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Oil prices fall after Gadhafi’s death

Oil prices fall after Gadhafi’s death

NEW YORK (AP & staff) — The price of oil is falling after the death of Libyan dictator Moammar Gadhafi, although it should take months for Libya’s oil industry to recover and for the full impact to be felt on world markets. Oil fell 33 cents to $85.28 per barrel in New York on Thursday. At the pump, the price of gasoline was flat at about $3.47 a gallon. Before the Libyan civil war, Libya had provided the world’s markets will 1.5 million barrels of oil a day. When Libya stopped exporting that oil, it helped push the price of oil to $114 a barrel earlier this year. Oil has also become cheaper this year because of lower demand in a slowing global economy.

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Stocks dip on reports of delay in European summit

Stocks dip on reports of delay in European summit

NEW YORK (AP & staff) — Stocks slid Thursday after reports that a meeting planned for the weekend between European leaders to fend off a credit crisis may be delayed. The news overshadowed an unexpected recovery in manufacturing in the Northeast. The Dow Jones industrial average was down 65 points, or 0.6 percent, at 11,439 at noon. Eastern. Investors are concerned that differences between the leaders of Germany and France may hold up an agreement on how to protect European banks from the likelihood of a default by the Greek government. Officials from the 17 countries that share the euro are scheduled to meet at a summit this Sunday to discuss ways to contain the damage. A messy default by Greece could to huge losses for European banks that hold Greek bonds. If that leads them to pull back on lending to each other, investors fear it could cause another freeze in global credit markets like the one in late 2008 after Lehman Brothers collapsed. The S&P 500 fell 7, or 0.6 percent, to 1,202. The Nasdaq lost 32, or 1.2 percent, to 2,572. The dollar and U.S. Treasury prices rose as investors shifted money into assets perceived as being relatively safe. The yield on the 10-year Treasury note fell to 2.12 percent. U.S. indexes had edged higher in early trading after the Federal Reserve Bank of Philadelphia said regional manufacturing was “showing signs of recovery.” Its index of manufacturing, shipments and new orders was far better than economists had forecast. Other economic reports were mixed. The Labor Department said new applications for unemployment benefits dropped to 403,000 last week, a sign that layoffs are easing. On the down side, sales of previously-occupied homes fell 3 percent last month. Several large companies reported earnings before the market opened. Union Pacific Corp., the nation’s largest railroad, surged after its earnings came in well ahead of analysts’ estimates. The company gained 5.3 percent after reporting that its income jumped 16 percent, more than analysts had forecast. It also said it expects the growth to continue. . Southwest Airlines rose 3.2 percent after reporting income that was a penny per share higher than analysts predicted. AT&T Inc. lost 1 percent after reporting that the number of new iPhones activated last quarter was the lowest in a year and a half. The New York Times jumped 4 percent after the company reported higher profits [...]

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Rate on 30-year fixed mortgage falls to 4.11 pct.

Rate on 30-year fixed mortgage falls to 4.11 pct.

WASHINGTON (AP & staff) — The average rate on the 30-year fixed mortgage was nearly unchanged this week after rising sharply last week. Freddie Mac said Thursday that the rate on the 30-year loan edged down to 4.11 percent from 4.12 percent last week. The week before, it fell to 3.94 percent. That’s the lowest rate ever, according to the National Bureau of Economic Research. The average rate on the 15-year fixed mortgage ticked up to 3.38 percent from 3.37 percent. It hit a record-low of 3.26 percent two weeks ago. Low rates have done little to revive the lagging housing market, which has struggled with weak sales and declining prices. Many can’t qualify for loans because their credit is weak or they can’t afford a down-payment. Most of those who can afford to refinance already have. The number of Americans who bought previously occupied homes fell in September and is on pace to match last year’s dismal figures — the worst in 13 years. The National Association of Realtors said Thursday that home sales fell 3 percent last month to a seasonally adjusted annual rate of 4.91 million homes. That’s below the 6 million that economists say is consistent with a healthy housing market. Sales of new homes are on pace to finish the year as the lowest on records dating back a half-century. Prices have been sliding because the market is flooded with houses being sold in foreclosure. Many borrowers are unable to take advantage of the low rates because they can’t meet banks’ restrictive lending standards, or are unable to scrape together a down payment. The low rates have caused a modest boom in refinancing, but that benefit might be wearing off. Most people who can afford to refinance have already locked in rates below 5 percent. There have been a few modest signs of life for housing. Homebuilders started projects in September at the fastest pace in 17 months, the government said Wednesday. Most of the gain was driven by a surge in volatile apartment construction. Still, single-family home construction, which represents nearly 70 percent of the market, increased only slightly. And building permits, a gauge of future construction, fell. The Federal Reserve has been trying to reduce long-term rates by buying longer-dated Treasurys. Mortgage rates tend to track the yield on the 10-year Treasury note. Buying by the Fed pulls the yield lower. The average [...]

