Defense starts for companies in Gulf spill trial

NEW ORLEANS — The owner of the drilling rig that exploded at the outset of the 2010 Gulf of Mexico oil spill catastrophe started its defense Monday at a trial designed to determine the disaster's causes and assign fault to the companies involved.

Transocean Ltd. called its first witness — well control expert Calvin Barnhill — on the 13th day of the trial. Transocean president and CEO Steven Newman is scheduled to testify Tuesday.

U.S. District Judge Carl Barbier already has heard testimony by more than a dozen witnesses called by the Justice Department and attorneys for Gulf Coast businesses and residents who claim the spill cost them money. The plaintiffs' lawyers still expect to call another witness to the stand this week, an employee of cement contractor Halliburton.

Tranoscean's witnesses could take up the rest of the trial's fourth week. Halliburton and Macondo well owner BP PLC also will call their own witnesses after Transocean finishes presenting its case.

Barbier is hearing the case without a jury and — barring a settlement — could decide how much more money BP and its contractors owe for their roles in the catastrophe. BP could be on the hook for nearly $18 billion in penalties under the Clean Water Act if the judge finds that it acted with "gross negligence."

The explosion on the Deepwater Horizon rig in the Gulf of Mexico on April 20, 2010, killed 11 workers and led to the nation's worst offshore oil spill.

After a plaintiffs' expert finished testifying Monday, BP attorney Andy Langan asked Barbier to rule that the plaintiffs haven't proven the London-based oil giant acted with gross negligence or willful misconduct. Barbier said he wasn't ready to rule on that request yet.

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Ericsson, STMicroelectronics to end joint venture

STOCKHOLM — Swedish wireless equipment maker Ericsson and Switzerland's STMicroelectronics say they will lay off up to 1,600 workers globally as part of a plan for splitting up their loss-making joint venture.

STMicroelectronics, one of Europe's largest chipmakers, announced in December that it wanted out of ST-Ericsson as it struggled with a downturn in global demand. After months of talks the two companies said Monday they had agreed to end the joint venture.

Ericsson says it will take on the joint venture's "thin modem" products, designed for smartphones and tablets while STMicroelectronics will deal with other existing products and related businesses.

The two companies said they will begin to shut down the remaining parts of the joint venture, with some 700 of the job cuts in Europe, mostly in Sweden.

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US builder confidence falls on weak supply, labor

Confidence among U.S. homebuilders fell this month because of concerns that increased demand for new homes is exceeding supplies of ready-to-build land, building materials and workers.

In the short term, those constraints could slow sales. But builders' outlook for sales over the next six months has reached its strongest point in more than six years.

The National Association of Home Builders/Wells Fargo builder sentiment index released Monday fell to 44 from 46 in February. It was the second decline since January, which was preceded by eight straight monthly gains. A measure of current sales conditions declined from February's reading.

Readings below 50 suggest negative sentiment about the housing market. The last time the index was at 50 or higher was in April 2006.

The index began trending higher in October 2011, when it was 17. That increase coincided with the start of a housing recovery.

An improving job market, persistently low mortgage rates and rising home values have helped fuel U.S. homes over the past year. New-home sales jumped 16 percent in January to the highest level since July 2008.

The combination of heightened demand and a tight supply of previously occupied homes for sale have motivated builders to ramp up construction. Builders started work on the most homes last year since 2008.

Despite the positive sales trends, many builders are facing higher costs for building materials and competition for land cleared for development. Some also are having trouble obtaining financing to buy land and cover construction costs.

Meanwhile, builders large and small have reported a shortage of workers in markets where residential construction has picked up sharply, such as Texas and Arizona.

Many construction workers — from roofers and drywall installers, to framers and carpenters — appear to have fled to other fields, such as the booming oil and natural gas industry.

While U.S. residential construction jobs increased 3.1 percent in February from a year earlier, they remain about 40 percent below the peak reached during the housing boom.

"The road to a housing recovery will be a bumpy one until these issues are addressed, but in the meantime, builders are much more optimistic today than they were at this time last year," said David Crowe, the NAHB's chief economist.

The latest builder confidence index, based on responses from 341 builders, comes as the critical spring home-selling season is under way.

A gauge of current sales conditions fell four points to 47, but a measure of traffic by prospective buyers improved three points to 35, while builders' outlook for sales in the next six months improved one point to 51, the highest level since June 2006.

Though new homes represent only a fraction of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB statistics.

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Jobless rates rise in January in half of US states

WASHINGTON — Unemployment rates increased in half of U.S. states in January from December, as employers nationwide added the fewest jobs in seven months.

The Labor Department said Monday that unemployment rates rose in 25 states. They fell in only 8 states and were unchanged in 17.

