Seller of fruit baskets, gifts seeks bankruptcy protection

Harry & David Holdings Inc., a provider of fruit baskets and other gifts, is filing for Chapter 11 bankruptcy protection.

The Medford, Ore., company said Monday that it agreed with some senior noteholders on terms of a reorganization plan that will eliminate “substantial” debt and provide equity financing to restructure its balance sheet.

The noteholders have agreed to vote for the plan and exchange their notes for common stock.

Harry & David relies on discretionary spending that’s often the first to get cut from household and business budgets.

High gasoline prices trigger surge in consumer spending

Consumer spending rose in February at the fastest pace in four months, but a big part of the increase went to cover higher gas prices.

The Commerce Department said Monday that consumer spending jumped 0.7 percent in February. Personal incomes rose 0.3 percent. That was after a 1.2 percent January income increase, the biggest in nearly two years. Both gains reflected a Social Security tax cut that boosted take-home pay.

Economists are concerned that if energy costs keep going up, it will cut into household budgets and leave consumers with less money to spend on other items.

Discount carriers ground bid to raise air travel fares again

The airlines’ latest effort to broadly raise U.S. fares by $10 per round trip has crumbled as discount carriers like Southwest decided not to raise their prices.

After several successful price increases from December through February, two efforts to raise fares this month have fizzled, raising questions about how much consumers are willing to pay for travel.

United and Continental started the push for another fare increase last week and were joined by Delta, American and US Airways. But low-cost airlines never went along.