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AT&T sees slowing growth in wireless in 3Q

AT&T sees slowing growth in wireless in 3Q

NEW YORK (AP & staff) — Running one of the nation’s biggest wireless networks has been a reliable way for AT&T Inc. to boost revenues, quarter after quarter, as people loaded up on phones, and then traded up to smartphones. But the easy money may already have been made, AT&T’s latest results show. AT&T said Thursday that its wireless service revenue grew just 4.3 percent in the July to September period versus a year ago. That growth rate had often topped 10 percent in the recent years, but has now been declining for a straight year. Contributing to the slowdown in growth was the delayed launch of the latest iPhone model, which just missed the end of the quarter. AT&T said it activated 2.7 million iPhones in the third quarter, the lowest number in a year and a half, as people waited for the new model. On Tuesday, Apple Inc. surprised investors with global iPhone sales figures that were below lofty expectations. But AT&T said Thursday that it had already activated 1 million units of the iPhone 4S in the first five days on sale, setting a new record for a phone. “The fourth quarter is going to be unbelievable,” Ralph de la Vega, head of the consumer side of AT&T, told analysts on a conference call. The longer-term trend behind the sluggish growth in service revenues may be that people are starting to reach the ceiling for what they’re able to pay for phone service each month. More than half of AT&T subscribers now have smartphones, which means they sign up for data plans. But AT&T’s revenue from phone calls is declining almost as fast as data revenue is increasing. “The wireless business simply isn’t a growth engine anymore,” said Sanford Bernstein analyst Craig Moffett. AT&T is trying to juice the wireless business by buying No. 4 carrier T-Mobile USA for $39 billion, but the Justice Department is trying to stop the deal, saying it would remove a competitor and raise prices. Observers give it only a small chance of being completed. Dallas-based AT&T reported its net income fell to $3.62 billion, or 61 cents per share, for the quarter, down from $12.3 billion, or $2.07 per share, a year ago, which was boosted by the sale of a subsidiary and a tax settlement. Excluding those items, last year’s earnings were 54 cents per share. The latest earnings matched [...]

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Philip Morris Int’l 3Q net up on higher prices

Philip Morris Int’l 3Q net up on higher prices

RICHMOND, Va. (AP & staff) — Cigarette maker Philip Morris International Inc. said Thursday that its third-quarter net income grew nearly 31 percent as it sold more cigarettes, particularly in Asia, and raised prices. The seller of Marlboro and other cigarette brands overseas also lifted the lower end of its full-year earnings forecast by 5 cents. It now expects profit of $4.75 to $4.80. Analysts had expected earnings of $4.75 for 2011. The company’s July-September quarter topped analyst expectations, and shares rose $2.18, or 3.3 percent, to $68.21 in late morning trading. Philip Morris International earned $2.38 billion, or $1.35 per share, up from $1.82 billion, or 99 cents per share, a year ago. Adjusted for one-time costs, the company earned $1.37 per share. Excluding excise taxes, revenue grew about 26 percent to $8.4 billion. Analysts polled by FactSet had expected earnings of $1.24 per share on revenue of $7.54 billion. Philip Morris International said the number of cigarettes it shipped grew 4.5 percent to 239.5 billion cigarettes. Total Marlboro shipments rose 4 percent to 78.9 billion cigarettes. Shipments to Asia rose nearly 13 percent, and revenue for the region jumped 53 percent. Chief Financial Officer Hermann Waldemer said in a conference call with investors that the Asian market is the “growth engine” of Philip Morris International. Growth in Asia is helping offset declining smokers in Western Europe and in Latin America and Canada. The company bought Philippines company Fortune Tobacco Co. in February 2010, bolstering its Asian business. Japan’s earthquake and tsunami this March has also buffeted Philip Morris International’s Asian sales. Supply disruptions stemming from the disaster at Japan Tobacco Inc., the world’s No. 3 tobacco maker, has helped Philip Morris International increase market share in Japan. Shipments soared 47 percent in the third quarter. The company also increased prices in Japan. CFO Waldemer said that the company was able to keep its Japanese retail market share at 30 percent in September and early October, even after competitors’ products were back on the market. Before the earthquake, Philip Morris International’s share in Japan was about 26 percent. “Japan has been an example of us seizing a business opportunity that presented itself in an optimal manner,” Waldemer said. Shipments also grew about 5 percent in Eastern Europe, the Middle East and Africa, but fell 3.5 percent in the European Union and dropped about 1 percent in the Latin America [...]

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2nd rescue of bank profits via Greece may not be enough

2nd rescue of bank profits via Greece may not be enough

BERLIN (AP & staff) — Greece’s international creditors warn that a second rescue package tentatively agreed in July may not be enough to save the German and French banks from serious losses or bankruptcy, but believe Athens should nevertheless get its next batch of bailout loans to try to bail them out, according to a draft of a debt inspectors’ report obtained Thursday by The Associated Press. Although the inspectors said Greece has missed its deficit-cutting targets and that the pace of its reforms is insufficient, they said Athens should get euro8 billion ($11 billion) of bailout loans as soon as possible so the country does not default on its bank debts next month. The banks booked big profits in the past by making high interest loans to Greece.  The high interest reflected the risk of default. Now the French and German governments are using political pressure to get european countries to lend money to Greece to pay off the high interest loans to save the bank profits. Greece has been relying on a euro110 billion ($152 billion) package of rescue loans since May last year. In July, eurozone leaders tentatively agreed in a second euro109 billion bailout, that would also seen banks and other private bondholders give Greece easier terms on its debt. However, the inspectors from the European Commission and the European Central Bank said Greece’s debt dynamics remain “extremely worrying.” Even though the second bailout would reduce Greece’s finance needs in the coming weeks, “this could not suffice for the debt dynamics to be described as sustainable” if Greece’s implementation the bailout program remains weak, the report says. The International Monetary Fund, which is also a creditor and part of the so-called troika, will issue its report on Greece’e efforts separately. But the conclusions from the two other institutions pile pressure on European leaders at a key summit this Sunday to make private creditors like banks take more losses on the Greek bonds they hold. The report adds that Greece’s overall “debt sustainability has effectively deteriorated, given delays in the recovery, in fiscal consolidation and in the privatization plan, as well as the perspective of bank recapitalizations.” The report, sent to German lawmakers Thursday, said the reform efforts by the Greek government are “very large”, but targets for September “appear to have been failed by a small margin.” “The implementation of the growth-enhancing structural agenda continues, but the pace of [...]

