Finance news. My opinion.

In the most significant change to U.S. cigarette packs in 25 years, the Food and Drug Administration released nine new warning labels that depict in graphic detail the negative health effects of tobacco use.

Among the images released Tuesday are rotting and diseased teeth and gums and a man with a tracheotomy smoking.

The labels will take up the top half of a pack of cigarette packs. Warning labels also must appear in advertisements and constitute 20 percent of an ad. Cigarette makers have until the fall of 2012 to comply.

Mandates to introduce new graphic warning labels were part of a law passed in 2009 that, for the first time, gave the federal government authority to regulate tobacco, including setting guidelines for marketing and labeling, banning certain products and limiting nicotine.

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Online:

Proposed Warning Labels: http://1.usa.gov/cQwvVc

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St. Louis-based CPI Corp. continued to battle economic and industry pressures in the portrait business in the first quarter of this year with its profit plummeting 89 percent.

The operator of about 3,000 portrait photo studios mostly in Sears and Walmart stores posted a profit of $747,000. or 11 cents a share, compared to $6.5 million, or 91 cents a share, in the same quarter a year ago.

“As we expected, our first quarter results reflect continuing difficult industry and broader economic conditions, which are weighing heavily on our top line,” Dale Heins, the company’s chief financial officers, told investors during a conference call this morning.

Net sales in the quarter were $88.6 million, down 7 percent from $95.5 million in the same quarter last year.

The company also blamed its weak performance on a later Easter, litigation and severance costs, and costs related to the acquisition and incorporation of Bella Pictures — a wedding photography business it bought in January.

But Heins said the company expects a better second half of the year because of $15 million in planned cost savings, including a “significant” reduction in “head count” at its St low fee payday loans. Louis headquarters. He did not immediately respond to a follow-up email about how many local employees have been laid off.

The bulk of the cost savings will also come from changing the operating hours and scheduling of employee hours at its studios, he said.

He also said he expects the company’s recently acquired and re-opened Kiddie Kandid studios inside Babies R Us and to help buoy the company’s performance later in the year.

When asked by an analyst about the costs related to a class-action lawsuit against CPI regarding wages and hours paid to former and current employees, Heins said the company expects the litigation will “cost us some money.”

But he added, “We’re feeling very good about the case.”

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China’s manufacturers suffered sluggish growth in orders in May as widespread power shortages and inflation-fighting curbs on credit dampened demand, surveys showed Wednesday.

The China Federation of Logistics and Purchasing said its purchasing managers index fell to 52 from 52.9 in April and 53.4 in March. The index has remained above 50, the benchmark for expansion, for 26 straight months.

Economists say the manufacturing trends reflect a moderation rather than a so-called hard landing.

London-based HSBC said its survey of 400 companies, which is adjusted for seasonal factors, showed manufacturers adding workers despite relatively slower output and new orders in May. Its index edged to a 10-month low of 51.6 in May, down from 51.8 in April.

“This is still just a moderation rather than a meltdown in growth, so there is no need to worry about over-tightening,” said Hongbin Qu, co-head of Asian Economic Research at HSBC.

After months of forecasting that inflation would moderate by midyear, China is expected to announce a rebound in inflation in May in its monthly data release later this month, partly due to surging food costs associated with a severe drought that has damaged crops across much of the central part of the country business

Portugal’s economy shrank for a second quarter in the three months through March, putting the country back into recession as the government tries to cut spending and raises taxes to narrow its budget deficit.

Gross domestic product dropped 0.7 percent from the fourth quarter, when it fell a revised 0.6 percent, the Lisbon-based National Statistics Institute said in a preliminary report today. Economists expected a decline of 0.3 percent, the median of three estimates in a Bloomberg survey showed. GDP dropped 0.7 percent from a year earlier. Portugal exited its last recession in the second quarter of 2009.

The contraction “reflects an accentuated negative contribution of internal demand, resulting from a reduction in consumer spending of households and public administration, and to a lesser degree, from a reduction in investment,” the institute said.

Finance Minister Fernando Teixeira dos Santos said May 5 the economy will shrink 2 percent this year, twice as much as previously forecast. The government is implementing additional austerity measures to qualify for an international aid package of as much as 78 billion euros ($112 billion) from the European Union and the International Monetary Fund. GDP will also decline 2 percent in 2012, he said.

