Mass. Gas prices up another 2 cents per gallon

BOSTON — The average cost of a gallon of gas in Massachusetts has crept up another 2 cents.

AAA Southern New England reports Monday that self-serve, regular is selling for an average of $3.48 per gallon.

The current price is 14 cents per gallon higher than a month ago, but still 24 cents lower than at the same time last year.

The Massachusetts price remains 2 cents higher than the national average.

AAA found self-serve, regular selling for as low as $3.34 a gallon to as high as $3.69.

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Olive Garden pins hopes on new logo, menu

ORLANDO, Fla. — Olive Garden has a plan to win back customers: a new logo and yet more menu changes.

In a call with analysts on Monday, executives at Darden Restaurants Inc. expressed confidence they could bring about a "brand renaissance" at the Italian chain with a new look and updated menu that presented food with "a sense of flair and sophistication." The changes include more small dishes and the option for people to mix and match pastas and sauces.

Darden executives also continued to make the case for why it made sense to hold onto Olive Garden and spin off or sell Red Lobster, rather than keeping the two struggling chains together and focusing on the company's more promising specialty restaurant unit, which includes Capital Grille and Yard House.

"We certainly recognize that industry dynamics have changed considerably over past two years," CEO Clarence Otis said during the call, acknowledging the need to make drastic changes.

The remarks came as Darden Restaurants Inc. reported preliminary quarterly results that fell short of Wall Street expectations as sales continue to slide at its two flagship chains. It said sales are expected to drop 5.4 percent at Olive Garden restaurants open at least a year. At Red Lobster, the figure is expected to fall 8.8 percent.

Customer traffic declines were even steeper, falling as much as 13 percent at Olive Garden in December and 19 percent at Red Lobster in January.

The Orlando, Fla.-based company said that exceptionally rough winter weather hurt results. But Darden has been battling shifting industry trends for years now, with people moving away from pricier casual dining chains where tips for waiters and waitresses push up the amount they spend on a meal. Darden has tried tweaking the menus and marketing for Olive Garden and Red Lobster to better suit today's eating habits, but the efforts have failed to take hold.

For the three months ended Feb. 23, Darden Restaurants Inc. said it expects to earn about 82 cents per share. Analysts expected a profit of $1.02 per share, according to FactSet. In addition to the bad weather, Darden said legal, advisory and other costs related to its plan to either spin off or sell Red Lobster hurt its profit.

Meanwhile, sales for the company's specialty restaurant group are expected to be down 0.7 percent at established locations. The metric is a key measure of a retailer's health because it excludes the volatility of newly opened and closed locations.

Excluding the impact of the weather and the shift in the timing of Thanksgiving, Darden said Red Lobster stores would have posted a decline of about 6.2 percent, while Olive Garden revenue at stores open at least a year would have fallen 2.8 percent and risen 2.9 percent at LongHorn Steakhouse locations. The specialty restaurant group would have posted a 1.9 percent increase.

The company backed its previous outlook for fiscal 2014, saying that it still expects earnings per share to decline 15 percent to 20 percent, excluding restructuring costs.

Shares of Darden were down more than 4 percent at $48.81.

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Budget carrier flydubai boasts $61 million profit

DUBAI, United Arab Emirates — Budget Mideast carrier flydubai says it recorded $60.7 million in profit last year out of total revenue of around $1 billion.

The airline said Monday that earnings were up 47 percent from 2012. Dubai International, where flydubai is based, handled 66.4 million passengers in 2013, making it one of the business airports in the world.

Flydubai says demand for travel within a five-hour flying radius of Dubai in the United Arab Emirates resulted in an increase of nearly 40 percent in passenger numbers to 6.82 million last year.

The airline is among the Gulf's fastest-growing airlines. It has committed to buying up to 111 Boeing 737 aircraft.

Flydubai operates an average of 1,100 flights a week and flies to 66 destinations.

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Peugeot 308 wins car of the year

GENEVA — The family car Peugeot 308 has been voted car of the year by European automotive editors.

