Many States Say Cuts Would Burden Fragile Recovery

States are increasingly alarmed that they could become collateral damage in Washington’s latest fiscal battle, fearing that the impasse could saddle them with across-the-board spending cuts that threaten to slow their fragile recoveries or thrust them back into recession.

Some states, like Maryland and Virginia, are vulnerable because their economies are heavily dependent on federal workers, federal contracts and military spending, which will face steep reductions if Congress allows the automatic cuts, known as sequestration, to begin next Friday. Others, including Illinois and South Dakota, are at risk because of their reliance on the types of federal grants that are scheduled to be cut. And many states simply fear that a heavy dose of federal austerity could weaken their economies, costing them jobs and much-needed tax revenue.

So as state officials begin to draw up their budgets for next year, some say that the biggest risk they see is not the weak housing market or the troubled European economy but the federal government. While the threat of big federal cuts to states has become something of a semiannual occurrence in recent years, state officials said in interviews that they fear that this time the federal government might not be crying wolf — and their hopes are dimming that a deal will be struck in Washington in time to avert the cuts.

The impact would be widespread as the cuts ripple across the nation over the next year.

Texas expects to see its education aid slashed hundreds of millions of dollars, which could force local school districts to fire teachers, if the cuts are not averted. Michigan officials say they are in no position to replace the lost federal dollars with state dollars, but worry about cuts to federal programs like the one that helps people heat their homes. Maryland is bracing not only for a blow to its economy, which depends on federal workers and contractors and the many private businesses that support them, but also for cuts in federal aid for schools, Head Start programs, a nutrition program for pregnant women, mothers and children, and job training programs, among others.

Gov. Bob McDonnell of Virginia, a Republican, warned in a letter to President Obama on Monday that the automatic spending cuts would have a “potentially devastating impact” and could force Virginia and other states into a recession, noting that the planned cuts to military spending would be especially damaging to areas like Hampton Roads that have a big Navy presence. And he noted that the whole idea of the proposed cuts was that they were supposed to be so unpalatable that they would force officials in Washington to come up with a compromise.

“As we all know, the defense, and other, cuts in the sequester were designed to be a hammer, not a real policy,” Mr. McDonnell wrote. “Unfortunately, inaction by you and Congress now leaves states and localities to adjust to the looming threat of this haphazard idea.”

The looming cuts come just as many states feel they are turning the corner after the prolonged slump caused by the recession. Gov. Martin O’Malley of Maryland, a Democrat, said he was moving to increase the state’s cash reserves and rainy day funds as a hedge against federal cuts.

“I’d rather be spending those dollars on things that improve our business climate, that accelerate our recovery, that get more people back to work, or on needed infrastructure — transportation, roads, bridges and the like,” he said, adding that Maryland has eliminated 5,600 positions in recent years and that its government was smaller, on a per capita basis, than it had been in four decades. “But I can’t do that. I can’t responsibly do that as long as I have this hara-kiri Congress threatening to drive a long knife through our recovery.”

Federal spending on salaries, wages and procurement makes up close to 20 percent of the economies of Maryland and Virginia, according to an analysis by the Pew Center on the States.

But states are in a delicate position. While they fear the impact of the automatic cuts, they also fear that any deal to avert them might be even worse for their bottom lines. That is because many of the planned cuts would go to military spending and not just domestic programs, and some of the most important federal programs for states, including Medicaid and federal highway funds, would be exempt from the cuts.

States will see a reduction of $5.8 billion this year in the federal grant programs subject to the automatic cuts, according to an analysis by Federal Funds Information for States, a group created by the National Governors Association and the National Conference of State Legislatures that tracks the impact of federal actions on states. California, New York and Texas stand to lose the most money from the automatic cuts, and Puerto Rico, which is already facing serious fiscal distress, is threatened with the loss of more than $126 million in federal grant money, the analysis found.

Even with the automatic cuts, the analysis found, states are still expected to get more federal aid over all this year than they did last year, because of growth in some of the biggest programs that are exempt from the cuts, including Medicaid.

