Here’s what’s important in the business world this morning:
U.S. Trade Deficit: The U.S. trade deficit narrowed in May from April, helped by cheaper oil that lowered imports and an increase in American exports to Europe and China.
But economists cautioned that decline wasn't enough to alter weak growth forecasts for the April-June quarter.
The Commerce Department said Wednesday that the trade deficit fell 3.8 percent to $48.7 billion in May, down from $50.6 billion in April.
Exports rose 0.2 percent to $183.1 billion. The increase reflected stronger sales of telecommunications equipment and heavy machinery.
Imports dropped 0.7 percent to $231.8 billion. America's foreign oil bill fell to the lowest level in 15 months.
A narrower trade gap is less of a drag on growth. It means the United States is spending less on foreign-made products, while taking in more from sales of U.S.-made goods.
Spain: Spain's government imposed further austerity measures on the country Wednesday as it unveiled sales tax hikes and spending cuts aimed at shaving €65 billion ($79.85 billion) off the state budget over the next two and a half years.
A day after winning European Union approval for a huge bank bailout and breathing space on its deficit program, Prime Minister Mariano Rajoy warned Parliament that Spain's future was at stake as it grapples with recession, a bloated deficit and investor wariness of its sovereign debt.
The spending cuts, designed to cut €65 billion of state budgets by 2015, include a wage cut for civil servants and members of the national parliament and a new wave of closures at state-owned companies. Spain will also speed up a gradual increase in the retirement age from 65 to 67.
The measures are in exchange for the bank bailout of up to €100 billion ($122.85 billion) granted to Spain by the other 16 countries that use the euro and extra time to cut the Spanish budget deficit. Finance ministers approved the bailout program at meetings in Brussels this week and as much as €30 billion could flow to Spain's banks by the end of the month. The country's banks are saddled with billions of euros in toxic loans and assets following the collapse of the country's real estate market. The goal is to strengthen the banks' balance sheets against further economic shocks so they can start lending to businesses and families. The full amount Spain will seek is not yet known.
American Airlines: The head of American Airlines says his company has done so much to fix its problems that it can consider potential mergers, and invitations will be going out soon.
Thomas Horton, the CEO of American and parent AMR Corp., said Tuesday that American has boosted revenue, reached cost-cutting deals with labor unions, and is well on its way to a successful restructuring after seven months under bankruptcy protection.
He said the company, working with its creditors, will soon reach out to "interested parties."
That wasn't Horton's attitude when AMR filed for Chapter 11 protection in November. For months, he insisted that the company should delay any merger talk until it got out of bankruptcy.
But US Airways has complicated Horton's job by pursuing American at every turn. It won the support of American's unhappy labor unions and appealed to AMR's creditors with this simple pitch: One big airline will be stronger than two smaller ones.
U.S. Futures: Stock futures rose Wednesday ahead of government report analysts hope will show that companies are ordering more goods, which would be good news for factories that produce them and for the economy as a whole.
Dow Jones industrial average futures rose 26 points to 12,611. Standard & Poor's 500 futures added 2.2 points to 1,337.70 and Nasdaq futures rose 1.25 points to 2,579.25.
The Associated Press contributed to this report.