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Markets skeptical over euro debt crisis response

Markets skeptical over euro debt crisis response

LONDON (AP & staff) — Seesawing expectations of this weekend’s summit of European leaders remained the main driver in markets on Thursday, with investors growing skeptical again about governments’ ability to agree on a strategy to deal with the debt crisis. Though stocks in Europe fell following an earlier retreat in Asia, the losses were limited as investors weigh every rumor and report about the likely make-up of a deal that may emerge at the Sunday meeting. On Thursday, concerns resurfaced that discussions over expanding the bailout fund, recapitalizing the banks and the terms of a second rescue package for Greece are proving more difficult than expected. France, Europe’s second biggest economy, is thought to be wary of committing too much money in case it loses its cherished triple A credit rating. Over the past few weeks, stocks recovered a chunk of their losses for the year on expectations that the 17 countries that use the euro were preparing a three-pronged solution to the debt crisis. That would include measures to boost the firepower of the bailout fund, a recapitalization of a large part of the banking sector and a plan to get the banks to take a bigger hit on their Greek debt holdings. This week, though, sentiment has oscillated between hope and skepticism. A general strike in Greece, which has paralyzed the country and seen outbreaks of violence, is doing little to convince investors that the government will be able to push through its reforms and austerity measures. “Financial markets are not normally known for their patience and yet for the time being, they are giving our political leaders and central bankers that most precious of commodities, time,” said Louise Cooper, markets analyst at BGC Partners. “I would say that the smallest event can cause everyone to head for the exit and predicting what event will cause panic is almost impossible.” In Europe, Germany’s DAX was down 0.5 percent at 5,881 while the CAC-40 in France fell 1 percent to 3,125. The FTSE 100 index of leading British shares was 0.7 percent lower at 5,415. Wall Street was poised to recover some of Wednesday’s losses — Dow futures were up 0.4 percent at 11,493 and the broader Standard & Poor’s 500 futures 0.5 percent higher at 1,212. A raft of U.S. corporate earnings later from the likes of drug company Ely Lily & Co. and telecoms firm AT&T [...]

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Greece paralyzed again as vote looms to bail out German and French banks

Greece paralyzed again as vote looms to bail out German and French banks

ATHENS, Greece (AP & staff) — More than 10,000 protesters gathered outside the Greek parliament Thursday, ahead of a vote on intensely unpopular new austerity measures needed to secure continued payment of international loans to fund the  payoff of more of Greece’s high interest loans, primarily from German and French banks. On the second day of a general strike that’s seen the country paralyzed, a communist party-backed union has said it will try to encircle parliament in a peaceful bid to prevent lawmakers from accessing the building for the final vote on spending cuts and tax hikes required by Greece’s international creditors. But riot police moved to foil the attempt by blocking off the main avenues leading to parliament. It is not known why the notoriously corrupt Greek government is trying to repay the loans with borrowed cash instead of calling them in and exchanging them for non-interest bearing notes with no due date. Several separate demonstrations were due to converge later in the day on Syntagma Square in front of parliament, where more than 100,000 people gathered Wednesday to protest the draft legislation. Though largely peaceful, Wednesday’s protest was marred by attacks on police and public property. The austerity bill won initial approval in a first vote Wednesday night, and deputies are now to vote on the details, which include the suspension on reduced pay of 30,000 public servants and the suspension of collective labor contracts. The governments of other countries, needing cover for their efforts to bailout their own banks, have demanded the measures before they give Greece more funds from a euro110 billion ($152.11 billion) package of bailout loans from other eurozone countries and the International Monetary Fund. Greece says it will run out of money in mid-November without the next euro8 billion ($11 billion) installment. If it does, the banks will not be paid for notes now coming due. The next installment to save the banks has yet to be authorized and there’s growing unease in the markets about whether a summit of eurozone leaders this Sunday in Brussels will yield a comprehensive solution to the continent’s debt crisis, that’s also seen Ireland and Portugal funded so the French and German banks can be saved from losses on their high interest loans.  The Greek government’s latest round of austerity measures are expected to pass though deputies from the governing Socialist party have expressed outrage, with several indicating they could vote [...]

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Home building jumps 15 percent in September

Home building jumps 15 percent in September

WASHINGTON (AP & staff) — Homes were built in September at the fastest pace in 17 months, a hopeful sign for the economy. Most of the gain was driven by a surge in volatile apartment construction, which helps boost economic growth. But other data suggest a housing recovery is far off. Single-family home construction, which represents nearly 70 percent of homes built, rose only slightly. And building permits, a gauge of future construction, fell to a five-month low. “Certainly there is no overbuilding going on now, so the overall result is favorable,” said Pierre Ellis, an analyst at Decision Economics. “But greater optimism would have been prompted if single-family starts had increased — suggesting that builders were seeing a better market ahead.” Builders began work in September on a seasonally adjusted 658,000 homes, the Commerce Department said Wednesday. That’s a 15 percent increase from August and the best pace since April 2010, when a federal homebuyers’ tax credit temporarily boosted construction. Still, the level is roughly half the 1.2 million that economists say is consistent with healthy housing markets. Single-family homes rose 1.7 percent. And building permits fell 5 percent. Apartment building surged 53.4 percent to its highest level in three years. Increased apartment construction could be a sign that builders are gaining access to hard-to-get financing for projects, analysts said. It could also be a positive sign for the broader economy. The Federal Reserve “will still be more encouraged than not, given the healthy multi-family sector — and the positive hint about availability of financing that it gives,” Ellis said. While home construction represents a small portion of the housing market, it has an outsize impact on the economy. Each home built creates an average of three jobs for a year and about $90,000 in taxes, according to the National Association of Home Builders. Overall, homebuilding fell to its lowest levels in 50 years in 2009, when builders began work on just 554,000 homes. Last year was not much better. Cash-strapped builders are struggling to compete with deeply discounted foreclosures and short sales, when lenders allow borrowers to sell homes for less than what is owed on their mortgages. And few homes are selling. After previous recessions, housing accounted for at least 15 percent of economic growth in the United States. Since the recession officially ended in June 2009, it has contributed just 4 percent. New-home sales fell in [...]