French automaker Peugeot's compact beat six other finalists — including a pair of electric sports cars, the Tesla S and BMW i3 — and a premium Mercedes S class for the award announced Monday, the eve of the Geneva Auto Show.

The Peugeot 308 is more compact than its predecessor, with a larger trunk and redesigned cockpit that includes a smaller steering wheel with the instruments placed above it.

Ray Hutton, past president of the car of the year jury, says European motoring journalists tend to prefer family cars that appeal to their readers over pricier models.

Hutton said the 308 was "an extremely good Peugeot" with "a lot of nice detailing."

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Men's Wearhouse, Jos. Bank signal they're talking

NEW YORK — Men's Wearhouse and Jos. A. Bank Clothiers Inc. are moving a bit closer to a possible combination, announcing they are exchanging certain confidential information with each other.

Men's Wearhouse Inc. said Monday that it's also received a draft merger agreement from Jos. A. Bank.

The news comes four days after Jos. A. Bank, based in Hampstead, Md., rejected the latest acquisition bid of $1.78 billion from Men's Wearhouse. The offer of $63.50 per share was increased from Men's Wearhouse's previous bid of $57.50 per share. The Houston company has said it may raise the bid to $65 per share, if some conditions are met.

While Jos. A. Bank nixed the $63.50 per share offer, it did say Thursday that it was willing to meet with Men's Wearhouse to discuss the higher bid.

Men's Wearhouse's $63.50 per share offer is set to expire on March 12, unless extended.

Walter Loeb, a New York-based retail consultant, said that the latest maneuver is much more than gamesmanship between the two chains.

"I think they're getting closer to a deal," he said. "There's pressure from shareholders from both sides."

Loeb believes that a deal could be reached as early as this week.

The back-and-forth between Men's Wearhouse and Jos. A. Bank started in October, when Jos. A. Bank offered to buy its larger rival for $2.3 billion. Men's Wearhouse scoffed at that offer, and turned the tables, offering to buy its rival for $1.54 billion. But after Jos. A. Bank turned down that overture, Men's Wearhouse increased its bid to $1.6 billion, and then again to $1.78 billion.

The latest exchange between Jos. A. Bank and Men's Wearhouse comes nearly three weeks after Jos. A. Bank announced that it was planning to buy the parent company of Eddie Bauer in a cash-and-stock deal valued at $825 million. But at the time, Jos. A. Bank left the door open, saying it may end the Eddie Bauer deal if it receives an acquisition offer that is superior.

Shares of Jos. A. Bank rose 40 cents to $62.48 in late morning trading. Men's Wearhouse's stock rose 13 cents to $53.92.

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Twitter installing log cabins at headquarters

NOVATO, Calif. — Employees at Twitter's headquarters in San Francisco will soon get to take their lunch break in 19th century relics.

The Marin Independent Journal reports  the high-tech giant is installing a pair of low-tech log cabins from the late 1800s to serve as dining rooms.

The cabins were salvaged from ranches in Montana by a Marin County contractor and sold to the owner of an architectural firm helping to refurbish Twitter, Inc.'s headquarters.

They should be in place within a few weeks. The plan is to build booths inside them for company employees to sit in while they eat.

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Information from: Marin Independent Journal, http://www.marinij.com

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Energy costs boosted US consumer spending in Jan.

WASHINGTON — Americans spent more in January, but the increase came from a surge in spending on heating bills during the harsh winter. Spending in areas such as autos and clothing declined.

Spending rose 0.4 percent in January after a 0.1 percent gain in December the Commerce Department said Monday. The December figure was revised down from a 0.4 percent increase.

Income grew 0.3 percent in January after no increase in December.

The overall spending increase in January reflected a 0.8 percent jump in spending on services, the effect of higher heating bills. It was the biggest increase in spending on services since October 2001.

Spending on durable goods such as autos fell 0.3 percent. And spending on nondurable goods, covering things like clothing and food, dropped 0.7 percent.

"Spending looks great but is not," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Without an 11.3 percent surge in spending on utility bills, Shepherdson said consumer spending would have been close to flat.

