growth stays weak.

The latest estimate was the government's third look at first-quarter growth. The bulk of the revision was because consumer spending was cut to an annual rate of 2.6 percent. That's sharply lower than the 3.4 percent rate estimated last month. Consumer spending accounts for 70 percent of economic activity.

Much of the change reflected a lower estimate for spending on services such as heat and electricity. Export growth was also trimmed as was investment spending by businesses in buildings.

An increase in Social Security taxes on Jan. 1 has reduced take-home pay for most Americans. A person earning $50,000 a year has roughly $1,000 less to spend, while a high-earning couple has less than $4,500.

Many economists had thought that the tax increase, along with steep government spending cuts, would start to affect consumers in the second quarter, which ends next week. But the revision suggests the tax increase may have hampered consumer spending a little earlier than thought.

Economists had predicted that growth would rebound to a rate of around 2.5 percent in the July-September quarter and to more than a 3 percent rate in the final three months of the year.

The Fed's latest economic projections are for growth of 2.3 percent to 2.6 percent this year. And it predicts that growth will accelerate next year to as much as 3.5 percent.

The latest reports have been encouraging. U.S. factories are fielding more orders. Home sales and prices are rising, signaling a stronger housing recovery. Spending at retail businesses rose in May. And employers added 175,000 jobs last month, which almost exactly matched the average increase of the previous 12 months.

Steady job growth has gradually reduced the unemployment rate to 7.6 percent from a peak of 10 percent in 2009. And it has lifted Americans' confidence in the economy to its highest point in 5½ years.

Consumers' confidence in the economy is watched closely because their spending accounts for about 70 percent of U.S. economic activity.

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Downtown may bag grocer

Roche Bros. is in lease negotiations to open its first Boston grocery store in Downtown Crossing, sources told the Herald.

The Wellesley-based, family-owned chain of suburban supermarkets is hammering out plans for its first urban market at Millennium Partners' $630 million Millennium Tower project, which includes redevelopment of the adjacent Filene's building, according to sources familiar with the talks.

Roche Bros. spokeswoman Lisa Lazarczyk, meanwhile, said the company was considering a number of locations within its market area. "However, at this time, we can't discuss any other locations than the Medfield one," she said.

Millennium principal Anthony Pangaro yesterday said he'd neither confirm nor deny the negotiations.

"It's fantastic news," Rosemarie Sansone, president of the Downtown Boston Business Improvement District, a property owner-funded group that's been working to revitalize Downtown Crossing, said of the reported talks.

"It's absolutely the right brand," Sansone said. "Roche Bros. has a fabulous reputation, and people in this neighborhood and people in this district will be pleased. It is the first question in every conversation with residents, with people interested in what's going on in the district and other businesses that are moving into the district: What about a grocery store?"

Roche Bros., which has 18 Massachusetts stores, announced last week that it would open a new smaller, neighborhood store format in Medfield next February, with approximately 9,000 square feet.

Millennium's Downtown Crossing project includes 240,000 square feet of retail space. Both the developer and the city have wanted to bring in a grocery store to cater to the growing number of condo residents in the area — including those who will move into Millennium Tower's 450 luxury units — in addition to workers.

The 61-year-old Roche Bros. chain is small, but very well-respected, according to Mike Berger, senior editor of the Griffin Report of Food Marketing in Duxbury. "(They're) very big on fresh and perishables, quality stuff," he said. "They really do a lot of customer services. They've (also) really grown in catering and prepared foods."

A Downtown Crossing location would be a unique opportunity for the company, according to Norwell retail consultant Michael Tesler. "It gives them the opportunity to be very innovative, very creative," he said. "It upgrades their brand and the opportunities for their brand."

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athenahealth Inc. gets tax break for 1,900 jobs

BOSTON — A company that's leading efforts to computerize health care records nationwide is promising to add 1,900 jobs in Massachusetts in an exchange for a state tax break.

The Boston Globe reports that the agreement with athenahealth Inc. is the biggest economic development deal reached with Massachusetts in years.

Athenahealth already has 1,100 employees at its Watertown headquarters, where it plans to add the new jobs.

Under the tentative agreement, its workforce there will nearly triple by 2022 in exchange for $9.5 million in state tax credits. The incentive works out to about $5,000 per job. That's less than other incentives the state has awarded.

To make room for the new employees, athenahealth recently agreed to buy a Watertown office complex from Harvard University for nearly $169 million.

