China boosts interest rate in new bid to curb inflation

China raised a key interest rate for a third time this year as it tries to cool surging inflation.

The benchmark rate for one-year loans will be raised 0.25 percentage points to 6.56 percent, effective today, the central bank announced. The rate paid on deposits will rise by a similar margin to 3.5 percent.

Inflation hit a 34-month high of 5.5 percent in May and is believed to have risen further in June even as an overheated economy cools gradually under the pressure of investment curbs and other controls.

The slowdown in some industries has prompted fears more interest rate hikes might trigger a sharp slump. But most analysts say the government should be able to avoid that. 

Stock market shrugs off weak service sector report

Stock indexes managed slight gains Wednesday as investors shrugged off slower growth in the U.S. service sector.

The Institute for Supply Management reported that business growth slowed at U.S. service providers in June. Financial companies and health care providers reported the weakest results.

On the positive side, June marked the 19th consecutive month of growth at service companies, which employ the majority of American workers.

U.S. stocks had opened mixed after a broad sell-off in Europe and another interest rate hike in China. 

Facebook offers video calls and option for group chats

Quick on the heels of Google’s launch of its latest social-networking venture, Facebook said Wednesday that its 750 million users will now be able to make video calls on the site.

The feature will be powered by the Internet phone service Skype. Facebook also redesigned its chat feature, so that the people a user sends messages to the most often show up first.

Facebook is also adding a group chat option. This works much the same way as the group chat on Google Plus. Once you are chatting with one friend, you can click an icon to add more people to the conversation.

Facebook’s new products come after a relatively quiet period for the world’s largest online social network. 

Portuguese markets reel after credit downgrade

Portugal’s financial plight deepened Wednesday, with borrowing rates jumping higher and stocks slumping after its bonds were downgraded to junk status.

Portugal’s hopes of slowly emerging from its debt crisis were knocked by ratings agency Moody’s, which downgraded Portugal’s debt four notches Tuesday and said the country will likely follow Greece in needing a second rescue package.

Portugal took a $112 billion bailout from its European partners and the International Monetary Fund earlier this year after nervous investors began charging it unsustainably steep returns on loans. 

Visa sees debit card rules slowing its growth in 2012

Visa Inc. on Wednesday warned that its revenue and earnings growth will slow in 2012 after new regulations kick in on the fees that banks can charge for debit card transactions.

The San Francisco payments network operator repeated an earlier forecast for its current fiscal year, which ends Sept. 30, for revenue growth between 11 percent and 15 percent and earnings-per-share growth of greater than 20 percent.

Next year, however, Visa said it expects its revenue growth to slow to the high single digits or low double digits. The company expects earnings-per-share growth to slow to the mid-to-high teens.

Analysts, on average, were forecasting 11 percent revenue growth and 16 percent earnings growth for 2012. 

— From news service reports