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Business Highlights

Monday - 5/5/2014, 6:00pm  ET

The Associated Press

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Target's chairman and CEO out in wake of breach

NEW YORK (AP) -- Target's massive data breach has now cost the company's CEO his job.

Target announced Monday that Chairman, President and CEO Gregg Steinhafel is out nearly five months after the retailer disclosed the breach, which has hurt its reputation among customers and hammered its business.

Experts say his departure marks the first CEO of a major corporation to resign in the wake of a data breach and underscores how CEOS are now becoming more at risk in an era when such breaches have become common.

The nation's third-largest retailer said Steinhafel, a 35-year veteran of the company and CEO since 2008, has agreed to step down, effective immediately. He also resigned from the board of directors.

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AP IMPACT: Deadly side effect to fracking boom

CLARKSBURG, W.Va. (AP) -- Booming production of oil and natural gas has led to a little-known side effect -- a spike in traffic fatalities in states where many streets and highways are choked with large trucks and heavy drilling equipment.

An Associated Press analysis of traffic deaths and U.S. census data in six drilling states shows that in some places, fatalities have more than quadrupled since 2004.

The energy boom has created badly needed jobs, lifted local economies and drawn global manufacturers back to the United States. But the frenzy of drilling activity contributes heavily to the flood of traffic of all kinds that experts say has led to the increase in serious accidents and deaths.

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Coke, Pepsi to drop controversial ingredient entirely

NEW YORK (AP) -- PepsiCo has joined Coca-Cola in saying it's working to remove a controversial ingredient from all its drinks, including Mountain Dew.

The company had announced last year that it was removing the ingredient from Gatorade. Then on Monday, Coca-Cola said it is dropping the ingredient from all its drinks, including Powerade.

Brominated vegetable oil was the target of petitions by a Mississippi teenager who wanted it out of Gatorade and Powerade. The petition noted that the ingredient has been patented as a flame retardant and isn't approved for use in Japan and the European Union.

Coca-Cola and PepsiCo have stood by the safety of the ingredient.

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US service firms grow at fastest pace since August

WASHINGTON (AP) -- U.S. service firms grew last month at the fastest pace since August as new orders and sales grew, adding to evidence that the economy is picking up after a slow start to the year.

The Institute for Supply Management said Monday that its service-sector index rose to 55.2 from 53.1 in March. Any reading above 50 indicates expansion. The ISM is a trade group of purchasing executives.

The figures come after a healthy jobs report on Friday also fueled hopes for an improving economy. The government said employers added 288,000 jobs in April, the most in 2 1/2 years, and the unemployment rate fell to 6.3 percent.

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Pfizer 1Q profit drops 15 pct. due to lower sales

Despite sharply lower expenses and taxes, Pfizer Inc.'s first-quarter profit dropped 15 percent, due to cheaper generic competition for multiple medicines and some promotion partnerships with other drugmakers ending.

The world's second-biggest drugmaker missed Wall Street's revenue expectations by $730 million, but narrowly beat profit expectations. Its shares fell almost 3 percent in afternoon trading.

The New York-based company has seen its revenue shrink since 2011 as inexpensive copycat pills hurt sales of about 20 off-patent drugs that once brought in billions annually, particularly cholesterol fighter Lipitor, the top-selling drug of all time with peak revenue of nearly $13 billion.

According to Pfizer, "the vast majority" of sales declines from generic competition will be over by the end of 2015.

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EU expects recovery to lower unemployment faster

BRUSSELS (AP) -- The ongoing economic recovery across Europe should help unemployment fall faster than previously expected, according to a new EU forecast released Monday.

In its spring forecast, the EU's executive Commission said the economic recovery is spreading across the 28-country bloc and that should help reduce the ranks of the 25.7 million unemployed.

Among the 18 EU countries sharing the euro currency, the Commission expects unemployment to drop to 11.8 percent this year and 11.4 percent in 2015. Those predictions are lower than those it made in February, when it foresaw unemployment at 12 percent this year and 11.7 percent next.

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Buffett defends how he runs Berkshire Hathaway

OMAHA, Neb. (AP) -- Warren Buffett remains confident in the long-term future of his company after spending the weekend with shareholders of Berkshire Hathaway.

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