Consumer spending is closely watched because it drives about 70 percent of economic activity. On Friday, the government said the economy grew at a 2.4 percent annual rate in the October-December quarter, down sharply from an initial estimate of a 3.2 percent rate.

Analysts said the drop in spending on goods in January as bad weather kept people from shopping might also have held down spending in February.

"Given that the weather was unusually severe in February too, the outlook is more uncertain than usual," said Paul Dales, senior U.S. economist at Capital Economics.

The 0.3 percent rise in income was partly influenced by temporary factors, such as the start of health care coverage in several areas under the Affordable Care Act. But the expiration of benefits for some long-term unemployed people acted to reduce income. Without those special factors, income would have risen 0.2 percent in January, the government said.

Inflation as measured by a price gauge tied to consumer spending remained moderate. It rose 0.1 percent in January and has risen 1.2 percent over the past 12 months, well below the Federal Reserve's 2 percent target.

Most of the revision in overall economic growth in the fourth quarter reflected a lower estimate for consumer spending, which grew at an annual rate of 2.6 percent during the quarter. That was down from an initial estimate of a 3.3 percent annual rate.

Part of the downward revision in spending reflected lower sales of autos and lower spending for non-durable goods than first thought. Analysts said the severe weather that hit much of the country was to blame for those reductions. Most think the harsh weather will also limit growth in the current January-March quarter.

Economists generally think overall growth this quarter will dip to an annual rate of around 2 percent. But they still foresee a rebound beginning in the April-June quarter and for the rest of the year. They expect that contained employment gains and a lessening of last year's drag of higher taxes and federal spending cuts will support growth this year.

Many forecast that the overall economy will grow at a solid 3 percent annual rate this year, up from 1.9 percent growth in the gross domestic product last year. That would be the best performance since the recession ended nearly five years ago.

But before growth rebounds, the economy must endure a soft patch caused by winter weather and decisions by companies to work down a buildup in their stockpiles before they step up spending again.

Once warmer weather arrives, many analysts expect a burst of spending caused by pent-up demand from consumers who put off spending for big-ticket items like autos during winter.

Federal Reserve Chair Janet Yellen testified to Congress last week that the Fed still expects the economy to strengthen this year. But she told the Senate Banking Committee that the Fed will be studying the data to make sure the slowdown is just a temporary weather phenomenon.

The Fed is gradually reducing its monthly bond purchases, which have been intended to keep long-term loan rates low to encourage spending and growth.

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Sanctions threat grows as Ukraine tensions rise

LONDON — Fears of a tit-for-tat campaign of economic sanctions between Russia and Western powers over Ukraine ratcheted up Monday, with concerns largely centering on Russia's supplies of natural gas to Europe.

But with the situation in Ukraine still fluid, it's not clear how far either side is willing to go. While the European Union is by far the biggest consumer of Russian gas, any disruption would come at huge financial cost to Moscow.

"The world now faces a new round of geopolitical tension with potentially very high stakes," said Jane Foley, an analyst at Rabobank International.

Over the past couple of days, the crisis has ratcheted up sharply. With Ukraine accusing Russia of declaring war by taking control of the Crimea region, investors around the world took fright on Monday, sending stock indexes lower and energy and staple foods higher.

Even if military conflict does not break out, Western powers are looking at how they can punish Russia for what they consider to be a breach of international law.

U.S. Secretary of State John Kerry warned Russian President Vladimir Putin that he may "find himself with asset freezes on Russian business." European foreign ministers meeting in Brussels were considering economic sanctions, but have yet to commit to anything concrete. Some have suggested boycotting the Group of Eight summit of leaders in the Olympic host city of Sochi this summer.

The biggest economic risk revolves around Russia's supply of natural gas. Many eastern European countries rely almost entirely on those imports and even Germany, Europe's largest economy, gets 35 percent of its supplies from Russia. Gazprom, the Russian energy giant, has threatened to end a cheap deal on gas it sells to Ukraine, and claimed it is owed around $1.55 billion.

"No wonder Europe's response to the on-going problems has been little more than a wag of the finger at this stage," said Kathleen Brooks, market analyst at Forex.com. "We will have to wait and see if the EU merely looks the other way when it comes to Russian-Ukrainian problems and leaves the diplomatic response to the U.S. and U.K. as they try and protect their energy supplies."