But the cuts still pose a real risk to states, officials said. State budget officials from around the country held a conference call last week to discuss the threatened cuts. “In almost every case the folks at the state level, the budget offices, are pretty much telling the agencies and departments that they’re not going to backfill — they’re not going to make up for the budget cuts,” said Scott D. Pattison, the executive director of the National Association of State Budget Officers, which arranged the call. “They don’t have enough state funds to make up for federal cuts.”

The cuts would not hit all states equally, the Pew Center on the States found. While the federal grants subject to the cuts make up more than 10 percent of South Dakota’s revenue, it found, they make up less than 5 percent of Delaware’s revenue.

Many state officials find themselves frustrated year after year by the uncertainty of what they can expect from Washington, which provides states with roughly a third of their revenues. There were threats of cuts when Congress balked at raising the debt limit in 2011, when a so-called super-committee tried and failed to reach a budget deal, and late last year when the nation faced the “fiscal cliff.”

John E. Nixon, the director of Michigan’s budget office, said that all the uncertainty made the state’s planning more difficult. “If it’s going to happen,” he said, “at some point we need to rip off the Band-Aid.”

Fernanda Santos contributed reporting.

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Gunfire and deadly crash rattle the Las Vegas Strip

LAS VEGAS — A spectacular predawn crash on the Strip — triggered when bullets fired from a black Range Rover peppered a Maserati — hit this resort city right between the eyes. In the end, three people were dead and a major intersection under lockdown during a three-state manhunt for the shooters, leaving even casino veterans used to the extraordinary scratching their heads.

The mayhem was sparked, witnesses told police, by a quarrel early Thursday at a hotel valet stand.

The two vehicles left the Aria resort hotel and were heading north on Las Vegas Boulevard at 4:20 a.m., an hour when the casino marquees shine brightly but the gambling thoroughfare is largely empty. At Harmon Avenue, occupants inside the Range Rover opened fire on the Maserati, police said.

The silver-gray sports car, which was struck several times, sped into the intersection at Flamingo Road, ramming a Yellow cab. The taxi exploded, killing the driver and a passenger. Four other vehicles in the intersection were also involved in the crash and explosion, but officers offered no details.

"Omg Omg Omg that car just blew up!" one witness tweeted shortly after the crash, posting a photo of the wreckage. "God Bless their Souls! Omg!"

The driver of the Maserati died later at a hospital, police said. A passenger in the vehicle received minor injuries and was being interviewed by investigators. At least three others were also injured.

Police in Nevada, California, Arizona and Utah were on alert for the distinctive black Range Rover SUV, described as having dark-tinted windows, black rims and out-of-state paper dealer plates.

"We are going to pursue these individuals and prosecute them," Clark County Sheriff Doug Gillespie said at an afternoon news conference. "This act was totally unacceptable. It's not just tragic but unnecessary — the level of violence we see here in Las Vegas and across America."

Authorities had not publicly identified the dead. But a Las Vegas television station late Thursday identified the taxi driver as Michael Boldon, 62, who the station said had recently moved here from Michigan to care for his 93-year-old mother.

The victim's son, who drives a limousine, told Fox News 5 that he last talked with his father after 3 a.m., and later called his cellphone shortly after the crash to warn him to avoid the Strip. But there was no answer.

The station also identified the driver of the Maserati as Ken Cherry, a rap artist from Oakland who also is known as "Kenny Clutch." The station quoted family members identifying Cherry as the driver. An Internet video of a Cherry song called "Stay Schemin" shows two men in a vehicle on the Strip.

Police had more questions than answers.

"It began with a dispute at a nearby hotel and spilled onto the streets," said Capt. Chris Jones of the Las Vegas Police Robbery and Homicide Division.

The morning's events threw the Strip into disarray all day. The gambling boulevard's busiest and best-known intersection was cordoned off by yellow police tape until nightfall, keeping traffic and curious pedestrians away from the carnage. Even skywalks were blocked off.

While slot machines beeped and card games continued inside casinos around the accident scene — including the Bellagio, Caesars Palace and Paris Las Vegas — hotel bell captains were fielding questions from tourists who had awakened to news of the crash and the Strip shutdown. The alleys and side streets between nearby hotels were clogged with pedestrians who inched along on narrow sidewalks, past delivery doors, many making their own paths between the landscaped bushes and palm trees.

