AP
Business Highlights
Wednesday July 23, 7:05 pm ET

House OKs rescue for homeowners, Freddie, Fannie

WASHINGTON (AP) -- Rescue legislation sailed through the House Wednesday aimed at helping 400,000 strapped homeowners avoid foreclosure and to prevent troubled mortgage giants Fannie Mae and Freddie Mac from collapsing.

The 272-152 vote reflected a congressional push to send election-year help to struggling borrowers and to reassure jittery financial markets about the health of two pillars of the mortgage market.

Hours before the vote, President Bush dropped his opposition to the measure, which is now on track to pass the Senate and become law within days.

Oil drops below $125 for 1st time in over 6 weeks

NEW YORK (AP) -- Oil prices shed nearly $4 Wednesday, tumbling below $125 a barrel for the first time since early June on growing fears that high prices and the weak economy are destroying demand.

Light, sweet crude for September delivery dropped $3.98 to settle at $124.44 a barrel on the New York Mercantile Exchange, crude's lowest finish since June 4. The August contract expired Tuesday at $127.95.

At the gas pump, prices continued to let up. Regular gasoline dropped more than a penny to an average of $4.0402 a gallon nationwide, according to auto club AAA, the Oil Price Information Service and Wright Express. That is down more than 7 cents from last Thursday's all-time high. Diesel slipped 0.6 cent to $4.802.

Stocks advance following sharp drop in oil prices

NEW YORK (AP) -- Stocks advanced for the second straight session Wednesday as another decline in oil prices and several upbeat profit reports eased some of Wall Street's concerns about the economy.

Investors expect that a sustained pullback in oil prices would give a crucial boost to the economy.

While oil at times tugged at stocks, as it has for months, reports from AT&T Inc., McDonald's Corp. and Pfizer Inc. -- all among the 30 stocks that make up the Dow Jones industrial average -- pleased investors.

The Dow rose 29.88, or 0.26 percent, to 11,632.38 after rising nearly 100 points early in the session. On Tuesday, the blue chips gained 135 points.

Fed report says slower growth, rising prices slam economy

WASHINGTON (AP) -- The country slogged through slower economic growth and rising prices during the summer, packing a double whammy to people and businesses alike.

The Fed's new snapshot of business conditions, released Wednesday, also underscored the challenges confronting Federal Reserve Chairman Ben Bernanke and his colleagues as they try to get the economy back on track.

Growth and inflation barometers turned worse in the summer, according to the Fed report. Some worry that the country may be headed for a bout of stagflation, that toxic combination of stagnant growth and stubborn inflation not seen in decades. Bernanke has said, however, that he doesn't believe the economy will suffer from stagflation.

Toyota outsells GM worldwide in first half

DETROIT (AP) -- General Motors Corp., pummeled by falling U.S. sales and high gas prices, lost the global sales lead to Toyota Motor Corp. in the first half of this year, but the churning market makes it difficult to predict which automaker will end the year on top.

Toyota sold 4,817,941 vehicles globally during the first six months of the year, company spokesman Hideaki Homma said Wednesday, beating GM by 277,532 vehicles. Toyota said its global sales rose 2 percent from the same period the year before, while GM's sales fell 3 percent.

It's the second time Toyota has beaten GM in sales in the first half of the year. In 2007, Toyota outsold GM by about 50,000 vehicles, although GM eked out a win for the full year, retaining its 77-year position as the world's largest automaker by sales.

Chrysler plans to cut 1,000 salaried jobs

DETROIT (AP) -- Chrysler LLC said Wednesday it will cut 1,000 salaried jobs worldwide by Sept. 30 as it tries to return to profitability amid a severe downturn in U.S. sales.

The automaker announced the cuts in a letter to employees. Chrysler spokesman David Elshoff said the company hopes most of the cuts will be accomplished through early retirements, attrition and voluntary separation programs, but he said involuntary layoffs will be considered if the company fails to meet its targets.

