AP Business Highlights

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Productivity rises in 2Q while labor costs plunge

 

WASHINGTON (AP) -- Productivity surged in the spring by the largest amount in almost six years while labor costs plunged at the fastest pace in nine years. The results point to a recession losing steam, but they do not bode well for the unemployed or those forced to work shorter weeks who were hoping for more hours.

The Labor Department said Tuesday that productivity, the amount of output per hour of work, rose at an annual rate of 6.4 percent in the April-June quarter, while unit labor costs dropped 5.8 percent. Both results were greater than economists expected.

In a second report, the Commerce Department said wholesale inventories declined for a record 10th consecutive month, falling 1.7 percent in June. That was nearly double the 0.9 percent decrease economists had expected.

Stocks fall as traders await Fed's take on economy

NEW YORK (AP) -- A recurrence of investors' anxiety about the economy gave Wall Street its biggest loss in five weeks.

The major indexes fell 1 percent Tuesday as investors worried that the market's steep gains in the past month could unravel if the economy doesn't show more signs of strengthening. Warnings about the health of banks and uneasiness ahead of the Federal Reserve's economic statement Wednesday led investors to dump financial stocks and wade into defensive areas like consumer staples companies and government debt.

The Dow Jones industrial average fell 96.50, or 1 percent, to 9,241.45.

GM says new Volt could get 230 mpg in city driving

WARREN, Michigan (AP) -- General Motors said Tuesday its Chevrolet Volt electric car could get 230 mpg (98 kilometers per liter) in city driving, making it the first American vehicle to achieve triple-digit fuel economy if that figure is confirmed by federal regulators.

But when the four-door family sedan hits showrooms late next year, its efficiency will come with a steep sticker price: $40,000. Still, the Volt's fuel efficiency would be four times more than the popular Toyota Prius hybrid, the most efficient car now sold in the U.S.

Fed gathers to take economy's pulse

WASHINGTON (AP) -- With the economy turning a corner, Federal Reserve policymakers will consider whether some consumer lending programs intended to ease the recession and stem the financial crisis should be extended.

Fed Chairman Ben Bernanke and his colleagues opened a two-day meeting Tuesday afternoon, where they will sift through economic data and anecdotal information about how businesses and consumers are faring nationwide. So far, many of those barometers suggest the worst recession since World War II is ending and that the economy has started to grow again, or will soon.

Still, the Fed has warned that recoveries after financial crises tend to be slow.

Citigroup approves $6B in new lending initiatives

NEW YORK (AP) -- Citigroup Inc. said Tuesday it approved $6 billion in new lending initiatives during the second quarter as part of its programs supported by government bailout funds.

The New York-based bank said it has now approved $50.8 billion in lending programs tied to receiving money as part of the Troubled Asset Relief Program, or TARP. The program was launched last fall by the Treasury Department to help stabilize the lending markets at the peak of the credit crisis.

Citigroup has received $45 billion in TARP money since last October. A portion of that money was recently converted into a 34 percent ownership stake for the government.

Energy prices slump after Labor Department report

UNDATED (AP) -- Energy prices slumped Tuesday on a Labor Department report that suggested consumer spending, a major economic driver, may be depressed for some time as companies cut back.

Benchmark crude for September delivery fell $1.15 to settle at $69.45 a barrel on the New York Mercantile Exchange. It was the fourth straight day of declines and the first time this month that the price for crude dipped below $69. Meanwhile, the national average for retail gas fell for the first time in three weeks.

Oil prices have ended the week higher for five straight weeks, a period that coincides with earnings reports from U.S. companies. The results appeared surprisingly healthy, which gave energy prices a boost on the belief that the recession has loosened its grip.

Wyeth: FDA delays ruling on sales of new Prevnar

TRENTON, N.J. (AP) -- Drugmaker Wyeth said Tuesday that U.S approval of a much-anticipated, improved version of its blockbuster children's vaccine Prevnar has been delayed.

Wyeth had expected a ruling by Sept. 30 from the Food and Drug Administration on whether it can start selling Prevnar 13.

The vaccine reduces risk of infection by 13 strains of pneumococcal disease, which causes many ear infections and potentially deadly meningitis, pneumonia and blood infections.

That's six more types of the bacterial disease than are prevented by the current vaccine, Prevnar 7, which had $2.7 billion in sales last year.

China's trade, factory output rise amid stimulus

BEIJING (AP) -- China's exports, retail sales and factory output improved in July, the government said Tuesday, adding to spreading signs the global economy might be recovering from its worst downturn since the 1930s.

China's positive data come after the U.S. jobless rate dipped in July for the first time in 15 months and Germany's exports and Japanese machinery orders rebounded.

"The general sense is that the financial crisis has been contained and maybe the world economy can, if not show a normal recovery, at least start growing again," said economist David Cohen of Action Economics in Singapore.

Studies: New osteoporosis drug cuts fracture risk

UNDATED (AP) -- A first-of-its-kind osteoporosis drug lowers the risk of bone fractures better than some existing treatments, two studies suggest, and could soon add a more expensive but easier option to the booming market.

Amgen Inc. will stress that only two shots of its genetically engineered denosumab, which could be approved for sale this fall, are needed each year. That's important because many patients stop taking other drugs due to side effects or frequent dosing.

Wall Street sees denosumab as a potential blockbuster crucial to Amgen. But with many cheaper, heavily advertised treatments, doctors view its expected high cost as a drawback.

Ex-Madoff CFO pleads guilty in court in NYC

NEW YORK (AP) -- The former chief financial officer for Bernard Madoff pleaded guilty Tuesday to conspiracy, admitting to helping Madoff carry out a massive fraud that cost thousands of people billions of dollars by lying to investors and testifying falsely when it seemed the fraud might be discovered.

"I was loyal to him. I ended up being loyal to a terrible, terrible fault," Frank DiPascali said as he pleaded guilty in U.S. District Court in Manhattan to charges including securities fraud, falsifying records and international money laundering.

The plea to charges which carry a potential penalty of up to 125 years in prison came with a cooperation deal that could earn him leniency at sentencing.

By The Associated Press

The Dow Jones industrial average fell 96.50, or 1 percent, to 9,241.45.

The broader S&P 500 index also had its worst day since July 7, falling 12.75, or 1.3 percent, to 994.35.

The Nasdaq composite index fell 22.51, or 1.1 percent, to 1,969.73, while the Russell 2000 index of smaller companies fell 9.75, or 1.7 percent, to 562.12.

Benchmark crude for September delivery fell $1.15 to settle at $69.45 a barrel on the New York Mercantile Exchange.

In other Nymex trading, gasoline for September delivery gained 1.38 cents to settle at $2.9422 a gallon and heating oil fell 1.59 cents to settle at $1.9117. Natural gas for September delivery fell 10 cents to settle at $3.541 per 1,000 cubic feet.

In London, Brent prices fell $1.04 to settle at $72.46 a barrel on the ICE Futures exchange.

 

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