Even casino industry workers were thrown into turmoil. Hotel maids and dealers who finished their midnight shifts after dawn were left without bus service home. "I'm stranded," said Tiruselam Kefyalew, 25, a maid. "What a day to leave my cellphone at home."

Limousine drivers who normally prowl the city's gambling core improvised detours. Some said the police blockade would cost them $500 or more in lost business and tips.

"Most people understand, but you have your complainers," said Jim DeSanto, a limo driver who waited for fares outside Bally's casino. "Those people will complain, even when everything is perfect."

Well after noon, guests peered out nearby hotel windows and others leaned into the street to glimpse the crime scene.

"Hey, honey, it must have happened right here," one man told his wife as they left Caesars around noon. The tourist, who would only say that he had arrived from Tampa, Fla., the previous evening, had looked out his hotel window at 4:30 to see a vehicle in flames.

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Good Lookin' Out

The other strap-it-on-and-get-rad cameras out there — the GoPros and the Contours and the Ions — are all pretty sick in their own right. But for ease of use, no camera is sicker than Drift Action’s HD Ghost cam.

It has enough capability and pure oomph to keep up with the competition — it captures 1080p at 30fps and 720p at 60fps, and it can talk to your other devices via Wi-Fi — but it also comes stock with features other cams make you pay extra for: an integrated 2-inch color LCD screen; big, meaty navigation buttons on top of the camera; and a wrist-mounted remote control that lets you start and stop recording from up to 30 feet away. The whole thing’s waterproof up to 9 feet, too, so mountain biking through a rainstorm or snowboarding during a whiteout doesn’t require a separate waterproof case.

Now, 1080p at 30fps isn’t the best in class. The best camera for slow-mo footage is the GoPro Hero3 (also $400), which offers double the frame rate at 1080p. And all those additional features — the remote, the LCD screen, the waterproof case — are available in some form or another with other cams, albeit usually at an extra cost. What makes the HD Ghost stand out is how easy to use it is. Thanks to the clearly labeled buttons and the intuitive menu on the LCD screen, I was able to ditch the user guide and still access the majority of the Ghost’s functions.

The wrist-mounted remote is great, too. The controls can be operated with heavy gloves on, and the buttons make changing settings, swapping functions, and checking out the footage you just captured remarkably easy. Colored LED lights on the watch-sized unit let you know what mode the Ghost is in, as well as the camera’s status.

My favorite feature on the Ghost is the on-the-fly video-tagging capability. When it’s in what Drift calls “Flashback mode,” the camera records video on a continuous loop ranging in length from 10 seconds to five minutes. If something sweet happens on your bike ride, you can press a button and save the last minute of footage (or however long), then immediately start a new loop. Not only does this save precious space on your memory card, but it also saves you from having to wade through hours of boring footage to find the good clips.

During my test trip to Squaw Valley in Northern California’s Lake Tahoe area, I never lost footage due to user error (leaving the camera off and thinking it was recording when it wasn’t, which I usually do all the time), and the rotating lens let me mount it just about anywhere without tweaking my angles. I was satisfied with the footage. It was clear and sharp, and I was able to snag the occasional still photo while I was recording video.

Here’s a highlight reel. This string of clips is made up of raw video straight from the camera.

The GoPro Hero and the new Sony Action Cam are still the wearables to beat for image quality and (especially with the GoPro) capturing slo-mo shots. But I can heartily recommend the HD Ghost, especially for those who’d rather get outside and start recording than spend hours digesting a manual to figure out how it works.

WIRED Simple out-of-box use. Battery lasts about three hours. Waterproof to 9 feet without a case. Intuitive smartphone app interface. Awesome remote you can strap to your wrist, or anywhere. Rotating lens lets you position it pretty much anywhere on your body or board and still find acceptable angles. Can capture 11-megapixel stills while shooting video.

TIRED Heavy. Multicolored LED lights aren’t great for us red/green colorblind folks. Pricey — Sony’s camera is less expensive.

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Tyler, Perry lead Songwriters Hall of Fame class

NASHVILLE, Tenn. (AP) — The Songwriters Hall of Fame is saluting 1970s and ’80s rock ‘n’ roll with its 2013 induction class.