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Asian markets still shaky on China credit concern

LONDON — Asia's main stock markets continued to fall Tuesday on concerns that trouble in China's credit system could hurt growth in the world's second-largest economy. Markets stabilized elsewhere, however, with European indexes rebounding.

Chinese stocks extended the previous day's heady declines as investors worried that measures to curb so-called shadow banking — the unregulated lending to companies starved of credit by China's traditional banks — would cause an increase in borrowing rates for many companies, hurting business.

The Shanghai Composite Index fell another 0.2 percent to close at 1,959.51 after plunging nearly 6 percent the day before, its biggest loss in four years.

The jitters caused a sell-off across the globe on Monday, but nerves seemed steadier outside Asia on Tuesday.

In Europe, Britain's FTSE 100 recovered some of the previous day's losses, adding 1 percent to 6,087.44 in early trading. Germany's DAX rose 1.5 percent to 7,809.23 and France's CAC-40 gained 1.4 percent to 3,645.77.

Wall Street also appeared set to recoup losses from the day before. Ahead of the opening bell, Dow Jones industrial futures were up 0.6 percent to 14,672. The broader S&P 500 futures were also 0.6 percent higher, at 1,576.30.

Besides China's credit problems, markets have also been jolted by an increase in U.S. bond yields. The rise is due to expectations that the Federal Reserve will soon start winding down its monetary stimulus, allowing borrowing rates to edge up from their current lows as the economy improves.

The Fed's bond-buying stimulus program has been keeping rates low, encouraging traders to buy riskier assets such as stocks and to invest in emerging markets, driving many equity indexes to record or multiyear highs. Concern over how markets will handle the end to the program, however, has made investors nervous and caused volatility.

Investors will later in the day monitor U.S. figures on durable goods sales and consumer confidence to judge the strength of household spending, a key pillar of the world's largest economy.

Elsewhere in Asia, Hong Kong's Hang Seng rose 0.2 percent to 19,855.72, overcoming earlier losses, while the Shenzhen Composite Index lost 0.2 percent to 879.93.

Japan's Nikkei 225 shed 0.7 percent to 12,969.34. South Korea's Kospi dropped 1 percent to 1,780.63 and Australia's S&P/ASX 200 was down 0.3 percent to 4,656. Stocks in the Philippines and Indonesia also declined while India and Singapore gained.

In energy markets, the benchmark oil contract for August delivery was up 62 cents to $95.80 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.49 to close at $95.18 in New York on Monday.

In currencies, the euro was steady at $1.3119 while the dollar fell 0.5 percent against the Japanese yen, to 97.26 yen.

___

Youkyung Lee in Seoul, South Korea, and Fu Ting in Shanghai contributed to this report.

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Walgreen 3Q profit jumps but misses estimates

Walgreen Co.'s fiscal third quarter earnings jumped 16 percent compared to last year but the performance still missed Wall Street expectations.

Shares of the nation's largest drugstore chain sank Tuesday almost 6 percent in premarket trading.

The Deerfield, Ill., company reported net income of $624 million, or 65 cents per share, in the quarter that ended in May. That's up from $537 million, or 62 cents per share, a year ago, when the company had fewer shares outstanding.

Revenue rose about 3 percent to $18.31 billion.

Adjusted earnings were 85 cents per share, excluding expenses such as acquisition and legal costs.

Analysts forecast earnings of 91 cents per share on $18.4 billion in revenue, according to FactSet.

A business split with the nation's largest pharmacy benefits manager, Express Scripts Holding Co., hurt Walgreen's performance in last year's quarter. The companies had a break of about nine months, and that caused many Walgreen customers to migrate to competitors for their prescriptions, at least temporarily, before resuming business last September.

Walgreen said Tuesday its results in this year's quarter were helped by its acquisition of a stake in European health and beauty retailer Alliance Boots, which contributed about 10 cents per share to the U.S. company's adjusted earnings. Walgreen announced that deal the same day it reported fiscal third quarter earnings last year.

Walgreen CEO Greg Wasson also said in a statement that drugstore chain's revenue from the front end of its stores, or the area outside pharmacy, missed the company's expectations. He said increasing that will be a near-term priority.

Walgreen runs nearly 8,100 drugstores. That's more than competitors CVS Caremark Corp. and Rite Aid Corp.

Its shares dropped $2.85, or 5.9 percent, to $45.20 in premarket trading Tuesday an hour before the market opening.

