In Brief

NEW YORK

Sources say SEC rules would halt trading to stop big swings

U.S. stock exchanges would briefly halt trading of some stocks that have big price swings under new trading rules aimed at avoiding market plunges, according to two people familiar with the plan.

The rules are expected to begin in mid-June under a six-month pilot program agreed to by exchanges and regulators, the people said. They spoke on condition of anonymity because the plan has not been made public.

It was not known when an announcement would be made.

Under the plan, trading of any Standard & Poor's 500 stock that rises or falls 10 percent or more would be halted for five minutes. These rules, known as "circuit breakers," would be applied if the price swing occurs between 9:45 a.m. and 3:35 p.m. Eastern time. That's almost the entire trading day.

The rules are intended to prevent a repeat of the May 6 market plunge in which the Dow Jones industrials fell to a loss of almost 1,000 points in less than 30 minutes. The pilot program is scheduled to end Dec. 10. Regulators and the exchanges would then decide whether to widen the program to include other stocks, the people said.

NEW YORK

Big discounts on appliances hurt profits for Sears Holdings

Heavy discounts on appliances squeezed Sears Holdings Corp. in the first quarter even as a key measure of revenue rose, bolstered by federal rebates for those same appliances.

Sears Holdings' first-quarter net income fell 38 percent to $16 million, or 14 cents per share, in the quarter that ended May 1. A year earlier, it was $26 million, or 21 cents per share.

The results contrast sharply with Sears' recent success in boosting both revenue and net income as it closed underperforming stores and slashed expenses.

Revenue fell 0.1 percent $10.05 billion from $10.06 billion a year ago because the company has 63 fewer stores than in last year's first quarter.

Adjusted for a gain on the sale of real estate, pension expenses and other one-time items, Sears earned 16 cents per share.

Analysts surveyed by Thomson Reuters, who typically exclude one-time items, expected the company to report profit of 14 cents per share on revenue of $10.21 billion.

SEATTLE

Sales of technology services, computers boost Dell profits

Computer maker Dell Inc. said Thursday its first-quarter net income rose 52 percent.

For the February-through-April quarter, Dell's net income rose to $441 million, or 22 cents per share, from $290 million, or 15 cents per share in the same period last year.

Excluding certain items, Dell said earnings totaled 30 cents per share, three cents more than Wall Street analysts were expecting, according to a Thomson Reuters survey.

Dell's revenue rose 21 percent to $14.9 billion, more than the $14.3 billion analysts were expecting.

SAN FRANCISCO

With 'smart TV' Google aims to meld TV, Web experience

Google Inc. believes it has come up with the technology to unite Web surfing with channel surfing on televisions.

To reach the long-elusive goal of turning TV sets into Internet gateways, Google has partnered with Sony Corp., Intel Corp. and Logitech International. They unveiled their much-anticipated plan for a "smart" TV on Thursday, and Intel CEO Paul Otellini predicted the effort will be "the biggest improvement to television since color."

The TVs are expected to go on sale this fall in U.S. Best Buy stores, with prices to be announced later in the year. Sales will expand to other countries next year.

CHICAGO

Ronald McDonald will stay; clown called 'force for good'

Retire Ronald McDonald? No way.

That's the message McDonald's Corp.'s CEO Jim Skinner gave Thursday to the red-haired clown's critics who say the cartoon promotes unhealthy eating and should go the way of the Marlboro Man and Joe Camel.

"The answer is no," Skinner told a room full of shareholders who gathered for a meeting at the company's headquarters in the Chicago suburb of Oak Brook, Ill.

"He is a force for good," Skinner said, adding that the nearly 50-year-old clown is an ambassador for the McDonald's brand and its Ronald McDonald House Charities. "He communicates effectively with children and families around balanced, active lifestyles. He does not hawk food."

Shareholders applauded Skinner. And they unleashed a chorus of boos when representatives from the advocacy group Corporate Accountability International requested the famous icon be shelved -- for good.

CINCINNATI

Women press P&G officials in controversy over diapers

Four women who blog about consumer products for young families spent Thursday talking about diapers with Procter & Gamble Co. officials and advisers as the company tried to counter fast-spreading online criticism.

Claims that the new Dry Max version of Pampers -- P&G's biggest-selling brand -- cause severe rashes have triggered lawsuits and a federal safety investigation.

The criticisms picked up steam this month on Facebook and other online social media after national reports of the inquiry.

P&G has diverted 40 to 50 employees to marketing and research on Dry Max full time, extended its Pampers phone line from five to seven days a week and consulted with more than a dozen outside experts.

It hopes the effort -- including flying in the four so-called "mommy bloggers" from around the country because they can influence parents seeking product reviews, money-saving tips and other advice -- will deflect criticism. For instance, P&G said some of the complaints have come from consumers in China, where Dry Max diapers aren't even sold.

P&G says Pampers sales are strong and it has found no evidence Dry Max, billed as 20 percent thinner than earlier versions, is more likely to cause rashes.

LOS ANGELES

Official says Tesla to build electric cars in Bay Area

An official who negotiated with Tesla Motors Inc. to open an auto factory in Southern California said Thursday that the carmaker will instead partner with Toyota Motors Corp. to build electric cars at a recently shuttered auto plant in the San Francisco Bay Area.

Downey Councilman Mario Guerra said Tesla CEO Elon Musk called him to break the news, hours before Tesla planned a news conference with Gov. Arnold Schwarzenegger in Palo Alto.

"We feel stunned. Just recently we met with Elon Musk and his top executives to go over page by page of a lease agreement," Guerra said. "We were led to believe that Downey was it ."

Tesla spokesman Ricardo Reyes said major news would be announced at the news conference.

HARRISBURG, Pa.

Civil Liberties Union works to shield anonymous Twitter users

An American Civil Liberties Union lawyer said Thursday his organization is helping two anonymous Twitter users fight an effort by prosecutors to unmask them after they tweeted criticism of the Pennsylvania attorney general, who is running for governor.

ACLU attorney Vic Walczak said he will ask a judge to throw out a subpoena seeking identities of the two Twitter users, "bfbarbie" and "CasablancaPA," if an agreement with Attorney General Tom Corbett's office can't be worked out.

Walczak said the subpoena by a statewide investigative grand jury is an unconstitutional retaliation that violates First Amendment free-speech protections.

"It's a prized American right to criticize government officials, and to do so anonymously," Walczak said.