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WASHINGTON • U.S. builders began work on more homes last month, evidence that the battered housing market is slowly healing.

The Commerce Department said today that builders broke ground at a seasonally adjusted annual pace of 717,000 homes in April from March. That’s 2.6 percent more than March’s total, which was revised higher. Construction rose for both single-family homes and apartments.

Building permits, a gauge of future construction, fell last month from a 3 ½ year high to a seasonally adjusted annual rate of 715,000. But that was because of a 23 percent drop in the volatile apartment category. Permits for single-family homes rose almost 2 percent.

Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. But the increase, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may finally be starting to recover nearly five years after the housing bubble burst.

Builders have grown more confident since last fall, in part because more people have expressed interest in buying a home. In May, builder optimism rose to the highest level in five years, according to the National Association of Home Builders/Wells Fargo builder sentiment index.

Homebuilders reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also rose to 34 from 31 guaranteed high risk personal loans.

Recent job gains have likely made it easier for more Americans to purchase a home. Employers have added 1 million jobs in the past five months. And unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.

Mortgage rates, meanwhile, have fallen to record lows, making home-buying more affordable. Still, many would-be buyers are having difficulty qualifying for home loans or can’t afford larger down payments required by banks.

Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

There are some hurdles to a smooth recovery: Builders are struggling to compete with deeply discounted foreclosures and short sales — when lenders allow homes to be sold for less than what’s owed on the mortgage.

Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a re-sale. That’s nearly twice the markup typical in a healthy housing market.

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Avon shares are plunging in premarket trading after Coty dropped its $10.7 billion takeover bid for the cosmetics company.

Coty Inc., a privately held rival, had raised its original offer last week by about 6.5 percent, but set a deadline of Monday for the New York company to accept the bid.

Avon asked for more time to consider the bid over the weekend, but it appears that Coty is having none of it. It slammed that door shut on the troubled company Monday and investors are following suite even before the markets open Tuesday in some heavy trading.

If the current prices hold, Avon shares will be worth less than when Coty made its original offer back in April.

Shares are down 14 percent to $18 in premarket trading.

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Shares of Tilly’s Inc. rose Friday above their offered price in the clothing retailer’s debut on the New York Stock Exchange.

The Irvine, Calif.-based company’s stock jumped $2.30, or 14.8 percent, to $17.80 in morning trading after opening at $18.80 and briefly rising as high as $19.29 per share.

The company had priced its initial public offering of 8 million shares at $15.50 per share. It is offering 7.6 million shares and selling stockholders are offering 400,000 shares.

Tilly’s sells surf-inspired and casual West Coast-styled clothing and accessories at its chain of 140 stores in 19 states. It was founded by Hezy Shaked and Tilly Levine, who opened their first store in Orange County, Calif., in 1982 and are still principal shareholders.

Tilly’s expects to receive net proceeds of about $107.6 million after expenses. It won’t receive any proceeds from the sales by the selling stockholders cheap credit report.

Tilly’s is a holding company and does its business through Tilly’s World of Jeans & Tops. It plans to use proceeds from the IPO to pay shareholders with a stake in Tilly’s World Jeans & Tops, which will be made into a wholly owned subsidiary of Tilly’s.

In the fiscal year ending Jan. 28, the company earned $34.3 million. That was up 41 percent from the prior year. Its revenue rose 20 percent to $400.6 million for the year.

The underwriters of the IPO included Goldman, Sachs, BofA Merrill Lynch, and Piper Jaffray. Underwriters have a 30-day option to purchase up to an extra 1.2 million shares to cover overallotments.

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Stocks opened lower on Wall Street Monday on news that Spain’s economy entered another recession.

The Dow Jones industrial average slipped 34 points to 13,193 in the first half-hour of trading. The Standard & Poor’s 500 index fell eight points to 1,395 and the Nasdaq composite fell 21 points to 3,048.

Stocks were also being held back by a report from the Commerce Department that consumer spending growth slowed in the U.S. last month. That added to worries that the U.S. economy recovery is slowing down.

The losses were broad. Nine of the ten industry groups in the S&P 500 fell, led by materials. Only health care stocks rose. The dollar rose against the euro and the prices of U.S. Treasury bonds increased as investors parked money in low-risk assets.

