Business Highlights from The Associated Press

September 2, 2008 6:36 PM ET

(AP) - Oil's retreat not enough to sustain stock rally

NEW YORK (AP) — Wall Street succumbed to its ongoing angst Tuesday, giving up a sharp advance and turning moderately lower after falling oil prices failed to calm the market's nervousness about the economy and the financial sector.

The Dow Jones industrial average initially surged by nearly 250 points as oil prices dropped as low as $105.46 a barrel on reports that the Gulf Coast and its oil facilities were spared heavy damage from Hurricane Gustav.

But the positive effect of the storm's outcome on stocks was short-lived, and the blue chips ended the day down 26.

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Insurers estimate Gustav claims as high as $10B

BEAUMONT, Texas (AP) — Residential and commercial insurance claims could total $4 billion to $10 billion. More than a million customers, including some refineries, lack electricity. And retailers are gearing up for a burst of sales once residents who fled the Gulf Coast return.

Snapshots of Hurricane Gustav's economic impact revealed Tuesday that the storm was hardly as damaging as feared — particularly for the region's vast network of energy facilities. But it will be days, if not weeks, before business as usual returns.

While Gustav's force paled in comparison to Hurricane Katrina, which cost insurers $41 billion, oil workers, utility crews, fishermen and other business owners fanned out across the Gulf Coast Tuesday to assess damage and make preparations to restart operations.

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Manufacturing shrinks in August, construction down

NEW YORK (AP) — For the nation's lumber companies, automakers, home builders and other manufacturers, the final half of 2008 may be as sluggish as the first.

Slow consumer spending and high gas prices have stalled manufacturing, and even some bright spots are expected to dim. Exports, which have propped up the sector, may slide as economies overseas slow. Meanwhile, construction spending is at a seven-year low that has spread from housing to nonresidential projects.

The Institute for Supply Management said Tuesday its reading for the nation's manufacturers fell to 49.9 in August from 50 in July, matching economists' expectations, according to Thomson/IFR. A reading below 50 signals contraction, while a reading above 50 signals growth.

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Oil industry tallies up damage from Gustav

HOUSTON (AP) — Initial inspections of the Gulf Coast's extensive energy complex confirmed Tuesday that Hurricane Gustav was nowhere near as destructive as Katrina and Rita three years ago, but resumption of production and refining may be a few days away, or more.

Oil companies, rig and pipeline owners and refiners spread out across the region to look for damage from Monday's storm, and some were already putting equipment and people back in place to resume operations. The full impact should be known in the next couple of days.

The approach of Gustav had been one of the last remaining pillars of support for oil prices.

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Oil prices plunge as Gustav dissipates

NEW YORK (AP) — Oil prices plunged to the lowest level in five months Tuesday, falling to within sight of $100 a barrel on signs that Hurricane Gustav only grazed U.S. energy infrastructure in the Gulf of Mexico.

Light, sweet crude for October delivery fell $5.75 to settle at $109.71 a barrel on the New York Mercantile Exchange, after earlier dropping as low as $105.46. It was the lowest trading level since April 4, just before oil began an unprecedented march above $147 per barrel.

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KBD chief says banks seeking Lehman deal

SEOUL, South Korea (AP) — Korea Development Bank said Tuesday it is in the hunt for troubled U.S. investment bank Lehman Brothers, confirming weeks of speculation over its intentions amid expectations the Wall Street institution is in dire need of a capital injection.

It was unclear from Min's remarks how much of a stake in Lehman the banks were seeking to obtain in the negotiations or if the private banks referred to South Korean banks.

A Lehman Brothers Holdings Inc. spokesman declined to comment.

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Struggling Alcatel-Lucent names new top executives

PARIS (AP) — Alcatel-Lucent on Tuesday named two executives from the aerospace and telecommunications industries as its new CEO and chairman, hoping to turn around the money-losing technology giant.

The world's largest manufacturer of fixed-line telecommunications gear appointed Ben Verwaayen, a former chief executive of BT Group, as its chief executive, and former EADS co-CEO Philippe Camus as its new chairman.

Verwaayen, who is Dutch, and Frenchman Camus replace the U.S. and French executives behind the $11.4 billion deal that combined France's Alcatel and U.S.-based Lucent two years ago that has yet to lead to a quarterly profit.

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Commodities pullback speeds up as oil tumbles

NEW YORK (AP) — Investors are fleeing commodities in another massive exodus, reviving debate about whether the futures bubble has burst or is just going through a temporary contraction.

A steep drop in oil prices Tuesday started the latest selling wave, and gold, silver, copper and wheat also posted huge losses.

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India's Tata stops work indefinitely at Nano plant

MUMBAI, India (AP) — Tata Motors suspended work indefinitely at a factory building the world's cheapest car, the company said Tuesday, following increasingly violent protests by farmers demanding the return of their land.

No one has reported to work at the West Bengal Nano factory since Friday, at the company's request, and some international staffers have gone home, the company said.

The conflict pits several thousand of the world's poor against one of India's richest men, Ratan Tata, who wants to build them cars. At $2,500, the Nano has knocked the bottom out of the mini-car market in India, with other automotive players pushing to enter the super-economy market.

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Pfizer resuming ads for Lipitor after controversy

TRENTON, N.J. (AP) — Television ads for the world's top-selling drug, cholesterol fighter Lipitor, are back, six months after Pfizer Inc. pulled them amid charges its use of a celebrity doctor endorser who's never practiced medicine misled the public.

This time, Pfizer is leaving out the celebrity.

In the new ads, the endorser is a talent agent from the San Francisco Bay area who tells viewers he started taking Pfizer's Lipitor after surviving a heart attack last year.

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Doctors say Vytorin-cancer link can't be ruled out

MUNICH, Germany (AP) — Results so far from three studies of the cholesterol-lowering drug Vytorin are not enough to prove or rule out a possible link to a higher risk of cancer, so the drug should be used with caution until more is known, editors of a leading medical journal urged Tuesday.

The New England Journal of Medicine published results online from one study and an analysis of partial results from two others. They also were presented at a cardiology conference in Munich.

Vytorin is a combination of Merck's Zocor, a long-sold statin drug, and Schering-Plough's Zetia, a newer type of medicine that lowers cholesterol in a different way.

The possible cancer risk unexpectedly arose in July, when Dr. Terje Pedersen of Oslo, Norway, announced preliminary results from a study testing whether Vytorin could prevent damage to the heart's aortic valve from worsening.

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By The Associated Press

The Dow fell 26.63, or 0.23 percent, to 11,516.92. On Friday, the blue chip index lost 171 points. The biggest drop among the 30 Dow components came from aluminum producer Alcoa Inc., which fell $1.67, or 5.2 percent, to $30.46.

Broader stock indicators also turned lower after moving sharply higher in early trading. The Standard & Poor's 500 index fell 5.25, or 0.41 percent, to 1,277.58, and the technology-dominated Nasdaq composite index fell 18.28, or 0.77 percent, to 2,349.24.

Natural gas futures fell 68.2 cents, or 8.5 percent, to settle at $7.261 a gallon, their lowest closing price since late December.

In other Nymex trading, heating oil futures fell 11.83 cents to settle at $3.0736 a gallon, while gasoline futures lost 12.05 cents to settle at $2.7337 a gallon.

In London, October Brent crude fell $1.07 to settle at $108.34 a barrel.