U.S. Economy Barely Grew in Fourth Quarter, Revision Shows

Breathe a tiny sigh of relief, if not exactly contentment: the American economy grew just barely in the last quarter of 2012.

Output expanded at an annual rate of just 0.1 percent, which is basically indistinguishable from having no growth at all and is far below the growth needed to get unemployment back to normal. But at least the economy did not shrink, as the Commerce Department had originally estimated last month, when the first report suggested that output contracted by an annual rate of 0.1 percent.

The department’s latest estimate for economic output, released Thursday, showed that growth was depressed by declines in military spending (possibly in anticipation of the across-the-board spending cuts set to begin Friday) and the amount that companies restored their stockroom shelves.

“The good news with business inventories is that what they take away in one quarter they tend to add to the next,” said Paul Ashworth, senior United States economist at Capital Economics, referring to the measure of this restocking process. “So there’s a good chance that first-quarter numbers will be better than originally thought.”

The output growth number was revised upward from the original estimate partly thanks to updated, and improved, data on business investment and net trade. Imports were lower than previously reported and exports were higher.

Economists expect that government spending will continue to drag on the economy this year, especially if Congress does not avert the spending cuts, which would shave around 0.6 percentage point off growth. Many are hoping that even if the cuts go through, Congress will reverse them in short order.

“They can always change their minds when they have to renew the continuing budget resolution at the end of this month or in April or May,” said Mr. Ashworth. “My expectation is that at most the cuts stay a month or two, and in most departments, with a wink or a nod, they won’t do anything crazy.”

Even if government does lop off $85 billion in the so-called sequester, as current law states, the private sector will offset most of this drag, thanks to the housing recovery and other sources of strength. Forecasts for the first quarter are for annual growth around 2.4 percent to 3 percent.

Monetary stimulus from the Federal Reserve, while under fire from some Republicans, is also helping offset the fiscal contraction.

“With monetary policy working with a lag and still being eased, the boost to the economy is probably still growing,” said Jim O’Sullivan, chief United States economist at High Frequency Economics.

The combination of monetary expansion and fiscal tightening has helped lead to a painfully slow drawdown in the unemployment rate. The jobless rate stood at 7.9 percent in January. The recent end of the payroll tax holiday is also expected to hold back consumer spending, and so job growth as well.

“I think it’s largely steady as she goes for employment,” said Jay Feldman, an economist at Credit Suisse, of the indications from the latest growth report. “I still think we’re in kind of a 175,000-jobs-a-month clip for a while, but with some downside risks later in the year from the sequester.”

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Donald Trump returns to the 'Apprentice' boardroom

NEW YORK (AP) — There is something Donald Trump says he doesn't know.

Trump has welcomed a reporter to his 26th-floor corner office in Trump Tower to talk about "All-Star Celebrity Apprentice." And here in person, this one-of-a-kind TV star, billionaire businessman, ubiquitous brand mogul and media maestro strikes a softer pose than he has typically practiced in his decades on public display.

Relaxed behind a broad desk whose mirror sheen is mostly hidden by stacks of paper that suggest work is actually done there, Trump is pleasant, even chummy, with a my-time-is-your-time easiness greeting his guest.

He even contradicts his status as a legendary know-it-all with this surprising admission: There's a corner of the universe he doesn't understand.

The ratings woes of NBC, which airs his show, are on Trump's mind at the moment, and as he hastens to voice confidence in the network's powers-that-be ("They will absolutely get it right"), he marvels at the mysteries of the entertainment world.

"If I buy a great piece of real estate and do the right building, I'm really gonna have a success," he says. "It may be MORE successful or LESS successful, but you can sort of predict how it's gonna do. But show business is like trial and error! It's amazing!"

He loves to recall the iffy prospects for "The Apprentice" when it debuted in January 2004. With show biz, he declares, "You NEVER know what's gonna happen."

Except, of course, when you do.

"I do have an instinct," he confides. "Oftentimes, I'll see shows go on and I'll say, 'That show will never make it,' and I'm always right. And I understand talent. Does anybody ask me? No. But if they did, I would be doing them a big service. I know what people want."

So maybe he does know it all. In any case, lots of people wanted "The Apprentice." In its first season, it averaged nearly 21 million viewers each week.

And it gave Trump a signature TV platform that clinched his image as corporate royalty. He presided in a mood-lit stagecraft boardroom where celebrity subjects addressed him as "Mr. Trump" and shrank at that dismissive flick of his wrist and dreaded catchphrase, "You're fired."