Despite the increase, some long-suffering states showed improvement in January.

Florida's unemployment rate fell below the national level for the first time in five years, further evidence that the state is recovering from a deep housing slump.

And Michigan, which has benefited from the comeback of the auto industry, added 26,500 jobs in January — the most of any state. Its unemployment rate was unchanged at 8.9 percent.

Nationally, the unemployment rate ticked up in January to 7.9 percent from 7.8 percent in December. Employers added only 119,000 jobs, down from 219,000 in December.

Job gains have since accelerated. Employers added 236,000 jobs in February, and the national unemployment rate fell to a four-year low of 7.7 percent.

Florida has added 127,500 jobs in the past year, the third most of any state. The state has benefited from greater tourism as the U.S. economy has slowly recovered. That has led to more jobs at hotels, restaurants and retail stores.

North Dakota had the lowest unemployment rate among states in January, at 3.3 percent. It has benefited from an oil and gas boom. Nebraska had the second lowest at 3.8 percent, followed by South Dakota at 4.4 percent.

California and Rhode Island reported the highest state unemployment rates in January, both at 9.8 percent.

Nevada had the third highest, at 9.7 percent. Still, that's down from 9.8 percent in December. And the state's unemployment rate has fallen sharply over the past 12 months, down from 12 percent in January 2012. That's the biggest year-over-year drop of any state.

One reason for the rapid decline is many out-of-work people in Nevada have stopped looking for jobs. Nevada's work force fell 1.2 percent in the 12 months through January. The government counts people as unemployed only if they are actively looking for work.

Still, some of those out of work have found jobs. In the past year, the number of jobs in the state has increased 2.5 percent.

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AAA: Mass. gas price average falls 4 cents to $3.65

AAA: Mass. gas price average falls 4 cents to $3.65

Bay State gas prices are down another 4 cents this week, according to AAA Southern New England.

Self-serve, regular unleaded gas is currently averaging $3.65 a gallon, 3 cents less than the national average of $3.68.

Local prices are down 7 cents over the past month. A year ago at this time, the Massachusetts average price was $3.73.

Midgrade unleaded is also down 4 cents this week to $3.84 a gallon, while premium unleaded dropped 3 cents to $3.97 a gallon. Diesel fell a penny to $4.13 a gallon.

The range in prices in the latest AAA survey for unleaded regular is 38 cents, from a low of $3.51 to a high of $3.89.

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Cynosure to buy Mass. laser rival Palomar for $294M

Cynosure to buy Mass. laser rival Palomar for $294M

Cynosure of Westford said today it will acquire rival medical laser maker Palomar Medical Technologies in a cash-and-stock deal worth nearly $294 million.

The proposed merger will combine two Bay State companies. Palomar is based in Burlington.

"We believe the acquisition of Palomar creates a substantial opportunity to generate profitable, long-term growth for our company and drive value for our stockholders," said Michael Davin, Cynosure's chairman and chief executive officer, in a statement. "Combining with Palomar complements our product portfolio and customer base, adding new product and service revenues, strengthening our global distribution network, creating new cross-selling opportunities and enhancing our intellectual property position with the addition of more than 40 patents."

The companies said they have a total combined installed base of more than 20,000 aesthetic laser systems worldwide, with a distribution network spanning more than 100 countries. The companies had combined revenue of more than $234 million last year with 52 percent of product revenue stemming from North America and the remaining 48 percent originating from the international markets.

Davin will serve as chairman and CEO of the combined company, while Palomar President and CEO Joseph Caruso will join Cynosure's board of directors as vice chairman and will serve as president.

Cynosure added it ultimately plans to relocate its Westford headquarters to Palomar's owned facility 15 miles away in Burlington.

Under terms of the acquisition, Palomar shareholders will receive $13.65 per share of Palomar common stock; $6.825 per share in cash and 6.825 per share in Cynosure common stock.

The deal is expected to close in the third quarter of this year. Upon completion, Cynosure shareholders will own about 77 percent and Palomar shareholders will own nearly 23 percent of the combined company.

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Hearing aid tech firm Lantos wins FDA approval

Lantos Technologies Inc. of Cambridge said today it has received U.S. Food and Drug Administration clearance to sell its 3-D ear scanning system.

Initially developed in Massachusetts Institute of Technology labs, the system "streamlines the process of obtaining ear topology measurements for custom-fit in ear devices," the company said, adding Lantos' technology replaces the process of taking a silicone impression for the production of custom-fit ear devices.

"The straightforward process of obtaining a 3-D representation of the ear canal by our system provides opportunities to improve efficiencies across the hearing device value chain," said Lantos CEO and Chairman of the Board Jeffrey Leathe, in a statement. "The 3-D Ear Scanning System also promises manufacturing efficiencies, simplifies logistics and improves the turnaround time for product delivery to the customer."