German Expansion

In the euro area as a whole, Germany and France led economic growth in the first quarter as booming exports fueled domestic spending in the bloc’s core, offsetting the turmoil sparked by sovereign-debt woes in Greece, Ireland and Portugal. German GDP jumped 1.5 percent from the fourth quarter and French GDP rose 1 percent.

Portugal’s aid package calls for the government to implement some austerity measures that parliament rejected in March fast cash without a hassle. Spending reductions for 2012 and 2013, including cuts to pensions, will amount to 3.4 percent of GDP, while revenue increases will represent 1.7 percent of economic output. The plan also earmarks 12 billion euros for Portugal’s banks.

The government will freeze public workers’ salaries and pensions through 2013 and cut pensions of more than 1,500 euros a month. Tax deductions will be limited, and the government is aiming to sell its stakes in companies including EDP-Energias de Portugal SA, the biggest electricity provider, and REN-Redes Energeticas Nacionais SA, the operator of the national power grid, by the end of this year.

The aid program will allow the economy to start recovering in 2013, according to Teixeira dos Santos. Portugal’s unemployment rate will peak at 13 percent in 2013, he said.

The European Commission today forecast Portugal’s GDP will drop 2.2 percent this year and 1.8 percent in 2012. The country’s economic growth has averaged less than 1 percent a year in the past decade, one of Europe’s weakest rates.

The three-year aid plan for Portugal set goals for a budget deficit of 5.9 percent of GDP this year, 4.5 percent in 2012 and 3 percent in 2013. Portugal’s public debt swelled to 93 percent of GDP in 2010 from 68 percent in 2007. The commission forecast that debt will increase to 101.7 percent of GDP this year and 107.4 percent in 2012.

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Hundreds of thousands of Cubans marched through Havana and other cities on Sunday to mark May Day in a demonstration touted as a vast show of support for economic changes recently approved by the Communist Party _ even though the people holding placards and shouting slogans haven’t seen the details yet.

Nearly two weeks after the party endorsed President Raul Castro’s bet to fix the island’s broken economy through limited free-market reforms, the government has not released specifics of the 311-point guidelines, or said when it will do so.

The parade, always a big event on the communist-run island, has nevertheless been touted by the official party newspaper, Granma, as “the best chance for Cuban workers to ratify … their backing for the accords.”

Castro led a march in eastern Santiago de Cuba, the island’s second largest city, while the Havana parade was led by Jose Ramon Machado Ventura, the 80-year-old recently named second secretary of the party, the country’s second most powerful position.

Salvador Valdes Mesa, the head of Cuba’s only government-approved labor union, was the only dignitary to address the crowd.

“We are doing this (marching) because we support the agreements made at the Party Congress,” Valdes Mesa said in his speech, as workers held up signs with photos of Raul and Fidel Castro and slogans like “Socialism is and will be our hope.” Many wore the colors of Cuba’s red, white and blue flag.

Still, many in Havana said they were impatient to see the actual details of the changes.

“I would like to know what the guidelines have that’s new, because so far it seems to be a lot of noise and nothing concrete,” said Manuel Pedrosi, 56, who was just a small boy when Fidel and Raul Castro’s revolution succeeded in 1959. “But if we’ve waited 50 years, we can wait a little longer.”

The economic measures approved unanimously and en bloc at a party summit April 19 include potential blockbusters that would open a door in the island’s tightly controlled economic system, such as legalizing the buying and selling of private property and providing bank credit to finance small businesses.

Officials released a broad outline of the proposals last year, but the document was extensively revised and discussed at the congress. While Cuban TV showed highlights of delegates debating the finer points of the document, including the wording of obscure paragraphs, viewers had no reference to guide them or explain what they were seeing.

Those who study Cuba’s economy say that without details it is impossible to gauge the impact of the measures.

“This is not a small issue. The details are the change,” said Rafael Romeu, president of the Association for the Study of the Cuban Economy, a nonpolitical association that promotes research on Cuba. “There is no change without a concrete ability to spell out what you’re going to do, how it will be achieved, by what date it will be implemented, what are the measurable results that can be delivered.”

Cuban officials did not respond to requests for comment on why the guidelines have not been released, or say when they might be. State media, often used to convey government announcements, has also been silent.