The two-hour premiere of "All-Star Celebrity Apprentice" (Sunday at 9 p.m. EST) starts by rallying its 14 veteran contenders in the even more evocative setting of the 2,000-year-old Egyptian Temple of Dendur at the Metropolitan Museum of Art.

There, grandly, Trump receives such returning players as Gary Busey, Stephen Baldwin, LaToya Jackson and reality mean queen Omarosa.

Soon, teammates are chosen by team leaders Bret Michaels and Trace Adkins. Their first assignment: concoct a winning recipe for meatballs, then sell more of them than the rival team.

This is the 13th edition of the "Apprentice" franchise, which has now slipped to less than one-third its original viewership, according to Nielsen Co. figures. But even an audience matching last season's 6.26 million viewers would be pleasant news for NBC, which has recently fallen to fifth place in prime time, behind even Spanish-language Univision.

"I could probably do another show when I don't enjoy 'The Apprentice' anymore," says the 66-year-old Trump, mulling his TV future. "I have been asked by virtually every network on television to do a show for them. But there's something to sticking with what you have: This is a good formula. It works."

Years before "The Apprentice," Trump had hit on a winning formula for himself: Supercharge his business success with relentless self-promotion, putting a human face — his! — on the capitalist system, and embedding his persona in a feedback loop of performance and fame.

Since then, he has ruled as America's larger-than-life tycoon and its patron saint of material success. Which raises the question: Does he play a souped-up version of himself for his audience as Donald Trump, a character bigger and broader than its real-life inspiration?

He laughs, flashing something like a you-got-me smile.

"Perhaps," he replies. "Not consciously. But perhaps I do. Perhaps I do."

It began as early as 1987, when his first book, "Trump: The Art of the Deal," became a huge best-seller.

And even without a regular showcase, he was no stranger to TV. For instance, in the span of just 10 days in May 1997, Trump not only was seen on his "Miss Universe Pageant" telecast on CBS, but also made sitcom cameo appearances as himself on NBC's "Suddenly Susan" and ABC's "Drew Carey Show."

Meanwhile, as a frequent talk-show guest then (as now), he publicized his projects and pushed his brand.

"I'll be on that show for 20 or 30 or 60 minutes, and it costs me nothing," he notes. "When you have an opportunity for promotion, take it! It's free."

No one has ever accused Trump of hiding his light under a bushel. But his promotional drive (or naked craving for attention) has taken him to extremes that conventional wisdom warns against: saying and doing things that might hurt your bottom line.

Item: Trump's noisy, even race-baiting challenge to President Barack Obama to prove his American citizenship. This crusade has earned Trump the title from one editorialist as "birther blowhard."

For an industrialist and entertainer, where's the profit in voicing political views that could tick off a segment of your market or your audience?

"It's a great question, and a hard question to answer, because you happen to be right," Trump begins. "The fact is, some people love me, and some people the-opposite-of-love me, because of what I do and because of what I say. But I'm a very truthful person. By speaking out, it's probably not a good thing for me personally, but I feel I have an obligation to do it."

But isn't he being divisive with some of his pronouncements?

"I think 'divisive' would be a fair word in some cases, not in all cases," he replies. "But I think 'truthful' is another word."

The publicity he got from his political activism reached a fever pitch during his months-long, media-blitzed flirtation with running for president that seemed conveniently to dovetail with the Spring 2011 season of his TV show.

That May, he announced he would not run. For some, it was the final scene of nothing more than political theatrics.

"They weren't," Trump says quietly. "I was very seriously considering running. It was a race that the Republicans should have won. I made a mistake in not running, because I think I would have won."

He says he has no designs on this year's race for mayor of New York. But his politicizing continues apace. In his Twitter feed, with 2 million followers, he continues to bash China and rant about Washington. He phones in to Fox News Channel's "Fox & Friends" each Monday morning to vent his spleen.

"I believe in speaking my mind," he says, "and I don't mind controversy, as you probably noticed. I think sometimes controversy is a good thing, not a bad thing."

Last summer saw the opening in Aberdeen, Scotland, of Trump International Golf Links after a bitter, yearslong fight waged by environmentalists and local residents against government leaders and, of course, Trump.

A man for whom it seems no publicity is bad publicity, Trump insists the controversy helped the project.

