Business Highlights

AP News
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Posted: Nov 16, 2009 5:42 PM

Bernanke: Fed will keep eye on sliding dollar

WASHINGTON (AP) _ Federal Reserve Chairman Ben Bernanke on Monday said the central bank will monitor the sliding U.S. dollar but pledged anew to keep interest rates at record-lows to nurture the economic recovery.

In remarks to the Economic Club of New York, Bernanke engaged in a delicate dance.

He made clear that Fed policymakers will keep rates at super-low levels. Yet through his words, Bernanke is also trying to bolster confidence in the dollar without actually raising rates, a move that could short-circuit the fragile recovery.

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Retail sales rise 1.4 percent in October

WASHINGTON (AP) _ Retail sales rose more than expected in October due largely to a big rebound in auto sales. But broader consumer spending remains under pressure, raising questions about the durability of the recovery.

Last month's jump in sales also followed a dismal September retail performance that was revised even lower by the government, and many analysts remain concerned about consumer demand going forward.

The Commerce Department said Monday that retail sales rose 1.4 percent last month. Economists surveyed by Thomson Reuters had expected a gain of 1 percent.

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Stocks jump as retail sales rebound in October

NEW YORK (AP) _ Investors kept the stock market's upward momentum going Monday, sending shares sharply higher as the dollar extended its slide and after retail sales rebounded more than expected in October.

Major stock indexes rose more than 1 percent to new 13-month highs, including the Dow Jones industrial average, which jumped 136 points to 10,406.96. The Standard & Poor's 500 index closed above the 1,100 mark for the first time in more than a year.

The weaker dollar lifted gold to a new record and pumped up prices of other commodities, including oil. That, in turn, helped shares of energy and materials companies.

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GM reports $1.2B loss, says it shows progress

DETROIT (AP) _ General Motors Co. said Monday it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30, far better than it has reported in previous quarters and a sign that the auto giant is starting to turn around its business.

The company also said it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It plans to repay the debt over the next eight quarters, but could pay it back as early as next year. But the money will come from funds loaned by the government.

GM said its improved performance was fueled by new products including the Chevrolet Camaro muscle car, and the Chevrolet Equinox and GMC Terrain midsize crossover vehicles.

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Lowe's 3Q profit falls but co. sees signs for hope

NEW YORK (AP) _ Lowe's Cos. said Monday it is expecting consumers will spend cautiously this holiday season on trees and gifts like power tools but said it sees signs the housing market is slowly improving.

The No. 2 home improvement retailer said Monday while reporting a lower third-quarter profit that some of the hardest-hit markets in the housing downturn improved compared with the quarter before. They include California, Florida and Arizona.

In all, 45 of 50 states showed improvement from the second quarter.

Home-improvement retailers have seen sales slip as consumers cut back on big-ticket remodeling projects amid the recession. Although the U.S. housing market is stabilizing, after a nearly three-year decline, home prices remain far below their peak.

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SEC staff targets Beazer Homes CEO over bonus pay

BOSTON (AP) _ Federal regulators may try to collect bonus money awarded to the top executive of Beazer Homes USA Inc. covering periods when the homebuilder restated financial results.

Beazer Homes said in a regulatory filing Monday that Securities and Exchange Commission staff issued a so-called Wells notice to CEO Ian McCarthy, citing an anti-fraud law provision allowing the government to "claw back" compensation in some instances.

The notification comes more than a year after Atlanta-based Beazer settled a Securities and Exchange Commission investigation into its financial statements.

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GMAC CEO Alvaro de Molina steps down

NEW YORK (AP) _ Troubled auto and home lender GMAC Financial Services said Monday CEO Alvaro de Molina is stepping down.

Michael A. Carpenter, a member of the company's board of directors, has been named his successor.

De Molina's sudden resignation comes while the lender is in the midst of negotiating with the Treasury Department over additional taxpayer assistance. GMAC is instrumental to the operations of automakers General Motors Co. and Chrysler Group LLC, but its finances have been haunted by bad loans it made during the housing boom.

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Vonage to settle investigation involving 32 states

NEW YORK (AP) _ Internet phone service provider Vonage Holdings Corp. has agreed to pay $3 million to 32 states to settle an investigation into some of its business practices.

In a filing Monday with the Securities Exchange Commission, the company said it also agreed to provide refunds to affected customers.

Idaho Attorney General Lawrence Wasden said his office received complaints from consumers who said they found it difficult to cancel their service with Vonage amid pressure from the company to keep their accounts.

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Gasoline prices remain near 2009 high

Gasoline prices remained near their highs for the year on Monday as a weaker dollar and rising global stock markets boosted oil prices.

Prices at the pump fell 0.4 cents overnight to $2.631 a gallon, according to AAA, Wright Express and Oil Price Information Service. That is down 6 cents from the peak of $2.691 reached Oct. 30.

But the gap between now and a year ago continues to widen. Prices are 52.6 cents higher _ about $25 more a month for a typical driver _ than last year at this time, when gasoline prices slid along with oil prices as the recession took hold.

Higher prices for gasoline come even as demand for oil and gasoline remains soft.

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Time Warner to spin off AOL on Dec. 9

SAN FRANCISCO (AP) _ Time Warner said Monday that it will spin off its Internet business, AOL Inc., as a separate company on Dec. 9.

Time Warner Inc. said it has declared a dividend on the AOL shares it owns that will result in a complete separation of the two companies.

On Dec. 9, Time Warner stockholders of record Nov. 27 will receive AOL common stock for every 11 shares of Time Warner common stock they hold.

According to a recent regulatory filing, Time Warner had about 1.17 billion outstanding shares as of Oct. 27, so this means AOL will start out with roughly 106.1 million shares.

By The Associated Press

The Dow rose 136.49, or 1.3 percent, to 10,406.96 after rising nearly 164 points.

The broader S&P 500 index rose 15.82, or 1.5 percent, to 1,109.30. It traded above 1,100 in mid-October but hasn't closed above that benchmark since October last year. The S&P 500 index first finished above 1,100 more than a decade ago, in March 1998.

The Nasdaq composite index rose 29.97, or 1.4 percent, to 2,197.85. The Russell 2000 index of smaller companies advanced 16.59, or 2.8 percent, to 602.87.

Benchmark crude for December delivery rose $2.55 to settle at $78.90 a barrel on the New York Mercantile Exchange.

Prices at the pump fell 0.4 cents overnight to $2.631 a gallon, according to AAA, Wright Express and Oil Price Information Service. That is down 6 cents from the peak of $2.691 reached Oct. 30.

In other Nymex trading, heating oil rose 6.59 cents to settle at $2.0320 a gallon. Gasoline for December delivery gained 7.06 cents to settle at $1.9868 a gallon. Natural gas for December delivery advanced 22.2 cents to settle at $4.614 per 1,000 cubic feet.

In London, Brent crude for December delivery rose $2.45 to settle at $78.76 on the ICE Futures exchange.