China manufacturing shrinks for 4th month

HONG KONG — China's manufacturing contracted in April for the fourth straight month but the pace of decline was less severe, suggesting the downturn in the world's No. 2 economy is bottoming out.

HSBC's purchasing managers' index released Monday ticked up to 48.1 from 48.0 in March on a 100-point scale on which numbers above 50 indicate expansion.

The reading is slightly lower than 48.3 in a preliminary version of the report last month. But it's the first time the index has risen since it started falling from 50.9 in October.

The report said new export orders contracted in April although the decrease was slight and outpaced by a faster decline in new orders overall, indicating that weak domestic demand was mainly to blame for weakness in manufacturing. Employment at factories declined for the sixth month in a row.

"The latest data implied that domestic demand contracted at a slower pace, but remained sluggish," said HSBC's chief China economist, Qu Hongbin. The numbers "indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum."

HSBC's report was more pessimistic than a manufacturing index released last week by the state-sanctioned China Federation of Logistics and Purchasing, which hovered above the no-change level at 50.4. The official survey gives more weight to China's big state companies while HSBC's focuses more on small private enterprises, and the difference indicates the latter are under more pressure amid the slowdown.

Economic growth slowed to 7.4 percent over a year earlier in the first quarter, with weak trade and manufacturing fuelling concern about a possible rise in politically volatile job losses.

Chinese leaders are trying to shift the economy to growth based on domestic consumption instead of exports and investment.

In the past few years, Beijing has rolled out mini-stimulus efforts when growth appeared to be cooling too sharply, but Qu said "bolder actions" will be required to ensure growth regains momentum.

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China refuses Vietnam's call to stop oil drilling

HANOI, Vietnam — Vietnam demanded China stop oil drilling operations in a disputed patch of the South China Sea, saying on Monday that Beijing's decision to deploy a deep sea rig over the weekend was illegal.

China dismissed the objections, saying the activity was being carried out in its territorial waters.

Beijing's increasingly assertive territorial claims to the waters, which are thought to have large oil and gas deposits beneath them, have angered Vietnam, the Philippines and other claimants. The region is widely seen as a potential area of conflict.

Last week, President Barack Obama signed a new defense pact with the Philippines aimed at reassuring Asian allies of American backing as they wrangle with Beijing's growing economic and military might.

The China Maritime Safety Administration posted a navigational warning on its website advising that the CNOOC 981 rig would be drilling in the South China Sea from May 4 to Aug. 15, in an area close to the Paracel Islands, which are controlled by China but Vietnam claims as its own.

China's maritime administration also said that ships entering a 3-mile (4.8-kilometers) radius around the area are prohibited.

Vietnam's foreign ministry said the area where the rig was stationed lay within Vietnam's exclusive economic zone and continental shelf as defined by the 1982 U.N. Convention on the Law of the Sea.

"All foreign activities in Vietnam's seas without Vietnam's permission are illegal and invalid," the ministry said in a statement. "Vietnam resolutely protests them."

Vietnam's state-owned oil company, PetroVietnam, demanded that China National Offshore Oil Corporation "immediately stop all the illegal activities and withdraw the rig from Vietnamese waters."

Asked about Vietnam's objections, Chinese Foreign Ministry spokeswoman Hua Chunying said the drilling was taking place in Chinese waters.

Many analysts believe China is embarking on a strategy of gradually pressing its claims in the water by seeing what it can get away with, believing that its much smaller neighbors will be unable or unwilling to stop them. Vietnam has accused Chinese ships of cutting cables to its exploration vessels and harassing fishermen, as has the Philippines.

Chinese assertiveness puts Vietnam's authoritarian government in difficult position domestically because anger at China, an ideological ally, runs deep in the country. This is exploited by dissident movements, who accuse the government of being unwilling to speak out against Beijing.

Tran Cong Truc, the former head of a government committee overseeing the country's border issues, said the latest Chinese move was especially provocative.

"This act by China is much more dangerous than previous actions such as cutting the exploration cable or fishing bans," he said.

___

Associated Press news assistant Zhao Liang in Beijing contributed to this report.

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Target CEO Steinhafel out in wake of data breach

NEW YORK — Target's massive data breach has now cost the company's CEO his job.

