Dan's, Macey's stores will drop tobacco

The president, Dave Wirthlin, says the loss of sales is easily outweighed by the health issues tied to cigarettes.

He says tobacco is inconsistent with his focus on a healthy lifestyle. Wirthlin says the Dan's and Macey's stores have started a program for employees who want to stop smoking.

The stores are located from Logan to Utah County.

Stocks mixed on energy, construction news

NEW YORK -- Wall Street capped a week of big gains with modest moves Friday as investors grappled with surging energy prices that overshadowed news of a surprise increase in home construction.

Investors hoping for an economic rebound in the second half of the year and searching for signs that the housing market is bottoming got some relief before the market opened: the Commerce Department's report that home construction jumped 8.2 percent in April. But investors were clearly sidetracked for much of the session by energy prices and their effect on consumer spending, which accounts for more than two-thirds of U.S. economic activity.

Oil sets record near $128

NEW YORK-- News that Saudi Arabia had boosted its oil output by 300,000 barrels a day was greeted as a non-event on oil markets -- the move wasn't anywhere near the kind of production increase needed to bring prices down on Friday.

And traders were equally unimpressed by the U.S. government's plan to stop adding to the Strategic Petroleum Reserve.

GE to exit appliance business

NEW HAVEN, Conn. -- General Electric Co. plans to sell or spin off the business that for a century has put appliances in American homes, a decision that could presage further asset sales, analysts said.

The industrial conglomerate, one of the world's largest companies, said in a statement Friday that the move is part of an ongoing plan to exit "slower growth and more volatile businesses."

Last year, Fairfield-based GE shed its underperforming plastics business by selling it to a Saudi Arabian company for $11.6 billion.

Fannie Mae scraps higher down payments

WASHINGTON -- Fannie Mae is doing away with higher minimum down-payment requirements for borrowers in parts of the country where home prices are dropping.

The government-sponsored mortgage finance company said Friday it will require minimum down payments of between 3 percent and 5 percent for all loans that it guarantees. That replaces a December policy that required a higher minimum if the loan was for a home in a zip code with declining real estate prices.

Washington-based Fannie says the move is part of its effort to help resuscitate the flagging mortgage market.

U.N.: World economy to grow by 1.8 percent

UNITED NATIONS -- The world economy is "teetering on the brink" of a severe downturn and is expected to grow only 1.8 percent in 2008, the United Nations said in its mid-year economic projections Thursday.

That's down from a global growth rate of 3.8 percent in 2007, and the downturn is expected to continue with only a slightly higher growth of 2.1 percent in 2009, the U.N. report said.

The mid-year update of the U.N. World Economic Situation and Prospects 2008 blamed the downturn on further deterioration in the U.S. housing and financial sectors in the first quarter.

Macy's to put FAO Schwarz in its stores

CINCINNATI -- FAO Schwarz will open toy stores in nearly 700 Macy's department stores over the next two years in a move that both stores hope will drive traffic in a tough economic environment.

The two companies announced Friday that about 75 full-size FAO Schwarz toy stores will open across the country in the fall, along with about 200 smaller shops that will be up to 300 square feet.

Macy's CEO Terry Lundgren told shareholders that FAO Schwarz will open stores in up to 275 of Macy's stores this fall.

The companies plan to expand over the next two years to include 685 Macy's stores that have children's departments.

Abercrombie profit edges up on sales increase

COLUMBUS, Ohio -- Teen retailer Abercrombie Fitch Co. said Friday that its first-quarter earnings rose 3 percent from a year ago on stronger sales.

Abercrombie said it earned $62.1 million, or 69 cents per share, in the three months ended May 3 compared with profits of $60.1 million, or 65 cents a share, a year ago.

Sales rose 8 percent to $800.1 million from $742.4 million last year. But sales at stores open at least a year, considered a key indicator of a retailer's strength, fell 3 percent.