"If there wasn't controversy surrounding it, I don't think anybody would even know it exists," he says, laying out the alternative: "I could take an ad: 'Golf course opening.'"

Trump even seems to profit from the harsh attention focused on his hair.

"I get killed on my hair!" he says, with no trace of remorse. But he wants everyone to know, "It's not a wig!" Nor is it an elaborately engineered coif to hide a hairline in retreat, as many Trump-watchers imagine.

To prove it, Trump does a remarkable thing: He lifts the flaxen locks that flop above his forehead to reveal, plain as day, a normal hairline.

"I wash my hair, I comb it, I set it and I spray it," he says. "That's it. I could comb it back and I'd look OK. But I've combed it this way for my whole life. It's become almost a trademark. And I think NBC would be very unhappy if I combed it back, 'cause — you know what? — maybe I wouldn't get as high a rating."

___

Online:

www.nbc.com

___

Frazier Moore is a national television columnist for The Associated Press. He can be reached at fmoore(at)ap.org and at http://www.twitter.com/tvfrazier

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The New Old Age Blog: For the Elderly, Lists of Tests to Avoid

The Choosing Wisely campaign, an initiative by the American Board of Internal Medicine Foundation in partnership with Consumer Reports, kicked off last spring. It is an attempt to alert both doctors and patients to problematic and commonly overused medical tests, procedures and treatments.

It took an elegantly simple approach: By working through professional organizations representing medical specialties, Choosing Wisely asked doctors to identify “Five Things Physicians and Patients Should Question.”

The idea was that doctors and their patients could agree on tests and treatments that are supported by evidence, that don’t duplicate what others do, that are “truly necessary” and “free from harm” — and avoid the rest.

Among the 18 new lists released last week are recommendations from geriatricians and palliative care specialists, which may be of particular interest to New Old Age readers. I’ve previously written about a number of these warnings, but it’s helpful to have them in single, strongly worded documents.

The winners — or perhaps, losers?

Both the American Geriatrics Society and the American Academy of Hospice and Palliative Medicine agreed on one major “don’t.” Topping both lists was an admonition against feeding tubes for people with advanced dementia.

“This is not news; the data’s been out for at least 15 years,” said Sei Lee, a geriatrician at the University of California, San Francisco, and a member of the working group that narrowed more than 100 recommendations down to five. Feeding tubes don’t prevent aspiration pneumonia or prolong dementia patients’ lives, the research shows, but they do exacerbate bedsores and cause such distress that people often try to pull them out and wind up in restraints. The doctors recommended hand-feeding dementia patients instead.

The geriatricians’ list goes on to warn against the routine prescribing of antipsychotic medications for dementia patients who become aggressive or disruptive. Though drugs like Haldol, Risperdal and Zyprexa remain widely used, “all of these have been shown to increase the risk of stroke and cardiovascular death,” Dr. Lee said. They should be last resorts, after behavioral interventions.

The other questionable tests and treatments:

No. 3: Prescribing medications to achieve “tight glycemic control” (defined as below 7.5 on the A1c test) in elderly diabetics, who need to control their blood sugar, but not as strictly as younger patients.

No. 4: Turning to sleeping pills as the first choice for older people who suffer from agitation, delirium or insomnia. Xanax, Ativan, Valium, Ambien, Lunesta — “they don’t magically disappear from your body when you wake up in the morning,” Dr. Lee said. They continue to slow reaction times, resulting in falls and auto accidents. Other sleep therapies are preferable.

No. 5: Prescribing antibiotics when tests indicate a urinary tract infection, but the patient has no discomfort or other symptoms. Many older people have bacteria in their bladders but don’t suffer ill effects; repeated use of antibiotics just causes drug resistance, leaving them vulnerable to more dangerous infections. “Treat the patient, not the lab test,” Dr. Lee said.

The palliative care doctors’ Five Things list cautions against delaying palliative care, which can relieve pain and control symptoms even as patients pursue treatments for their diseases.

It also urges discussion about deactivating implantable cardioverter-defibrillators, or ICDs, in patients with irreversible diseases. “Being shocked is like being kicked in the chest by a mule,” said Eric Widera, a palliative care specialist at the San Francisco V.A. Medical Center who served on the American Academy of Hospice and Palliative Medicine working group. “As someone gets close to the end of life, these ICDs can’t prolong life and they cause a lot of pain.”

Turning the devices off — an option many patients don’t realize they have — requires simple computer reprogramming or a magnet, not the surgery that installed them in the first place.