While Cubans have generally welcomed the economic overhaul, some expressed impatience with the lack of clarity. Some say they are anxious to go into business for themselves or buy a home big enough to accommodate their family, but are waiting to see the ground rules.

Others are nervous about plans _ shelved for the time being _ to lay off hundreds of thousands of state workers, and to gradually phase out the ration book, which provides Cubans with a basic basket of food at greatly subsidized prices.

“This can’t wait. Everyone is going to benefit in one way or another because there will be a little more freedom to do as you like with what’s yours,” said Yordanka Rodriguez, a 45-year-old Havana resident. “We just have to see what the terms are like. Until that happens, it’s hard to judge accurately.”

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Verizon’s latest 4G-LTE smartphone launch was delayed after the new, ultra-fast network suffered a major outage Wednesday and Thursday morning.

The Samsung Droid Charge, which was supposed to go on sale Thursday, was unavailable at stores or online. Verizon Wireless confirmed that the Droid Charge’s availability had been delayed, but it didn’t give a specific date for when it would go on sale.

The company said it would update its customers about the new smartphone’s availability soon. Meanwhile, customers can provide store representatives with their contact information, and they will be notified when the phone is available for purchase, according to Brenda Raney, spokeswoman for Verizon Wireless.

The wireless giant confirmed via Twitter at 11 a.m. ET that the network was up and running. It first acknowledged the outage Wednesday morning at 9:21 a.m., also on Twitter.

The Droid Charge will be the second phone to operate on Verizon’s 4G network, which was launched in November. The first phone, the HTC Thunderbolt, went on sale in March, and Verizon sold a quarter million of them in two weeks.

The launch will be closely watched by analysts, because the smartphone will retail at $300 with a new two-year contract — $100 more than most high-end 3G smartphones.

Most of the Droid Charge’s features are similar to other top-of-the-line Android-based smartphones, except that the new Samsung device has the ability to download data at a speed of 5 megabits to 12 megabits per second. That’s about 10 times faster than most 3G connections.

Verizon (VZ, Fortune 500) has placed a big bet on its 4G-LTE network, building out an entirely new — and extremely costly — infrastructure. It’s a risky gamble, since the company is requiring users to buy more expensive devices to use the new network, and 4G is not yet available in most locations.

The new 4G network only covers 46 metropolitan areas and 110 million customers, compared to the 290 million customers that receive Verizon’s 3G coverage. Verizon doesn’t expect 4G to reach nationwide coverage until 2013, at the earliest.

AT&T (T, Fortune 500) is also expected to launch its 4G-LTE network this year, and the company said it will be able to achieve nationwide 4G coverage if it is allowed to purchase T-Mobile. Sprint (S, Fortune 500) is widely believed to be exploring an LTE option, even as it continues to promote its 4G option called WiMax, which operates on a different network standard.

Verizon said through Twitter that it had discovered the cause of its outage, but has not yet explained the reason. While the 4G network was unavailable, customers were still able to access the 3G network, and Thunderbolt customers were still able to make phone calls.  

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NATO launched news airstrikes Wednesday on targets held by Moammar Gadhafi as the rebel movement urged a stronger air campaign that will allow them to advance on Gadhafi’s territory.

A NATO official confirmed a strike on at least one ammunition bunker outside the Libyan capital, Tripoli. He asked that his name not be used because the military alliance was not yet releasing the information publicly. A Tripoli resident said there were two blasts on the outskirts of the city.

“Over the past days, we didn’t hear any explosions except for planes flying in the sky, but no raids,” said the resident, who asked that his name not be used for fear of reprisals by the government.

Libya’s official JANA news agency reported airstrikes Wednesday in three other places: Misrata, Libya’s third-largest city; Sirte, a Gadhafi stronghold and home to the Libyan leader’s tribe; and Aziziyah, about 22 miles (35 kilometers) south of Tripoli. Jana said the strike in Misrata was in an area “populated with residents.”

But Mohammed Abdullah, a Misrata activist and a professor, said residents had mostly evacuated that part of Misrata several weeks ago after Gadhafi troops stormed it.

“Gadhafi troops are misleading the NATO,” he said. “The Gadhafi forces turn the shops into weapon caches and then claim that the areas are residential.”

Libyan rebels have been pleading for more NATO airstrikes as top Western and Arab envoys gather in Qatar’s capital to discuss ways to end the Libyan crisis.

