AP
Business Highlights
Monday August 11, 6:11 pm ET

Federal Reserve finds deepening credit crisis

WASHINGTON (AP) -- More banks are tightening lending standards on home mortgages and other consumer and business loans as a deepening credit crisis exerts a heavier toll on the economy.

The Federal Reserve said Monday the percentage of banks reporting tighter lending standards rose across various loan types in its July survey. In April, the central bank had found that the percentage of banks reporting tighter lending standards was already near historic highs.

The new survey, conducted in early July, found that about 75 percent of the banks surveyed indicated they had tightened their lending standards for prime mortgages. That was up from about 60 percent of banks who said they were tightening lending standards for prime mortgages in the previous survey.

NY AG expands auction-rate securities probe

NEW YORK (AP) -- New York Attorney General Andrew Cuomo said Monday he is expanding his investigation into the collapse of the auction-rate securities market to include JPMorgan Chase & Co., Morgan Stanley and Wachovia Corp.

Last week, Cuomo's office and the Securities and Exchange Commission reached settlements that forced Swiss bank UBS to repurchase $18.6 billion in the securities, while Citigroup agreed to buy back $7 billion of the securities. UBS will also pay a fine of $150 million, while Citigroup will pay a $100 million fine.

The attorney general will determine if JPMorgan, Morgan Stanley and Wachovia knowingly misrepresented the safety of the securities when selling them to investors.

Oil extends its slide on signs of demand slowdown

NEW YORK (AP) -- Oil prices finished at a new three-month low Monday after briefly dropping below $113 a barrel mark, as the dollar extended its rebound and more signs emerged that China's energy demand could be leveling off.

In earlier trading, oil fluctuated as traders monitored the conflict between Russia and Georgia that some believe could disrupt supplies. But those worries faded to the background as the dollar's recovery accelerated, and as the energy market focused on a report from China that the country's crude oil imports in July were down 7 percent from last year.

Light, sweet crude still fell 75 cents to settle at $114.45 per barrel on the New York Mercantile Exchange after dipping to $112.72, its lowest price since early May.

Stocks end higher, extending last week's gains

NEW YORK (AP) -- Wall Street advanced Monday but gave back some of its gains after crude oil prices pulled off their lows and the Federal Reserve said more banks are tightening lending standards.

Oil's big drop over the past month has eased investors' concerns about the drag of rising prices on the economy, but its move off its lowest levels Monday deflated a stock market rally that was building upon steep gains from last week.

The Dow Jones industrials, up more than 130 points in afternoon trading, ended the day up 48.03, or 0.41 percent, at 11,782.35 after rising more than 300 on Friday.

Conflict seems unlikely to deter Russia investors

LONDON (AP) -- Russian stock markets rose Monday as investors focused on the long-term opportunities offered by Russia's booming economy instead of the clash between Russia and Georgia over the separatist province of South Ossetia.

News of the fighting in the South Ossetia region on Friday sent Russia's RTS stock index down 6.5 percent to a two-year low, but by market close Monday the index had regained 1.2 percent following Russian President Dmitry Medvedev's announcement that the army had completed a "significant" part of its operations.

Meanwhile, the dollar-denominated MICEX index gained 3.9 percent on Monday. In another sign the fighting was not fueling panic, oil prices fell despite concerns the conflict could disrupt pipelines running from Caspian fields across Georgia to the Black Sea and the Mediterranean.

Waste Management sweetens offer for rival Republic

UNDATED (AP) -- Waste Management Inc. has raised its unsolicited buyout offer for Republic Services Inc. by 9 percent to $6.73 billion, escalating a takeover battle among the nation's largest trash haulers.

Monday's sweetened offer of $37 a share comes less than a month after Waste Management, the nation's largest trash collector, offered to buy No. 3 Republic in an all-cash buyout worth $34, or about $6.19 billion. That bid was quickly rejected by Republic, which said the offer undervalued the company and was an attempt to disrupt its own plans to buy another waste hauler.

Republic had agreed earlier this summer to buy Allied Waste for $6.07 billion in a stock deal, creating a company with revenue nearly as large as Waste Management's.

Goldman, Morgan Stanley among Dubai Merc investors

DUBAI, United Arab Emirates (AP) -- Goldman Sachs Group Inc., Morgan Stanley and four energy-related companies are taking minority stakes in Dubai Mercantile Exchange Ltd., adding clout to the fledgling exchange as it seeks to establish itself as a major player in the global crude oil market.

The exchange said Monday that the new investors, which also include a division of Royal Dutch Shell PLC and energy trading companies Vitol, Concord Energy Pte Ltd. and Casa Energy Trading, bought their stakes after the exchange's board approved a 20 percent sale.

Financial terms of the deal and the size of the investors' stakes were not disclosed. The exchange did not confirm whether the buyers' investments constituted the entire 20 percent up for sale.

Health care costs seen rising 10 percent in 2009

Health care costs are expected to rise more than 10 percent into next year, according to a survey of insurers by Aon Consulting Worldwide.

But that increase is the smallest Aon has seen in six years. Experts say it shows that efforts to tame costs, such as employee wellness or disease management programs, may be paying off.

Aon Consulting surveyed about 70 health insurers around the country, including companies such as Aetna Inc. and Cigna Corp. It found that actuaries expect costs to rise an average of 10.6 percent during 12-month rating periods starting this year between April and September.

China shares hit 19-month low on economic fears

SHANGHAI, China (AP) -- China's benchmark Shanghai Composite Index fell 5.2 percent Monday following the release of economic data showing wholesale price inflation jumped to its highest level in 12 years in July.

The Shanghai index closed at 2,470.07 on Monday, down 135.65 points. That was its lowest close in more than a year and a half. The Shenzhen Composite Index of China's smaller, second market plunged 6.6 percent to 698.37.

Airlines, textile exporters and refiners led the decline. Two of three major publicly traded airlines dropped by the daily maximum 10 percent.

Retailers' 2Q results may not be as bad as thought

NEW YORK (AP) -- Amid the pile of downbeat sales reports for July from retailers, there was a sliver of hope: Second-quarter profits may not be as bad as expected when merchants such as Wal-Mart Stores Inc., Macy's Inc. and J.C. Penney Co. post their results starting this week.

Several companies, from Gap Inc. and Penney to teen retailer Hot Topic Inc., raised their outlooks last week -- with help from strict inventory controls and slashing expenses -- even as they reported sales declines in July at established stores.

Still, retailers overall are expected to report a fifth consecutive drop in quarterly earnings. Worries abound about how merchants will stem the erosion of their profits as they confront what could be a deeper spending funk in the critical months ahead.

By The Associated Press

The Dow rose 48.03, or 0.41 percent, to 11,782.35 on the New York Stock Exchange.

Broader stock indicators also advanced Monday. The Standard & Poor's 500 index rose 9.00, or 0.69 percent, to 1,305.32. The Nasdaq composite index rose 25.85, or 1.07 percent, to 2,439.95.

Light, sweet crude for September delivery fell 75 cents to settle at $114.45 a barrel on the New York Mercantile Exchange.

In Nymex trading, heating oil futures slipped 0.85 cent to settle at $3.1195 a gallon, while gasoline futures fell 2.08 cents to finish at $2.8666 a gallon. Natural gas futures rose by 10.1 cents to $8.349 per 1,000 cubic feet.

In London, Brent crude futures fell 66 cents to settle at $112.67 a barrel on the ICE futures exchange.