IN BRIEF

SAN FRANCISCO

Palm agrees to $1 billion buyout by Hewlett-Packard

Palm Inc., a pioneer in the smartphone business that couldn't quite make the comeback it needed, has agreed to be bought out by Hewlett-Packard Co. for about $1 billion in cash.

The two Silicon Valley companies announced Wednesday that the deal will see HP pay $5.70 for every Palm common share. Palm had closed trading Wednesday at $4.63 but traded as high as $18.09 in the past 52 weeks.

Palm was founded in 1992 by Donna Dubinsky and Jeff Hawkins and helped originate the handheld computing market with its Palm Pilot "personal digital assistants" in the 1990s. But after Palm reshuffled itself repeatedly -- it was bought by U.S. Robotics, a modem maker that itself was bought by 3Com Corp. in 1997, and then spun off again as its own company in 2000 -- other companies took control of the market.

HP hopes Palm's webOS operating system, which runs the Pre and the Pixi, will help it participate more aggressively in the fast-growing market for Internet-connected mobile devices.

HP, known for its printers and PCs, also has a line of phones called the iPAQ, but it had one-tenth of 1 percent of the worldwide cell phone market last year, according to research firm IDC.

WASHINGTON

Interest rates will stay low
until economy heals, Fed says

The Federal Reserve sounded a more confident note Wednesday that the economy is strengthening but pledged to hold rates at record lows to make sure it gains traction.

Wrapping up a two-day meeting, the Fed in a 9-1 decision retained its pledge to hold rates at historic lows for an "extended period." Doing so will help energize the recovery.

The Fed offered a more upbeat view of the economy even as it noted that risks remain. It said the job market is "beginning to improve," an upgrade from its last meeting in mid-March. It observed then that the unemployment situation was merely "stabilizing."

The Fed also noted that consumer spending has "picked up," an improvement from its last observation that spending was expanding at a "moderate pace."

NEW YORK

European debt crisis pushes dollar higher against euro

The dollar surged to a one-year high against the euro Wednesday as the debt crisis in Europe intensified, but gave back some of its gains after the Federal Reserve offered a more upbeat view of the economy and pledged to keep rates at record lows.

In late New York trading, the euro sank as low as $1.3116, its weakest point since April 2009, before edging back up to $1.3187. On Tuesday, it was worth $1.3184.

On Wednesday, credit ratings agency Standard & Poor's downgraded Spain's debt a day after cutting the ratings of Greece and Portugal.

Budget deficits in several European countries and fears of prospective debt defaults have dragged down the euro from a level above $1.51 in early November.