Target announced Monday that Chairman, President and CEO Gregg Steinhafel is out nearly five months after the retailer disclosed the breach, which has hurt its reputation among customers and has derailed its business.

The nation's third-largest retailer said Steinhafel, a 35-year veteran of the company and CEO since 2008, has agreed to step down, effective immediately. He also resigned from the board of directors.

A company spokeswoman declined to give specifics on when the decision was reached.

Shares fell nearly two percent in pre-market trading Monday.

The departure suggests the company is trying to start with a clean slate as it wrestles with the fallout from hackers' theft of credit and debit card information on tens of millions of customers. The company's sales, profit and stock price have all suffered since the breach was disclosed.

Target, based in Minneapolis, said Chief Financial Officer John Mulligan has been appointed interim president and CEO. Roxanne S. Austin, a member of Target's board, has been named as interim nonexecutive chair of the board. Both will serve in those roles until permanent replacements are named.

Steinhafel will serve in an advisory capacity during the transition. Jim Johnson remains lead independent director on the board.

Steinhafel's tenure has been rocky. The company has struggled with its expansion into Canada, its first foray outside of the U.S. The company, known for its cheap chic clothing and home decor, also has seen uneven sales since the recession ended as it confronts fierce competition.

Under Steinhafel's leadership, the company has expanded into fresh groceries and offered a 5 percent discount to customers who use its branded debit and credit cards. But clearly the breach was a big black eye on Steinhafel's term.

"The last several months have tested Target in unprecedented ways," Steinhafel wrote in a letter to the board that was made available to The Associated Press. "From the beginning, I have been committed to ensuring Target emerges from the data breach a better company, more focused than ever on delivering for our guests."

Steinhafel's departure comes two months after the company announced that Chief Information Officer Beth Jacob resigned and outlined a series of changes it was making to overhaul its security systems and its security department.

Last week, Target named Bob DeRodes, who has 40 years of experience in information technology, as its new chief information officer. Target said it is continuing its search for a chief information security officer and a chief compliance officer.

Target also said last week that MasterCard Inc. will provide branded credit and debit cards with a more secure chip-and-PIN technology next year. That will make Target the first major U.S. retailer that will have store cards with this technology.

Steinhafel has been facing increasing pressure since it was revealed on Dec. 19 that a data breach compromised 40 million credit and debit card accounts between Nov. 27 and Dec. 15. Then on Jan. 10, the company said hackers also stole personal information — including names, phone numbers as well as email and mailing addresses — from as many as 70 million customers.

The company's board has been meeting with Steinhafel monthly instead of quarterly to oversee Target's response to the breach.

When the final tally is in, Target's breach may eclipse the biggest known data breach at a retailer, one disclosed in 2007 at the parent company of TJ Maxx that affected 90 million records.

Target reported in February that its fourth-quarter profit fell 46 percent on a revenue decline of 5.3 percent as the breach scared off customers.

Target's sales have been recovering as more time passes, but it expects business to be muted for some time: It issued a profit outlook for the current quarter and full year that missed Wall Street estimates because it faces hefty costs related to the breach.

Target's shares have been volatile and are down 2.5 percent since the breach was disclosed. Shares fell $1.06 to $60.95 in premarket trading.

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Dunkin' Donuts readies to do battle in Europe

AMSTERDAM — The doughnut, that classic deep-fried American snack, is going forth to do battle with European national treats in their homelands: the Belgian waffle, the Austrian strudel and the Danish ... Danish.

After beating a retreat in the 1990s, American restaurant chain Dunkin' Donuts has been quietly building up its presence in Europe and now has 120 outlets, mostly in Germany but also in Russia, Spain, Bulgaria and most recently, Britain.

Dunkin' Donuts' head of international development Jeremy Vitaro says that the company is now looking to open stores in Denmark, Austria, Belgium and the Netherlands. Despite the weak European economy, it thinks customers have money to spend.

"They're sophisticated, and they're culturally very open (to trying new foods)," he said.

Dunkin' Donuts' mainstays are doughnuts and coffee, along with muffins and more solid lunch foods, such as bagels. Then the chain offers variations to please local tastes.

