AP Business Highlights

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On Monday February 22, 2010, 5:58 pm EST

Toyota faces federal, congressional probe

WASHINGTON (AP) -- Facing tough questions in Congress, Toyota Motor Corp. said Monday that federal prosecutors have launched a criminal investigation into the company's safety problems and the Securities and Exchange Commission was probing what the automaker told investors.

The twin developments created new challenges for Toyota officials scheduled to testify at hearings Tuesday and Wednesday amid concerns that the company and federal regulators failed to take safety problems seriously. Congressional investigators are reviewing the Japanese automaker's recall of 8.5 million vehicles since fall to deal with safety problems involving gas pedals, floor mats and brakes.

Stocks close lower on caution about economy

NEW YORK (AP) -- The stock market paused from a four-day rally Monday and closed modestly lower after big consumer companies gave a cautious outlook for economic growth.

The market, which has advanced on stronger economic signs, fluctuated after Lowe's Cos. and Campbell Soup Co. reported higher earnings but reminded investors that a recovery among consumers is expected to be slow. Stocks drew some support from news that oil field services company Schlumberger Ltd. agreed to buy Smith International Inc.

The Dow fell 18.97, or 0.2 percent, to 10,383.38. Rising stocks were about even with losers on the New York Stock Exchange, where volume came to a light 944 million shares.

Outlook no brighter for Obama's new health plan

WASHINGTON (AP) -- Starting over on health care, President Barack Obama knows his chances aren't looking much more promising.

A year after he called for a far-reaching overhaul, Obama unveiled his most detailed plan yet on Monday. Realistically, he's just hoping to win a big enough slice to silence the talk of a failing presidency.

The 10-year, $1 trillion plan, like the current Democratic version in the Senate, would bring health insurance to more than 31 million Americans who now lack it. Government insurance wouldn't be included, a problem for Democratic progressives. Republicans are skeptical about where the money would come from -- and about Obama's claim that the plan wouldn't raise the federal deficit.

Bank of America hires 2 former Merrill executives

CHARLOTTE, N.C. (AP) -- It's a sign of the changing times at Bank of America: Two Merrill Lynch executives who fled the company are back.

Sam Chapin and Todd Kaplan are returning to serve as executive vice chairmen of its global banking operations, Bank of America Corp. said Monday. The two investment bankers were among the many senior Merrill Lynch executives who left after Bank of America agreed to buy Merrill Lynch in September 2008.

Their return is a sign of rebuilding at Bank of America's investment banking division.

They are also rejoining the Charlotte, N.C.-based bank after it repaid a $45 billion government loan -- a repayment that relieved Bank of America of restrictions on how much it could pay executives like Chapin and Kaplan.

Lowe's sees better 2010 as 4Q profit rises

NEW YORK (AP) -- Consumers responded to Lowe's rebates for higher-priced items such as cabinets and countertops, a sign home owners are starting to consider bigger remodeling projects as the economy stabilizes.

Modestly higher sales and cost cutting helped Lowe's fourth-quarter profit rise 27 percent, the first quarterly increase since 2007, the company reported Monday.

The No. 2 home-improvement chain also said Monday that it expects sales to rise this year as the long-suffering housing market and broader economy recover. Still, a snowy February kept Lowe's cautious about the first-quarter outlook.

Campbell Soup 2Q profit up despite Chunky struggle

HADDONFIELD, N.J. (AP) -- The Campbell Soup Co. said Monday that it fumbled its relaunch last fall of Chunky ready-made soups, but the world's largest soup maker said its second-quarter profit still rose 11 percent from a year earlier.

It was the third straight quarter the company's profit rose from a year earlier even as its soup sales fell; it has benefited from cost-cutting and from stabilizing prices for its ingredients and packaging.

The company hoped the new healthier versions of its Chunky soups would become a prime option for people continuing to eat at home to save money during the recession -- especially after sales to the products' mainstay customers, football-watching men, had flattened.

Yellen: Low rates are needed to feed recovery

WASHINGTON (AP) -- Record-low interest rates are still needed to foster the economic recovery and to relieve high unemployment, a Federal Reserve official said Monday.

Janet Yellen, president of the Federal Reserve Bank of San Francisco, is the latest Fed official in recent days to stress that the central bank isn't in any rush to boost borrowing costs for millions of Americans. The remarks come after the Fed took a surprise step Thursday and bumped up the rate banks pay for emergency loans.

Despite a big growth spurt at the end of last year, the economic rebound is likely to slow later this year as benefits from the government stimulus plan fade, Yellen pointed out in a speech in San Diego.

Study: 2010 big employer health costs rise 6.5 pct

INDIANAPOLIS (AP) -- A new study says health care costs for large employers will rise more than 6 percent this year, and more companies are thinking about revamping their benefits.

The study from benefits consultant Towers Watson says this year's increase in the cost companies pay to administer health plans and pay claims is down slightly from 2009's 7 percent hike.

A total of 83 percent of companies surveyed say they have either revamped their health care strategy or expect to do so in the next two years. This can mean switching plan designs or an increasing employee payments among other big changes.

Company asks FDA to say new items cut tobacco risk

RICHMOND, Va. (AP) -- Star Scientific Inc., which sells tobacco products that dissolve in the consumer's mouth, is asking the Food and Drug Administration to certify them as less harmful than other forms of tobacco.

Star Scientific said Monday it asked the FDA Friday to approve its wintergreen-flavored dissolvable tobacco lozenges called Ariva-BDL as a "modified risk" product under the 2009 law that gave the FDA authority over tobacco.

The Glen Allen, Va., company said the lozenges contain "below detectable levels" of certain cancer-causing chemicals found in tobacco and its smoke. The letters BDL in the product's name refer to the regulatory term.

GM names board member Girsky vice chairman

DETROIT (AP) -- General Motors says it has named board member Stephen J. Girsky vice chairman of corporate strategy and business development.

The automaker says Girsky will be responsible in his new post for corporate strategy, business alliances, new business development and related areas.

Girsky, 47, a former Wall Street analyst, was named to GM's board last July, representing the United Auto Workers union. Chairman and CEO Ed Whitacre has said he relies heavily on Girsky for advice.

By The Associated Press

The Dow fell 18.97, or 0.2 percent, to 10,383.38.

The Standard & Poor's 500 index fell 1.16, or 0.1 percent, to 1,108.01, while the Nasdaq composite index fell 1.84, or 0.1 percent, to 2,242.03.

Benchmark oil for March delivery added 35 cents Monday to settle at $80.16 a barrel on the contract's final day of trading on the New York Mercantile Exchange. Most of the trading volume already has shifted to the April contract, which added 25 cents to settle at $80.31 a barrel.

In other Nymex trading in March contracts, heating oil rose less than a penny to settle at $2.0788 a gallon, and gasoline gained 3.01 cents to settle at $2.1158 a gallon. Natural gas dropped 14.9 cents to settle at $4.895 per 1,000 cubic feet.

In London, Brent crude added 42 cents to settle at $78.61 on the ICE futures exchange.

 

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