Economic conditions hit summer slump

WASHINGTON - The Federal Reserve found economic conditions around the country worsened in June and early July while the Commerce Department said orders for big-ticket manufactured goods rose only slightly last month. They were the latest signals the economy was slowing in the early summer.

The Fed's survey, compiled from reports from its 12 regional bank districts, showed that retail sales, especially for autos, weakened over the last two months. That followed a big jump in consumer activity in the early spring.

Meanwhile, the Commerce Department reported that orders to American factories for big-ticket durable goods eked out a small 0.7 percent gain in June, reflecting a surge in orders for military aircraft, following declines in April and May.

Boeing posts profit as outlook brightens

CHICAGO - Boeing Co. swung to a $607 million second-quarter profit from a loss a year earlier and raised its forecast for earnings and 2005 airplane deliveries Wednesday, citing the latest signs of recovery in the long-stagnant commercial aviation market.

Despite a decline in revenue from its commercial airplane unit, Boeing's upbeat report exceeded analysts' expectations and portrayed a brightening outlook for a company that appears to have weathered the worst of a three-year aviation slump.

Besides a thriving defense business, the results show Boeing's commercial jet business on the upswing as a result of multiple orders from discount airlines, according to analyst Paul Nisbet of JSA Research.

Northwest pilots propose lower pay

MINNEAPOLIS - Union pilots for Northwest Airlines said they are willing to accept lower pay in exchange for flying 70-seat regional jets that the Eagan-based carrier wants to add to its fleet.

The Northwest branch of the Air Line Pilots Association said its proposal would preserve jobs while helping Northwest stay competitive.

Northwest declined to comment on the union proposal Wednesday and has not offered a counterproposal.

Net income falls at Time Warner

Time Warner Inc., the world's largest media company, said second-quarter net income fell 27 percent from a year earlier, when it had gains from a legal settlement and asset sales. Revenue rose on higher sales at its cable- television channels and film studios.

Net income dropped to $777 million, or 17 cents a share, from $1.06 billion, or 24 cents, the New York-based company said in a statement. Revenue from continuing businesses increased 10 percent to $10.9 billion.

Farm trade talks hit disagreements

GENEVA - Senior trade mediators and government negotiators worked into the night Wednesday, attempting to bridge the divide between rich and poor nations over farm trade liberalization.

The World Trade Organization's 147 members are trying to reach an agreement by the end of the week to clear the way for sweeping changes in world trade. But mediators said disagreements on farm trade changes are holding up the talks.

Unilever reports European sales dip

Unilever, the world's biggest maker of ice cream and tea, said Wednesday that quarterly sales fell for the first time in four years as the company sold fewer Magnum bars and Lipton drinks in Europe.

Sales of Unilever's top brands dropped 0.2 percent in the second quarter, Finance Director Rudy Markham said. Analysts had forecast a gain of 2.2 percent. Shares of the London- and Rotterdam-based company had their biggest drop in three months after Markham declined to repeat a forecast for full-year sales growth.

Cold weather in Europe damped demand for ice creams and cold teas, and Unilever cut prices to keep up with competitors including Procter & Gamble Co. Co-chairmen Niall FitzGerald, 58, and Antony Burgmans, 57, have pared hundreds of brands in five years to focus on the most profitable.