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American Airlines parent posts $162M loss for 3Q

American Airlines parent posts $162M loss for 3Q

DALLAS (AP & staff) — Even higher fares couldn’t pull American Airlines out of its financial nosedive. American’s parent, AMR Corp., said Wednesday that it lost $162 million in the third quarter, as fuel spending jumped 40 percent, wiping out higher revenue from fare increases and passenger fees. The loss of 48 cents per share was wider than analysts’ forecast for a loss of 43 cents per share. Revenue totaled $6.38 billion, $30 million better than analysts expected, as American charged an average of 7 percent more on fares. It was AMR’s fourth straight losing quarter and 14th in the last 16. In last year’s third quarter — often the strongest of the year for airlines because of heavy summer travel — AMR earned $143 million, or 39 cents per share. AMR hasn’t turned a full-year profit since 2007, and it has lost more than $12 billion since 2001, adding to speculation that it could be headed toward bankruptcy. Chairman and CEO Gerard Arpey said the third quarter was “challenging for American Airlines,” but said the company was moving aggressively to improve. The top goal, he said, was to control costs. American has high costs, a heavy debt load, too many gas-guzzling planes in its fleet, and years of labor problems. As other airlines merged and returned to profitability in the last two years, analysts and investors have grown impatient with AMR management, skewering executives for failing to show enough urgency in fixing American’s problems. The last few days provided another example of AMR’s woes. The company raised expectations it would settle labor negotiations with American Airlines pilots and win money-saving schedule flexibility, but there was no weekend deal and AMR’s stock fell 6 percent on Monday. American and the pilots’ union could still reach an agreement any day, allowing American to argue that it is doing something to control costs and boost productivity. The airline is also taking steps to update its fleet. It announced in July that it will buy 460 new jets from Boeing Co. and Airbus over several years. That should reduce fuel and maintenance spending, but the improvement will be gradual. AMR’s stock price has fallen 64 percent this year — far more than any other major U.S. airline company — reflecting speculation that the company could be forced into bankruptcy protection like so many other carriers over the past decade. Most analysts think that [...]

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Consumers paid more for food, gas in September

Consumers paid more for food, gas in September

WASHINGTON (AP & staff) — Consumers paid more for food and gas last month, although inflation outside those volatile categories was tame. The Labor Department says the Consumer Price Index rose 0.3 percent in September, below a 0.4 percent rise in August. Excluding food and energy, so-called core prices increased 0.1 percent, the smallest rise since March. Inflation has worsened this year, after the cost of oil, grains and other commodities spiked in the spring. But economists expect price increases to moderate in the coming months as weak growth lowers commodity prices. A small amount of inflation is good for the economy. It encourages businesses and consumers to spend and invest money sooner rather than later, before inflation erodes its value. Still, Americans are facing higher food and gas prices at a difficult time. Unemployment has been roughly 9 percent for more than two years. Hiring is slow and few people are seeing much in the way of raises. Steeper prices for basic necessities have forced many to cut back on more discretionary purchases. That has slowed overall growth. Food prices rose 0.4 percent in September, pushed up by big increases in the dairy, cereals, and fruits and vegetables categories. Gas prices rose 2.9 percent. Dairy prices have jumped 10.2 percent in the past year. Gas prices have soared 33.3 percent. Those increases are key reasons overall inflation has jumped 3.9 percent in the 12 months ending in September, the largest year-over-year increase in three years. Core prices have increased 2 percent for the same period. At the same time, inflation-adjusted average hourly earnings fell 0.1 percent in September, the Labor Department said Wednesday. In the past year, average inflation-adjusted hourly earnings have dropped 1.9 percent. The annual increase in consumer prices means that 55 million Social Security beneficiaries will receive higher benefits next year. They will get a 3.6 percent cost-of-living increase, the first since 2009. Inflation has been so low in the past two years that Social Security checks, which are tied to the CPI, haven’t changed. The core index has reached the top of the Federal Reserve’s informal inflation target of between 1.5 percent and 2 percent. But Fed policymakers also expect inflation to moderate in the coming months. Last month, Fed officials said that inflation would decline to levels “at or below” the target, according to minutes released last week. On a brighter note, prices for [...]

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SuperValu returns to profit in its 2nd quarter

SuperValu returns to profit in its 2nd quarter

MINNEAPOLIS (AP & staff) — SuperValu Inc. returned to a profit in its fiscal second quarter, absent hefty goodwill and impairment charges incurred a year earlier. The supermarket operator’s results beat Wall Street estimates but it cut the high end of its fiscal 2012 earnings outlook on Wednesday. SuperValu, which runs SuperValu, Jewel-Osco, Albertsons and other supermarket chains, reported net income of $60 million, or 28 cents per share, for the period ended Sept. 10. That compares with a loss of $1.47 billion, or $6.94 per share, a year ago. The performance topped the 20 cents per share analysts expected. Revenue dropped 3 percent to $8.43 billion from $8.66 billion, but still beat Wall Street’s estimate of $8.36 billion. Its stock rose 27 cents, or 3.3 percent, to $8.44 in premarket trading.

