Nation roundup for July 8

New phone rules for US-bound air travelers

WASHINGTON (AP) — Passengers at some overseas airports that offer U.S.-bound flights will soon be required to power on their electronic devices in order to board their flights — a measure intended to enhance aviation security at a time when intelligence officials are concerned about hidden explosives, a counterterrorism official said.

American intelligence officials have been concerned about new al-Qaida efforts to produce a bomb that would go undetected through airport security. There is no indication that such a bomb has been created or that there’s a specific threat to the U.S., but intelligence has suggested that al-Qaida and like-minded groups are focused on perfecting an explosive that could be hidden in shoes, electronics or cosmetics, said the official who spoke on condition of anonymity because the official was not authorized to publicly discuss the matter.

The Transportation Security Administration says it is adding the requirement that passengers coming to the U.S. from some airports must turn on devices such as cellphones before boarding. It says devices that won’t power up won’t be allowed on planes and those travelers may have to undergo additional screening. Turning on an electronic device can show a screener that the laptop or cellphone, for instance, is a working device and that the batteries are used for operating that device and that the device is not hiding explosives.

The enhanced security measures come as U.S. intelligence officials are concerned about Americans and others from the West who have traveled to Syria to join the fight against the Syrian government. The fear is that a fighter with a U.S. or other Western passport, who therefore may be subject to less stringent security screening, could carry such a bomb onto an American plane.

TSA will not disclose which airports will be conducting the additional screening. Industry data show that more than 250 foreign airports offer nonstop service to the U.S.

Virgin Galactic partners with New Mexico hotel

ALBUQUERQUE, N.M. (AP) — Virgin Galactic appears to be getting closer to reaching its long-delayed goal of launching tourists into space.

The company said Monday it has selected Hotel Encanto de Las Cruces as the preferred hotel for its elite roster of passengers, who will pay $200,000 a person to make the flights from Spaceport America.

Virgin Galactic also announced a contract with World Class Gourmet of Las Cruces to provide catering for travelers during their training at Spaceport and said it is relocating more of its staff to New Mexico and will be hiring locally in the next few months.

The company is the anchor tenant in the $209 million futuristic Spaceport America that the state built for Virgin Galactic founder Richard Branson to launch his flights from. But the project and Virgin have been plagued by delays.

Originally, Branson had said he hoped to launch the flights by the end of 2010. The company is now hoping to begin operations by the end of this year, although its public relations agency said in a statement that the schedule “will ultimately be dictated by safety and readiness — as has always been the case.”

The partnership with the hotel, however, addresses concerns about where celebrities and others who can afford the pricey flights will stay while they go through pre-space flight training.

Early on in spaceport’s development, there was talk of building an ultra-luxury hotel in the area. And about four years ago, when Branson announced he was creating a Virgin hotel brand, he told a hotel conference one of the first ones might be built near spaceport. But that never came to fruition.

Spaceport America is about 60 miles from Las Cruces, near the town of Truth or Consequences, and about 182 miles from Albuquerque. But even the state’s largest city lacks a five-star hotel.

As part of its partnership with Spaceport, Hotel de Encanto will spend several million dollars on upgrades, which will include the creation of “Executive Suite VIP Wings” with concierge service, private VIP areas, customized room service menus, and upgraded rooms and suites.

The hotel is also working on other upgrades that should boost its AAA rating from three to four diamonds. New Mexico has no Five Diamond hotels, the top ranking.

“By partnering with Hotel Encanto de Las Cruces and World Class Gourmet, we further our vision of investing in the local New Mexico community while we define the Virgin Galactic astronaut experience,” said Virgin Galactic CEO George Whitesides. “Future astronauts will come from around the world to New Mexico, so it’s important that they experience the outstanding local offerings and character as part of their experience.”

Stocks slip, pulling Dow back near 17,000

NEW YORK (AP) — After pushing stocks to records last week, investors turned cautious on Monday ahead of a batch of corporate earnings reports.

