The Ticker

Dow has worst week

Stocks fell yesterday, closing out what was the worst week of the year for the Dow Jones industrial average.

The market was dragged lower by a weak performance from retailers and companies sensitive to higher interest rates. Homebuilders and banking stocks were among the best performers.

Stocks had a decent start to the week, but investors were hit hard the past three days. The Dow retreated 2.2 percent for the week, its worst in 2013. The broader Standard & Poor's 500 index lost 2.1 percent for the week, its second-worst performance of the year.

The possibility of a cutback in the Federal Reserve's bond-buying program in September has roiled the bond market, which has spilled over into stocks. The yield on the benchmark U.S. 10-year Treasury note rose to 2.83 percent, its highest level since July 2011.

Judge hurts Icahn bid for Dell

A Delaware judge yesterday dealt a blow to activist investor Carl Icahn's effort to stop CEO and founder Michael Dell's $24.8 billion buyout offer for the struggling computer maker.

He refused to fast-track proceedings on Icahn's claims that Dell Inc. directors have betrayed their duties to shareholders in trying to win support for Michael Dell's bid.

After three delays, Dell's board has scheduled a special shareholder vote on Sept. 12 for Michael Dell's offer of $13.75 per share, plus a 13-cent dividend. That's to be followed by an overdue annual meeting on Oct. 17.

Icahn, who is seeking to oust Michael Dell as CEO, wanted the vote and annual meeting to be held on the same day. That would give shareholders a chance to vote on a rival board he is offering as part of his proposal, a complex alternative plan that he says would be worth at least $15.50 per share.

Egypt violence sends oil higher

The price of oil rose for the sixth consecutive day yesterday on continuing violence in Egypt and supply disruptions elsewhere in the Middle East and North Africa.

U.S. benchmark crude edged up 13 cents to $107.46. It rose 1.4 percent for the week. Brent crude, which is used to price imported crude used by many U.S. refineries, rose 80 cents to $110.40 per barrel for October delivery.

The average retail price for a gallon of gasoline rose less than a penny to $3.54 per gallon. It is down 9 cents per gallon in August, however, and it is 17 cents lower than it was last year.

THE SHUFFLE

• Acella Construction Corp., a construction services company, announced that Dennis Tellier, left, has joined the firm as a project superintendent. Tellier will coordinate site construction activities and supervise field personnel to complete projects on time and within budget.
• Eastern Insurance Group LLC announced that Timothy J. Lodge has joined the agency as a senior vice president in its commercial lines division. Lodge will work out of Eastern Insurance's Providence, R.I., office as a sales executive focusing on the real estate, manufacturing and technology industries.

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Mass. likely to mirror U.S. start stats

Massachusetts builders appeared to follow a national trend of breaking ground on more apartments than single-family homes in July, particularly in Boston and its suburbs, according to a local builders group.

"Massachusetts continues to lag behind the vast majority of states in new construction, which is going to lead to a spike in housing prices," said John Smolak, chairman of the Homebuilders and Remodelers Association of Massachusetts' governmental affairs committee. "Because of housing prices and the state of the economy, apartments are a more affordable option."

In some parts of the state, existing homes for sale are drawing multiple bids because of a lack of new housing starts due to regulatory hurdles such as zoning and energy-efficiency requirements, Smolak said.

State housing-start statistics will not be available until later this month.

Nationally, developers broke ground on homes at a faster pace in July, but the rise was because of apartment construction, according to data released yesterday by the U.S. Commerce Department. Builders began work on fewer single-family homes — the bulk of the market — and sought fewer permits to build them.

Robert Authier, executive vice president of the Massachusetts Association of Realtors, said one of the reasons may be that it can be harder for buyers to get a mortgage.

"We've seen nine straight months of housing price increases," Authier said. "A lot depends on whether an appraisal is keeping pace with rising home prices. If the appraisal comes in lower than the value ratio of the house, the buyer won't qualify."

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Modern style lights up Southie home

This architect-­designed freestanding contemporary townhouse offers a mix of Manhattan and the South End in a traditional neighborhood on South Boston's East Side.