In London, where the chain has recently opened three shops, it sells a savory snack called "Bacon Buttie," as well as porridge.

Is that porridge as in, well, oatmeal?

"Hot cereal, yes," Vitaro says. "We also do a Croistrami sandwich, that's a pastrami croissant. So we do localize. We have a curry doughnut in India."

Joost Kling, a Dutch food industry entrepreneur, thinks the chain will face something of an uphill battle in the Netherlands.

"They don't have much name recognition, if any," he said. "I think a lot will depend on their staying power." He wondered about the willingness of the firm to advertise and lose money for a time when stores first open.

Kling has some experience going the opposite direction. His company, "Eat Dutch Waffles," has brought the Dutch delicacy known as "stroopwafel" — a hot waffle cookie filled with syrup — into 1,000 American stores and bakeries.

He guessed around a half of Dutch people know what doughnuts are, but most have only tried low-quality versions on offer in grocery stores.

"A stroopwafel tastes very different when it's fresh, and it's the same for a doughnut," he said. Europeans "won't really have any basis for value comparison: they don't know what makes a good doughnut."

In addition, Europeans may feel attachment to their own local delicacies.

In Belgium, the Brussels waffle is light and fluffy and dusted with powdered sugar, while in Liege they're heavier and sweeter, with caramelized sugar. The "Belgian Waffle" topped with powdered sugar, strawberries and a flourish of whipped cream is probably an American invention. It's popular in Scandinavia.

In Austria, people with a sweet tooth turn to Apfelstrudel — or Danishes.

In Denmark they also eat Danishes, of course. But the Danes in turn call them "wienerbrod," or 'Viennese bread,' since, as lore has it, the treat was introduced by Austrian bakers once upon a time. Cinnamon is a favorite flavor.

Vitaro said Dunkin' Donuts is already interviewing would-be franchise owners and plans to open several stores in each new market by the end of 2014, focusing on major cities first, with "many more" coming in early 2015.

"We believe our basic offer of speed and value and fun will connect well with consumers," he said. "It has so far."

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Target CEO Steinhafel out in wake of data breach

NEW YORK — Target says Chairman and CEO Gregg Steinhafel is out, nearly five months after the retailer disclosed a massive data breach that hurt its reputation.

The nation's third-largest retailer says Steinhafel has agreed to step down as the company's chairman, president and CEO, effective immediately. He also has resigned from its board of directors.

Target, based in Minneapolis, says Chief Financial Officer John Mulligan has been appointed interim president and CEO. Roxanne S. Austin, a member of Target's board, has been named as interim nonexecutive chair of the board.

Steinhafel, a 35-year veteran of Target, will serve in an advisory capacity during the transition.

Target said in December that hackers stole credit and debit card information on tens of millions of customers.

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Buffett says US firms prosper as economy improves

OMAHA, Neb. — Investor Warren Buffett says the U.S. economy continues to improve gradually, and he doesn't think any price "bubbles" are developing.

Buffett told Berkshire Hathaway shareholders at the company's annual meeting Saturday that American businesses are thriving as is evident in their profit reports.

The fact that interest rates have remained near zero for several years has some investors worried about bubbles forming in prices.

Buffett doesn't see signs that a bubble is forming in bonds or any other assets. But he says it's unusual that rates have remained low this long.

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Decoding the Apple-Samsung patent dispute

LOS ANGELES — Apple and Samsung are suing each other in courts and trade offices around the world, each making claims that the other copied patented mobile device features.

The companies' most-recent legal tussle all but concluded on Friday, when a California jury found that Samsung copied some of Apple's smartphone features. The panel also concluded that Apple illegally used one of Samsung's patents in creating the iPhone 4 and 5.

All told, the jury awarded Samsung $158,400 and Apple $119 million, far less than the $2.2 billion the company sought.

Jurors were ordered to return to court Monday to continue deliberations on a minor matter that could result in a higher award for Apple.

Before determining whether the companies copied phone technologies, jurors had to consider several patents. Here's a look at select patents and the jury's conclusions:

Patent 5,946,647

—Official description: System and method for performing an action on a structure in computer-generated data.

—What it really means: In a mobile device, the technology described in this patent is used to display a pop-up menu of options. One example: When you highlight a phone number on the touchscreen and the software gives you a prompt of options.