The palliative care doctors also pointed out that patients suffering pain as cancer spreads to their bones get as much relief, the evidence shows, from a single dose of radiation than from 10 daily doses that require travel to hospitals or treatment centers.

Finally, their list warned that topical gels widely used by hospice staffs to control nausea do not work because they aren’t absorbed through the skin. “We have lots of other ways to give anti-nausea drugs,” Dr. Widera said.

You can read all the Five Things lists (more are coming later this year), and the Consumer Reports publications that do a good job of translating them, on the Choosing Wisely Web site.

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Paula Span is the author of “When the Time Comes: Families With Aging Parents Share Their Struggles and Solutions.”

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DealBook: As Losses Mount, R.B.S. Unveils Plan to Sell Assets

LONDON – The Royal Bank of Scotland, hammered by losses, announced plans on Thursday to sell assets and pare back its investment banking business, in an effort to appease regulators and its biggest shareholder, the British government.

R.B.S. said it planned to sell a stake in the Citizens Financial Group, the American lender it bought in 1988, through an initial public offering in two years. The bank will also continue to reduce its investment banking operations, with plans to cut risky assets and eliminate jobs.

The moves are designed to help bolster the bank’s capital levels and refocus its operations, part of a multiyear turnaround effort initiated by its chief executive, Stephen Hester. In the end, R.B.S. will emerge a much smaller bank, largely focused on Britain.

“R.B.S. is four years into its recovery plan,” Mr. Hester said in a statement, “and good progress has been made. We are a much smaller, more focused and stronger bank. Our target is for 2013 to be the last big year of restructuring.”

Like many rivals, R.B.S. is struggling with the legacy of the financial crisis and a spate of legal issues. On Thursday, it reported a bigger-than-expected loss, in part tied to its legal troubles.

The bank, in which the British government holds an 82 percent stake after a bailout in 2008, posted a net loss of £5.97 billion ($9 billion) in 2012, much larger than the £2 billion loss recorded in 2011. Analysts had been expecting a loss of £5.1 billion. For the last quarter of 2012, R.B.S. reported a £2.6 billion loss, up from a £1.8 billion loss in the period a year earlier.

The rising losses reflect the bank’s regulatory and legal problems.

R.B.S. said on Thursday that it had set aside an additional £1.1 billion to compensate clients to which it improperly sold insurance products, bringing the total provision to £2.2 billion. It also estimated it would have to pay £700 million to compensate small businesses to which it improperly sold some interest-rate hedging products.

The bank agreed this year to pay $612 million to British and American authorities to settle accusations of rate-rigging. Since then, Mr. Hester has promised to tighten controls at the bank to limit the risk of future rate manipulation.

The head of R.B.S.’s investment banking division, John Hourican, resigned at the beginning of February as a result of the scandal related to manipulating the London interbank offered rate, or Libor. The bank plans to pay its fine with money clawed back from bonuses.

‘‘Along with the rest of the banking industry we faced significant reputational challenges,’’ Mr. Hester said in the statement. ‘‘We are determined to overcome the cultural and reputational baggage of precrisis times with the same focus we have applied to the financial cleanup from that era.’’

Eager to get back some of the £45.5 billion it invested in R.B.S., the British government recently increased pressure on the bank’s management to speed up the reorganization.

Some analysts said the government could start selling parts of its investment in the bank, even at a loss, before the next general election, which is set for 2015. R.B.S.’s shares are still trading at about half what the government paid for them in 2008. Some lawmakers said they would favor handing out shares to the public instead of a possible sale of the stake on the open market.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said there were signs that Mr. Hester’s efforts to turn around the bank had started to pay off, but that “the ongoing absence of a dividend and overhang of the government stake are negatives which need to be resolved.”

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Clearing a Path for Renewal of Violence Against Women Act

WASHINGTON — Bowing to pressure from within their own party, House Republican leaders last night appeared to clear a path for House passage of the Senate’s broadly bipartisan reauthorization of the Violence Against Women Act.

The House Rules Committee, an arm of leadership, approved a bifurcated process to consider the legislation, which would broaden the landmark 1994 law. The House will vote on a Republican version on Thursday that contains provisions that weaken a Senate version that empowers Native American courts to prosecute non-Indians accused of violence on tribal land. The House version also does not explicitly extend programs to prevent domestic violence and treat its victims to members of same-sex relationships.

