TOP 10 STORIES / April 23-27

1. Economic Growth a Welcome Surprise: The U.S. economy grew at an unexpectedly strong 2% annual rate in the first three months of the year, thanks largely to buoyant shopping by American consumers. The gross domestic product--the country’s total output of goods and services--expanded at twice the pace it did in the final three months of 2000 and at twice what analysts had expected, the government said Friday. Although many analysts said the economy remains balanced between strong growth and recession, economic optimists exulted over the report. Fed Chairman Alan Greenspan added to the celebratory mood by saying that a key trend behind the economy’s strong performance of the last decade--its ability to improve productivity--is likely to resume despite the current slowdown.

(Peter Gosselin)

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2. Stocks Rise on Good News: The GDP report boosted stock prices, which already had gotten a lift from better-than-expected home sales figures earlier in the week. The Dow Jones industrial average rose 117.70 to close at 10,810.05 on Friday, up 2.2% for the week, while the S&P; 500 index climbed 18.53 to 1,253.05. The Nasdaq, which had fallen Thursday on concerns over weak technology profits, rose 40.80 to 2,075.68, finishing the week down 4.1%. Meanwhile, the yield on the benchmark 10-year Treasury note rose to 5.33% from 5.19%.

(Times Staff Writer)

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3. Power Crisis Zaps State Bond Rating; Price Controls OKd: The mounting cost to the state general fund of buying electricity for California consumers prompted Standard & Poor’s Corp. to downgrade $25 billion of California’s general obligation bonds. S&P; lowered California’s bond rating by two notches, to A-plus from AA. The move could add hundreds of millions of dollars to the state’s borrowing costs, bond experts said. Separately, federal regulators approved a plan to control electricity prices in California during times of supply shortages. The Federal Energy Regulatory Commission tied prices during power emergencies to the cost of natural gas and emission controls, among other things, with the least efficient generator setting the market price. Critics said the order contains loopholes that will allow market manipulation.

(Nancy Rivera Brooks)

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4. FTC Pans Music Industry Marketing: A much-anticipated sequel to last year’s Federal Trade Commission report on the marketing of violent entertainment to children slammed the record industry for failing to heed regulators’ recommendations. Though it gave some credit to the film and video-game industries for revising the way they marketed to young audiences, the FTC found the five major record conglomerates continued to advertise “explicit-content” albums on popular teen shows such as MTV’s “Total Request Live” and BET’s “Top 10 Live.” Just before the release of the first report, the Recording Industry Assn. of America had blunted some of the criticism by introducing a policy against ads for such albums on TV shows or in publications whose audience is mostly 16 years old or younger. But the RIAA said it rescinded the policy in September.

(Jeff Leeds)

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5. Gas Prices Continue Upward Spiral: The average price of self-serve regular gasoline spurted higher again in California and around the nation on an increase in demand and a switch by refiners to the more costly summer gasoline blend required in parts of the country by air-quality regulations. Prices in California got an extra boost from a fire at a Los Angeles-area refinery owned by Tosco Corp. and by a change in Tosco’s pricing strategy. In late March, Tosco increased wholesale prices to its dealers in Southern California and Arizona and tied prices to the cost of gasoline in the spot market. Some other major suppliers have begun matching the Tosco increase, market experts said. Some market watchers foresee gas at $3 a gallon or more.

(Nancy Rivera Brooks)

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6. General Dynamics Renews Newport News Bid: General Dynamics Corp. agreed to acquire Newport News Shipbuilding Inc. in a $2.1-billion deal that would create the nation’s largest military shipbuilder and leave only one maker of U.S. aircraft carriers and submarines. The proposed merger, which the Pentagon had rejected two years ago, marks the latest in a renewed wave of consolidations in the defense industry and would again make General Dynamics one of the largest private employers in San Diego. General Dynamics executives said they are confident of receiving the necessary approvals because this time they will be dealing with the Bush administration, which may view the takeover differently.

(Peter Pae)

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7. Disney Earnings Beat Estimates: Walt Disney Co.’s second-quarter operating results exceeded Wall Street’s expectations as the company’s studio and consumer products units improved, although Disney did post a net loss stemming largely from a one-time charge related to the restructuring of its Internet portal. Disney also confirmed that it will shrink its venerable animation unit, with a union official estimating as many as 300 jobs of about 1,000 in Burbank could be cut. Separately, President Robert Iger confirmed that layoffs will be needed to reach Disney’s previously announced goal of cutting 4,000 jobs companywide. Disney’s studio and consumer products groups showed improved results in the quarter, while earnings were flat in its theme parks and softer in broadcasting.

(James Bates)

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8. New FCC Chief Vows Deregulation: Repudiating decades-old media ownership rules, Federal Communications Commission Chairman Michael K. Powell said he envisions a broad rollback of restrictions, which could bring about a tidal wave of consolidation. In his most candid remarks about the role of the FCC since taking office, Powell said he would move in early May to eliminate regulations that prevent one company from owning a newspaper and a television station in the same city. Powell also told broadcasters meeting in Las Vegas that Viacom Inc. was likely to prevail in its challenge of federal rules that prevent any broadcaster from owning stations that reach more than 35% of the nation’s television viewers.

(Sallie Hofmeister)

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9. Ford Takes More Heat Over Explorer Tires: Ford Motor Co. came under the most direct criticism leveled against it yet regarding last year’s massive Firestone tire recall. Two prominent consumer safety groups issued a report saying that the auto maker was largely to blame for accidents in which Ford Explorer sport-utility vehicles, equipped with Firestone tires, spun out of control after the tires lost their treads. Though they blamed Bridgestone/Firestone for producing tires prone to failure, Public Citizen and Safetyforum.com said Ford bore the bulk of the responsibility for dictating an insufficiently robust tire design and designing the Explorer so it would overly stress the tires and tip over too easily once a tire blew.

(Terril Yue Jones)

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10. American Airlines Sued Over Health Coverage: A flight attendant filed a complaint with the Equal Employment Opportunity Commission in Los Angeles, charging that American Airlines discriminated against some employees by refusing to offer insurance coverage for birth control, Pap tests and infertility treatments. The case could test the position the EEOC took in December that the federal Pregnancy Discrimination Act forbids employers from excluding contraceptives from prescription drug plans.

(Lisa Girion)

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These and additional stories from last week are available at https://www.latimes.com/business, divided by category. Click on “Money and Investing,” “Entertainment Business” and other topics.

* Please see Monday’s Business section for a preview of the week’s events.