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Oil hovers above $88 after US crude supplies drop

SINGAPORE (AP & staff) — Oil prices hovered above $88 a barrel Wednesday in Asia after a report showed U.S. crude supplies unexpectedly fell last week, suggesting demand could be improving. Benchmark crude for November delivery was down 22 cents at $88.12 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.96 to settle at $88.34 in New York on Tuesday. Brent crude for December delivery was up 40 cents at $111.55 a barrel on the ICE Futures Exchange in London. The American Petroleum Institute said late Tuesday that crude inventories fell 3.1 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.8 million barrels. Inventories of gasoline dropped 1.6 million barrels last week while distillates slid 2.2 million barrels, the API said. The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday. Crude has jumped 17 percent from $75 two weeks ago as investor optimism was bolstered by signs European leaders will soon announce a plan to contain the region’s sovereign debt crisis. Oil traders have also been encouraged by gains in global stock markets after a period of sustained losses. The Dow Jones industrial average rose 1.6 percent Tuesday and most Asian stock markets advanced Wednesday. However, some analysts are forecasting commodities such as oil will drop next year amid weak global economic growth and a stronger U.S. dollar, which makes crude more expensive for investors with other currencies. “We would still expect fresh falls in 2012 as global economic activity remains sluggish, risk appetite stays fragile and the dollar recovers more ground,” Capital Economics said in a report. In other Nymex trading, heating oil fell 1.1 cents to $3.02 per gallon and gasoline futures dropped 1.3 cents to $2.70 per gallon. Natural gas added 0.2 cent to $3.56 per 1,000 cubic feet.

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Bank of England unanimous on stimulus policy

Bank of England unanimous on stimulus policy

LONDON (AP & staff) — Bank of England rate-setters voted unanimously this month to inject more money into the struggling British economy, marking a sharp turnaround in sentiment. Minutes of the October meeting released Wednesday showed that all nine members of the Monetary Policy Committee authorized 75 billion pounds ($118 billion) in asset purchases from financial institutions in the face of a gloomy outlook. “The available indicators suggested that the underlying rate of growth had moderated and would be close to zero in the fourth quarter,” the minutes said. Household spending and exports had slowed and the panel noted concern about the impact of the eurozone’s debt crisis. Hinting that more stimulus may be on the way, the minutes showed that that members even discussed possibly splashing out 100 billion pounds during their deliberations on Oct. 5 and Oct. 6. “We continue to expect at least another 75 billion pounds extension of the program in February, and perhaps considerably more thereafter,” said Jonathan Loynes, chief European economist at Capital Economics. A month earlier, American economist Adam Posen was alone in advocating the move, which the Bank hopes will boost the money circulating in the economy and get banks lending more. Britain’s economy grew by just 0.1 percent in the second quarter, while unemployment has risen to a 15-year peak of 8.1 percent and inflation is at a three-year high of 5.2 percent. The Bank of England pumped 200 billion pounds into its so-called quantitative easing program between March 2009, when it also dropped its base rate to an all-time low of 0.5 percent, and January 2010. A recent Bank of England report concluded that the earlier round of quantitative easing had a positive impact, though the magnitude was impossible to quantify. “There appeared to be no strong reason to expect the economic effect of further asset purchases to be materially different, but their impact would need to be kept under review,” the minutes said. In a speech Tuesday night, Bank of England Governor Mervyn King said the monetary stimulus would not solve underlying problems of indebtedness and an overlarge public sector. “Providing liquidity to buy time to devise and put in place a coherent response to the underlying problem can be not only valuable but necessary,” King said. “Without monetary stimulus — low interest rates and large asset purchases — there is a risk that growth will stall and inflation [...]

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Apple employees celebrate Jobs, stores close

Apple employees celebrate Jobs, stores close

CUPERTINO, Calif. (AP & staff) — Apple held a private memorial service for employees to celebrate the life of company co-founder and former chief executive Steve Jobs. The service, announced to Apple employees in an email by CEO Tim Cook, is happened for 10 a.m. Wednesday at company headquarters in Cupertino. It was  webcast to employees worldwide. Apple closed its retail stores for several hours so employees could watch the service online, according to a person familiar with the matter. The person was not authorized to speak publicly about the issue, and spoke on condition of anonymity. The service took place in the campus’ outdoor amphitheater, according to Cook’s email. The celebration is for employees to “take time to remember the incredible things Steve achieved in his life and the many ways he made our world a better place,” Cook wrote. The event follows a memorial at Stanford University last Sunday for friends and family. That service at Memorial Church reportedly brought out tech titans including Oracle chief Larry Ellison and Microsoft’s Bill Gates, as well as politicians including Bill Clinton. U2 frontman Bono and Joan Baez reportedly performed. Jobs died on Oct. 5, at age 56 after a battle with pancreatic cancer. It has been sugggested that he died prematurely of a curable disorder because he had pursued alternative treatments prior to going to physicians specializing in pancreatic cancer.

