Business Highlights

AP News
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Posted: Nov 23, 2009 5:39 PM

Tax credit gives home sales best boost in decade

WASHINGTON (AP) _ First-time buyers taking advantage of a special tax credit gave sales of existing homes their biggest surge in a decade, raising hopes for a turnaround in the housing market and pleasing Wall Street.

While rising foreclosures and disappearing jobs still threaten the comeback, there are now bidding wars for houses in some cities, and home sales are nearly 36 percent above their low point in January.

Analysts said the gains in October mainly reflected the tax credit of up to $8,000 for new homeowners, which was due to expire this month before Congress extended it until spring _ and expanded it to more buyers.

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Weak dollar, home sales data carry stocks higher

NEW YORK (AP) _ Investors halted a three-day losing streak on the stock market Monday, sending prices broadly higher on a weaker dollar and better-than-expected home sales numbers.

Major stock indexes soared more than 1 percent, including the Dow Jones industrials, which rose 133 points to a 13-month high. Volume was thin ahead of the Thanksgiving holiday, which can exaggerate the size of swings in the market.

Investors found plenty of reasons to buy as the day's developments pointed to two trends: an improving economy and interest rates that are expected to stay low.

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Gas prices fall to begin busy travel week

Retail gasoline prices headed downward in most places at the beginning of one of the country's busiest travel weeks, with more than 33 million people expected to hit the road for the Thanksgiving holiday.

Americans are remaining closer to home because of anxiety about the economy and demand for gasoline is weaker now than it was last year at this time.

That is telling because a gallon of gasoline then cost only $1.93 as the economic crisis unfolded in 2008.

Unlike last year, however, gas is not falling sharply and though prices fell overnight, it still cost about $2.64 per gallon on average, according to Department of Energy data and also auto club AAA, Wright Express and Oil Price Information Service.

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Campbell Soup earnings rise as expenses fall

MOUNT LAUREL, N.J. (AP) _ Price-conscious grocery shoppers are being choosy about what they buy to cook at home, even from the value-oriented Campbell Soup Co.

The company reported Monday that its first quarter profit rose 17 percent with the help of lower costs from increased efficiency in getting its products from its plants to store shelves, as well as lower prices for grain ingredients. But revenue fell 2.1 percent to $2.2 billion with dips in sales for most of its categories.

Earnings were $304 million, or 87 cents per share, in the first quarter, up from $260 million, or 70 cents per share, a year ago. But the company says the year-ago profit figure included one-time charges, including some related to closing facilities in Australia and Canada and restructuring management, that made it look worse than it was.

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Tyson Foods posts 4Q loss on beef charge

MILWAUKEE (AP) _ Tyson Foods Inc. said it made strides in the meat business this year and predicts more improvements next year, but analysts worry the company's all-important chicken business is lagging others in the industry.

The world's largest meat producer, based in Springdale, Ark., said on Monday a hefty impairment charge in its beef business left it with a loss for the fourth quarter. But all of its business units, including chicken and pork, were profitable, when excluding the $560 million noncash charge.

The company said it expects those profits to continue as an improving economy will lead to better demand next year. Consumers have been watching their money tightly in the recession, eating less expensive food and limiting trips out to restaurants. That has hurt Tyson's business by pulling down prices for key items like chicken breast meat.

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Economic survey: Job losses to bottom out in 1Q

Economists expect the joblessness that has weighed down the nation's economic recovery will start to slowly abate in 2010, but they predict consumers will continue to keep a tight rein on spending, according to a new survey.

While signs have pointed to the end of the recession, joblessness remains rampant. The national unemployment rate jumped to 10.2 percent in October, the highest in 26 years. About 9 million people currently receive unemployment benefits.

The November outlook by the National Association for Business Economics, which is set to be released Monday, shows economists expect net employment losses to bottom out in the first quarter of next year. Employers are seen starting to add to their payrolls after that.

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Cadbury shares rise on report of Nestle interest

LONDON (AP) _ Shares in British chocolate maker Cadbury PLC hit their highest level in at least five years Monday on reports that another rival, Switzerland's Nestle SA, may make a takeover bid.

Cadbury is already the target of a $16.4 billion hostile bid from Kraft Foods that it has dismissed as "derisory."

U.S. chocolate company The Hershey Co. and Italy's Ferrero International SA last week said they are also considering a possible offer for Cadbury, possibly setting up a bidding war.

A report Monday by Bloomberg cited two unidentified sources saying Nestle is likewise reviewing its options about a possible offer.

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HP's profit up 14 pct despite sales drop

SAN FRANCISCO (AP) _ Hewlett-Packard Co.'s profit jumped 14 percent in the latest quarter, helped by cost-cutting and better results from its technology services division.

Those factors helped offset the fact that four of HP's major divisions _ personal computers, servers, software and printers _ each reported big revenue declines from last year. HP's overall revenue fell 8 percent.

HP's results are a yardstick for measuring the health of overall technology spending. And the latest numbers reinforce trends that other companies have reported: Consumers and China are showing stronger demand, while businesses remain hesitant.

Other tech heavyweights such as IBM Corp., Intel Corp. and Microsoft Corp. have reported better conditions in some of their businesses.

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Late payments on credit cards drop in 3rd quarter

NEW YORK (AP) _ Consumers got more serious about paying down their credit card debt this summer, a time when delinquencies usually to go up.

Cardholders making late payments on bank-issued cards like those bearing MasterCard and Visa logos fell to 1.1 percent for the July-to-September period, down from 1.17 percent in the prior three months, according to credit reporting agency TransUnion.

The decline is significant because of its timing. Delinquency rates usually rise in the third quarter from the prior period as people spend on summer vacations and back-to-school shopping, said Clifton O'Neal, a TransUnion spokesman.

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AP Poll: Debt stress turns shoppers into Scrooges

WASHINGTON (AP) _ A lot more Americans are feeling stressed out by debt this holiday season, raising the glum likelihood they'll behave like Scrooge rather than Santa.

In fact, fully 93 percent say they'll spend less or about the same as last year, according to an Associated Press-GfK poll. About 20 percent say they are suffering from debt-related stress, up from 15 percent in the spring despite all the talk about economic recovery.

Most people _ 80 percent _ say they'll use mostly cash to pay for their holiday shopping, and that generally means buying less.

By The Associated Press

The Dow rose 132.79, or 1.3 percent, to 10,450.95, after losing 120 points over the previous three days.

The Standard & Poor's 500 index rose 14.86, or 1.4 percent, to 1,106.24, while the Nasdaq composite index rose 29.97, or 1.4 percent, to 2,176.01.

Benchmark crude for January delivery settled at $77.56 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil rose less than a penny to settle at $1.9799 a gallon. Gasoline for December delivery fell less than a cent to settle at $1.9794 a gallon. Natural gas for December delivery rose about 5 cents to settle at $4.473 per 1,000 cubic feet.

In London, Brent crude for January delivery fell 26 cents to settle at $77.46 on the ICE Futures exchange.