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US futures up; businesses ramp up orders for goods

NEW YORK — Volatile trading on Wall Street continued Tuesday as stock futures recovered from a big sell-off at the start of the week.

Dow Jones industrial futures rose 79 points to 14,667. The broader S&P futures added 10.6 points to 1,576.80. Nasdaq futures rose 20.5 points to 2,864.50.

Tuesday also offered markets the week's first economic indicators.

Businesses ramped up orders for long-lasting manufactured goods, according to the Commerce Department.

Orders for durable goods increased 3.6 percent last month, matching April's gain, but it was also much stronger than most economists had expected.

It is the first time since late 2011 that orders have risen for three consecutive months.

Orders for such goods are considered a proxy for investment plans and business confidence.

Economists expect the Conference Board's consumer confidence index for June, to be released Tuesday, will decline after reaching its highest point in five years in May.

The Commerce Department releases its new homes sales report for May as well. Economists expect that sales may have risen at their fastest clip in five years.

Second-quarter earnings from Lennar Corp., the nation's third-largest homebuilder, appeared to buttress economist predictions Tuesday.

Lennar topped Wall Street expectations and CEO Stuart Miller said that demand in all of the company's markets continues to outpace supply.

Home deliveries climbed 39 percent to 4,464 homes, while new orders rose 27 percent to 5,705 homes

Shares of homebuilders, led by Lennar, rose sharply in premarket trading.

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US to Hong Kong: Don't delay Snowden extradition

WASHINGTON — The Obama administration on Saturday sharply warned Hong Kong against slow-walking the extradition of Edward Snowden, reflecting concerns over a prolonged legal battle before the government contractor ever appears in a U.S. courtroom to answer espionage charges for revealing two highly classified surveillance programs.

A formal extradition request to bring Snowden to the United States from Hong Kong could drag through appeal courts for years and would pit Beijing against Washington at a time China tries to deflect U.S. accusations that it carries out extensive surveillance on American government and commercial operations.

The U.S. has contacted authorities in Hong Kong to seek Snowden's extradition, the National Security Council said Saturday in a statement. The NSC advises the president on national security.

"Hong Kong has been a historically good partner of the United States in law enforcement matters, and we expect them to comply with the treaty in this case," White House national security adviser Tom Donilon said in an interview with CBS News. He said the U.S. presented Hong Kong with a "good case for extradition."

However, a senior administration official issued a pointed warning that if Hong Kong doesn't act soon, "it will complicate our bilateral relations and raise questions about Hong Kong's commitment to the rule of law." The official was not authorized to discuss the matter by name and insisted on anonymity.

Hong Kong's government had no immediate reaction to the charges against Snowden, a former National Security Agency contractor who admitted providing information to the news media about the programs. Police Commissioner Andy Tsang told reporters only that the case would be dealt with according to the law. A police statement said it was "inappropriate" for the police to comment on the case.

A one-page criminal complaint against Snowden was unsealed Friday in federal court in Alexandria, Va., part of the Eastern District of Virginia where his former employer, government contractor Booz Allen Hamilton, is headquartered, in McLean. He is charged with unauthorized communication of national defense information, willful communication of classified communications intelligence information and theft of government property. The first two are under the Espionage Act and each of the three crimes carries a maximum sentence of 10 years in prison on conviction.

The complaint is dated June 14, five days after Snowden's name first surfaced as the person who had leaked to the news media that the NSA, in two highly classified surveillance programs, gathered telephone and Internet records to ferret out terror plots.

Snowden told the South China Morning Post in an interview published Saturday on its website that he hoped to stay in the autonomous region of China because he has faith in "the courts and people of Hong Kong to decide my fate."

A prominent former politician in Hong Kong, Martin Lee, the founding chairman of the Democratic Party, said he doubted whether Beijing would intervene yet.

"Beijing would only intervene according to my understanding at the last stage. If the magistrate said there is enough to extradite, then Mr. Snowden can then appeal," he said.

Lee said Beijing could then decide at the end of the appeal process if it wanted Snowden extradited or not.

Snowden could contest extradition on grounds of political persecution.

Hong Kong lawyer Mark Sutherland said that the filing of a refugee, torture or inhuman punishment claim acts as an automatic bar on any extradition proceedings until those claims can be assessed.

"Some asylum seekers came to Hong Kong 10 years ago and still haven't had their protection claims assessed," Sutherland said.

Hong Kong lawmakers said that the Chinese government should make the final decision on whether Snowden should be extradited to the United States.

