AP Business Highlights

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On Thursday February 18, 2010, 6:15 pm EST

Job market improvement may be slowing, data show

WASHINGTON (AP) -- Layoffs aren't slowing as fast as some analysts had expected. That was the message Thursday in a government report that the number of people filing first-time claims for unemployment benefits rose unexpectedly last week. Jobless claims rose by 31,000 to a seasonally adjusted 473,000.

Further evidence that the pace of the economic recovery is slowing was a private research group's forecast of economic activity. The Conference Board's index of leading economic indicators rose for a 10th straight month in January, but the rate of increase is easing. The index is designed to forecast activity in the next three to six months.

A third report said wholesale prices shot up at double the expected pace in January. But the surprising surge was viewed as a temporary blip and not a signal of sustained inflation.

Wal-Mart profit rises 22 percent for 4Q

NEW YORK (AP) -- Wal-Mart Stores Inc., one of the recession's biggest beneficiaries, felt the pinch during the fourth quarter as quarterly sales fell at U.S. Walmart stores for the first time.

Still, overseas growth and a concerted cost-cutting campaign pushed profit up 22 percent.

The discounter, which rode low prices to dominate U.S. retailing, faced tough price competition from rivals during the holidays. That contributed to a decline in customer counts and spending.

The company said that a key measure of sales showed its third consecutive quarterly decrease as it continues to grapple with deflation in groceries and electronics and a tough economy.

Fed bumps up rate banks pay for emergency loans

WASHINGTON (AP) -- The Federal Reserve decided Thursday to boost the rate banks pay for emergency loans. The action is part of a broader move to pull back the extraordinary aid it provided to fight the worst financial and economic crisis since the 1930s.

The move won't directly affect borrowing costs for millions of Americans. But with the worst of the financial crisis over, it brings the Fed's main crisis lending program closer to normal.

The Fed decided to bump up the so-called "discount" lending rate by one-quarter point to 0.75 percent. The increase takes effect Friday.

The central bank said the action should not be viewed as a signal that it will soon boost interest rates for consumers and businesses. Record-low borrowing costs near zero are still needed to foster the recovery, it said. The Fed repeated its pledge to keep interest rates at "exceptionally low" levels for an "extended period."

Stronger manufacturing report lifts stock market

NEW YORK (AP) -- An increase in regional manufacturing pushed the stock market to its third straight advance and offset concerns about lower sales at Wal-Mart.

The Dow Jones industrial average rose 84 points to 10,392.90, bringing its gains for the week to nearly 300 points. It's the best streak for the Dow since November.

Stock futures turned lower after the closing bell Thursday when the Federal Reserve announced it was hiking the interest rate that it charges banks for emergency loans. The move doesn't change consumer borrowing rates, but the notion that policymakers would start to reel in some of the emergency economic supports put in place since 2007 spooked investors.

Yahoo-Microsoft deal set, taking aim at Google

SAN FRANCISCO (AP) -- U.S. and European regulators have cleared the long-discussed Internet search partnership between Microsoft Corp. and Yahoo Inc., enabling the rivals to form a tag team as they try to mount a more serious challenge to Google Inc.

The government approvals announced Thursday anointed an alliance that Microsoft and Yahoo proposed nearly seven months ago after years of flirtation and often contentious negotiations.

Microsoft first approached Yahoo about working together in late 2006 and again in 2007. In 2008, Microsoft launched a hostile bid to buy Yahoo in its entirety, only to withdraw the $47.5 billion offer in exasperation.

Toyota president agrees to testify before Congress

WASHINGTON (AP) -- Toyota president Akio Toyoda says he will testify at a congressional hearing next week on the automaker's recalls.

Toyoda said in a statement he looks "forward to speaking directly with Congress and the American people."

Toyoda is the grandson of the Japanese automaker's founder. He had said he wasn't planning to attend the hearings but would consider appearing before Congress if invited.