If that version fails to win passage, the House will take up the Senate-passed version — at this point the likely outcome. That would ensure a swift White House signing ceremony.

The Senate passed that version earlier this month, 78 to 22, with 23 Republicans voting yes, up from 15 last year.

House conservatives maintain that the Senate provision on tribal courts is a dangerous and unconstitutional expansion of tribal power, and they preferred to keep the bill silent on same-sex couples. But the pressure, especially on the tribal issue, was bipartisan. Republican Representatives Darrell Issa of California and Tom Cole of Oklahoma, himself a Chickasaw, pressed hard to toughen the tribal-courts language. Mr. Cole said on Sunday he would try to bring the House bill down if he did not prevail.

Ultimately, it is likely he will. Democrats are united against the Republican version, and Representative Eric Cantor of Virginia, the House majority leader, has committed to passing a bipartisan version in the House or none at all.

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9/11 victim's mom upset film used son's last words

NEW CANAAN, Conn. (AP) — A Connecticut woman whose son died in the Sept. 11 attacks at the World Trade Center says she's upset the Oscar-winning movie "Zero Dark Thirty" used a recording of his last words without her permission.

Mary Fetchet of New Canaan told CBS News and the Daily News this week that she was shocked the filmmakers didn't ask if they could use the voicemail her son, Bradley Fetchet, left on her phone while he was on the 89th floor of the World Trade Center's south tower.

The movie about the manhunt for Osama bin Laden begins with the voices of 9/11 victims making their last phone calls.

Sony Pictures Entertainment said in a statement that the filmmakers contacted several relatives of 9/11 victims about using the voice recordings.

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Global Health: After Measles Success, Rwanda to Get Rubella Vaccine

Rwanda has been so successful at fighting measles that next month it will be the first country to get donor support to move to the next stage — fighting rubella too.

On March 11, it will hold a nationwide three-day vaccination campaign with a combined measles-rubella vaccine, hoping to reach nearly five million children up to age 14. It will then integrate the dual vaccine into its national health service.

Rwanda can do so “because they’ve done such a good job on measles,” said Christine McNab, a spokeswoman for the Measles and Rubella Initiative. M.R.I. helped pay for previous vaccination campaigns in the country and the GAVI Alliance is helping financing the upcoming one.

Rubella, also called German measles, causes a rash that is very similar to the measles rash, making it hard for health workers to tell the difference.

Rubella is generally mild, even in children, but in pregnant women, it can kill the fetus or cause serious birth defects, including blindness, deafness, mental retardation and chronic heart damage.

Ms. McNab said that Rwanda had proved that it can suppress measles and identify rubella, and it would benefit from the newer, more expensive vaccine.

The dual vaccine costs twice as much — 52 cents a dose at Unicef prices, compared with 24 cents for measles alone. (The MMR vaccine that American children get, which also contains a vaccine against mumps, costs Unicef $1.)

More than 90 percent of Rwandan children now are vaccinated twice against measles, and cases have been near zero since 2007.

The tiny country, which was convulsed by Hutu-Tutsi genocide in 1994, is now leading the way in Africa in delivering medical care to its citizens, Ms. McNab said. Three years ago, it was the first African country to introduce shots against human papilloma virus, or HPV, which causes cervical cancer.

In wealthy countries, measles kills a small number of children — usually those whose parents decline vaccination. But in poor countries, measles is a major killer of malnourished infants. Around the world, the initiative estimates, about 158,000 children die of it each year, or about 430 a day.

Every year, an estimated 112,000 children, mostly in Africa, South Asia and the Pacific islands, are born with handicaps caused by their mothers’ rubella infection.

Thanks in part to the initiative — which until last year was known just as the Measles Initiative — measles deaths among children have declined 71 percent since 2000. The initiative is a partnership of many health agencies, vaccine companies, donors and others, but is led by the American Red Cross, the United Nations Foundation, the Centers for Disease Control and Prevention, Unicef and the World Health Organization.

This article has been revised to reflect the following correction:

Correction: February 27, 2013

An earlier version of this article misstated the source of the financing for the upcoming vaccination campaign in Rwanda. It is being financed by the GAVI Alliance, not the Measles and Rubella Initiative.

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Little Movement on Wall Street

Wall Street stocks opened little changed on Wednesday as investors awaited a second round of testimony in Congress by the Federal Reserve chairman, Ben S. Bernanke, for clarity on the longevity of the Fed’s economic stimulus program.