Mohamed Ismail Tajouri, a 54-year-old businessman who joined the rebels in their stronghold of Benghazi, said having a rebel delegation attend the Qatar meeting amounts to key international recognition.

“We are proud of this,” he told The Associated Press. “This political development is really good for the rebels but the Gadhafi regime is not normal. He is a bloody creature, he won’t leave until he spills some blood.”

At Wednesday’s meeting, a spokesman for Libyan rebels urged the U.S. military to reassert a stronger role in the NATO-led air campaign or risk more civilian casualties in the fighting between Gadhafi and forces seeking to end his four-decade rule.

The appeal by the spokesman, Mahmoud Shammam, appeared to set the urgent tone for the rebels’ meetings with the U.N.’s secretary-general and other top envoys.

While peace efforts remain the top objective, there also appears to be a shift toward trying to boost the rebels’ firepower to protect their territory from government offensives. One proposal noted by Italy _ Libya’s former colonial ruler _ calls for allies providing defensive weapons.

The meeting comes as fighting on the eastern side of the country has been restricted to the occasional barrage of rockets, in contrast to the rapid advances and retreats that characterized much of the fighting there in past weeks.

Gadhafi’s forces, however, continued to shell the besieged city of Misrata in recent days. International groups are warning of a dire humanitarian crisis in Misrata, the only city in western Libya still partially in the hands of rebels.

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Orders for long-lasting manufactured goods outside of transportation fell in January by the largest amount in two years.

The Commerce Department says that orders for durable goods excluding transportation fell 3.6 percent last month, the biggest drop since January 2009.

A key category viewed as a proxy for business investment spending was also down by the largest amount in two years.

Total durable goods orders rose 2.7 percent but that increase was driven by a huge rebound in orders for commercial aircraft totally free credit score.

Manufacturing has been one of the standout performers during this recovery and economists expect that to continue despite the January weakness. January orders totaled $200.5 billion, considered a healthy level by economists and 25 percent above the recession low hit in March 2009.

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Jay Lassiter is no longer “in a relationship.”

Let’s clarify that: Lassiter, a media adviser for political campaigns who lives in Cherry Hill, N.J., is still with his partner of nearly eight years, Greg Lehmkuho. But since Thursday, when Facebook expanded its romantic-status options, Lassiter’s profile there echoes his relationship’s legal status: “Domestic partnership.”

It may not be a life-altering change. After all, you can call yourself anything you want on a social network. And Facebook is merely that.

But, Lassiter notes: “I’m no different from all those other Facebook users whose identity is tied up with their Facebook pages, for better or for worse.”

And so, he says: “It’s high time. It’s an affirming gesture. It’s sort of one tiny step for gays, but a giant leap for gay rights.”

Facebook’s addition of civil unions and domestic partnerships to the list of relationships its users can pick from came after talks with gay rights organizations, including GLAAD, the Gay & Lesbian Alliance Against Defamation.

The social network has “sent a clear message in support of gay and lesbian couples to users across the globe,” said GLAAD’s president, Jarrett Barrios. “By acknowledging the relationships of countless loving and committed same-sex couples in the U.S. and abroad, Facebook has set a new standard of inclusion for social media.”

He added that the new status options, available to Facebook users in the U.S., Canada, Britain, France and Australia, will serve as an important reminder that legal marriage is not an option for gay couples in most states.

Only Iowa, Vermont, New Hampshire, Massachusetts, Connecticut and Washington, D.C. allow same-sex marriages. Hawaii will soon become the seventh state to permit civil unions or similar legal recognition for gay couples.

Of course, there’s also a Facebook option to say “It’s complicated” _ and that’s exactly how some users felt about the new changes. Because, for people both gay and straight, more options mean more decisions to make: What exactly is my relationship, and what should I call it?

“You go into a store and there are 27 kinds of soda, and sometimes it would be easier if there were just Coke and Pepsi,” explains Erik Rueter, who works in marketing at an educational nonprofit institution in Pittsburgh.

To Rueter, the essence of his relationship is crystal clear: He and his partner, Robb, will be together forever. “We complete each other’s sentences,” he says. “We’ll be sitting there in the nursing home, gumming up each other’s food, chasing each other in our wheelchairs.”

Two years ago, Rueter, 34, proposed to his partner on bended knee, despite the fact that in Pennsylvania they cannot marry. They’ve been engaged ever since, and that’s been his Facebook status _ until Thursday, when he changed it to domestic partnership.