Designed by Boston architectural firm Touloukian Touloukian Inc., this three-­bedroom unit has an open, airy feel on its four levels of living space. Winner of a Boston Society of ­Architects design award, this stylish abode was added to the rear of an 1890s brick bowfront home, and features a custom full-wall maple built-in in the living/dining area, a high-end kitchen and lots of picture windows, skylights and a three-floor light shaft that bring in daylight. It's on the market for $825,000.

The house has a clapboard exterior and is topped with a decorative fin. A private ­entrance leads into a double-height foyer with a two-tier chandelier.

To the left is a ­recessed-lit open living/dining/kitchen area with high ceilings, maple floors and a large picture window. Along one full wall sits a custom maple built-in with bookshelves above, a granite shelf and cabinets below.

The dining area segues into a kitchen with custom maple cabinetry, granite counters and a full-wall granite backsplash with glass shelves. There's a granite-topped island with stainless-steel cabinets and stainless-steel appliances including a Bosch refrigerator and dishwasher and a Frigidaire four-burner gas stove.

Off the kitchen is a half bath with basket-weave Carrara marble floors and a pedestal sink.

The turning stair­cases to bedrooms on the second and third floors have metal and glass rails and there are corner windows at the top of the landings.

The second floor has an en-suite guest bedroom with maple floors and a bathroom with Carrara marble floors and lined shower. The bath also opens onto a third small bedroom, which is nursery-sized but with a large closet with built-in storage. Along the second-floor hallway is a closet with a stacked Bosch washer and dryer.

The townhouse's master bedroom suite takes up the entire third floor, which is crowned with a series of skylights and a light well that make it very sunny. There's a decent-sized bedroom with maple floors and a large picture window and the room steps down to a light-filled home office. The master suite has a large walk-in closet with built-in storage and frosted-glass wardrobe space. The master bathroom has a radiant heated marble floor as well as a marble-lined steam shower. There's also a lot of extra cabinet space along the outside wall of the bedroom.

The carpeted lower level of the unit has a family room/home ­office with built-in maple cabinets and a decent amount of storage space in an unfinished area behind. This area also houses a gas-fired two-zone heating and central air-conditioning system.

There is garage parking for this unit behind, along with one tandem outside space. But there is no green space in the backyard.

Broker: Colin Sullivan of Coldwell Banker Residential Brokerage at 617-529-6622

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Nissan 370Z is 100% sports car

The 2013 Nissan 370Z Roadster Touring boasts outstanding sports car performance that is priced well under the German and Italian competition — an entry level 370Z is yours for under $45,000.

Our gorgeous test Z was dressed in a midnight blue metallic paint and capped with a black cloth droptop. Conspicuous red-painted brake calipers glared out from 19-inch Rays alloy wheels, which were part of a sport package that pushed the price of our tester up to $50,000.

While the price tag says entry level, the Z is 100 percent sports car. The Nissan's 3.7 liter V-6 engine produces 332 horsepower. The Z, which weighs in at 3,488 pounds, does 0 to 60 mph in 4.9 seconds. A 6-speed manual transmission was a blast to rip through, especially with the top down.

Driving the Z was all about performance. Our tester's firm suspension, bigger wheels and low ground clearance provided sharp handling. The Z felt fast even at low speeds as it was hard to hold back in stop and go situations. The Z's sport tuning was great for highway straightaways and twisty roads, but gave the coupe a harsh feel on bad pavement and bridge expansion joints. The Z also suffered from permeating road noise with the top up, which was a great excuse to keep it down.

Despite being only a two seater, I found plenty of leg room with the roadster's power adjustable seats. The leather and mesh cloth buckets were both heated and air conditioned, features that kept the convertible top down on cool nights and in hot weather. The coupe's interior featured a leather-wrapped steering wheel and stick shift. Aluminum-trimmed pedals also stood out. Storage space was limited, but I did find some space behind the seats for a bag or two of groceries.

Trunk space was sparse, barely enough room to fit a couple of overnight bags, but it does offer a diagram on how to fit a bag of golf clubs into the tight space.

The Z has an engaging dashboard with red dials and digital readouts constantly changing on six gauges.