But cutting gas supplies or raising their prices would be a dangerous game for Russia as well, whose economy relies heavily on energy exports — shares in Gazpom, the Russian energy giant, plunged 14 percent on Monday.

Gazprom's retreat was a large reason why Moscow's RTS stock index slid 12 percent while the dollar spiked to an all-time high of 37 rubles. That prompted the country's central bank to make an emergency interest rate increase, by 1.5 percentage points to 7 percent. Though it didn't mention Ukraine as a motivation for the increase, the move is clearly an attempt by the Russian authorities to stem the financial outflows and support the currency.

European officials suggested Russia had more to lose in the case of an exchange of economic sanctions.

"Those consequences will be bad for everyone, but for Russia they will be far worse than for the EU," said Dutch Foreign Minister Frans Timmermans, adding it would not be wise to threaten sanctions now.

The EU is Russia's biggest trading partner, and Russia is the EU's third-largest partner with imports predominantly raw materials such as oil and gas, according to the EU Commission. Russian exports to the EU totaled 213 billion euros ($293 billion at current prices) in 2012, with imports from the EU at about 123 billion euros.

Russia is the largest oil, gas, uranium and coal exporter to the EU. Gazprom exported 133 billion cubic meters of gas to the European Union in 2013. Almost half of this amount — 65 billion cubic meters— was transported through pipelines on Ukrainian soil. Germany is Russia's single-biggest client, gobbling up some 40 billion cubic meters alone, according to Gazprom statistics.

Given Russia's dependence on European markets, there are hopes that cool heads will prevail.

"Moscow will likely keep such disruptions to a minimum under almost all circumstances," said Holger Schmieding, chief economist at Berenberg Bank.

Fears also grew that trade of basic agricultural products will be impacted by the crisis. Wheat futures, for example, were up over 5 percent, while corn futures spiked more than 2 percent.

Some experts suggest that instead of wide-ranging sanctions on industries, western powers might prefer more focused ones on individuals. Russians are huge investors outside their country. They store deposits in banks in Cyprus, control companies in the Netherlands and own property in many western capitals, notably in London. Penalties on those activities could be most effective.

"That would upset a lot of London estate agents," said Louise Cooper, an analyst at CooperCity.

One part of Europe that is likely to suffer anyway is Ukraine, which is hanging in limbo. The country's currency has in recent days hit a record low and the economy is estimated to be sliding into recession. The government estimates it needs $35 billion in international rescue loans over the next two years.

Ukraine's richest man, Rinat Akhmetov, has thrown his support behind the new government that wants Russia to end its control of Crimea.

"I call upon all my fellow citizens to unity for the sake of a whole and undivided Ukraine ... Our strength is in the solidarity of business, government and society," said Akhmetov. His company alone employs 300,000 people.

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Juergen Baetz in Brussels contributed to this report.

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4 women with new wombs are trying to get pregnant

LONDON — A Swedish doctor says four women who received transplanted wombs have had embryos transferred into them in an attempt to get pregnant.

He would not say on Monday whether any of the women had succeeded. In all, nine women in Sweden have received new wombs since 2012, but two had to have them removed because of complications.

The women received wombs donated by their mothers or other close relatives in an experimental procedure designed to test whether it's possible to transfer a uterus so a woman can give birth to her own biological child. The women had in vitro fertilization before the transplants, using their own eggs to make embryos.

"We have already begun transferring embryos into four of the women and plan to make attempts with the others when they are ready," said Dr. Mats Brannstrom, a professor of obstetrics and gynecology at the University of Goteburg, who is leading the research.

Brannstrom predicted that three or four of the seven women might successfully give birth.

"One or two more will perhaps get pregnant and miscarry, and one or two won't be able to get pregnant," he said.

There have been two previous attempts to transplant a womb — in Turkey and Saudi Arabia — but both failed to produce babies. Doctors in Britain and Hungary also are planning similar operations, but using wombs from women who had just died.