The Dow Jones industrial average ended almost 50 points lower after closing above 17,000 for the first time last week. Investors moved money into stocks traditionally thought of as safer than the broader market: utilities, telecommunication companies and consumer staples such as soft drinks and detergent.

Stocks that depend the most on a growing economy were among the biggest decliners, including small companies, consumer discretionary names, materials and industrial stocks.

“All eyes have turned to earnings,” said Joe Tanious, global market strategist with J.P. Morgan Funds.

There’s a lot riding on this quarter’s earnings season. Investors largely believe the weather had an unusually large impact on the U.S. economy in the first three months of year, and that economic activity rebounded in the second three months of this year. Many companies blamed the weather for their disappointing first quarter results.

Secondly, stocks are trading at all-time highs and investors will need Corporate America to deliver on profits in order to justify these record-high prices.

“As we’ve emphasized in recent weeks, stocks are not cheap, but we believe they can climb modestly higher in the second half (of the year) amid continued economic improvement,” said Russ Koesterich, global chief investment strategist at BlackRock, in a note to investors.

The Dow Jones industrial average lost 44.05 points, or 0.3 percent, to 17,024.21. The Standard &Poor’s 500 index lost 7.79 points, or 0.4 percent, to 1,977.65 and the Nasdaq composite fell 34.40 points, or 0.8 percent, to 4,451.53.

The Dow reached a record and a new 1,000-point milestone last Thursday by closing above 17,000 for the first time. That followed a strong U.S. jobs report. U.S. markets were closed Friday for the Independence Day holiday.

The Russell 2000 index, which is made up primarily of small-company stocks, fell more than the rest of the market. The index lost 1.7 percent, versus the 0.4 percent decline in the S&P 500, which is made up of large companies.

Another sign that investors were hesitant to place big bets ahead of corporate earnings reports could be seen in Monday’s low trading volume. Roughly 2.6 billion shares traded hands on the New York Stock Exchange, well below the 3.2 billion shares that moves on an average trading day.

Aluminum mining giant Alcoa reports its latest results on Tuesday and Wells Fargo, the No. 1 U.S. mortgage lender, reports on Friday. Investors are expecting second quarter profits to be up 4.9 percent from a year ago, according to FactSet.

“I think we’re going to exceed expectations,” Tanious said. “Companies were able to post 6 percent earnings growth in the first quarter, even with the U.S. economy contracting. Now that we’ve seen a rebound in economic activity, I think we’re looking at a pretty good earnings season.”

Major airlines stocks fell after the Transportation Security Administration announced new security measures that would impact international flights into the United States. The TSA said that all electronic devices would need to have power in order to travel, including tablet computers and cell phones, which could impact the number of passengers able to travel.

United Continental fell $1.26, or 3 percent, to $38.62, Delta fell $1.70, or 4.5 percent, to $36.90 and American Airlines fell $1.52, or 4 percent, to $40.10. Domestic U.S. airlines fell as well, but the declines were tamer. JetBlue fell 27 cents, or 2.5 percent, to $10.62 and Southwest fell 54 cents, or 2 percent, to $27.17.

Investors also tried to reduce their exposure to risk by buying U.S. government bonds. The yield on the U.S. 10-year note fell to 2.62 percent from 2.64 percent late Thursday.

In other company news:

— Archer Daniels Midland rose 73 cents, or 2 percent, to $46.50 after the company announced it was buying Swiss food flavorings company Wild Flavors for $3 billion in cash. Wild Flavors makes flavors and oils that are used in processed foods.

— BioDelivery Sciences International was up 9 percent after the drug developer said its treatment for severe pain fared better than a placebo in another late-stage study. The company said the trial triggered another $10 million payment from Endo International Plc, which has a licensing agreement with BioDelivery. BioDelivery’s stock rose $1.07 to $13.06.