While overwhelming at first, I found the additional controls on the steering wheel, combined with a compact media center and a full array of radio dials, simple to operate.

The Z is expensive when compared to the Subaru Scion coupe offerings, which are clearly out-muscled on the straightaways by the Nissan, but all match in handling. On the higher end, the Z's agility, muscle and abundance of modern technology really gives the $90,000 Porsche Boxter S a run for the money. 

Clearly the Z is not a long road tripper and it would be hard to justify as a daily driver, but who wouldn't love to haveone sitting in his garage for a midsummer night dinner reservation for two or for a fall foliage run.

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Baker’s cooks up a problem

There's a meltdown in the baking aisle as consumers, angered at Baker's Chocolate shaving the size of its iconic bars, took their fudgy feud to Facebook.

Baker's Chocolate, which originated in Dorchester, halved its package from 8 ounces to 4 ounces in the spring, but the cocoa cacophony went viral this week when the pop culture site Buzzfeed harvested and posted the best barbs from Baker's Facebook page.

Cambridge resident Amy Todd, 47, was among those brought to the boiling point.

"The box has been the same size my entire life. I stood in the aisle thinking there is something strange about this. I really wondered if there had been a mistake. Why was the price so high?" Todd told the Herald about her Facebook rant.

Todd, an anthropology professor at UMass Boston, was prompted to post a complaint after paying $4.99 for a 4-ounce package at a local supermarket in May.

Kraft Foods, Baker's parent company, responded to a Herald inquiry with a statement. The size reduction was "consumer driven" and the "suggested retail price was lowered to $2.89," wrote a Kraft spokesman.

At Shaw's in Brighton, a 4-ounce box of Baker's Chocolate was priced at $3.29. Nearby at Stop & Shop, Baker's was selling for $3.19.

Excerpts from the vitriol on Baker's Facebook page included this from Sarah Carol Bing: "Another loyal customer lost. I have been making my great aunt's recipe using Baker's Chocolate for 25 years now. The original recipe, written in her own handwriting calls for an 8 oz package of 'Baker's Chocolate.'"

Another user, Shannon Harris, quipped, "Christmas is coming, and baking season. Too bad, I will be switching brand for all my zillion kitchen adventures." Tammy Borushko railed, "Wow! What a crappy way to treat your customers."

Edgar Dworsky, a Somerville-based consumer advocate, said a communication meltdown may be to blame.

"Did they cut the price in half? No, there's a bit of a premium. The product was cut in half content-wise but the price wasn't, but the price was definitely reduced," said Dworsky. Even if sold at Kraft's suggested retail price of $2.89, the chocolate is now 72 cents per ounce as compared to 62 cents.

But the damage has been done for Dorchester baker Chirelle Hitt. Hitt, 40, tackles the holiday baking for her family and is known for whipping up batches of chocolate crinkles for workmates.

"At this point, I'm so used to using the 8-ounce it feels like I'm cheated even if the prices are lower," said Hitt, a staff assistant at Harvard Medical School. "I'm already looking for different chocolate."

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Low sales dampen trading

Stocks spiraled downward yesterday on lower than expected sales forecasts from key companies and fears the Federal Reserve would soon start scaling back its $85 billion bond-buying program, but experts said the one-day drop in the markets wasn't a cause for concern.

The Dow Jones Industrial Average dropped 225.47 points, or 1.5 percent, to 15,112.19 while the Standard & Poor's 500 index dropped 24.07 points, or 1.4 percent, to 1,661.32. It was the Dow's worst day in nearly two months.

"This is exactly what should be happening," said Christine Armstrong, senior vice president at Morgan Stanley. "This is a healthy, regular thing. It's not a crisis, it's not an emergency. When you look at what's going on, it's good, it's healthy."

The slump in the stock markets were in part a reaction to subpar earnings reports from two giant companies: Wal-Mart and Cisco Systems.

The world's biggest retailer cut its estimates for annual sales and profits, citing shoppers who are spending less.