But Rueter is conflicted about the change Payday advance.

“Part of me wants to go back to ‘engaged’ _ because I still am,” he says. “Part of me wants to say ‘married,’ as in, ‘I don’t care what the law says.’ And part of me says, ‘It’s just Facebook!’”

And then ANOTHER part of Rueter tells him just how powerful and influential Facebook is, with well over 500 million users across the globe. “Just having the option to say, ‘This is what my relationship is’ is a really good thing,” he says.

It can be a good thing for some straight Facebook users, as well. Michael Stimson, a Scot who lives in Marseille, France, is not married to his partner, Izzy (short for Isabelle), but they live together and have a young son. He’s just changed his status from blank to domestic partnership.

For Stimson, it helps to clarify to other users with whom he’s chatting that he is not, well, available. “People do flirt with you on the Internet,” he says. “I like to put them in the picture a wee bit, so there’s no confusion.”

Izzy approves of his decision. “Most people that you speak with on Facebook are people you don’t know,” she says, speaking in French from home in Marseille. “This makes things more clear.”

Of course, there are no political overtones to the couple’s change in status. In the United States, though, there is a passionate debate over gay marriage. Lassiter, the campaign adviser from New Jersey, changed his status from “in a relationship” to “married” last year in an act of political defiance, he says, when the state legislature rejected a bid to recognize gay marriage.

But it just didn’t feel right, and he changed it back to “in a relationship” months later. Besides the fact that “married” wasn’t accurate, “I’m not really the marrying type,” he says. “Me and my partner have an equilibrium as things are.”

But “in a relationship” made it sound like a high-school relationship, rather than one that’s lasted a number of years.

So the new status feels better, says Lassiter. And he’s been encouraged by the positive feedback he’s gotten on just the first day from Facebook friends _ including people from as far back as high school _ giving him a thumbs-up.

Lassiter also thinks the change is most important for gay people _ especially younger ones _ living in areas of the country where their sexual orientation is less accepted than in the liberal Northeast.

“For those people, it legitimizes being in a gay relationship,” he says.

And so, maybe a social network can be something of an agent of social change.

After all, Lassiter says, “As Facebook goes, so goes the world.”

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Associated Press Writer Geoff Mulvihill in Philadelphia contributed to this report.

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German business confidence unexpectedly rose to a record high in January as booming exports to Asia and stronger household spending bolstered growth in Europe’s largest economy.

The Munich-based Ifo institute said its business climate index, based on a survey of 7,000 executives, increased to 110.3 from 109.8 in December. That’s the highest since records for a reunified Germany began in 1991. Economists predicted the index would hold steady, according to the median of 41 forecasts in Bloomberg News survey. French business sentiment also rose.

Germany’s economy expanded a record 3.6 percent last year as declining unemployment encouraged consumers to spend more and companies increased investment to meet export demand. German growth is driving the recovery in the 17-nation euro area as countries such as Ireland, Greece, Portugal and Spain introduce austerity measures to rein in budget deficits amid a sovereign debt crisis.

“The message couldn’t be any better,” said Andreas Scheuerle, an economist at Dekabank in Frankfurt, who predicts growth of 2.5 percent this year. “If the economy keeps going like this, we can all raise our forecasts.”

Ifo’s gauge of executives’ expectations jumped to a record 107.8 from 106.8, while an indicator of the current situation slipped to 112.8 from 112.9. The euro rose after the release before retreating to trade little changed at $1.3535 at 10:44 a.m. in Frankfurt.

‘Great Vigor’

“The German economy has started the year with great vigor,” Ifo President Hans-Werner Sinn said in an e-mailed statement. “Especially in exports, the survey participants see much greater opportunities.”

Investor confidence jumped to a six-month high in January and the benchmark DAX stock index this week rose to the highest level in more than 2 1/2 years after companies reported higher profits.

Douglas Holding AG, Europe’s largest makeup and perfume retailer, said on Jan. 12 that annual profit rose 21 percent and first quarter sales increased as Germans boosted spending at the company’s bookstores and Christ jewelry outlets.

Germany’s Bayerische Motoren Werke AG, Daimler AG and Audi AG, the world’s three largest luxury-car makers, will expand factories this year to ease capacity constraints driven by record demand for their vehicles.

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