Those are the kind of figures that could give Americans the
psychological boost necessary for recovery to take root after the worst
recession since World War II. A net total of 247,000 jobs were lost last month, the fewest in a
year and a drastic improvement from the 443,000 that vanished in June. The Labor Department's report Friday showed that the unemployment
rate dropped a notch to 9.4 percent in July, from 9.5 percent the previous
month. Together with slight increases in the average workweek and wages, the
new figures suggested the economy is in a transition from recession to
recovery. AIG reports 2Q profit, first since 2007 American International Group Inc. said it had its first
profitable quarter since 2007 -- and warned that it still has plenty of repair
work to do. The troubled insurer said Friday it earned $1.82 billion in the
April-June quarter as some of its soured assets regained value. But its core insurance business deteriorated sharply amid the
recession. And AIG cautioned that unwinding its $1.3 trillion worth of
derivatives will take a long time, and that future results will be volatile as
it accounts for its restructuring. Its big plan to pay back the government loan keeping it alive is
to sell some of its businesses. But that plan has been revised "to take
into account the deterioration of global market conditions," and it now
plans to "maximize the value of its businesses over a longer time
frame," the company wrote in a filing. AIG didn't give details, but the message was clear that it's not
going to pull off any quick sales. Freddie Mac avoids more gov't aid WASHINGTON (AP) -- Freddie Mac escaped the second fiscal quarter
without asking the government for any new financial aid, but still expects to
need more federal help in the future. The government-controlled mortgage finance company posted a
quarterly loss of $374 million, or 11 cents a share, including $1.1 billion in
dividends paid to the government. Excluding those payments, the company would have earned $768
million. In the year-ago period Freddie lost $1.05 billion, or $1.63 a share.
Revenue totaled $7.5 billion versus $1.6 billion. Investors finally find good news on unemployment NEW YORK (AP) -- The economy's most vexing problem, unemployment,
is showing the first signs of easing. And Wall Street is celebrating. Major stock indexes barreled higher by more than 1 percent Friday
after the government said the nation's unemployment rate unexpectedly fell in
July for the first time in 15 months and that employers cut fewer jobs. Bond
prices fell, driving yields higher as investors left the safety of Treasurys. The Labor Department report handed investors the best evidence
yet that the economy could be climbing out of the recession. Analysts widely
consider unemployment the biggest obstacle to a recovery in the economy, which
is driven by consumer spending. The surprise figures injected new life in a monthlong rally and
provided validation for traders who have been betting since March that the
economy is healing. The Dow Jones industrial average rose 114 points to cap its
fourth straight weekly gain. The Dow is at its highest level since early
November. Berkshire Hathaway's 2Q profit jumps 14 percent OMAHA, Neb. (AP) -- Warren Buffett's company reported a 14
percent jump in second-quarter profit as the improving stock market boosted the
value of Berkshire Hathaway Inc.'s derivative contracts and its investments. On Friday, the Omaha-based company reported $3.3 billion in net
income, or $2,123 per share, for the quarter ending June 30. That's up from
$2.88 billion, or $1,859 per share, in the same period a year ago. The three analysts surveyed by Thomson Reuters on average
expected Berkshire to report earnings per share of $1,238.38. Berkshire generated revenue of $29.61 billion in the quarter,
down slightly from $30.03 billion a year ago. Berkshire owns more than 60 subsidiaries and it has major investments
in such companies as Coca-Cola Co. and Wells Fargo & Co. Consumers cut debt for 5th straight month WASHINGTON (AP) -- Consumers paid down their credit cards and cut
other debt in June for the fifth straight month as they rebuild savings battered
by the recession. Outstanding U.S. consumer debt fell by $10.3 billion, or 4.9
percent at an annual rate, to $2.5 trillion, the Federal Reserve said. That's a
much steeper cut than the $4.7 billion analysts expected, according to Thomson
Reuters. June's reduction follows a 2.6 percent cut in May and a steep 8.2
percent drop in April, when consumers reduced their borrowing by $17.4 billion.
That was the most in dollar terms on records dating back to 1943. 'Cash-for-clunkers' program gets $2B refill WASHINGTON (AP) -- Car shoppers caught up in the frenzy of the
"cash-for-clunkers" program now have more time and a $2 billion
reason to trade in their old gas guzzlers. President Barack Obama signed into law Friday a measure tripling
the budget of the $1 billion incentive program that has drawn big crowds to
formerly deserted showrooms. The Senate on Thursday passed the legislation
extending the two-week-old program into Labor Day and preventing it from
running out of money. The extra money, approved by the House last week, is aimed at
helping automakers and spurring the economy while removing the some of the
least fuel-efficient vehicles from the road. Delta will cut more management jobs ATLANTA (AP) -- Delta Air Lines Inc., the world's biggest airline
operator, is planning to cut more management and administrative jobs, but isn't
saying how many, according to a recorded message and a memo from top
executives. Chief Executive Richard Anderson said in a recorded message to
employees Thursday that Delta has seen its revenue stream decline by billions
of dollars because of the weak economy and the drop-off in demand for air
travel. Atlanta-based Delta is cutting more capacity and has previously
hinted that more frontline employee positions may have to be cut. Merck, Schering-Plough shareholders OK $41B deal TRENTON, New Jersey (AP) -- Shareholders of drugmakers Merck
& Co. and Schering-Plough Corp. on Friday both overwhelmingly backed a
$41.1 billion tie-up to create the world's No. 2 pharmaceutical company. The acquisition of smaller Schering-Plough allows Merck, the
world's eighth-biggest drugmaker by prescription medicine sales, to leapfrog to
No. 2 worldwide, just behind Pfizer Inc. The new Merck would have about $42.4
billion in annual sales. CIT draws down credit, suspends preferred divs NEW YORK (AP) -- Commercial lender CIT Group Inc., which is
trying to avoid filing for bankruptcy protection, said Friday that it has
received the remaining $1 billion available under a $3 billion credit agreement
and is suspending preferred dividend payments. The company, which is one of the nation's largest lenders to
small and midsize businesses, said it will use a substantial portion of the new
borrowing to support its small and middle market customers. Suspending the dividends on four series of preferred stock will
improve liquidity and preserve capital during its restructuring, CIT said. Colonial BancGroup faces federal investigation MONTGOMERY, Ala. (AP) -- Colonial BancGroup said Friday it is
under criminal investigation by the Department of Justice over alleged
accounting irregularities at its mortgage warehouse lending unit. The company said the probe involves one year's worth of financial
statements and that it intends to cooperate. The company was notified of the official
investigation on Thursday. The announcement follows a raid by federal agents on Monday at
Colonial BancGroup Inc.'s branch in Orlando, Fla., where the mortgage warehouse
lending unit is located. By The Associated Press The Dow Jones industrial average rose 113.81, or 1.2 percent, to
9,370.07. The broader S&P 500 index gained 13.40, or 1.3 percent, to
1,010.48, while the Nasdaq composite index rose 27.09, or 1.4 percent, to
2,000.25. Benchmark crude for September delivery gave up $1.01 to settle at
$70.93 a barrel on the New York Mercantile Exchange. In other Nymex trading, gasoline for September delivery fell 5.26
cents to settle at $2.0081 a gallon and heating oil dropped 2.45 cents to
settle at $1.9122 a gallon. Natural gas for September delivery lost 6.9 cents
to settle at $3.674 per 1,000 cubic feet. In London, Brent prices gave up $1.24 to settle at $73.59 a
barrel on the ICE Futures exchange.