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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Business in brief: Productivity declines in second quarter

From wire reports

WASHINGTON – Worker productivity dropped this spring for the first time in more than a year, a sign that companies may need to step up hiring if they hope to grow.

Productivity declined at an annual rate of 0.9 percent in the April-to-June quarter after posting large gains throughout 2009, the Labor Department said Tuesday. Unit labor costs edged up 0.2 percent in the second quarter, the first increase since the spring of 2009.

Output of U.S. workers is the key ingredient to boosting living standards. It allows companies to pay workers more because of the increased production without being forced to raise the cost of their goods, which sparks inflation.

Associated Press

Morgan Stanley fined over conflict of interest rules

NEW YORK – Morgan Stanley was fined $800,000 Tuesday by the Financial Industry Regulatory Authority over failures to adequately disclose potential conflicts of interest in its analyst research notes.

The New York bank self-reported the violations to FINRA, an independent regulator of investment companies.

Morgan Stanley didn’t properly alert clients about relationships the bank might have with the companies being covered in the research notes, according to FINRA.

Investment banks have separate divisions that provide research and analysis to customers about publicly traded companies, providing recommendations on whether to purchase or sell a stock and projections for future earnings.

Those reports typically list the interest that the bank has in the companies it researches.

Morgan Stanley failed to provide proper disclosures in 6,632 research reports and 84 public appearances by its research analysts between April 2006 and June 2010.

Associated Press

Briefcase

From wire reports

• The Walt Disney Co. blew past forecasts by posting third-quarter net income of $1.33 billion, or 67 cents per share, on a 16 percent increase in revenue to $10 billion. Analysts expected 58 cents per share of earnings on $9.38 billion.

• Wendy’s/Arby’s Group plans to open 180 dual-branded Wendy’s and Arby’s restaurants in Russia in the next decade. Wenrus Restaurant Group Ltd., an affiliate of Food Service Capital, will run the restaurants.

• Wholesale inventories rose 0.1 percent in June, the Commerce Department reported Tuesday. Sales fell 0.7 percent.