European markets were mainly lower over growing concerns about Spain. Stocks were off nearly 1.3 percent in Spain and France.

The Spanish government said that country’s economy shrank 0.3 percent in the first three months of the year, the second straight three-month period of contraction. It’s the second time in three years that Spain has been in a recession.

Ratings agency Standard & Poor’s downgraded Spain’s government debt to just three notches above junk Friday. On Monday S&P lowered its rating for 11 Spanish banks, which are loaded with bad debt from a collapsed housing market. Spain is the fourth-largest economy among the 17 countries that use the euro online payday advance. Investors worry that Europe’s bailout funds won’t be big enough to rescue Spain if it needs help.

Stocks to watch include Barnes & Noble, which is teaming up with Microsoft to create a unit to house the digital and college businesses of the bookseller and include a Nook application for Windows 8. The companies said they may separate those businesses entirely. That could mean a stock offering, sale, or some other kind of deal.

Barnes & Noble jumped 62 percent to $22.26 in early trading. Microsoft was flat.

Health insurer Humana fell 6 percent to $82.44 after reporting a 21 percent drop in first-quarter profit as the company paid out more in claims, falling short of Wall Street expectations.

NYSE Euronext, owner of the New York Stock Exchange, fell 4 percent to $25.95 after reporting that its income plunged 44 percent in the first three months of the because of weaker trading business and the collapse of its proposed merger with the European exchange operator Deutsche Boerse.

Sunoco jumped 21 percent to $49.30, the most of any stock in the S&P 500, on news that the company agreed to be bought by Energy Transfer Partners, a natural gas pipeline company, for $5.3 billion.

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Swedish retail sales unexpectedly rose for a sixth month in March as lower interest rates and falling unemployment fueled consumer confidence.

Sales rose a monthly 0.2 percent and climbed an annual 4.5 percent, compared with 3.5 percent the previous month, Stockholm-based Statistics Sweden said today. The median estimate in a survey of six economists by Bloomberg was for a monthly drop of 0.3 percent and an annual gain of 3.4 percent.

Germany’s top central banker is rejecting calls for the European Central Bank to cut interest rates and offer more support to banks and bond markets.

Jens Weidmann says that “monetary policy is not a panacea and central bank firepower is not unlimited,” particularly within the constraints of a currency shared by 17 countries.

Weidmann heads Germany’s Bundesbank and sits on the 23-member governing council of the ECB.

He was responding to calls by some international finance officials for the ECB to do more to support the eurozone economy and its indebted governments. Weidmann said the central bank system in Europe has already done a lot and can’t be a substitute for inaction by governments on budget-cutting and pro-growth reforms.

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Egypt is facing daunting challenges, a leading candidate for president said Sunday, presenting his decades as a senior government official as a prime reason to vote for him and not an Islamist.

Amr Moussa said Egypt is going through an economic and social crisis that requires the talents of an experienced statesman, not a president who learns on the job.

Egyptians pick a new president to replace deposed Hosni Mubarak in a process that begins May 23-24. It is unclear how much power the new president will have, as the process for writing a new constitution is snagged over disagreements about makeup of the body that will write the new document.

Moussa served as Egypt’s foreign minister under Mubarak and in 2001 moved over to head the Arab League. He resigned that post last year to run for president.

At a news conference Sunday in Cairo, he disagreed with the goals of Islamist parties, which have won clear majorities in parliamentary elections running on a platform of Islamic principles.

“I believe that Egypt has been injured, Egypt has been mismanaged and that Egypt should not get into an experiment that has not been tried before,” he said when asked about his top Islamist opponent, a member of Egypt’s powerful Muslim Brotherhood.

Such an experiment, he said, could enter Egypt “into a period of confusion.”

Critics charge that Moussa’s record as a top official under Mubarak could mean his election would mark a return to the ways of the former regime, characterized by corruption, inefficiency and nepotism.

Egypt’s economy has been hard hit in the aftermath of the popular uprising. Tourism and investment rates have plummeted, foreign currency reserves have dipped dangerously and the national budget reels under the burden of heavy subsidies on fuel and basic food products.

Thirteen candidates are running to replace Mubarak. Since he resigned after a popular uprising, Egypt’s military has been running the country.