And Cisco Systems late Tuesday released a revenue forecast that was weaker than expected and announced plans to cut 5 percent of its workforce, about 4,000 employees, as sales slow. The computing company said it plans to focus on research and development. It was unclear if any of the three Cisco locations in Massachusetts, which have research and development divisions, would be affected by the layoffs. The Massachusetts Executive Office of Labor and Workforce Development had not received a notification from Cisco, which is required for significant numbers of layoffs.

The government said yesterday that the number of Americans applying for unemployment benefits dropped to 320,000 last week. Combined with other positive economic news recently, investors were concerned the central bank soon would end its stimulus program supporting the economy.

"We are having a taper tantrum," Armstrong said, referring to the Fed's strategy to slow the bond purchases that have been credited with keeping interest rates down.

"Taper fears are probably front and center," Jim Russell, senior equity strategist for U.S. Bank Wealth Management, told Bloomberg.

Armstrong said the dip yesterday and the inevitable tapering is part of the recovery process.

"This is all part of this economic improvement."

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Heat’s a bit off on high apartment prices in Boston

It is no secret that rents for apartments in Boston are expensive, making it difficult for tenants to find affordable places to live.

According to Trulia's latest report released in July, rents in Boston rose 4.1 percent compared to the same time last year. The average monthly rent for a two-bedroom apartment in the Boston area is $2,275 and vacancies still are in the 3 percent range.

But there may be some relief for people looking for a place to live.

"This September rental market has loosened up a bit," said broker Joseph Baglio of Back Bay Residential. "There is more availability and less 'panic' to find a place than there was last year."

According to Multiple Listing Service, last year there were 705 apartments for rent in Boston in August (for a September move-in) compared to 978 on the market this year, a 28 percent increase.

"There has been some softening with a few of the larger buildings paying some of the broker fees to bring in clients such as Garrison Square and Landmark Square," Baglio said. And some of the private landlords, who thought they would be able to push rents again this year, have to roll back prices a little to get the apartments filled."

Frank Carroll, principal of Boston Realty Net said, "This spring was very busy with people securing apartments for September in April, May, June. Many renters, especially in the more affordable studio and one-bedroom apartments, were staying put, trying to avoid moving costs."

Construction of new rental properties in Boston, such as Factory 63, the Kensington and Gatehouse 75, have finally come to fruition this year to create supply and ease potential renters' frustrations. Also contributing to Boston's rental inventory were many individual investors, buying single properties for cash and renting them out, Carroll said.

"We saw a number of cash buyers this spring, looking to purchase property, such as a condo in Boston, either as an investment or for a family member to live in at a later date."

Boston is still seeing some softness in the high-end market.

"A stunning two-bedroom home in Battery Wharf on the Waterfront has stayed on the market since early May with a $9,100 per month price tag," Baglio said.

Carroll said, "More affordable neighborhoods, such as South Boston, where you can get a two-bedroom in the $2,000s, turn much faster; where in the Back Bay, a two-bedroom would be about $4,500 and those higher price rentals move slower."

Some good news to ease the Sept. 1 crunch, Carroll said, is "that both apartment owners and renters want to avoid the September 1st rush and are staggering the leases to an August date, middle of September or even October date."

Even better news is that next year more newly constructed apartments will be complete, helping to ease the tight supply of apartments in Boston.

Jennifer Athas is a licensed real estate broker. Follow her on Twitter @Jenathas.

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Many left waiting for bombing insurance $$

Scores of insurance claims either have been closed without payment or remain open four months after the Boston Marathon bombings, leaving business owners and residents in limbo, according to the state Division of Insurance.

Of the 207 claims reported as of July 26, 84 claims were closed with a total of 
$1.17 million in payments, and 76 were closed without payment. The remaining 47 claims were still pending.

"We're still fighting for money," said Brett Fodiman, one of the owners of the Forum Bar and Restaurant. "No one's helped us out. We hired an adjuster to help us manage all our losses. If the city and state were involved, it might speed things up. But for now, this battle is still going on."

Sheila Dillon, director of the city's Department of Neighborhood Development, said the department registered more than 500 businesses in the affected area and asked them to name their insurance carriers. The department helped about 80 of those businesses with insurance issues, often using local attorneys donating their time.