Brannstrom said any woman in the study who does get pregnant will be on a low dose of drugs to keep from rejecting the transplanted womb and will be monitored as a high-risk pregnancy.

The transplants are intended to benefit women unable to have children because they lost a uterus to cancer or were born without one.

Some doctors said women who got pregnant with a new uterus would have to be watched carefully for how the womb progresses throughout pregnancy.

"There are questions about how the physiological changes in the uterus will affect the mother and whether the transplanted uterus will be conducive to a growing baby," said Dr. Charles Kingsland, a spokesman for Britain's Royal College of Obstetricians and Gynaecologists and a gynecologist at Liverpool Women's Hospital.

In a study published last week, Brannstrom and colleagues described the procedures used to transplant the nine wombs and said there were "mild rejection episodes" in four patients.

He said the transplanted wombs would be removed after a maximum of two pregnancies.

Other experts called it a promising step but said it would be crucial that babies get enough nutrients from the mother's blood supply.

"We really don't know if the blood flow to the uterus will increase and adapt in the same way," as in a regular pregnancy, said Dr. Yacoub Khalaf, director of the Assisted Conception unit at Guy's and St. Thomas' hospital in London.

"It is a good sign they have done the (embryo) transfers," Khalaf said. "But a live birth will be the best validation that this works."

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US manufacturing boosted by orders and stockpiles

WASHINGTON — U.S. manufacturing expanded more quickly last month as companies received more orders and boosted their stockpiles.

A measure of production fell to its lowest level in nearly five years, likely a casualty of severe winter weather. But the rise in orders raises the possibility that factory output will rebound in coming months, economists said.

The Institute for Supply Management, a group of purchasing managers, said Monday that its manufacturing index rose to 53.2 in February from 51.3 in January. The increase only partly reversed a five-point drop in January from December.

Still, any reading above 50 signals growth. And economists were encouraged by the increase in both new and backlogged orders.

Growth in February was also broad-based: Fourteen of the 18 industries that are tracked by the survey reported growth. That was up from 11 industries in January. The industries reporting expansion included machinery, plastics, transportation equipment and paper products.

"We expect a substantial rebound ... when weather patterns eventually normalize," said Joseph LaVorgna, an economist at Deutsche Bank.

A gauge of employment was unchanged at 52.3, suggesting that factories added only a modest number of jobs last month.

Bradley Holcomb, chair of the ISM's survey committee, said many businesses blamed bad weather for a slowdown in their output.

"Other comments reflect optimism in terms of demand and growth in the near term," Holcomb said.

The production index fell to its lowest level since May 2009. And the slowdown in output caused manufacturers' stockpiles of raw materials and parts to surge by the most in 25 years.

The weather also disrupted the shipping of raw materials, leaving manufacturers with only some of the supplies they needed to produce goods, Holcomb said. That slowed production and left more parts sitting in warehouses, thereby swelling inventories.

The report coincided with data showing that China's manufacturing weakened in February and that employers cut staff at the fastest rate in nearly five years. It was further evidence that growth in the world's second-largest economy is cooling.

"Weak China ... is now a real problem," Ian Shepherdson, an economist at Pantheon Macroeconomics, said in a note to clients.

Overall, the outlook for U.S. factories is mixed. Last year, they were cranking out appliances, autos and other goods at a healthy pace until harsh winter weather disrupted production.

The ISM's index rose for six straight months until dipping slightly in December. That was followed by January's sharp fall as heavy snow caused factories to close.

Auto and home sales slumped in January as fewer Americans ventured outdoors to take a test drive or check out homes for sale. Car sales slipped 3 percent, while sales of existing homes plunged to their lowest level in 18 months.

In response, factories cut back on the production of autos, furniture and appliances. Factory output dropped sharply in January, according to the Federal Reserve.

And businesses remain cautious about ordering more machinery, metal parts and computers. Orders for durable goods fell for the second straight month in January, the government said last week. Durable goods are those meant to last at least three years.

Core capital goods, which exclude defense goods and aircraft, rose, a sign that businesses stepped up investment. But the increase came after a slightly larger decline in December.

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Contact Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber .

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