Chrysler's U.S. sales fell 22 percent in the first six months of this year as customers shunned its trucks and sport utility vehicles in favor of smaller, more fuel-efficient cars. Industrywide U.S. sales were down 10 percent, but the decline hit Chrysler harder because trucks and SUVs make up 72 percent of the company's U.S. sales.

McDonald's swings to profit, may alter dollar menu

NEW YORK (AP) -- Consumers helped bring McDonald's Corp. back to profitability in the second quarter by spending on breakfast biscuits, chicken sandwiches and drinks despite the tough economy in the U.S.

But the nation's No. 1 hamburger chain also warned Wednesday that it expects beef and chicken costs to rise substantially in the U.S. and Europe through the rest of this year, and is testing several options that may change the makeup of its popular dollar menu.

McDonald's earned $1.19 billion in the second quarter, including a gain from the sale of its stake in sandwich chain Pret A Manger, solidly besting Wall Street estimates. A year earlier, the company posted a loss of $711.7 million stemming from charges on the sale of its Latin America and Caribbean businesses.

Weak dollar, foreign sales boost drugmakers

TRENTON, N.J. (AP) -- Profits posted Wednesday by Pfizer Inc. and Wyeth show a common theme among pharmaceutical companies -- nearly all the growth they're seeing these days is overseas, driven by emerging markets and the weak dollar.

U.K.-based GlaxoSmithKline PLC, which also reported on its second-quarter earnings Wednesday, likewise is targeting emerging markets. Like most of the industry, the companies are trying to stave off growing competition from cheaper generics, which is being magnified by government and other payers seeking to hold down health spending.

It's been much the same at other major drug makers issuing quarterly reports the last two weeks.

Minimum wage going up, little help as costs soar

WASHINGTON (AP) -- About 2 million Americans get a raise Thursday as the federal minimum wage rises 70 cents. The bad news: Higher gas and food prices are swallowing it up, and some small businesses will pass the cost of the wage hike to consumers.

The increase, from $5.85 to $6.55 per hour, is the second of three annual increases required by a 2007 law. Next year's boost will bring the federal minimum to $7.25 an hour.

The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

FCC nearing approval of satellite radio deal

WASHINGTON (AP) -- The proposed merger of the Sirius and XM satellite radio companies appeared close to final approval Wednesday, with the sole undecided member of the Federal Communications Commission poised to support the deal if the companies settle past rules violations.

Commissioners are currently at a 2-2 tie over whether to approve the proposed takeover of XM Satellite Radio Holdings Inc. by Sirius Satellite Radio Inc.

The value of the pending deal soared to $3.9 billion as shares of Sirius rose Wednesday by nearly 13 percent. XM shareholders will receive 4.6 shares of Sirius stock for every share of XM stock.

Amazon profit doubles, beats estimates

NEW YORK (AP) -- Amazon.com Inc. showed that it wasn't being hurt by economic weakness and high fuel prices, reporting Wednesday that its second-quarter profits more than doubled and surpassed analyst expectations. The Internet retailer also raised full-year revenue projections.

Sales were strong in several sections of Amazon's massive marketplace.

For the quarter that ended June 30, Amazon earned $158 million, or 37 cents per share. Amazon earned $78 million, or 19 cents per share, in the same quarter last year.

The company's revenue climbed 41 percent to $4.06 billion, including a 35 percent leap in North American sales.

By The Associated Press

The Dow rose 29.88, or 0.26 percent, to 11,632.38 after rising nearly 100 points early in the session. On Tuesday, the blue chips gained 135 points.

Broader stock indicators also advanced Wednesday. The Standard & Poor's 500 index rose 5.19, or 0.41 percent, to 1,282.19 and the technology-laden Nasdaq composite index rose 21.92, or 0.95 percent, to 2,325.88.

Light, sweet crude for September delivery dropped $3.98 to settle at $124.44 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil futures lost 12.8 cents to settle at $3.5501 a gallon, while gasoline futures shed 11.26 cents to settle at $3.0344 a gallon. Natural gas prices fell 27.9 cents to $9.788 per 1,000 cubic feet -- its first finish below $10 since April.

September Brent crude tumbled $4.26 to settle at $125.29 a barrel on the ICE Futures exchange in London.