Facing Moussa are candidates from the Muslim Brotherhood and other Islamist factions, as well as another Mubarak-era official, Ahmed Shafiq, his last prime minister instant personal loans guaranteed.

In a last minute decision, the Brotherhood decided to field a candidate in the race, after it had promised it would not. This led many to accuse the Brotherhood of being power hungry, aiming to lead Egypt toward into a religion-based system of government. The Brotherhood says it would have Islam as its reference for governing.

The group’s candidate, Mohamed Morsi, said Saturday if he wins, he will be president of all Egyptians, but it is now time to put into practice the group’s slogan, “Islam is the solution.”

The Brotherhood’s main candidate was among 10 disqualified this month by Egypt’s election commission, along with another leading Islamist and Mubarak’s former intelligence chief, boosting Moussa’s chances. Morsi replaced the group’s first choice.

Moussa pointed to his credentials as a longtime government official with deep knowledge of the system.

“I believe I can start from minute one as president with my knowledge of the government, the administration, the management and also the connection with the world and the Arab world and the African world, and Europe,” he said. “The country is in a major crisis. A major crisis doesn’t justify at all a president who will ask around, what should I do at this point or that point and gaining experience as he goes.”

The Brotherhood was outlawed for decades before Mubarak was overthrown in February 2011, so its leaders have never held high office.

Moussa, 76, is popular among Egyptians who see in him a seasoned and outspoken diplomat, particularly voicing criticism of Israeli policies.

On the other hand, he has been harshly criticized in recent protest rallies for his association with the Mubarak regime, and many protesters say that he, like other former regime officials, should not be allowed to run in the first post-Mubarak elections.

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Bank of Israel Governor Stanley Fischer said Israel shouldn

A group of prominent Chinese writers have demanded millions of dollars in compensation from technology giant Apple Inc. for allegedly selling unlicensed versions of their books in its online store, a lawyer said Monday.

The case is a departure from the usual pattern of U.S artists or companies going after Chinese copycats. Trade groups say illegal Chinese copying of music, designer clothing and other goods costs legitimate producers billions of dollars a year in lost sales.

Three separate lawsuits have been filed with the Beijing No. 2 Intermediate Court on behalf of 12 writers who allege 59 of their titles were sold unlicensed through Apple’s iTunes online store, said Wang Guohua, a Beijing lawyer representing the writers.

The three suits together demand 23 million (US$3.5 million) in compensation from Apple, Wang said. Well-known novelist and race car driver Han Han is among the writers taking the legal action, he said.

Apple did not immediately respond to an emailed request for comment.

Wang said Apple uploaded the Chinese writers’ works without their permission, violating their copyright, and while Apple deleted some of the books after the suits were filed in January, some of the works quickly appeared again, apparently uploaded by developers that sell apps through the Apple Store.

“Some developers, with whom Apple has contracts, put them back online again,” said Wang of the United Zhongwen Law Firm. “It is encouragement in disguise, because they did not punish the developers. The developers could have been kicked out. But nothing happened to them.”

Wang said 10 other writers have also gotten involved since January but their suits have yet to be filed. In all, 23 writers have registered their complaints with Wang and claim that Apple sold 95 pirated titles.

The official Xinhua News Agency reported late Sunday that the writers were collectively seeking 50 million yuan ($7.7 million) in compensation from Apple but Wang could not confirm that figure.

Product piracy is a major irritant in China-US relations, but usually involves complaints that Chinese are copying American products.

However, it’s not the first time Chinese have cried foul over copyright infringement by an American company either. In 2009, the government-affiliated China Written Works Copyright Society complained that Google had scanned nearly 20,000 works by 570 Chinese authors without permission as part of its digital library project, drawing an apology from Google.

For Apple, the latest case is just one of several legal battles being fought in China. The company is embroiled in a battle over the iPad trademark with Proview Electronics Co., a Chinese computer monitor and LED light maker that says it registered the trademark more than a decade ago.

Proview wants Apple to stop selling or making the popular tablet computers under that name.

Apple says Proview sold it worldwide rights to the iPad trademark in 2009, though in China the registration was never transferred.

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AP researcher Zhao Liang contributed.

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