AP

AP
Business Highlights
Friday August 15, 5:58 pm ET

Oil touches 3-month low on stronger US dollar

NEW YORK (AP) -- Oil fell to its lowest price in three months Friday, briefly touching the $111 level after the dollar muscled higher and OPEC predicted the world's thirst for fuel next year will fall to its lowest point since 2002.

Light, sweet crude for September delivery fell $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange after falling to $111.34, its lowest price since May 2 and more than $35 -- or 24 percent -- below its July 11 trading record above $147.

As high energy costs force countries around the globe to cut back on consumption, crude prices have plummeted and are now within striking distance of $100 a barrel, a level first reached Feb. 19.

Cuomo to file auction-rate suit against Merrill; Wachovia settles

NEW YORK (AP) -- New York Attorney General Andrew Cuomo said Friday he sent a letter to Merrill Lynch & Co. notifying the investment bank that his office will file suit against it as part of an investigation into the collapse of the auction-rate securities market.

The letter sent to Merrill, which was given to reporters by Cuomo's office, is similar to one Citigroup Inc. received before settling with the attorney general.

Earlier Friday, Wachovia Corp. became the fifth bank to settle as part of the investigation; Wachovia agreed to buy back $8.5 billion of the securities at face value from investors. The Charlotte, N.C.-based bank will also pay $50 million in fines to be distributed among states. The fines will be distributed to states based on the amount of securities sold to investors in each state.

Wall Street ends mixed on credit concerns, oil

NEW YORK (AP) -- Wall Street closed mixed Friday after playing out a now familiar scenario: Upbeat sentiment about falling oil prices flagged amid onging concerns about weak credit markets and the economy.

The major indexes also turned in a mixed performance after another volatile week.

While the decline in oil was placating investors this week, it still did not offset their ever-present anxiety over the slumping housing and credit markets.

Industrial output up 0.2 percent in July

WASHINGTON (AP) -- Industrial output rose in July at a slightly better pace than expected as a further rebound in the auto industry offset a big plunge in output at the nation's utilities.

The Federal Reserve reported Friday that industrial production edged up 0.2 percent last month. That was half the pace of the 0.4 percent gain in June, but it did surpass analysts' expectations for flat production in July.

The increase reflected a 0.4 percent gain in output at manufacturing plants. Motor vehicles and parts showed the biggest increase in manufacturing, advancing for a third straight month.

J.C. Penney's 2Q profits fall 36 percent

NEW YORK (AP) -- J.C. Penney Co. reported a 36 percent drop in second-quarter profits Friday and issued a downbeat outlook for the current quarter as shoppers cut back on clothing spending in a tough economy.

The Plano, Texas-based department store chain said it earned $117 million, or 52 cents per share, in the three-month period ended Aug. 2, compared with $182 million, or 81 cents per share, a year earlier.

Total net sales fell 2.5 percent to $4.28 billion from $4.39 billion. Same-store sales, or sales at stores opened at least a year, fell 4.3 percent. Same-store sales are considered a key indicator of a retailer's health.

Hershey to raise prices 11 percent

HERSHEY, Pa. (AP) -- Hershey Co. said Friday it plans to raises prices on its products by an average of 11 percent as it tries to stem the impact of soaring commodities costs, and trimmed its projections for 2008 and 2009.

The candy company known for its chocolate bars bite-sized Kisses said the immediate increase was necessary to offset "significant increases" in the cost of raw materials such as sugar, cocoa and peanuts -- up as much as 45 percent since the start of the year -- as well as the growing cost of fuel, utilities and transportation.

Netflix resumes normal shipping after 3-day glitch

SAN FRANCISCO (AP) -- Online DVD rental leader Netflix Inc. resumed normal shipments Friday after its distribution centers were crippled by three days of severe technical problems, a spokesman said.

The Los Gatos-based company also offered a 15 percent credit to customers whose discs were delayed by the outage, the longest disruption in service since Netflix launched its subscription service nine years ago.

The outage held up shipments for about a third of the company's 8.4 million subscribers, meaning the total value of the credits could run into the millions of dollars.

Dollar's prospects may be brighter after long drop

LONDON -- The U.S. dollar extended its recent rally against major currencies on Friday as commodities fell and European and Japanese economies faltered. After sliding for years, the dollar may finally be on the way back up, some analysts argue.

The currency rose against the pound for the 11th straight day on Friday, to $1.85 -- its longest winning streak in 37 years. As recently as July, one pound would buy two dollars. At the same time, the dollar climbed to its strongest level in almost six months against the euro, which fell to $1.47, and to near a seven-month high versus the yen.

Gold plummets amid stronger dollar, oil decline

NEW YORK (AP) -- Prices for the precious metal -- which touched $1,000 an ounce for the first time in March -- have plunged in recent weeks, and on Friday tumbled below $800 for the first time since late last year.

It has been a sharp reversal for a bellwether of the commodities boom that only months ago seemed poised to soar to uncharted heights.

The dramatic sell-off -- gold has slashed more than $100 off its prices since Aug. 1 -- comes amid a host of bearish factors that have dented the metal's safe-haven appeal: The once-limping dollar is strengthening against its rivals, crude oil is easing from record levels and signs suggest the worst may be over for the flagging U.S. economy.

Cadence withdraws proposal to buy Mentor Graphics

SAN JOSE, Calif. (AP) -- Electronic design software maker Cadence Design Systems Inc. on Friday withdrew its offer to buy smaller rival Mentor Graphics Corp.

Cadence, which is based in San Jose, Calif., in June offered to buy Mentor Graphics for $16 per share, or about $1.45 billion.

Republic again rejects Waste Management buyout bid

HARTFORD, Conn. (AP) -- Efforts by Waste Management Inc. to buy rival trash hauler Republic Services Inc. are getting more complicated.

The industry's No. 1 player was rebuffed a second time by Republic, which rejected a sweetened buyout offer that it said still undervalues the company.

Republic said late Thursday it sent a letter to Waste Management declining to enter into discussions over its $6.73 billion unsolicited bid because its board unanimously believes the proposal undervalues Republic.

Cablevision will pay 10-cent quarterly dividend

PHILADELPHIA (AP) -- Cablevision Systems Corp. said Friday it will pay its first-ever regular dividend in September, a conciliatory move toward shareholders as the company seeks to boost its stock price.

The decision by the diversified cable operator, which also owns Madison Square Garden in New York, follows closely behind Philadelphia-based Comcast Corp., which began paying a dividend in April.

Russ Solomon, an analyst at Moody's Investors Service in New York, said the dividend actions from Comcast, the cable industry leader, and now Cablevision will put pressure on other operators such as Time Warner Cable Inc. to follow suit.

By The Associated Press

The Dow Jones industrial average rose 43.97, or 0.38 percent, to 11,659.90.

Broader indexes were narrowly mixed. The Standard & Poor's 500 index rose 5.26, or 0.41 percent, to 1,298.20, while the Nasdaq composite index fell 1.15, or 0.05 percent, to 2,452.52.

In other Nymex trading, heating oil futures rose 2 cents to settle at $3.1191 a gallon, while gasoline prices slipped 5.18 cents to settle at $2.8602 a gallon. Natural gas futures fell 4.4 cents to settle at $8.092 per 1,000 cubic feet.

In London, September Brent crude fell $1.13 to settle at $112.55 a barrel.