—The jury's verdict: The jury found that Apple proved Samsung infringed on the patent across several mobile devices, including the Galaxy Nexus, Galaxy S III and Stratosphere.

Patent 6,847,959

—Official description: Universal interface for retrieval of information in a computer system.

—What it really means: This patent covers a process that's similar to the function of a search engine. It enables the mobile device to access information from a variety of locations, while only listing relevant data for the user.

One of the features in the patent is a graphic interface showing a "Go-To" menu option in a text input window.

—The jury's verdict: Apple failed to prove Samsung infringed on this patent.

Patent 7,761,414

—Official description: Asynchronous data synchronization among devices.

—What it really means: This patent involves a way to synchronize data across computers and mobile devices. In the case of a smartphone, this could apply to synchronizing address books on your phone with online storage.

—The jury's verdict: Samsung did not infringe on Apple's patent.

Patent 8,046,721

—Official description: Unlocking a device by performing gestures on an unlock image.

What it really means: This patent refers to a way of controlling an electronic device with a touch-sensitive display. Specifically, Apple claimed Samsung infringed on a feature of the patent that describes the swipe-and-unlock feature on iPhones.

—The jury's verdict: Apple made its case that certain Samsung devices, including the Admire, Stratosphere and Galaxy Nexus violated patents. But the panel rejected claims pertaining to Samsung's Galaxy S II, Galaxy S II Epic 4G Touch and Galaxy S II Skyrocket.

Patent 5,579,239

—Official description: Remote video transmission system.

—What it really means: Samsung's patent describes a system for digitizing, compressing and transmitting audio and visual signals and then reversing the process for broadcast.

The jury's verdict: Apple did not infringe on a section of Samsung's patent that covers transmitting video in real time over a cellular frequency.

Patent 6,226,449

—Official description: Apparatus for recording and reproducing digital image and speech.

—What it really means: This Samsung patent refers to the kind of dual digital camera that's become standard in many smartphones. As described in the patent, the user is able to change the direction of the camera.

The jury's decision: Apple infringed on Samsung's patent on several versions of the iPhone and iPod Touch.

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Westfield State U. agog over new Google technology

WESTFIELD, Mass. — It was a futuristic sight, as about a dozen students, faculty, and community members gathered around a cluster of screens on the second floor of the Ely Library at Westfield State University late last month to behold a wonder of modern technology.

The wonder that lay before them, projected onto seven screens standing seven feet tall, is Liquid Galaxy, a revolutionary product developed by Google which utilizes the company's Google Earth component to take users almost anywhere in seconds, on Earth or elsewhere.

"It sends Mars data, too," said Tom Raffensperger, the dean of Academic Information Services at Westfield State. "There's a rover up there taking pictures and mapping."

Capable of showing off the red planet just as adeptly as taking users to Fenway Park, Liquid Galaxy's potential is seemingly limitless, and Raffensperger says it will be available to the greater Westfield community during open lab times, after being made available to professors and students first.

As the jaws of students and faculty alike dropped to the floor at the startling realism and accuracy of Google Earth's mapping, professors in the school's geography department took the opportunity to speak about the project, it's humble beginnings, and what it means for the institution.

"It all started when Tim (LeDoux) and I were invited to attend the geospatial technology and higher education workshop at Google in California last summer," said Dr. Carsten Braun, a professor of Geography and Regional Planning at the University. "When we saw the Liquid Galaxy we said 'wow, this is cool, but not just cool — a great teaching tool.' So when we came back, we launched an idea to (Dr.) Liz Preston and Tom Raffensperger saying 'Hey, is this something we could get?'"

Various university departments collectively paid $25,000 to use the program.

"It was really a collaborative effort," said Raffensperger. "It was a lot of departments getting together. The library, we worked hard to make this space available, and the people at IT, academic information services, academic affairs, just a lot of different departments seeing how this would benefit the university as a whole."

Raffensperger added that professors such as LeDoux will be using the program for introductory and advanced global imaging systems (GIS) courses to take students to distant cities.

