Business briefs

Chief executives' confidence in the nation's economy, which surged to a reading of 73 during the first quarter of the year, dipped to a current level of 70 during the second quarter, New York City-based The Conference Board reported. A reading of more than 50 points reflects more positive than negative responses.

"Despite the dip in overall confidence, CEOs are very upbeat about the outlook for the next six months," said Lynn Franco, director of The Conference Board's Consumer Research Center. "Profit expectations are much improved from a year ago, and the majority of business leaders cite an increase in market demand as the main impetus."

The business think tank said CEOs' overall assessment of current business conditions remained positive in the second quarter, with the measure of current economic conditions holding steady at a reading of 78. More than 90 percent of CEOs claim current economic conditions have improved, the same as last quarter. Asked to assess their own industries, confidence levels edged up to 72 from 71. More than 70 percent say conditions are better now than six months ago.

Looking ahead to the next six months, CEO's expectations were more subdued than during the last quarter, but still positive. Their outlook for the economy dipped to a reading of 68 from 72 during the prior quarter. Their expectations for their own industries also recorded a decline, slipping to a level of 65 from 70 during the first quarter.

About 88 percent of the CEOs canvassed expect profits to rise, up from a year-ago reading of 65 percent. But there were differences among and within industries. About 84 percent of executives in the service industry expect profit increases. But among manufacturers, those in the durable goods sector were substantially more optimistic than producers of non-durable goods (products expected to last fewer than three years). A full 100 percent of durable goods producers expect profits to rise, compared with 85 percent of non-durable goods producers.

Among those CEOs who expect profits to advance, 60 percent cite increases in market demand as the driver, while about 25 percent cited cost cutting. The remaining 8 percent said they expect price increases will account for rising profits.

Federated Department Stores, the Cincinnati-based parent of Bloomingdale's and Macy's, said it has launched an offer to repurchase all of its $350 million in 8.5 percent senior notes maturing in 2010.

Federated said once the deal is put to bed, it expects "to achieve reduced interest expense and higher earnings per share in 2004," excluding any one-time costs tied to the repurchase. The company said it will pay for the buyback from existing cash balances.

Credit Suisse First Boston and Bank of America Securities are managing the offer.

At the same time, the department store chain said its directors have authorized an additional common stock buyback of $750 million. The latest move brings to a total of $1.29 billion the amount authorized for share repurchase.

The retailer said it plans to repurchase about $700 to $900 million worth of its common stock during 2004. As of July 16, the company said it had repurchased about 5.7 million shares this year, paying about $280 million in cash.

"Federated has significant excess cash, and we intend to use it to deliver value to our shareholders," said Federated CEO Terry Lundgren, emphasizing, "It is important to recognize that these actions do not limit Federated's ability to pursue strategic investments."