AP
Business Highlights
Friday September 5, 6:23 pm ET

Unemployment climbs to 5-year high of 6.1 percent

WASHINGTON (AP) -- The nation's unemployment rate zoomed to a five-year high of 6.1 percent in August as employers slashed 84,000 jobs, dramatic proof of the mounting damage a deeply troubled economy is inflicting on workers and businesses alike.

The Labor Department's report, released Friday, showed the increasing toll the housing, credit and financial crises are taking on the economy.

The jobless rate jumped to 6.1 percent in August, from 5.7 percent in July. And, employers cut payrolls for the eighth month in a row. Job losses in June and July turned out to be much deeper. The economy lost a whopping 100,000 jobs in June and another 60,000 in July, according to revised figures. Previously, the government reported job losses at 51,000 in each of those months.

Stocks mostly rise as investors snap up financials

NEW YORK (AP) -- Wall Street wrestled with intensifying economic worries Friday, extending sharp losses after a disheartening jobs report and then grudgingly engaging in some mild bargain hunting that gave the market some modest gains.

The major indexes ended the week with big declines, a sign that investors, who not long ago expected the economy to improve, are now growing increasingly discouraged.

Stocks initially fell after the Labor Department reported that payrolls shrank more than predicted last month and that the unemployment rate reached a five-year high. But stocks that had been pounded lower, including a huge drop on Thursday, were suddenly more attractive to investors willing to make some bets.

Home loan troubles break records again

WASHINGTON (AP) -- The source of trouble in the mortgage market has shifted from subprime loans made to borrowers with bad credit to homeowners who had solid credit but took out exotic loans with ballooning monthly payments.

The Mortgage Bankers Association said Friday that more than 4 million American homeowners with a mortgage -- a record 9 percent -- were either behind on their payments or in foreclosure at the end of June.

As the economy falters and home prices keep falling, concern is building about a second wave of mortgage defaults flooding the market through 2010.

Oil prices drop as jobs data add to demand worries

NEW YORK (AP) -- Oil prices sank to a five-month low Friday as a jump in the U.S. unemployment rate signaled to traders that Americans might keep paring back their energy use to save money.

The Labor Department said the economy lost jobs in August for the eighth consecutive month -- and at a faster-than-expected pace. The unemployment rate spiked to 6.1 percent from 5.7 percent in July, above the 5.8 percent rate that analysts forecast.

Light, sweet crude for October delivery fell $1.66 to settle at $106.23 a barrel on the New York Mercantile Exchange -- its lowest settlement since early April. During the session, it fell as low as $105.13.

FDA posts list of potential problem drugs

WASHINGTON (AP) -- The government on Friday began posting a list of prescription drugs under investigation for potential safety problems in an effort to better inform doctors and patients.

The first list is a bare-bones compilation naming 20 medications and the potential issue for each. It provides no indication of how widespread or serious the problems might be, leading some consumer advocates to question its usefulness, and prompting industry worries that skittish patients might stop taking a useful medication if they see it listed.

Food and Drug Administration officials said they are trying to walk a fine line in being more open to the public while avoiding needless scares.

GE may face civil action on securities violations

FAIRFIELD, Conn. (AP) -- General Electric Co. says it has been informed that the Securities and Exchange Commission may recommend fines and other action for possible violations of securities law related to accounting changes the company made.

GE said in a regulatory filing Friday that the notification, called a "Wells notice," is related to issues dating to several years ago concerning GE's accounting for certain derivatives used for hedging interest rate risk as well as other transactions.

GE said it disagrees with a recommendation for civil action and is cooperating with the SEC.

Bank of America ready to settle securities probes

WASHINGTON (AP) -- Bank of America Corp. said Friday it is ready to settle federal and state investigations into sales of risky auction-rate securities, joining eight other big investment banks that have agreed to buy back a total of more than $50 billion of the securities.

Charlotte, N.C.-based Bank of America, the second-largest U.S. bank by assets, said it has been in negotiations for nearly a month with the Securities and Exchange Commission and authorities in New York and Massachusetts on a possible settlement to buy back the bond-like securities from investors.

Prosecutors: Loss in AIG scheme exceeds $1B

NEW HAVEN, Conn. (AP) -- Federal prosecutors in Connecticut say a scheme to manipulate the financial statements of the world's largest insurance company, American International Group Inc., resulted in a loss of more than $1 billion to investors.

Four former executives of General Re Corp. and a former executive of American International Group were convicted in February of conspiracy, securities fraud, mail fraud and making false statements to the Securities and Exchange Commission. They await sentencing.

One of the defendants, Christopher Garand, said in court papers filed Sept. 2 that the government contends the loss from the scheme exceeded $1 billion.

Report: Samsung working to acquire SanDisk

SEOUL, South Korea (AP) -- Samsung Electronics Co. is pursuing an acquisition of U.S. computer memory card maker SanDisk Corp., a South Korean online business newspaper reported Friday.

Both Samsung and SanDisk neither confirmed nor denied the report. But SanDisk's shares climbed more than 31 percent Friday.

Continental to charge $15 for 1st checked bag

DALLAS (AP) -- Continental Airlines Inc. said Friday it is charging some coach customers $15 for a first checked bag, matching a similar fee imposed by most other major U.S. carriers.

A company spokeswoman said the fee would help offset high fuel costs, which have caused Continental and other carriers to lose money this year.

The fee took effect immediately on tickets for travel in the United States and Puerto Rico, the U.S. Virgin Islands and Canada for travel starting on Oct. 7 or later.

By The Associated Press

The Dow Jones industrial average rose 32.73, or 0.29 percent, to 11,220.96; the blue chips had been down 150 points at their lows of the session.

Broader stock ended mixed. The Standard & Poor's 500 index rose 5.48, or 0.44 percent, to 1,242.31, and the Nasdaq composite index fell 3.16, or 0.14 percent, to 2,255.88.

Light, sweet crude for October delivery fell $1.66 to settle at $106.23 a barrel on the New York Mercantile Exchange -- its lowest settlement since early April. During the session, it fell as low as $105.13.

Heating oil futures fell 4.09 cents to settle at $2.9828 a gallon on the Nymex, where gasoline prices dropped 5.43 cents to $2.6861 a gallon. Natural gas for October delivery rose 12.7 cents to $7.449 per 1,000 cubic feet.

In London, October Brent crude fell $2.21 to settle at $104.09 a barrel on the ICE Futures exchange.