"As a geographer and planner, I talk a lot about different cities and the issues they're facing, such as Detroit with its bankruptcy," LeDoux said. "I can talk a lot about the legacy — the racism, the disinvestment issues — and that helps students paint a picture, but to take them on the ground and walk through the neighborhoods of Detroit using this, they see it, the abandoned buildings, and it brings home the visual element to them."

"I will be using this in my physical geography class, which is about landforms — glaciers, rivers, mountains, beaches — all kinds of stuff that. With this immersive program, you can experience beach erosion, experience sea level rise, much better than a static picture," Braun said. "We can do labs and say 'let's go to the Grand Canyon, let's look at what goes on at the intersection of land and ocean.'"

"(We'll be) working with the folks from the Art Department, or any other interested people to create content experiences that they can use in their classes," he added. "That's what we're going to be working on in the next few months. 'You teach English Literature, you teach Art, let's see how we can create activities that let students experience this in a special sense.'"

"This can be applied to all the different disciplines at the University," LeDoux added. "Whether you're trying to ground literature for students, poetry that a poet is writing about a landscape, it's a very vivid image, but actually seeing what they're writing about is very powerful."

When asked about the prevalence of this technology, Braun was proud to admit that Liquid Galaxy is so far only available in museums and large research-based institutions, none of which are the size of Westfield State.

"I'd be super happy to talk to anybody about how to make this useful," Braun said. "In a perfect world, we want to help everybody get this. But first, let's take this off the campus and bring it into the community, working in the local schools and make this a tool or experience that we share with the entire community."

"We are very excited to be able to provide this," said Westfield State University President Dr. Elizabeth Preston during the demo. "Part of the reason we decided to invest in the technology is because it's very clear that it has applications for all kinds of disciplines beyond the obvious. So we're very excited to have the technology on campus."

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'Orange Is the New Black' wins GLAAD Media Award

NEW YORK — GLAAD celebrates "Orange Is the New Black."

The Netflix show set in a women's prison was named outstanding comedy series at the 25th annual GLAAD Media Awards' New York ceremony.

Cast members — including Laverne Cox, who won her own GLAAD honor at the organization's Los Angeles awards ceremony last month — accepted the award Saturday at the Waldorf Astoria hotel.

George Takei received the Vito Russo award, presented to an openly gay media professional for promoting equality for the gay, lesbian, bisexual and transgender community.

Other winners Saturday included the films "Concussion" and "Philomena" and Oprah Winfrey's interview with openly gay professional basketball player Jason Collins.

The GLAAD Media Awards recognize fair, accurate and inclusive representation in media of the LGBT community and the issues that affect their lives.

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Debate over 38 Studios bond default to heat up

PROVIDENCE, R.I. — Rhode Island has shelled out the first appropriated funds for its failed investment in Curt Schilling's 38 Studios company, but the debate over whether to honor the rest of the debt is expected to ramp up in the General Assembly.

The state sent the bond trustee $2.4 million for an interest-only payment due to bondholders on Thursday. Lawmakers reluctantly approved the funds last session.

But they will soon have to take up whether to appropriate $12.5 million for the next installment. Gov. Lincoln Chafee has included the amount in his spending plan and maintains that a default would seriously harm Rhode Island's financial reputation and significantly increase future borrowing costs.

The state remains on the hook for some $87 million. Earlier payments came from funds set aside as part of the deal under which Schilling's startup video game company got a $75 million loan.

The Economic Development Corp. agreed in 2010 to back the loan to help lure the company from Massachusetts to Providence. 38 Studios later went bankrupt.

The EDC, now called the Commerce Corp., is suing the former Red Sox pitcher and 13 others, including some of its own former officials, claiming the board was misled into approving the loan guarantee. The defendants deny the charges.

House Speaker Nicholas Mattiello says he is waiting for the findings of an outside report on the impact of defaulting on the "moral obligation" bonds. Faye Zuckerman, a spokeswoman for Chafee, said the report by S.J. Advisors should be out soon.

One vocal critic of repayment is Rep. Karen MacBeth. The Cumberland Democrat, who is chairwoman of the House Oversight Committee, has introduced legislation for the second year that would prohibit the state from making the payments.

She said the committee will hear testimony on the issue Thursday and is reviewing how the 38 Studios deal came about and whether it was properly vetted.

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