Cheaper Gas Predicted for Summer

Morning Business Memo….

Gas prices usually head higher during the spring and summer but not this year. The American Automobile Association's new forecast says drivers are likely to pay less this summer, with prices dropping to below $3.40 a gallon in most states by July, down from today's average of $3.55. As long as there aren't what AAA calls "refinery problems or significant international news events," the trend of lower prices is likely to continue. Ample refinery production and weak demand are reasons for the expected price drop. April gas prices are at their lowest since 2010. West Texas crude is close to $93 a barrel on oil futures markets. The decline in gas costs could lead to a busier summer driving season.

Apple is selling $17 billion in bonds - the biggest corporate bond sale in history. It's part of Apple's effort to raise money it plans to give to shareholders through dividend payments and stock buybacks. Apple is sitting on $145 billion in cash, more than enough for the $100 billion cash return program it announced last week. But most of its money sits in overseas accounts, and the company doesn't plan to bring it to the US unless the federal corporate tax rate is lowered. Raising the money through a corporate bond sale gives Apple a tax benefit, since interest payments on corporate debt are tax-deductible. Market participants say the $17 billion is spread across six types of bonds, including a three-year note and a 30-year bond.

Six years after the iPhone went on sale, Apple is declaring the original device virtually obsolete. From next month most owners of first-generation devices will no longer be able to get them repaired or serviced. The original iPhone will be labeled "vintage" by Apple, according to the blog site 9to5 Mac. Introduced in June, 2007, the first iPhones led to a revolution in mobile computing.

The housing recovery is accelerating right across the country. Average prices are rising at their fastest rate since 2006. According to S&P/ Case-Shiller and other surveys some of the local markets with the biggest bounce are cities where prices plunged 50 percent or more during the slump. One reason for the rise in house prices is more expensive rents, says Craig Lazarra of Standard & Poor's. "Rents in many cities are quite high so as the cost of renting goes up that people gives people an incentive to think about buying houses." If you have a good credit score home loan rates are very low and that can make buying cheaper than renting. "The cost of financing is at lows for my lifetime," says Lazarra.

One week after hackers broke into The Associated Press' Twitter feed and shook financial markets, federal regulators say they need to find ways to deal with the impact of social media. No action has been taken yet by the Commodity Futures Trading Commission. Commissioner Bart Chilton suggested that regulators should consider imposing tougher cybersecurity rules for investment firms and others that trade.

Richard Davies Business Correspondent ABC News Radio Twitter: daviesabc

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