Outspoken legislator Leung Kwok-hung said Beijing should instruct Hong Kong to protect Snowden from extradition before his case gets dragged through the court system.

Leung urged the people of Hong Kong to "take to the streets to protect Snowden."

The Obama administration has now used the Espionage Act in seven criminal cases in an unprecedented effort to stem leaks. In one of them, Army Pfc. Bradley Manning acknowledged he sent more than 700,000 battlefield reports, diplomatic cables and other materials to the anti-secrecy website WikiLeaks. His military trial is underway.

Sen. Bill Nelson, D-Fla., a member of the Senate Armed Services Committee, welcomed the charges against Snowden.

"I've always thought this was a treasonous act," he said in a statement. "I hope Hong Kong's government will take him into custody and extradite him to the U.S."

But the Government Accountability Project, a whistle-blower advocacy group, said Snowden should be shielded from prosecution by whistle-blower protection laws.

"He disclosed information about a secret program that he reasonably believed to be illegal, and his actions alone brought about the long-overdue national debate about the proper balance between privacy and civil liberties, on the one hand, and national security on the other," the group said in a statement.

Michael di Pretoro, a retired 30-year veteran with the FBI who served from 1990 to 1994 as the legal liaison officer at the American consulate in Hong Kong, said "relations between U.S. and Hong Kong law enforcement personnel are historically quite good."

"In my time, I felt the degree of cooperation was outstanding to the extent that I almost felt I was in an FBI field office," di Pretoro said.

The U.S. and Hong Kong have a standing agreement on the surrender of fugitives. However, Snowden's appeal rights could drag out any extradition proceeding.

The success or failure of any extradition proceeding depends on what the suspect is charged with under U.S. law and how it corresponds to Hong Kong law under the treaty. In order for Hong Kong officials to honor the extradition request, they have to have some applicable statute under their law that corresponds with a violation of U.S. law.

Disclosure of the criminal complaint came as President Barack Obama held his first meeting with a privacy and civil liberties board and as his intelligence chief sought ways to help Americans understand more about sweeping government surveillance efforts exposed by Snowden.

The five members of the little-known Privacy and Civil Liberties Oversight Board met with Obama for an hour in the White House Situation Room, questioning the president on the two NSA programs that have stoked controversy.

One program collects billions of U.S. phone records. The second gathers audio, video, email, photographic and Internet search usage of foreign nationals overseas, and probably some Americans in the process, who use major Internet service providers, such as Microsoft, Google, Apple, and Yahoo.

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Voters in Mass. city approve Wynn casino deal

EVERETT, Mass. — Voters in Everett overwhelmingly approved an agreement between city officials and Las Vegas casino mogul Steve Wynn, who wants to build a $1.2 billion resort casino at the site of a former chemical plant on the Mystic River.

Saturday's vote was the first binding referendum on a casino proposal since passage of the state's expanded gambling law in 2011.

The host community agreement was backed by a better than 6-1 margin, according to the city clerk. Passage was required before Wynn could apply to the state gambling commission for one of the three casino licenses allowed under the law.

"The decision of the Massachusetts Legislature to require community approval of gaming developments was a wise one," Wynn said after the vote in a statement released by his firm, Wynn Resorts. "It is rooted in the common sense notion that for any development to be meaningful, it must have robust support within the community.

"The voters of Everett have spoken clearly and decisively. The vote heightens our enthusiasm and dedication to this fine project," added Wynn, whose prominent Las Vegas properties include Bellagio and The Mirage.

The deal struck with Mayor Carlo DeMaria and other city officials calls for Wynn to make $30 million in advance payments to Everett and more than $25 million in annual payments if the casino is built.

In the agreement, Wynn also promised to mitigate traffic impacts in the city and complete a multimillion-dollar cleanup of pollution at the site, plus give hiring preference to Everett residents for the estimated 8,000 temporary and permanent jobs the project would bring.

Wynn turned his focus to Everett, a city of about 42,000 residents just north of Boston, after an earlier proposal to build a casino in Foxborough ran into opposition from many residents and officials.

City Councilor Michael McLaughlin, whose district includes the proposed casino site, said he was thrilled by the resounding vote of support for the project but acknowledged many hurdles remain.

"This is the first step of many milestones we have to cross," McLaughlin said. "This gives us the momentum and the energy to go forward."

One challenge facing Wynn and Everett officials is convincing neighboring communities to also sign on to the casino proposal. Somerville Mayor Joseph Curtatone is among those who have expressed major reservations about the plan.