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Stocks buoyed by Europe debt plan hopes

Stocks buoyed by Europe debt plan hopes

LONDON (AP & staff) — Renewed hopes that Europe is close to agreeing a package of measures to deal with its debt crisis helped shore up market sentiment on Wednesday, sending stocks and the euro sharply higher. A report in The Guardian newspaper in London suggested France and Germany, Europe’s two biggest economies, were putting the finishing touches on a massive expansion of the region’s bailout fund, possibly to euro3 trillion ($4.1 trillion) from the current euro440 billion. That helped boost stocks in the U.S. late Tuesday. The buying momentum carried through into Asia and Europe on Wednesday, though investors remain cautious in the run-up to Sunday’s meeting of eurozone leaders in Brussels. “Such suggestions were quickly met with rebuttals, however, it’s been difficult to establish the veracity of either call, so for the time being at least, traders do seem to be taking the glass-half-full approach,” said Ben Critchley, a sales trader at IG Index. In Europe, Germany’s DAX was up 1.4 percent at 5,961 while the CAC-40 in France rose 1.1 percent at 3,174. The FTSE 100 index of leading British shares was 1.1 percent higher at 5,471. Wall Street was poised for further modest gains at the open following Tuesday’s late rally — Dow futures were up 0.2 percent at 11,544 while the broader Standard & Poor’s 500 futures rose 0.1 percent at 1,224. Over the past couple of weeks, stocks recovered a chunk of their losses for the year as investors priced in the likelihood of a big European response to the debt crisis that has seen three countries bailed out and pushed Greece to the bring of default. The expectation was that the 17 countries that use the euro were preparing a three-pronged solution to the debt crisis. That would include measures to boost the firepower of the bailout fund, a recapitalization of a large part of the banking sector and a plan to get the banks to take a bigger hit on their Greek debt holdings. However, hopes for such a plan have diminished in the early part of the week, after German officials, including the finance minister, cautioned investors against believing that Sunday’s summit would mark a definitive turning point in the crisis. “The market risk remains disappointment with whatever is decided at the weekend summit,” said Neil MacKinnon, global macro strategist at VTB Capital. Investors will be closely monitoring all commentary from [...]

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Updates with closing stock price. With AP Photos.

Updates with closing stock price. With AP Photos.

SAN FRANCISCO (AP & Staff) — BlackBerry maker Research In Motion Ltd. unveiled a new operating system Tuesday in hopes of grabbing some attention away from the iPhone and Android phones. The new BBX system combines existing BlackBerry elements with RIM’s previously announced QNX operating system for phones and tablet computers. RIM said BBX will incorporate the reliability and security features of QNX — which RIM snagged in 2010 by purchasing QNX Software Systems. It will also enable software developers to create more advanced, dynamic apps for the devices. The Canadian company gave few details about the software and did not say when devices using it would be available. The company previously said that it would offer phones running QNX software in 2012. RIM co-CEO Mike Lazaridis introduced BBX on Tuesday at the company’s annual developer conference in San Francisco. He began his remarks by speaking briefly about the service outages that frustrated tens of millions of BlackBerry users last week. He said the company restored service as quickly as possible and is working on figuring out the causes and “making this right” for BlackBerry users worldwide. On Monday, BlackBerry tried to soothe customers by offering more than $100 worth of free software to each one and giving some a month of technical support. The disruption came as RIM, once dominant in smartphones with its secure BlackBerry email service, has been losing ground to more consumer-friendly offerings such as Apple Inc.’s iPhone and smartphones running Google Inc.’s Android software. RIM has sold 165 million BlackBerrys through August. Apple had sold 129 million iPhones as of June, but its device has been on the market for a much shorter amount of time. RIM has also lagged in the market for apps that run on smartphones and tablets. Its BlackBerry App World, which includes apps for its smartphones and its PlayBook tablet computer, includes more than 46,000 apps. That is just a fraction of the hundreds of thousands of apps offered for the iPhone and Android phones. RIM, which is based in Waterloo, Ontario, is trying to encourage developers to be more prolific, though, by showing off new software Tuesday that makes it easier to build apps and get them into the company’s online store. The company’s stock rose 81 cents, or 3.6 percent, to close at $23.21.

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Coca-Cola 3rd-quarter profit up on volume gains

Coca-Cola 3rd-quarter profit up on volume gains

PORTLAND, Oregon (AP & Staff) — The Coca-Cola Co.’s third-quarter profit rose 8 percent and beat Wall Street estimates as it sold more drinks worldwide and raised prices in North America, its largest market. Coca-Cola has shown consistent growth for years, but like many of its peers, it recently has been struggling with rising costs for raw materials and Americans’ cautious spending habits during the down economy. But the company’s third-quarter results are the latest sign that despite the tough economic environment, some of world’s top brands, including its bigger rival PepsiCo, continue to prevail by tweaking their strategy. Coca-Cola, which has more than 500 brands including Fanta, Sprite, Dasani and Minute Maid, has weathered the downturn by investing heavily in its business – increasing money for advertising, new products and plants. The company, like many of other companies, also has turned overseas for growth, particularly emerging markets like India and China. And in North America, it adjusted it is raising prices and offering smaller package sizes. The results have paid off. Although Coca-Cola continues to feel the pressure of higher commodity costs, which sent its gross margin down to 60.2 percent from 65.4 percent during the third quarter, the company has been able to offset that with stronger sales growth. “Over the past few months, we have all seen a downturn in global consumer confidence,” said Coca-Cola’s CEO Muhtar Kent. “At the same time, the last few months have reinforced our belief in the resilience of the global consumer.” Coca-Cola, based in Atlanta, reported on Tuesday that sales volume grew 5 percent worldwide, driven largely by its Coca-Cola brand. The company’s gains were strongest in emerging markets, including a 19 percent increase in volume in India and a 7 percent increase in Latin America. The company also had a gain in North America even though it raised prices about 2 percent to offset higher commodity and other costs there. Sales volume grew 5 percent in North America. Net income rose to $2.22 billion, or 95 cents per share, in the three months ended Sept. 30. That’s up from $2.06 billion, or 88 cents per share, a year ago. Excluding one-time items, it earned $1.03 per share. Revenue rose 45 percent to $12.25 billion. The quarter beat analysts’ expectations of $1.02 per share on revenue of $12.05 billion, according to FactSet. “We provide consumers with an affordable luxury as they enjoy [...]

