AP
Business Highlights
Tuesday July 1, 6:35 pm ET

General Motors holds off Toyota as June sales fall

DETROIT (AP) -- General Motors Corp. soundly beat Toyota Motor Corp. in June to retain its traditional U.S. sales lead, but GM sales still dropped 18.2 percent during a dismal month for large automakers.

Toyota's U.S. sales fell 21.4 percent, while Ford Motor Co. said it sales tumbled nearly 28 percent. Chrysler LLC took a huge hit for the month with sales down 35.9 percent.

GM's shares bounced more than 2 percent higher in late trading Tuesday after sinking to their lowest level in more than a half century during Monday's session.

The nation's biggest automaker on Tuesday reported selling 262,329 vehicles for the month, compared with Toyota's 193,234. Some industry analysts had expected Toyota to beat GM in the U.S. for the first time, but both companies were hurt by a sluggish economy and poor sales of trucks and sport utility vehicles.

Manufacturers struggle to overcome rising prices

NEW YORK (AP) -- Each week, Ira Cooper opens a letter from another supplier with the same message as the last: We're raising our prices, effective immediately. We can't tell you how long the new prices will last.

Manufacturers of everything from wallpaper to cereal are feeling the same hit. The Institute for Supply Management said Tuesday that its index of prices manufacturers pay for raw materials hit 91.5 in June, up from 87 in May and the highest reading since 1979.

Its overall index of manufacturing activity was 50.2, barely breaking a four month contraction streak. Any reading above 50 signals growth.

Manufacturers are "experiencing higher prices for their inputs while demand for their products is slowing," Norbert J. Ore, chairman of ISM's manufacturing business survey committee, said in a statement accompanying the report.

Some of the price increases are a game of catch-up.

Oil ends at new record near $141 on supply worries

NEW YORK (AP) -- Oil closed at a new record near $141 a barrel Tuesday on worries about tight supply and mounting tensions in the Middle East. In the U.S., prices at the gas pump edged to their highest point yet.

Crude prices resumed their advance as the head of the International Energy Agency said the world is experiencing its "third oil price shock," comparing the effects of today's prices with the oil crises that began with the 1973 Arab oil embargo and the 1979 revolution in Iran.

IEA chief Nobuo Tanaka added that OPEC is pumping oil at record levels and other producers "are working at full throttle." His comments reinforced the IEA's latest prediction that global supplies will remain pinched despite record prices and falling demand in the U.S. and Europe.

Ongoing tension in the Middle East -- a concern that has helped fuel oil's recent rise -- continued to weigh on traders' minds Tuesday.

Wall Street zigzags on first day of 3rd quarter

NEW YORK (AP) -- Wall Street began the third quarter with an erratic session and modest gain Tuesday after a mix of news made it clear the country is still deep in economic problems but may have some positive trends -- including some better than expected sales for General Motors Corp.

Prices rose early in the session, then turned sharply lower for much of the day and then recovered in late afternoon. The uneven performance wasn't surprising -- some bargain hunting was to be expected after a dismal first half, and in particular, a dismal June.

The session brought more discouraging news for investors: Oil rose again toward record high levels, a report showed that U.S. manufacturers are still under duress and Ford Motor Co. said its June sales tumbled. This all raised the market's fears that the economy -- still reeling from soaring commodities prices and the lingering credit crisis -- is not any closer to turning around.

Citibank ATM breach reveals PIN security problems

SAN JOSE, Calif. (AP) -- Hackers broke into Citibank's network of ATMs inside 7-Eleven stores and stole customers' PIN codes, according to recent court filings that revealed a disturbing security hole in the most sensitive part of a banking record.

The scam netted the alleged identity thieves millions of dollars. But more importantly for consumers, it indicates criminals were able to access PINs -- the numeric passwords that theoretically are among the most closely guarded elements of banking transactions -- by attacking the back-end computers responsible for approving the cash withdrawals.

The case against three people in U.S. District Court for the Southern District of New York highlights a significant problem.

Hackers are targeting the ATM system's infrastructure, which is increasingly built on Microsoft Corp.'s Windows operating system and allows machines to be remotely diagnosed and repaired over the Internet. And despite industry standards that call for protecting PINs with strong encryption -- which means encoding them to cloak them to outsiders -- some ATM operators apparently aren't properly doing that. The PINs seem to be leaking while in transit between the automated teller machines and the computers that process the transactions.

Starbucks closing 600 stores in the US

SEATTLE (AP) -- Starbucks Corp. said Tuesday it will close 600 company-operated stores in the next year, up dramatically from its previous plan for 100 closures, a sign the coffee shop operator is still feeling the pain from the faltering U.S. economy.

Starbucks said in a statement that 70 percent of the stores to be closed were opened after the start of 2006. The locations set to close include ones that "were not profitable and not projected to provide acceptable returns in the foreseeable future," it said.

About 12,000 workers will be affected by the closings, which are expected to take place over the next year, according to Valerie O'Neill, a spokeswoman for the company.

O'Neill said most of the employees will be moved to nearby stores, but she did not know exactly how many jobs will be lost.

R.I. high court overturns lead paint verdict

PROVIDENCE, R.I. (AP) -- Rhode Island's Supreme Court on Tuesday overturned a first-in-the-nation jury verdict that found three former lead paint companies responsible for creating a public nuisance, rejecting a closely watched case that had been seen as a bellwether for potential suits across the country.

The 4-0 decision ends the nearly decade-long court fight and spares the companies from potentially billions in cleanup costs for hundreds of thousands of contaminated homes.

Rhode Island was the first state to successfully sue former makers of lead pigment and paint, which can cause learning disabilities, brain damage and other health problems in children. A jury in 2006 found Sherwin-Williams Co., NL Industries, Inc. and Millennium Holdings LLC liable for creating a public nuisance by manufacturing a toxic product.

The state had proposed that the companies spend $2.4 billion inspecting and cleaning hundreds of thousands of Rhode Island homes believed to contain lead paint.

Visa rescinds debit card rule

WASHINGTON (AP) -- Consumers can now use Visa debit cards for smaller purchases without entering a personal identification number, the same way they can skip signing receipts.

Visa said Tuesday it is no longer requiring merchants to treat its debit cards differently when customers use them as PIN-debit cards, as opposed to signature cards.

The move prompted the Justice Department to drop an antitrust investigation of the practice.

Visa has allowed banks to permit merchants to waive the signature requirement when customers use Visa debit cards, usually on small purchases below $25, the department said. But Visa has prohibited banks from allowing merchants to waive the entry of a PIN if a customer chooses that route.

By The Associated Press

The Dow Jones industrial average, down more than 150 points earlier, rose 32.25, or 0.28 percent, to 11,382.26, while the Standard & Poor's 500 index rose 4.91, or 0.38 percent, to 1,284.91. The Nasdaq composite gained 11.99, or 0.52 percent, to 2,304.97.

Light, sweet crude for August delivery rose 97 cents to settle at a new high of $140.97 a barrel on the New York Mercantile Exchange. Prices at one point rose as high as $143.33, just 34 cents shy of Monday's trading record.

In other Nymex trading, heating oil futures rose 3.35 cents to settle at $3.9435 a gallon, while gasoline futures rose 1.43 cent to $3.5134 a gallon. Natural gas futures jumped 15.2 cents to settle at $13.505 per 1,000 cubic feet.

In London, Brent crude futures rose 84 cents to settle at $140.67 on the ICE Futures exchange.