AP
Business Highlights
Thursday September 4, 6:31 pm ET

Stocks plummet after retail, unemployment data

NEW YORK (AP) -- Dejected investors sent stocks plunging Thursday, hurtling the Dow Jones industrials down more than 340 points after retailers and the government added to a mountain of bad economic news and devastated hopes for a late-year recovery.

The market was already nervous as it waited for the government to release its August employment report on Friday. So news from the nation's major retailers that shoppers curtailed their spending last month due to higher gas and food prices, and that new applications for unemployment insurance rose by 15,000 last week, came as heavy blows.

Oil prices close at 5-month low on US gas report

NEW YORK (AP) -- Oil prices closed at their lowest level in five months Thursday as a lower-than-expected drop in U.S. gasoline supplies gave traders more reason to believe that a cooling economy is forcing Americans to drive less.

Light, sweet crude for October delivery fell $1.46 to settle at $107.89 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month contract since April 4.

Crude prices have fallen for five straight sessions, extending an almost two-month slide as traders shift their attention away from supply-threatening storms and back toward a stronger dollar and evidence of falling demand.

Jobless claims jump is bad omen for economy

WASHINGTON (AP) -- Jobless claims rose unexpectedly last week, the government said Thursday, while companies responded to the slowing economy by producing more with fewer workers.

The Labor Department reported that new applications for unemployment insurance rose to a seasonally adjusted 444,000, up 15,000 from the previous week. Economists had expected claims to drop to 420,000.

Meanwhile, productivity, or the amount of output for every hour of work, rose at a 4.3 percent annual rate in the April-June quarter, a full percentage point higher than economists expected.

Slow August sales signal more weakness in retail

NEW YORK (AP) -- Many of the nation's retailers struggled with a sluggish back-to-school season, though Wal-Mart posted higher August sales Thursday as shoppers focused on buying essentials amid worries about high gas and food prices.

As merchants announced their August sales results, Wal-Mart Stores Inc., the world's largest retailer, reported a solid gain that beat Wall Street forecasts. But mall-based apparel stores, like teen merchants Wet Seal Inc. and Abercrombie & Fitch Co., remained in the doldrums.

And high-end retailers Saks Inc. and Nordstrom Inc. posted weaker results as their affluent customers start to feel pinched.

Comcast appeals FCC Web traffic-blocking decision

WASHINGTON (AP) -- Comcast Corp. is appealing an FCC ruling that the company is improperly blocking customers' Web traffic, triggering a legal battle that could determine the extent of the government's authority to regulate the Internet.

In a precedent-setting move, a divided Federal Communications Commission last month determined that the company is violating a federal policy that guarantees unfettered access to the Internet.

Comcast challenged the FCC decision Thursday in the U.S. District Court of Appeals in Washington.

Toll Brothers posts 3Q loss as revenue falls

LOS ANGELES (AP) -- Toll Brothers Inc. said Thursday it swung to a loss in its fiscal third quarter as weak demand for new homes forced the luxury builder to mark down the value of its land and unsold homes.

But Chief Executive Robert Toll said he is seeing signs the market is stabilizing -- the company had the lowest contract cancellation rate in more than two years, and more buyers are putting down deposits.

The Horsham, Pa.-based builder lost $29.3 million, or 18 cents a share, in the three months that ended July 31. That's a reversal from a profit of $26.5 million, or 16 cents a share, in the year-ago quarter.

Investors reach compromise at TNK-BP

MOSCOW (AP) -- BP PLC and its billionaire Russian partners in the joint venture TNK-BP have agreed on a deal that forces out its embattled CEO and signals an end to a bitter struggle for control of the Russian-British company, officials said Thursday.

Under the deal, TNK-BP CEO Robert Dudley, a U.S. citizen who has been running the company from abroad since leaving Russia in July, will step down by the end of the year.

BP will nominate a new, independent CEO to replace Dudley.

The deal ends an acrimonious and very public fight that has battered Russia's image among investors. It has also contributed to a downgrade of BP's credit rating amid fears that the British oil company would lose control of the venture, perhaps ceding part of its stake to a Russian state-controlled company.

European, British central banks hold rates steady

FRANKFURT, Germany (AP) -- The European Central Bank and the Bank of England left their key interest rates unchanged Thursday, reluctant to move them lower as rising prices offset the fear of weaker growth and recession.

In London, the Bank of England kept its benchmark rate steady at 5 percent.

The Frankfurt-based ECB left its interest rate at 4.25 percent and warned of slower economic growth this year of between 1.1 percent and 1.7 percent, while growth next year in the 15-nation euro zone was expected to be between just 0.6 percent and 1.8 percent.

FDA orders stronger warnings for 4 arthritis drugs

WASHINGTON (AP) -- The Food and Drug Administration ordered stronger warnings Thursday on four medications widely used to treat rheumatoid arthritis and other serious illnesses, saying they can raise the risk of possibly fatal fungal infections.

The drugs work by suppressing the immune system to keep it from attacking the body. For patients with rheumatoid arthritis, the treatment provides relief from swollen and painful joints, but the drugs also lower the body's defenses to various kinds of infections.

The FDA became concerned after discovering that doctors seemed to be overlooking a particular kind of fungal infection called histoplasmosis. Of 240 cases reported to the FDA in which patients taking one of the four drugs developed this infection, a total of 45 died -- about 20 percent.

By The Associated Press

The Dow fell 344.65, or 2.99 percent, to 11,188.23. It was the worst drop for the blue-chip index since June 26, when it fell more than 358 points, or 3.03 percent.

Broader indexes also tumbled. The Standard & Poor's 500 index fell 38.15, or 2.99 percent, to 1,236.83, and the Nasdaq composite index dropped 74.69, or 3.20 percent, to 2,259.04.

Light, sweet crude for October delivery fell $1.46 to settle at $107.89 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month contract since April 4.

In other Nymex trading, heating oil futures fell 5.51 cents to settle at $3.0237 a gallon, while gasoline futures fell 2.64 cents to settle at $2.7404 a gallon. Natural gas futures rose 5.8 cents to settle at $7.322 per 1,000 cubic feet.

In London, October Brent crude fell $1.76 to settle at $106.30 a barrel on the ICE Futures exchange.