McLaughlin said he hopes to sit down with Curtatone and others in the coming weeks and try to convince them that the proposed development will bring regional economic benefits.

No organized group formed in Everett to oppose the plan, but some residents were wary of a casino bringing traffic gridlock, crime, and other social ills.

"This is just round one of a very long fight," said Evmorphia Stratis, a local artist who emerged as an unofficial spokeswoman against the project, of Saturday's vote. She called casinos a "predatory business."

Wynn's plan could be in competition for the eastern Massachusetts casino license with proposals from Suffolk Downs and Foxwoods Resorts, which is backing a proposed casino in Milford. Host agreements have not been signed yet in those communities and votes have not been scheduled.

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Crowdfunders push SEC for investor OK

The startup community is anxiously awaiting SEC regulations that would allow crowdfunders to invest in a company instead of receiving a reward like a sticker, but some, including one state official, want to make sure the rules are clear and prevent fraud.

"If they're going to have this, the rules need to be laid out," Secretary of State William F. Galvin said.

The regulations, part of the JOBS act, originally were due by Jan. 1, but have been delayed by the Securities and Exchange Commission. Title III of the JOBS act, called the Crowdfund Act, will provide an exemption to the current requirement that companies offering stock or other investment opportunities register with the SEC, which can be resource and time intensive. The SEC has not yet written the specific rules to regulate the exemption, although it has said the rule-making process is a top priority.

In the public comments section on the SEC's website, Galvin has submitted several letters outlining potential concerns.

"We want to make sure the potential for misrepresentation is not there," Galvin said. "There has to be some protections there to make sure it wouldn't be abused."

Instead of individual companies registering with the SEC, the funding portal, likely to take the form of a website, would register. The portal would be required to take anti-fraud measures, among other responsibilities.

Once the rules are in place, the potential for new companies will be huge, according to Tanya Prive, founder of RockThePost, an online funding site for startups.

"It democratizes the process of funding for startups," she said. "The power of fundraising is going to be substantially increased."

Still, not everyone is convinced that crowdfunded investments are smart. "I think it's bad for everybody," said Daniel Isenberg, the executive director of the Babson Entrepreneurship Ecosystem Project. "This will lead people to unexpectedly lose more money than they think. It will be lots and lots of people losing small amounts of money."

"Equity crowd-funding can't work," he said.

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Upstarts raise money for startups

Some recent graduates — hoping to escape from student debt, start a business or learn new skills — are using an innovative crowdfunding site to promise a percentage of their future earnings in exchange for cash in the short term.

Rachel Honeth Kim, a Harvard Business School graduate living in San Francisco, is raising $100,000 so she can pay off her loans and jump-start her business. To get the cash, she signed on with the crowdfunding site Upstart.com. She committed to paying back the money over 10 years, through a percentage of her income that will depend on the final amount of money she raises.

"The biggest thing for me was the financial implications of going out on my own," she said. "The only thing that's kind of been holding me back is the debt I have."

Kim quit her job four weeks ago, and started Nailed Kit, a custom nail art kit for parties. "It's so liberating to finally be able to take the plunge," she said.

What makes Upstart different than many other crowdfunding services is the investment in people's future earnings.

"It's actual investment in a person as opposed to stock or companies," said founder and CEO Dave Girouard, a former Google executive.

Unlike Kickstarter, where backers support a specific product, Upstart backers invest in the people behind the business or product. If the first business fails, as many startups do, the relationship between backer and the young entrepreneur, or "Upstart," remains the same, but so does the financial obligation.

This is why, Girouard said, many Upstarts use the money to pay off debt or learn a new skill, such as coding, instead of funding a specific project or product.

"They might be pursuing something where they might not be making money" but it will pay off in the future, he said.

Trina Spear, a Harvard Business grad who successfully raised $20,000 through Upstart, used the money to pay for her move from New York City to Los Angeles, where she started a business.

Her company, Figs Scrubs, a fashionable and tailored line of medical scrubs that donates a set of scrubs to doctors in need for every set sold, was invested in further by some of the backers that supported Spear initially, she said.

"The money wasn't the primary reason I was doing it," she said, adding the partnerships she has made with backers has been invaluable. Girouard calls Upstart one part bank, three parts social network.

Backers must be accredited investors in the eyes of the Securities and Exchange Commission, with a minimum net worth or annual income, but Girouard hopes to open up investments to more people. So far, about 200 backers have invested about $1.4 million in 100 people, Girouard said.