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Goldman Sachs loses $428 million in third quarter. Another bailout in the works?

Goldman Sachs loses $428 million in third quarter. Another bailout in the works?

NEW YORK (AP & Staff) — Goldman Sachs Group Inc. reported a third-quarter loss of $428 million Tuesday, only the second quarterly loss since the investment bank went public 12 years ago. Revenue from underwriting stocks and bonds plunged as businesses, unnerved by political wrangling in Washington and volatile markets, held off on new stock and bond offerings. Goldman also lost nearly $3 billion on investments in stocks, bonds and a stake in a Chinese bank. Investors were unfazed by the loss, which had been widely expected due to the turmoil in financial markets this summer. Goldman’s stock was up 2 percent to $98.88 at noon Eastern. In the past Goldman has used its political and Treasury connections to obtain bailouts when it made losses so it could pay employee bonuses and have additional funds to buy up un-bailed competitors.  It is unknown if the Obama administration will again do so. If the past is any guide, it will. UBS analyst Brennan Hawken said the stock, which had fallen from about $128 since second-quarter earnings were reported three months ago, had already priced in the impact of the dismal third-quarter results. “Well, we were braced for impact and we got it,” Nomura analyst Glenn Schorr wrote in a note to clients. Schorr noted that Goldman was the bank most exposed to declines in global assets like stocks and bonds. Goldman’s chief financial officer, David Viniar, attributed the weak results to volatile markets and the weakness of European banks. “Last week, big market rally; yesterday, big market decline,” Viniar said on a conference call. “So I think there’s still a lot of uncertainty and a lot based on who says what on what day.” The bank has been cutting expenses to shore up cash and said in July that it would eliminate as many as 1,000 jobs. Tuesday it said had 34,200 employees, down 1,300 from the previous quarter. Some of those cuts came from the bank’s sale of the Litton Loan Servicing Unit. The latest loss was equivalent to 84 cents per share. The bank earned $1.7 billion, or $2.98 per share, in the same period a year ago. Revenue slumped 60 percent to $3.6 billion, missing analysts’ estimates. Investment banking had been a bright spot in Goldman’s previous quarter, but a sharp slowdown in stock and bond offerings led to a 61 percent plunge in underwriting revenue. Revenue from bond and currency [...]

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French, German disagreement endangers another bank bailout deal via Greece

French, German disagreement endangers another bank bailout deal via Greece

BRUSSELS (AP & Staff) — Disagreement between France and Germany may prevent eurozone leaders from reaching a crucial deal on a second rescue package for Greece (read German and French banks) this weekend, a person familiar with the negotiations said Tuesday. A common position of the two biggest eurozone economies is seen as a precondition for reaching agreement between all 17 countries in the currency union at a crisis summit on Sunday. Investors around the world hope a comprehensive plan to fight the debt crisis, including final details on the banks’ second bailout via Greece, will keep the debt turmoil from pushing the global economy back into recession. Signs that such a plan is proving slower to clinch caused markets to slide on Tuesday. Germany is pushing for banks to accept cuts of 50 percent to 60 percent on their Greek bondholdings, while France is insisting that leaders should only make technical revisions to a preliminary agreement reached with private investors in July, the person said. The person was speaking on condition of anonymity because of the sensitivity of the negotiations. The July deal would lead to losses of some 21 percent on Greek bondholdings, much of that from cuts in interest rates and deferred payments. While that would take some pressure off Greece in the coming years, it would do little to reduce Greece’s overall debt load, which is set to reach more than 180 percent of economic output next year if the deal goes ahead, the person said. German officials have said in recent weeks that the eurozone needed to find a solution for Greece that makes the country able to repay its debts in the long-run. France on the other hand has been reluctant to back bigger losses for banks, since French banks are among the biggest holders of Greek government bonds. Its position is supported by the European Commission, the EU’s executive. Under the preliminary agreement reached in July, the eurozone would give Greece an extra euro109 billion in rescue loans. About one-third of that money would go into setting up expensive collateral funds for the banks that would secure them against any further losses on the Greek debt. But because of worsened market conditions since July, setting up those funds has become more expensive. A revision of the deal would either have to result in bringing the costs for the eurozone back down or achieve somewhat higher cuts [...]

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Cincinnati financier Carl Lindner Jr. dies

Cincinnati financier Carl Lindner Jr. dies

(AP & Staff) – Cincinnati financier Carl Lindner Jr., who used his experience running the family dairy store to build a business empire whose reach included baseball, banks and bananas, has died. He was 92. He died Monday night after being taken gravely ill to a hospital that morning, said a person close to the family who was not authorized to speak until a statement had been issued. Lindner became controlling partner and chief executive officer of the Cincinnati Reds in a 1999 deal that ended Marge Schott’s rocky 15-year reign as owner. In contrast to her grandstanding, Lindner stayed mostly in the background — save for a lasting memory in 2000 when he picked up Ken Griffey Jr. at the airport in his Rolls-Royce following the blockbuster trade. He sold his controlling share in the Reds in 2005. Lindner was chairman of Cincinnati-based American Financial Group, a publicly traded financial holding company that had more than $17 billion in assets. In 2009, Forbes magazine estimated Lindner’s personal wealth at $1.75 billion, placing him among the 400 richest Americans. Lindner ruled over a complex maze of corporations with nearly 70,000 employees worldwide. American Financial Group owned, or held substantial investments in, Charter Co., marketer of fuel to electric utilities; Chiquita Brands International Inc., one of the world’s largest food producers, and Great American Insurance Co. His financial support for the University of Cincinnati, which named its business administration building after him, and various charities earned him a reputation as a philanthropist. University of Cincinnati President Gregory Williams said in a statement that he saw Lindner last week and “he was as gracious and kind as ever.” “What more people should know about Mr. Lindner is his inspiring life, and of his efforts to guide generations to succeed the right way,” Williams said. In the business world, some critics considered him a ruthless takeover artist. He made millions in the 1970s and 1980s by investing, then retreating, from companies. An alleged attempt by Lindner to take over Gannett Co. prompted former chairman Al Neuharth to call him a “shark in sheep’s clothing.” Lindner made a name for himself by becoming one of Michael Milken’s earliest and most prominent junk-bond players. But he also showed his investment smarts by predicting a decline in the junk-bond market in the late 1980s. “Of course, Carl was always a couple years ahead of the pack,” [...]