The Standard & Poor’s 500-stock index added 0.2 percent, the Dow Jones industrial average rose 0.2 percent and the Nasdaq composite index was flat in morning trading.

“Of course, Bernanke is in the spotlight again but I don’t expect him to vary from his comments from yesterday,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.

A day earlier, Mr. Bernanke strongly defended the Fed’s monetary stimulus efforts before Congress, easing financial market worries over an early retreat from the Fed’s bond buying program, which had been triggered by minutes of the Fed’s January meeting released a week ago.

His remarks, along with data showing sales of new homes hit a four and a half year high, helped Wall Street stocks rebound Tuesday from their worst decline since November.

Despite the bounce, the benchmark S.&P. 500 was unable to move back above 1,500, a closely watched level that may prove to be a resistance point.

Up 6 percent for the year, the S.&P. 500 was within reach of record highs a week ago, before the minutes from the Fed’s January meeting were released. Since then, the index has shed 1 percent.

In earnings news, Target posted a lower quarterly profit as sales of food and value-priced items only partially mitigated weakness in holiday spending. The stock fell 1.7 percent.

Dollar Tree reported a higher quarterly profit as the chain controlled costs and as consumer spending improved. The stock rose 4.5 percent.

In Europe, shares rose, steadying after the previous session’s sharp losses, though jitters over the euro zone kept a lid on gains.

Italy’s 10-year debt costs rose more than half a percentage point at the first longer-term auction since an inconclusive parliamentary election, although they remained below the psychologically important level of 5 percent.

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Euro Watch: European Markets Dip Amid Italian Uncertainty

PARIS — Stocks fell Tuesday across Europe and investors sold Italian bonds, a day after an inconclusive election in Italy raised fears that political deadlock there could hamper efforts to restore the economy and complicate the governance of the euro zone.

European leaders argued for calm, stressing that the political confusion would soon clear up and that negative market reaction would be short-lived as Italians and their European partners returned to the work of building greater integration. But they also stressed that the course of reform started under the current prime minister, Mario Monti, must be continued, for the good of the 17-nation euro zone.

Results indicated that the center-left Democratic Party, led by Pier Luigi Bersani, would have a majority in the Lower House, thanks to the premium of bonus seats given to the largest bloc. But it would only have about 119 seats in the Senate, compared to 117 seats for the center-right People of Liberty party, led by former Prime Minister Silvio Berlusconi — far short of the majority of 158 required to govern.

Mr. Berlusconi hinted that his party might be inclined to form a grand coalition with the Democratic Party, a prospect that would be ideologically incoherent but that experts said might be the only governing coalition possible, given the results.

Mr. Monti’s party, which had helped restore investor confidence at the cost of unpopular spending cuts and tax increases, dropped into last place, behind the protest vote winner, the Five Star Movement of the former comedian Beppe Grillo. The result left the recession-weary nation with no clear path forward and the possibility that another round of elections will be necessary.

In afternoon trading in Europe, the Euro Stoxx 50 index, a barometer of euro zone blue chips, was down 2.29 percent, while the FTSE 100 index in London dipped 1.28 percent. The yield on the Italian 10-year sovereign bond, which moves in the opposite direction of the price, gained 0.31 percentage points, to 4.79 percent. The MIB index in Milan was down 4.23 percent.

Bond yields have a direct effect on government financing costs, and it was the rise in Italian and Spanish government yields that led the European Central Bank to promise last July that it would do whatever necessary to save the euro.

The euro, which fell sharply on Monday, was up slightly at $1.3087 from $1.3056 late Monday in New York.

Uncertainty about the Italian situation has echoed around the world. Asian shares dropped Tuesday, with the Nikkei 225 stock average in Tokyo closing down 2.26 percent and the Hang Seng index in Hong Kong closing down 1.32 percent. New York stocks ended Monday down more than 1 percent.

Olivier Bailly, a spokesman for the European Commission, the policy making arm of the European Union, on Tuesday urged Italy to form a government and to continue policies aimed at bringing down its public debt.

“The European Commission places its full confidence in Italian democracy, and the European Commission will work closely with the new government in order to relaunch growth and the creation of jobs in Italy,” Mr. Bailly said during a news conference in Brussels.

He suggested that continuing reforms was the best way to combat the instability on financial markets that followed the vote. “Markets are free to react the way they want,” he said. Italian leaders needed to “establish a political majority that will continue to deliver a growth and jobs agenda, which is basically what Italy needs in order to reduce the unsustainable level of its debt.”