Joe Perry and Steven Tyler of Aerosmith and Mick Jones and Lou Gramm of Foreigner will join the hall of fame this year along with the writers of iconic rock hits “Love Is a Battlefield” and “Heartache Tonight.” The ceremony will be held June 13 in New York.

Aerosmith and Foreigner will get the attention here, but inductees Holly Knight, JD Souther and Tony Hatch also have distinguished careers that helped define the sound of rock ‘n’ roll.

Knight wrote anthemic hits “Love Is a Battlefield” and “Invincible” for Pat Benatar and “The Warrior” for Patty Smyth. She also wrote several songs for Tina Turner, including “The Best” and “Better Be Good to Me,” that became standards for the star.

Souther, who has a role on the music-inspired television show “Nashville,” had a partnership with The Eagles that spawned several hits, including “Heartache Tonight,” ”Victim of Love,” ”New Kid in Town” and “Best of My Love.”

Hatch made his mark during the British invasion, teaming with Petula Clark on hits like “Downtown” and “My Love” that helped shaped the future of pop music.

Perry and Tyler have survived a sometimes contentious relationship to become one of rock’s most successful songwriting teams over the last 40 years. The Rock and Roll Hall of Famers, staples of classic rock radio and pop culture icons, are known for hits like “Sweet Emotion,” ”Dream On” and “Livin’ on the Edge,” and released their 15th studio album last year.

Jones and Gramm are contemporaries of Perry and Tyler who also ruled radio for a time, but they sometimes came at it from a different angle. They could lay down a straight-up rocker like “Jukebox Hero” or “Feels Like the First Time.” But they also could slow it down with hits like “I Wanna Know What Love Is” and “Cold as Ice” that helped foreshadow the ballad-driven rock of the late ’80s.

___

Online:

http://songhall.org

___

Follow AP Music Writer Chris Talbott: http://twitter.com/Chris_Talbott .

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Well: Ask Well: The Nutrients in Fruits and Veggies

The colorful skin of an apple, grape or tomato is certainly chockfull of nutrients. But by no means are the outer layers of most fruits and vegetables the prime source of their nutrition.

Part of what makes some fruits and vegetables so rich with color – wax and pesticides notwithstanding – are pigments in the skin that have healthful antioxidant properties. Resveratrol, for example, is found in the skin of red grapes and other fruits. But lycopene, one of the pigments that gives tomatoes and bell peppers their deep red color, is distributed throughout.

Indeed, many vitamins and nutrients are found in the skin as well as the flesh. Take apples. According to the United States Department of Agriculture, a large red apple with its skin intact contains about 5 grams of fiber, 13 milligrams of calcium, 239 milligrams of potassium, and 10 milligrams of vitamin C. But remove the skin, and it still contains about 3 grams of fiber, 11 milligrams of calcium, 194 milligrams of potassium, and plenty of its vitamin C and other nutrients.

Another example is the sweet potato. The U.S.D.A. says that a 100-gram serving of sweet potato cooked with its skin contains 2 grams of protein, 3 grams of fiber, and 20 milligrams of vitamin C. But the same sized serving of sweet potato without skin that has been boiled — a process that further leaches away some of its nutrients — still boasts 1.4 grams of protein, 2.5 grams of fiber, and 13 milligrams of vitamin C.

You can lose the skin, in other words, without losing all the benefits.

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Room for Debate: Should Companies Tell Us When They Get Hacked?

A National Priority and a Business Priority

Lauren Gelman, BlurryEdge Strategies

Like pollution, an insecure infrastructure is bad for everyone. Disclosing security breaches reintroduces the public's collective interest.

Disclosure Plays Into Hackers’ Hands

Alexander Tabb, partner, research and consulting firm

By requiring companies to disclose security breaches, we would be requiring them to telegraph their weaknesses to the world.

Investors Need to Know

Jacob Olcott, Good Harbor Security Risk Management

It’s not that the events aren’t happening. It’s that you're not being told about them -- despite the S.E.C.'s instructions.

We Need Better Notification Laws

Lee Tien, Electronic Frontier Foundation

Existing laws focus mainly on whether a breach exposed information, not why it happened. Yet the reason can be critical.

More Disclosure Is Not Always Better

Baruch Fischhoff, decision sciences, Carnegie Mellon

People may exaggerate the risk of hacking if they suddenly start hearing about a lot of it. Or they may get used to frequent reports and underestimate the risks.