Upstart provides a fundraising goal based on a proprietary income prediction model where higher potential earners can raise more money through the site. A Harvard Business School graduate who finished their MBA in 2012 can raise $43,400 in exchange for 3 percent of their income over the next 10 years, but an art history major who graduated from Boston College can raise $14,700 for the same income percentage, for example.

"Computer science majors from great schools earn a lot of money, it's relatively predictable," Girouard said, in response to concerns about putting a monetary value on people. "We don't try to position things as a judgment on a person. We're sensitive to that."

Spear likened the practice to an advance on a book deal, or a record contract.

"Why is it that companies can finance their growth through both equity and debt, but people can only finance their growth through debt?" she said.

Kim said she's optimistic about the payoff from Upstart.

"The worst case scenario is I pay my student debt," she said. "Anybody who has an idea should have an opportunity."

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Lenders are watching buyers’ credit up to the closings

WASHINGTON — You can call it Big Brother. You can call it high-tech snooping. But be aware: If you are applying for a mortgage in the coming weeks, you can be sure that your credit will be checked and re-checked — possibly monitored daily — to make certain no hints of new debts pop up before you close on the loan.

Just as the federal monitoring of phone traffic that's been in the headlines lately was a direct outgrowth of 9/11, pre-closing credit monitoring is a byproduct of the housing crash. Lenders are terrified of being forced to "buy back" loans from investors Fannie Mae or Freddie Mac because borrowers had more debts than they disclosed at the time of application.

As a result, virtually all banks and mortgage companies now use some form of commercially available program to keep tabs on credit files between the date of your loan application to your settlement. One of the three national credit bureaus, Equifax, offers a popular service that monitors applicants 24/7 and can detect even subtle hints that a home purchaser is planning to add on new debt before the closing.

Say your mortgage application was just approved. In the documents you laid out all your credit obligations and just barely passed the lender's crucial "debt-to-income" ratio test. You're feeling upbeat about the prospect of moving to a new home and you start thinking of things you need to buy: Furniture for the living and family rooms. New beds. TVs. Audio equipment.

So you visit a couple of stores and take up their offers for low interest-rate credit lines. You apply for what could come to as much as $14,000 worth of new debt, all to be paid off monthly.

Ping! In Equifax's computer maze, your credit "inquiries" to merchants trigger alerts. Your lender or mortgage broker is notified immediately that you are pursuing additional credit. And in this case, that $14,000 in potential new payment obligations could knock your debt-to-­income ratio over the cliff.

Lenders say clients can mess up transactions in all sorts of ways. Annie Austin, a senior loan officer with Cobalt Mortgage in Bellevue, Wash., says one borrower went out and bought a new Porsche on credit after getting his loan application approved, despite warnings not to incur new debt before closing.

Paul Skeens, president of Colonial Mortgage Group in Waldorf, Md., says that although he hands a prudent "do not do this" list to every applicant, some bor­rowers ignore it or forget that they've got credit-related situations they never disclosed, such as co-signed student loans, applications for overdraft coverage on checking accounts or even that the down payment cash they claimed as their own was actually lent to them by someone else and must be repaid. One borrower, Skeens­ recalled, had received home purchase money on the side from a "loan club" that would require $600 a month to pay off. Oops!

According to Equifax Vice President Raymond White, undisclosed debts — or fresh inquiries for additional credit never disclosed to the lender — now turn up in "nearly one out of five" mortgage applications. Yet under Fannie Mae and Freddie Mac rules, any increase in the total debt-to-income ratio of more than three percentage points, or that pushes the ratio beyond 45 percent, can put the lender into a vulnerable position. If the mortgage later goes bad, Fannie and Freddie can force the lender to buy it back — ­financial torture for any bank.

White says that failure to disclose debts on mortgage applications is an equal opportunity problem, seen in all market segments, including well-off borrowers who have excellent credit. Research by Equifax found that people with high credit scores are significantly more likely to have undisclosed debts — or new credit obligations in the works before settlement — than other applicants.

"The higher the FICO score you have," said White in an interview, "the more likely you are to buy something" — or apply for new credit — that triggers an alert. It's counterintuitive, he agrees, and it's probably because consumers with higher FICOs feel more confident about their credit and may have more resources to handle new debts.

Bottom line: From application to closing, don't shop for new credit. It's entirely possible someone is watching. And you are suddenly a person of interest.

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