AP
Business Highlights
Thursday August 28, 6:28 pm ET

Spring's economic rebound unlikely to last

Gross domestic product, or GDP, grew at a 3.3 percent annual rate in the April-June quarter, its fastest pace in nearly a year, the Commerce Department reported Thursday.

The revised reading was much better than the government's initial estimate of a 1.9 percent pace and exceeded economists' expectations for a 2.7 percent growth rate.

The rebound followed two dismal quarters, but it isn't expected to last.

Stocks jump on better-than-expected GDP, jobs data

NEW YORK (AP) -- Wall Street barreled higher Thursday after a better-than-expected reading on the gross domestic product and a drop in jobless claims gave investors some reassurance that the economy is holding up.

The Dow Jones industrial average jumped more than 200 points.

A decline in oil prices also appeared to add force to the rally in stocks. But trading volume was again light heading toward the Labor Day weekend, a condition that can skew price moves.

Dell 2Q profit drops 17 percent and stock plunges

Computer maker Dell Inc. said Thursday its fiscal second-quarter profit fell 17 percent, hurt in part by lower prices and restructuring charges. The earnings were short of Wall Street estimates, and Dell shares plunged.

For the three-month period that ended Aug. 1, Dell's earnings dropped to $616 million, or 31 cents per share, from $746 million, or 32 cents per share in the same period last year.

Boeing sends machinists final offer

Boeing Co. delivered a final contract offer to its union machinists Thursday that would boost pay by $34,000 on average over three years, the latest effort by the airplane maker to avoid a strike that could cost it millions of dollars a day.

Chicago-based Boeing said the proposed contract was its "best and final" offer and would increase compensation for the roughly 27,000 union workers in Kansas, Oregon and Washington.

Gustav likely to push up gas prices for Labor Day

Fears about Tropical Storm Gustav pushed crude oil above $120 a barrel Thursday, but prices later fell into negative territory as traders bet the government will tap the Strategic Petroleum Reserve if supplies are threatened.

Regardless of where the storm hits though, gas prices look to be headed higher.

CDC: Salmonella outbreak appears to be over

WASHINGTON (AP) -- The government said Thursday that the salmonella outbreak that sickened at least 1,440 people appears to be over, but its ultimate source may never be known, partly because of shortcomings in the nation's food safety system.

The Centers for Disease Control and Prevention and the Food and Drug Administration said they found strong evidence to implicate jalapeno and serrano peppers, and a farm in Mexico, in the largest outbreak of foodborne illness in a decade.

Investigators were unable to clear domestic and imported tomatoes, however, although the evidence against tomatoes is weaker.

Sears' 2Q profit drops 62 percent

CHICAGO (AP) -- Beleaguered retailer Sears Holdings Corp. reported a hefty drop in second-quarter profit as sales slumped, despite a restructuring aimed at drawing back shoppers who've taken their checkbooks elsewhere.

The company led by financier Edward Lampert also delivered a downbeat outlook, predicting sales and gross profit margins will feel continued pressure from the sluggish economy.

The performance -- the latest in a string of dismal news for the Hoffman Estates-based operator of Sears and Kmart stores, left some analysts unimpressed.

Jewelers look abroad to boost sales as US slows

NEW YORK (AP) -- Rising sales in Asia and Europe boosted Tiffany & Co.'s second-quarter profit on Thursday, signaling that strong international demand for jewelry is helping offset U.S. economic weakness.

Fellow jeweler Zale Corp. posted a loss for its fiscal fourth quarter but forecast 2009 profit above Wall Street expectations and noted significant growth opportunities in Canada.

The softening domestic economy, which has crimped discretionary spending for many Americans, has jewelers focusing on international efforts to offset sluggish sales in the U.S.

Toyota lowers 2009 global sales target

TOKYO (AP) -- Toyota lowered its global sales target for 2009 by 700,000 vehicles to 9.7 million Thursday, showing that even one of the world's most durable automakers is being hurt by rising material costs, a slowing U.S. market and soaring gas prices.

Toyota Motor Corp had previously set a 2009 global sales goal of 10.4 million vehicles.

The lower target would still be a 2 percent increase from the company's 2008 sales goal of 9.5 million. But even that figure was reduced last month from an initial 9.85 million units.

Toyota has been on such a potent growth track in recent years it is getting closer to ending General Motors Corp.'s 77-year run as the world's top automaker by sales.

Jobless claims fall for 3rd straight week

WASHINGTON (AP) -- The number of people signing up for jobless benefits declined last week, the third straight drop from a six-year high reached earlier this month, the government said Thursday.

Applications for unemployment benefits dropped to a seasonally adjusted 425,000, down 10,000 from the previous week, the Labor Department reported. That was a slightly better figure than the 427,000 analysts expected.

The four-week moving average also improved to 440,250, down from 446,250 the previous week.

By The Associated Press

The Dow rose 212.67, or 1.85 percent, to 11,715.18, bringing its three-day advance to nearly 330 points. Still, for the week, the Dow is up only slightly after a big decline Monday on credit worries.

Broader stock indicators also rose Thursday. The Standard & Poor's 500 index advanced 19.02, or 1.48 percent, to 1,300.68, and the Nasdaq composite index rose 29.18, or 1.22 percent, to 2,411.64.

Concerns about Tropical Storm Gustav pushed light, sweet crude for October delivery as high as $120.50 a barrel on the New York Mercantile Exchange, but prices later settled $2.56 lower at $115.59.

Natural gas for October delivery fell 55.8 cents to settle at $8.05 per 1,000 cubic feet.

In other Nymex trading, heating oil futures fell 7.91 cents to settle at $3.1826 a gallon, while gasoline futures dropped 4.58 cents to settle at $3.0214 a gallon.

In London, October Brent crude fell $2.05 to settle at $114.17 a barrel.