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Bulgari shows off Liz Taylor's gems

It isn't easy sometimes to be an ordinary person in Los Angeles, so near to and yet so far from the city's glamorous events.

You hear about the grand Oscar parties, but you will never be invited. The award ceremony may be taking place minutes from where you live, but you watch it at home, on TV, in your sweat pants — and you might as well be in Dubuque.

Rodeo Drive too can make you feel like a scrap on the cutting room floor. As you stroll the wide and immaculate sidewalks of Beverly Hills' iconic shopping street, you pass by boutiques you'd feel self-conscious walking into. In the windows are baubles and trinkets you could never in three lifetimes afford.

Which is why it is rather nice to be invited to make a private appointment at the house of Bulgari, the fine Italian jeweler that opened its doors in 1884.

Elizabeth Taylor loved Bulgari jewels. Richard Burton, whose torrid affair with her began during the filming of "Cleopatra" in Rome, accompanied her often to the flagship shop on the Via Condotti. He liked to joke that the name Bulgari was all the Italian she knew.

So it is fitting that starting Oscar week, the jeweler is celebrating the Oscar-winning star with an exhibit of eight of her most treasured Bulgari pieces.

They are heavy on diamonds and emeralds — of rare size, gleam and value.

And Bulgari knows their value well.

After Taylor's death, it reacquired some of the gems at a Christie's auction. One piece, an emerald-and-diamond brooch that also can be worn as a pendant, sold for $6,578,500 — breaking records both for sales price of an emerald and for emerald price per carat ($280,000).

That brooch, whose centerpiece is an octagonal step-cut emerald weighing 23.44 carats, was Burton's engagement present to Taylor. He followed it upon their marriage (his second, her fifth) with a matching necklace whose 16 Colombian emeralds weigh in at 60.5 carats. Bulgari bought the necklace back too, for $6,130,500.

They are in the exhibit, along with Burton's engagement ring to Taylor and a delicate brooch — given to her by husband No. 4, Eddie Fisher — whose emerald and diamond flowers were set en tremblant so that they gently fluttered as Taylor moved.

The jewels are not for sale.

On Tuesday night, actress Julianne Moore wore the Burton necklace, with pendant attached, at a gala for Bulgari's top clients. At the dinner hour, guests were escorted along a lavender-colored carpet to a nearby rooftop that had been transformed into a Roman terrace.

Those honored guests, of course, got private viewings of Taylor's jewels.

But so did Amanda Perry, a healer from West Hollywood who arrived the next morning for one of the first appointments available to the public.

Someone had emailed news of the collection to the 35-year-old Taylor fan. She walked in off the street Tuesday, when the exhibit was open only to press — and Sabina Pelli, Bulgari's glamorous executive vice president, fresh from Rome, was taking sips of San Pellegrino brought to her on a silver tray between back-to-back interviews that started at 5 a.m.

The camera crews were long gone when Perry came back Wednesday. She had the exhibit, and handsome sales associate Timothy Morzenti of Milan, entirely to herself.

In a black suit, still wearing on his left hand the black glove he dons to handle fine jewels, Morzenti whisked Perry off via a private elevator to the exhibit on the second floor. The jewels stood in vitrines mounted high off the ground. Behind them were photos and a slide show of Taylor, bejeweled.

"Which piece would you like to see first?" Morzenti asked her as a security guard stood by. "I personally love the emerald ring."

Then he proceeded at leisure to explain Bulgari-signature sugar-loaf cuts and trombino ring settings, while tossing in occasional Taylor stories.

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Pinterest Gets a Billion-Dollar Bump, Pins More Cash to Its Boards

Everyone’s favorite online discovery site Pinterest has raised yet another round of funding, $200 million from San Francisco firm Valiant Capital Partners, the company confirmed Wednesday. Existing investors, including Andreessen Horowitz, Bessemer Venture Partners and FirstMark Capital also participated. The massive round – twice as much as Pinterest’s last VC infusion of $100 million – values the company at $2.5 billion, according to Pinterest. All for a company that has either yet to figure how to make any money from its 50 million monthly visitors, or just as likely is keeping its mouth shut about its plans.
In the last year Pinterest has exploded. What started out as an invite-only social bookmarking network, where anyone could save a photo and link they found online, has become one of the top 50 websites, according to comScore. In May 2012, the site attracted $100 million at a $1 billion (or $1.5 billion, depending on who you talked to) valuation from Japanese firm Rakuten, leading venture capitalists and the media to hint at the possibility of another bubble set to burst.