"We asked (insurers) for a very high-level point person, flexibility and speed," Dillon said.

But for some businesses, payment has been elusive.

"We're still in talks; it's an ongoing thing," despite help from a lawyer the city provided, said Anthony Liquori, owner of Escape Salon, which was closed for nearly a week.

To date, the Division of Insurance has received four complaints — three from businesses and one from a Watertown resident, said Amie O'Hearn Breton, a division spokeswoman.

"All of them have been resolved favorably through the division's assistance," she said. "The division was able to recover additional monies for the affected consumers."

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The Ticker

Judge stalls ruling on airline bankruptcy

Lawyers for American Airlines pressed a judge yesterday to approve the company's plan to merge with US Airways and exit bankruptcy protection, but the judge delayed a ruling because of the federal government's lawsuit against the merger.

The U.S. Justice Department Tuesday filed a lawsuit against the merger, which it said would hurt competition and increase prices for consumers by leaving four airlines controlling more than 80 percent of the U.S. air-travel market.

Judge Sean Lane delayed a decision on the plan until at least Aug. 29.

Facebook tests mobile payment app

Facebook plans to test a mobile payment service that lets users make purchases inside mobile applications using payment information they have added to their account on the social network.

Facebook Inc. said yesterday that it is working on a "very small test" and the company said there is no set schedule for making the service available to users. The service would use payment information that shoppers store on Facebook to automatically complete checkout forms of certain mobile apps. Then the app would process the purchase.

Ford to cut hybrid mileage estimates

The U.S. government may change the rules for the gas mileage estimates that car buyers see on window stickers after finding that fuel economy figures for Ford's C-Max gas-electric hybrid were inflated.

The Environmental Protection Agency, which monitors mileage testing, said yesterday that it will cut the C-Max's combined city-highway mileage estimate by nearly 9 percent to 43 mpg, from 47. Ford Motor Co. will change its window stickers to reflect the correct estimate and said that it will compensate drivers for the difference.

C-Max buyers will get a $550 check, while those who leased will receive $325.

THE OUTLOOK

• Commerce Department releases housing starts for July.
• Labor Department releases second-quarter productivity data.

THE SHUFFLE

• J Barrett & Co. is announcing that Kate Chapman has joined the agency in its Beverly Cummings Center office. Chapman, who served in the military as a medic in Iraq and in personal security with a private firm, also has a strong background in finance and sales.
• Nixon Peabody LLP has hired Richard J. McCarthy as its new chief financial officer. McCarthy oversees the global firm's financial operations including legal project management, accounting, tax, financial planning, compliance and risk management.

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L'Oreal makes $843M bid for Chinese skincare brand

HONG KONG — French cosmetics giant L'Oreal is making an $843 million takeover offer for skincare company Magic Holdings to help it expand in China's fast-growing beauty market.

Magic Holdings International Ltd. is the "ideal fit" for L'Oreal SA's existing China business and the deal also gives Magic an "ideal partner" to expand into new markets, the companies said in a joint filing Thursday.

Magic is the market leader in the rapidly expanding product category of facial masks, with 26 percent market share last year, according to AC Nielsen data.

"Facial masks are one of China's beauty market's fastest growing areas with very promising development prospects," L'Oreal said in a statement. "L'Oreal intends to develop this Chinese brand by contributing its science based expertise."

Emerging markets such as China have become increasingly important for the French cosmetics maker, which is trying to counter stagnant growth in its traditional markets. Last year the Paris-based company made more money from "new markets," which include Asia, Latin America, the Middle East, Africa and Eastern Europe, than from North America or Western Europe.

China's economic growth has slowed from double-digit rates but remains much higher than developed economies.

Magic's sales rose 29 percent last year to $200 million.

The French company is offering 6.30 Hong Kong dollars (81 cents) for each Magic share. Magic's stock price soared 18 percent on the Hong Kong stock exchange to HK$5.98 on Friday.

Six key shareholders holding 62.3 percent of Magic are already supporting the deal, which needs approval from China's Ministry of Commerce.

L'Oreal has 3,500 staff, a research center and two factories in China.

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