The system, which is geared toward the hearing aid, consumer audio, industrial noise protection, military and communication markets, will be available commercially later this year, officials said.

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Bain leads $16M investment in Boston's AppNeta

AppNeta, a Boston-based company that provides cloud-delivered services for IT performance management, said today it has raised $16 million.

The company's third round of funding was led by Bain Capital Ventures, Egan-Managed Capital, JMI Equity and Business Development Bank of Canada.

"We have seen remarkable growth across our business during the past two years demonstrating a growing demand for SaaS-delivered performance management solutions," said AppNeta CEO Jim Melvin. "Our customers know they can't tolerate poor performing applications. They need complete, end-to-end visibility to assure optimal performance and end-user experience of all applications across all locations."

In June, the company acquired another Boston company, Tracelytics, which was founded in 2010 by four Brown University graduate students.

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Cyprus bailout deposit tax rattles markets

LONDON — Stocks around the world and the euro fell sharply Monday as investors fretted over a plan to tax depositors in Cypriot banks as a way to partly fund a bailout of the Mediterranean island nation.

Financial stocks bore the brunt of the selling in European stock markets, with France's Societe Generale down 5 percent and Italy's UniCredit 4 percent lower, as investors worried about the implications of the Cyprus bailout.

Since the European debt crisis began in late 2009, savers have been spared. But the bailout of Cyprus, agreed to on Saturday, foresees the government seizing 6.75 percent of deposits below €100,000 ($130,860), rising up to 9.9 percent on those above €100,000. That signals a huge policy shift for the embattled eurozone.

Now investors are worried that savers will start taking their money out of banks across Europe — just like Cyprus residents did on a weekend ATM bank run.

"If European policymakers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job," said Michael Hewson, senior market analyst at CMC Markets.

In Europe, the FTSE 100 index of top British shares fell 0.5 percent to 6,461 while Germany's DAX was 0.9 percent lower at 3,816. The CAC-40 in France dropped 0.7 percent to 3,817. Cyprus' main index was closed for a public holiday and the country shut down the banks until Thursday so Parliament can vote on the bailout.

The euro was also suffering, down 0.7 percent at $1.2925.

The Cypriot Parliament has to back the proposal for it to pass, and lawmakers have called it an unfair blow to small savers, since up until now deposits around the eurozone have been guaranteed up to the €100,000 level. The vote was postponed for a second time with the Parliament speaker saying it will now take place Tuesday.

One new proposal would make the tax more graduated: placing a one-time 3 percent levy on deposits below €100,000, rising to 15 percent for those above €500,000.

"The bottom line is that it's very finely balanced and the success of the vote will depend on what tax breakdown goes before Parliament," said Adam Cole, an analyst at RBC Capital Markets.

If it backs the levy, then Cyprus would be eligible for a €10 billion ($13 billion) financial rescue from its partners in the eurozone and the International Monetary Fund. If it doesn't back the deal, then the country of just a million people faces bankruptcy and potentially an exit from the euro — a development that could have huge ramifications in global financial markets.

German finance minister Wolfgang Schaeuble said a "no" vote by Cypriot lawmakers would devastate the country.

"Then the Cypriot banks will no longer be solvent, and Cyprus will be in a very difficult situation," said Schaeuble.

Cyprus' banking sector is about eight times the size of the economy and has been accused of being a hub for money-laundering, particularly from Russia. That's why many European officials wanted to have the banks' depositors involved in the cost of the bailout.

The uncertainty over Cyprus weighed on sentiment around the world, though the selling pressure was eased through the U.S. trading session.

In the U.S., the Dow Jones industrial average was 0.2 percent lower at 14,477 while the broader S&P 500 index fell 0.5 percent to 1,553.

Earlier in Asia, Japan's Nikkei 225 index slid 2.7 percent to 12,220.63, while Hong Kong's Hang Seng dropped 2 percent to 22,082.83.

Oil prices trimmed their earlier losses, with the benchmark New York rate 25 cents lower at $93.20 a barrel.

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Burger King to offer a turkey burger

NEW YORK — If you think a Whopper's too indulgent but are sick of chicken sandwiches, Burger King is offering a turkey burger for the first time.

The Miami-based company is rolling out the new sandwich this week as part of its limited-time offers for spring, marking the latest fast-food effort to cater to health-conscious diners. Last week, McDonald's said it plans to offer a lower-calorie version of its Egg McMuffin made with egg whites. The Oak Brook, Ill.-based chain said the egg whites will be available for any other breakfast sandwich on its menu as well.

McDonald's and Wendy's said they have no records indicating they ever offered a turkey burger, meaning Burger King would be the biggest fast-food chain to do so.

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