It’s spent some of that money on buying recipe aggregator PunchFork in January 2012, and on a new office near San Francisco’s design district. Another chunk of that cash went toward growing the 20-person team to more than 100 employees.

With this new cash, Pinterest is going abroad and buying more companies, says early Pinterest investor Rick Heitzmann of FirstMark Capital. “Pinterest will continue to build out and improve its products; you’ll see more international expansion and there will be additional acquisitions to fit Ben’s (Silbermann) greater vision for the company,” he says. The site is already popular in Europe and Asia, but Pinterest has plans to add more languages and create a more custom experience in other countries.

While $200 million seems over the top for a company that’s not pulling in any revenue, it’s just right, according to Heitzmann. “You always want more than enough capital to execute the vision,” he says. “Pinterest’s vision is to become one of the largest companies in the world for both online and offline discovery, and we want to make sure the company has enough to do that.”

Apparently a lack of revenue isn’t a problem yet. Heitzmann isn’t worried, saying when the time comes Pinterest will find a way to make use of all the content we’re pinning to our board to turn a profit. There’s already been hints of how that might happen. Pinterest started pulling in pricing information when someone pinned a product from an online shop. Pinterest is also immensely valuable to e-commerce retailers because of how much traffic a pin of a dress or coffee mug can send to their sites, and there’s been talk that businesses would be willing to pay for those referrals.

Still, potential avenues for revenue do not equal actual revenue. And while investors championed enterprise startups in the market last year for their clear-cut business models, it seems VCs are still taking their chances on a consumer company with lots of pretty pictures, lots of users and no profits. Either Pinterest’s viral growth is just that impressive, or there’s something else going on behind the scenes that have investors signing those fat checks. We’re betting on the latter.

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Well: The Benefits of Exercising Outdoors

While the allure of the gym — climate-controlled, convenient and predictable — is obvious, especially in winter, emerging science suggests there are benefits to exercising outdoors that can’t be replicated on a treadmill, a recumbent bicycle or a track.

You stride differently when running outdoors, for one thing. Generally, studies find, people flex their ankles more when they run outside. They also, at least occasionally, run downhill, a movement that isn’t easily done on a treadmill and that stresses muscles differently than running on flat or uphill terrain. Outdoor exercise tends, too, to be more strenuous than the indoor version. In studies comparing the exertion of running on a treadmill and the exertion of running outside, treadmill runners expended less energy to cover the same distance as those striding across the ground outside, primarily because indoor exercisers face no wind resistance or changes in terrain, no matter how subtle.

The same dynamic has been shown to apply to cycling, where wind drag can result in much greater energy demands during 25 miles of outdoor cycling than the same distance on a stationary bike. That means if you have limited time and want to burn as many calories as possible, you should hit the road instead of the gym.

But there seem to be other, more ineffable advantages to getting outside to work out. In a number of recent studies, volunteers have been asked to go for two walks for the same time or distance — one inside, usually on a treadmill or around a track, the other outdoors. In virtually all of the studies, the volunteers reported enjoying the outside activity more and, on subsequent psychological tests, scored significantly higher on measures of vitality, enthusiasm, pleasure and self-esteem and lower on tension, depression and fatigue after they walked outside.

Of course, those studies were small-scale, short-term — only two walks — and squishy in their scientific parameters, relying heavily on subjective responses. But a study last year of older adults found, objectively, that those who exercised outside exercised longer and more often than those working out indoors. Specifically, the researchers asked men and women 66 or older about their exercise habits and then fitted them all with electronic gadgets that measured their activity levels for a week. The gadgets and the survey showed that the volunteers who exercised outside, usually by walking, were significantly more physically active than those who exercised indoors, completing, on average, about 30 minutes more exercise each week than those who walked or otherwise exercised indoors.