According to a recent and wide-ranging study on the reform prospects for countries in the euro zone, the Lisbon Council, a research organization based in Brussels, concluded that Italy ranked last among all countries that use the euro in terms of its ability to generate economic growth over the long term.

Luis de Guindos, the Spanish economy minister, said on Tuesday that he was confident that the negative impact of the Italian vote on financial markets would be “only in the short term.” He told Spanish reporters that Italy would eventually manage to form “a stable government,” which would also be in the interest of Spain and the rest of the euro zone.

Before the election, Germany made very clear its expectations that whoever takes over in Rome must continue to implement the course of reforms begun under Mr. Monti. This line echoed throughout Berlin on Tuesday.

“It is important that Italy have a functioning government,” Michael Grosse-Broemer, an important ally of Chancellor Angela Merkel and parliamentary floor leader of her center-right party, said Tuesday. “Mr. Monti’s course of reform must be continued.”

“There is no alternative to the course of structural reform that has been started,” Philip Rösler, Germany’s economy minister, told the German public broadcaster ARD, adding his disappointment at the apparent lack of support for the country’s pro-reform parties .

Guido Westerwelle, the foreign minister, also called for Italy to swiftly form a “stable and functioning government,” stressing its importance for the rest of Europe.

But Werner Faymann, chancellor of Austria, warned against allowing concerns over the future Italian government to spark another debate over the future of the euro, insisting that the common currency was strong enough to withstand a period of instability.

“The euro remains stable even when it is not yet clear in any given country how a government will be formed,” Mr. Faymann said, according to ARD.

How worried Germans are about what political chaos in Rome could mean for them came across clearly in the German media.

“The election shows that Italy remains susceptible for populist slogan. This is demonstrated by the nearly 25 percent support for the cheap, angry outbursts of the anti-party of comedian Beppe Grillo. And then the 30 percent for Berlusconi,” wrote the daily Tagesspiegel in a commentary on Tuesday, pointing out that amounted to about every second voter supporting a populist.

“It is a very scary prospect that does not engender hope for Italy’s future,” the newspaper wrote. “We are a long way from a cure for the Berlusconi disease.”

David Jolly reported from Paris. Rachel Donadio in Rome, James Kanter in Brussels, Melissa Eddy in Berlin, Raphael Minder in Madrid, and Landon Thomas Jr. in London contributed reporting.

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Reversing trend, world music revenue inches upward

LONDON (AP) — More than a decade after online file swapping tipped the music industry into turmoil, record executives may finally be getting a sliver of good news.

Industry revenue is up. A measly 0.3 percent, but it's still up.

"For the global music business, it is hard to remember a year that has begun with such a palpable buzz in the air," said Frances Moore, whose International Federation of the Phonographic Industry put together the figures released Tuesday.

"These are hard-won successes for an industry that has innovated, battled and transformed itself over a decade," she said in a statement. "They show the music industry has adapted to the Internet world."

That adaptation has been a long time coming. Online song sharing popularized by services such as Napster at the turn of the millennium seriously destabilized the industry, which reacted with a barrage of lawsuits and lobbying. But the war on piracy failed to stem the tide of free music, and by the time executives finally began making legal music available through download services such as Apple Inc.'s iTunes, the industry was in a free fall.

Since its 1999 peak, the global music industry's revenues have crashed more than 40 percent. Tuesday's figures, which show a rise in global revenue from $16.4 billion in 2011 to $16.5 billion in 2012, are the first hint of growth in more than a decade.

Mark Mulligan, of U.K.-based MIDiA consulting, warned that Tuesday's figures did not mean the industry had put its misery years behind it.

"We're probably near the bottom," he said, "but it's so marginal we could easily have another year or two where it could get worse."

The physical music market continues to contract, losing another $500 million in revenue between 2011 and 2012, according to Tuesday's IFPI figures. The industry group has placed its bets on downloads, streaming, and subscription services to make up for lost ground, but there's still a long way to go.

Downloads and streaming audio now account for most of the music sold in the United States and Scandinavia, but physical music — everything from vinyl records to DVDs — still accounts for the majority of industry revenue worldwide.

Mulligan said he believed some of the lost revenue may never be recovered, with many casual users who used to buy the odd CD turning to free services such as YouTube, television music channels, or Internet radio instead.

"This is a case of managed decline," he said, predicting "a sustainable but smaller market built around more engaged music fans."

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