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AIRLINES

Cracks found in more Southwest planes

DALLAS | Southwest Airlines Co. said Tuesday it finished inspecting 79 older planes and found that five of them have cracks in the aluminum skin.

That's two more than the airline found by Monday afternoon.

Boeing said Tuesday it is directing Southwest and other airlines that own certain older 737s to conduct electromagnetic inspections of a portion of the roof once the planes have made a certain number of trips.

A Boeing 737-300 sprung a hole in the roof during a Southwest flight on Friday, forcing an emergency landing. In response, Southwest grounded 79 planes of the same model over the weekend.

Boeing project engineer Paul Richter said Southwest will have to replace an 18-inch section of overlapping aluminum panel called a lap joint on the planes with cracks in the skin. Southwest said the five planes with "minor subsurface cracking" will remain grounded until they can be repaired.

The plane that ripped open 34,000 feet above Arizona will face "obviously a much larger repair," Mr. Richter said.

FEDERAL RESERVE

Specter of boosting interest rates raised

Federal Reserve officials raised concerns last month that a big jump in energy prices could weaken the economy and unleash inflation, prompting some to suggest the possibility of tightening credit this year.

Such a move usually involves boosting interest rates, although the minutes from the Fed's March 15 closed-door meeting did not specify that. The minutes, which were released Tuesday, also did not note which members raised the prospect of a change in policy, or how many.

It simply noted that a "few members" raised that point. Other Fed members said the Fed might need to keep holding interest rates at record low levels beyond this year.

Meanwhile, investors dumped Treasurys after the minutes from that meeting were released.

The price of the 10-year Treasury note fell 53 cents per $100 invested in late trading. Its yield, which moves in the opposite direction, rose to 3.49 percent from 3.43 percent late Monday.

The differing viewpoints among the members of the central bank about potential policy actions in the future highlight a growing number of uncertainties facing an economy that all the members agreed was improving.

CUBA

Havana to drill five Gulf wells

HAVANA | Cuba said it will begin drilling five oil wells in the Gulf of Mexico this summer in hopes of locating enough crude to justify the costly exploration.

Manuel Marrero, an official with the Ministry of Basic Industry, said the prospects of finding valuable reserves are "promising."

Cuba's domestic production is exclusively heavy oil with a high sulfur content. Its offshore Gulf waters could contain large quantities of lighter, sweet crude, although a test well in 2004 turned up modest discoveries.

Mr. Marrero says studies since then have pointed to "oil traps" in the marine floor, persuading partner companies to take on the expensive task of exploration in deep water.

He said Tuesday the drilling will run through 2013.

BANKRUPTCY

Icahn, Dish, liquidators vie for Blockbuster

NEW YORK | Billionaire investor Carl Icahn, Dish Network and a pair of liquidation firms are among the bidders for video-rental chain Blockbuster in an auction Tuesday morning at U.S. Bankruptcy Court in New York.

The auction process is ongoing. Other bidders include a joint bid by liquidation firms Gordon Brothers Group and Hilco Merchant Resources, SK Telecom and a group of debtholders led by Monarch Alternative Capital LP.

At a break in the process on Tuesday, the debtholder group had the highest bid at $290 million including the assumption of $11.5 million in debt.

The bankruptcy auction will decide the fate of the Dallas movie-rental chain.

From wire dispatches and staff reports

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