Studies haven’t yet established why, physiologically, exercising outside might improve dispositions or inspire greater commitment to an exercise program. A few small studies have found that people have lower blood levels of cortisol, a hormone related to stress, after exerting themselves outside as compared with inside. There’s speculation, too, that exposure to direct sunlight, known to affect mood, plays a role.

But the take-away seems to be that moving their routines outside could help reluctant or inconsistent exercisers. “If outdoor activity encourages more activity, then it is a good thing,” says Jacqueline Kerr, a professor at the University of California, San Diego, who led the study of older adults. After all, “despite the fitness industry boom,” she continues, “we are not seeing changes in national physical activity levels, so gyms are not the answer.”

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Euro Watch: Manufacturers Survey Points to New Downturn in Euro Zone

LONDON — Hopes the euro zone might emerge from recession soon were dealt a blow on Thursday, as surveys showed the downturn in the region’s businesses worsened unexpectedly this month — especially in France.

The data came a day before the European Commission is due to announce interim economic forecasts for the 27-nation bloc, including which countries did not meet E.U. budget deficit targets.

European stock indexes were lower, following sharp declines in Asian benchmarks, and the euro slipped against the dollar. Analysts attributed the declines to nervousness about economic growth, especially following indications Wednesday that the U.S. Federal Reserve is divided on maintaining stimulus measures.

Economists had expected that the Markit Flash Eurozone Services PMI, a business survey and one of the earliest monthly indicators of economic activity, would add to tentative signs that a recovery is in the offing.

But the indicator fell in February to 47.3 from 48.6, marking a year below the 50 threshold for growth and confounding expectations for a rise to 49.0 from more than 30 analysts polled by Reuters, none of whom forecast such a poor reading.

Markit said the schism between Germany and France — the two biggest economies in the euro zone — was now at its widest since the survey started in 1998.

While companies in Germany sustained a healthy rate of growth, French services companies are in the midst of their worst slump since early 2009, when the financial crisis and subsequent recession were doing their worst.

“If it wasn’t for Germany, these would be really dire readings,” said Chris Williamson, chief economist at Markit. “At least the German economy is still helping to keep the euro zone afloat in some respects.”

He said the latest survey pointed to the euro zone economy shrinking 0.2 percent to 0.3 percent in the first quarter, following an estimated 0.4 percent contraction at the end of last year.

A Reuters poll of economists last week suggested the economy would merely stagnate this quarter.

By far the most worrying aspect of the data released Thursday was the dismal performance of French companies.

Mr. Williamson said the data for France were more befitting a struggling “peripheral” euro zone economy like Spain or Italy, rather than the “core” status that France traditionally shares with Germany.

By contrast, Germany has enjoyed a good start to the year. German investor morale soared to its highest level in nearly three years this month, according to the ZEW research institute, while the federal statistics office said on Tuesday that employment hit its highest level in the fourth quarter since reunification.

Still, there are limits to what German prosperity can do for the rest of the region, blighted by harsh budget austerity and rising joblessness.

The latest Markit survey suggests that the “positive contagion” noted by the European Central Bank president, Mario Draghi, in January may be more in hope than expectation.

New orders at euro zone service sector companies — which include banks, information technology companies, hotels and restaurants — declined at a faster rate this month, with the index sinking sharply to 46.0 from 48.4 in January.

The survey also dashed optimism that the slump in euro zone factories would ease further in February, as the manufacturing index barely moved, to 47.8 from 47.9 in January.

Output fell at a faster rate, although new export orders brought at least a glimmer of hope, as the index rose to 51.7 in February from 49.5 - its first above-50 reading since June 2006.

The composite index, which combines both the services and manufacturing surveys, fell to 47.3 in February from 48.6 in January.

Companies cut more jobs, although not as quickly as in January, when layoffs rose at the fastest pace in more than three years.

In afternoon trading in Europe the Euro Stoxx 50, a barometer of euro zone blue chips, was down 1.75 percent. National benchmarks were down by more than 1 percent, with the MIB in Milan down 2.42 percent.

In Asia, the Nikkei 225-stock index closed down 1.39 percent, and the Hang Seng index in Hong Kong fell 1.72 percent.

The euro was at $1.3207, down from $1.3340 late Wednesday in New York.

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