Toyota has recalled 8.5 million vehicles globally to address problems with accelerator pedals and brakes. The executive's appearance before Congress is expected to raise the profile of the House Oversight and Government Reform Committee hearing, scheduled for Wednesday.

Deficit panel can be candid: Budget cuts will hurt

WASHINGTON (AP) -- President Barack Obama's new deficit commission might give Americans a slap in the face about the sacrifices needed to avoid bankrupting future generations -- maybe working until age 70, paying higher taxes and spending more of their own money for doctors' visits and prescriptions.

Obama certainly won't be talking about that harsh medicine, nor will the lawmakers on Capitol Hill, nor the candidates trying to replace them next November.

In a poisonous election-year atmosphere, almost no one is willing to go on the record with solutions like raising the Social Security retirement age, ordering broad-based tax increases or increasing co-pays and deductibles for Medicare -- ideas far too politically explosive for one party to take on alone.

Dell 4Q profit edges down 6 percent; stock falls

SEATTLE (AP) -- Dell Inc. said Thursday its net income fell 6 percent in the last quarter despite early signs that businesses may be starting to buy new computers again.

Consumers snapped up low-cost laptops and smaller netbooks over the holidays, pushing Dell's PC shipments up 29 percent. Those products are less lucrative, though, and Dell's revenue and profit in the consumer PC division grew much more slowly.

For the three months ended Jan. 29, Dell said earnings slipped to $334 million, or 17 cents per share. That was down from $351 million, or 18 cents per share, a year ago.

Treasury announces 4 more warrant auctions

WASHINGTON (AP) -- The Treasury Department said Thursday it has authorized another four auctions of bank warrants to recoup taxpayer money from the controversial financial bailout fund.

Treasury said that four banks including Bank of America Corp. would participate in the auctions, which will be scheduled over the coming month.

The auctions are being held in cases where Treasury and the banks could not agree on a price for the warrants. The government received the warrants in return for the financial support provided from the $700 billion bailout fund.

Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price.

Glaxo to remove zinc from denture cream

WASHINGTON (AP) -- The maker of Poligrip denture cream will stop making formulas containing zinc amid lawsuits claiming years of excessive use caused neurological damage and blood problems in consumers, allegedly crippling some.

GlaxoSmithKline will stop making and marketing Super Poligrip Original, Ultra Fresh and Extra Care products in the U.S. The company plans to reformulate the creams without zinc.

The company, based in London, reported more than $520 million in denture adhesive sales last year. It stressed that the products are safe when used as directed, but that some people use extra cream to correct ill-fitting dentures.

Natural gas tumbles on large supplies

NEW YORK (AP) -- Natural gas prices tumbled nearly 4 percent Thursday after the government said supplies are still higher than average despite a rash of snowstorms that blanketed the East Coast during the past few weeks.

Natural gas is used to both heat homes and power electric generators, and supplies generally drop in the winter as homeowners crank up the heat.

The Energy Information Administration said natural gas stores did fall last week. However the remaining supply of 2.03 trillion cubic feet is still nearly 3 percent higher than the five-year average.

Natural gas lost 21.4 cents to settle at $5.172 per 1,000 cubic feet in trading on the New York Mercantile Exchange.

By The Associated Press

The Dow rose 83.66, or 0.8 percent, to 10,392.90, putting its gain for the week at 294 points.

The broader Standard & Poor's 500 index rose 7.24, or 0.7 percent, to 1,106.75. The Nasdaq composite index rose 15.42, or 0.7 percent, to 2,241.71, its fifth straight advance.

Benchmark crude for March delivery added $1.73 to settle at $79.06 a barrel on the Nymex. That's the highest settle for oil in more than a month.

Natural gas lost 21.4 cents to settle at $5.172 per 1,000 cubic feet in trading on the New York Mercantile Exchange.

In other Nymex trading in March contracts, heating oil added 4.49 cents to settle at $2.0516 a gallon, and gasoline rose 6.21 cents to settle at $2.0692 a gallon.

In London, Brent crude increased $1.51 to settle at $77.78 a barrel on the ICE futures exchange.

 

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