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US stock futures slip on earnings, French debt

US stock futures slip on earnings, French debt

NEW YORK (AP & staff) — U.S. stock futures are slipping after disappointing corporate earnings and another sign that Europe’s credit crisis isn’t solved. Moody’s warned late Monday that it may downgrade France’s top-notch credit rating in the next three months. That country’s finance minister said Tuesday that the French economy may grow at a slower pace than expected. In the U.S., International Business Machines Corp. fell 4 percent in premarket trading after missing Wall Street’s revenue estimates last quarter. Goldman Sachs, Apple and Intel will release earnings by the end of the day. Two hours before the market opened, Dow futures fell 34 points, or 0.3 percent, to 11,267. S&P 500 futures lost 2, or 0.2 percent, to 1,191. Nasdaq 100 futures gained 7, or 0.3 percent, to 2,327.

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Luxury giant LVMH gets Bulgari boost in Q3

PARIS (AP & staff) — French luxury powerhouse LVMH Moet Hennessy Louis Vuitton said Tuesday that its revenue grew strongly in the third quarter after a the purchase of jewelry giant Bulgari and a rebound in Japan. The company behind Dom Perignon champagne and Marc Jacobs said sales rose to euro6.01 billion ($8.28 billion), up 19 percent from the previous quarter. The biggest jump was in the jewelry and watches division, which doubled its sales from last quarter to euro636 million. The overall sales were up 17 percent from the same quarter a year earlier. The quarter also benefited from strong sales in Hong Kong and Macau and a return to luxury consumption in Japan after its devastating earthquake and tsunami. LVMH said it was confident that sales would remain strong for the rest of the year.

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Bank of America earns $6.2B on accounting gains

Bank of America earns $6.2B on accounting gains

NEW YORK (AP & staff) — Bank of America says it earned $6.2 billion in the third quarter, largely from accounting gains and the sale of a stake in a Chinese bank. The Charlotte, N.C. bank earned 56 cents per share, following a loss of $7.3 billion, or 77 cents a share during the same quarter last year. Analysts surveyed by FactSet forecast the bank would earn 28 cents per share. Its income got a boost from accounting gains of $4.5 billion and $1.7 billion, both related to drops in the value of its debt. Bank of America gained $3.6 billion from selling its stake in China Construction Bank and recorded a loss in its private equity business of $2.2 billion. Bank of America Corp.’s stock fell 2 percent to $5.91 in pre-market trading Tuesday.

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Markets edgy over EU debt crisis resolution

Markets edgy over EU debt crisis resolution

LONDON (AP & staff) — Skepticism over Europe’s ability to deliver a comprehensive solution to its debt troubles weighed on market sentiment Tuesday, as did a warning from Moody’s that it could soon review France’s cherished triple-A credit rating for possible downgrade. Over the past two weeks, stocks have recovered a large chunk of their losses for the year, while the euro and oil prices have surged as investors priced in the likelihood of a big European response to the debt crisis that has seen three countries bailed out and pushed Greece to the bring of default. The expectation was that the 17 countries that use the euro, led by Germany and France, were preparing a three-pronged solution to the debt crisis. That would include measures to boost the firepower of the bailout fund, a recapitalization of a large part of the banking sector and a plan to get the banks to take a bigger hit on their Greek debt holdings. However, hopes for such a plan were lowered on Monday when German officials, including the finance minister, cautioned investors against believing that Sunday’s summit of eurozone leaders in Brussels would mark a definitive turning point in the crisis. Coupled with a warning from Moody’s that France may be put on notice for a possible credit rating downgrade after a three-month assessment, sentiment continued to sour on Tuesday. “The positive momentum behind risk at the end of last week has faded as the realities in front of the EU counterbalanced the prior hope for a resolution to the region’s difficulties,” said David Watt, an analyst at RBC Capital Markets. In Europe, France’s CAC-40 index was 1.4 percent lower at 3,121, underperforming its main counterparts. Germany’s DAX was only 0.2 percent lower at 5,845 while the Britain’s FTSE 100 index was 0.9 percent lower at 5,387. Wall Street was poised for modest losses at the open, too — Dow futures were down 0.2 percent 11,284 while the broader Standard & Poor’s 500 futures fell 0.1 percent to 1,192. Investors will also monitor the next batch of U.S. corporate earnings. So far, they’ve been mixed. Among companies reporting quarterly financial results are Apple Inc., Bank of America Corp., Coca-Cola Co., Johnson & Johnson and Yahoo Inc. Alongside the softer tone in stock markets, the euro fell as well, trading 0.4 percent lower at $1.3677. When investors are willing to take on more [...]

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