Business Highlights

AP News
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Posted: Oct 19, 2010 6:09 PM
Business Highlights

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Banks unlikely to quell foreclosure-document mess

WASHINGTON (AP) _ Big lenders are trying to move past the foreclosure-document mess, saying they're now confident their paperwork is accurate.

Yet they face so much organized resistance that they can't just snap up their briefcases, declare the crisis over and move on.

Attorneys general in every state, lawyers for evicted homeowners, state judges and lawmakers are gearing up for a fight that could end up in courts around the country.

The document crisis, in other words, appears far from over.

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Bank of America posts $7.7B loss on special charge

NEW YORK (AP) _ Bank of America Corp. said Tuesday it lost $7.65 billion during the third quarter due to a charge related to credit and debit card reform legislation passed over the summer.

The bank also announced a change in its consumer banking strategy to focus on providing customers with incentives to do more business with the bank instead of generating revenue through penalty fees such as overdraft charges. The bank is already starting to implement some changes, and has cut overdraft fees on small amounts that customers charge to their debit cards.

The new legislation that caused Bank of America to take the $10.4 billion charge limits fees banks can collect when merchants accept debit cards. BofA said that change would reduce future revenues in its card business.

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Dow drops below 11,000 as dollar rebounds

NEW YORK (AP) _ A stronger dollar and a surprise interest rate hike in China that may slow that country's economy helped push stocks sharply lower Tuesday.

The Dow Jones industrial average fell below 11,000 for the first time in a little more than a week, reversing a streak that had pushed the index up nearly 7 percent for the year. It was the largest single-day drop in the market since early August.

Bank of America Corp.'s 4.4 percent drop was the largest fall in the Dow and came amid reports that a group of investors including BlackRock Inc. and Pacific Investment Management Co. are reportedly attempting to force the bank to repurchase mortgages put out by Countrywide Financial Corp., which Bank of America bought in 2008. BlackRock and Pimco declined to comment.

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China raises key rate for 1st time since crisis

BEIJING (AP) _ China raised its key interest rate Tuesday for the first time since the global crisis. The move is intended to control inflation and rapid growth even as other Asian economies move to keep their recoveries on track.

The rate hike, China's first since 2007, reflected Beijing's focus on guiding growth to a more sustainable level rather than revving up the economy. China's economy grew 10.3 percent in the second quarter.

The People's Bank of China, the central bank, might have felt forced to act after bank lending surged in September despite government orders to control credit, said economist Mark Williams of Capital Economics in London.

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Home starts rises slightly, building permits fall

WASHINGTON (AP) _ Home construction rose slightly last month on the strength of single-family homes, but the market was still too weak to propel growth in the battered industry.

Construction of new homes and apartments rose 0.3 percent in September from a month earlier to a seasonally adjusted annual rate of 610,000, the Commerce Department said Tuesday. It was the strongest report on home construction since April.

Housing starts are up 28 percent from their bottom in April 2009. Still, they are down 73 percent from their peak in January 2006 and 40 percent below the 1 million annual rate that analysts say is consistent with healthy housing markets.

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Goldman Sachs earns $1.74B, easily tops forecasts

NEW YORK (AP) _ Goldman Sachs Group Inc.'s earnings easily beat analysts' forecasts again, but the bank saw a big slowdown in trading, its most profitable business.

Net income after paying preferred dividends fell 43 percent from the year-ago period as revenue in the bank's bond, currency and commodities trading division fell to its lowest level since the depths of the financial crisis in late 2008.

Goldman's results are closely watched because they considered the strongest bank on Wall Street and regularly exceed forecasts. The decline in Goldman's earnings could signal a change in the mix of how investment banks make money now that financial markets have steadied themselves following the credit crisis and recession.

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Yahoo 3Q profit doubles, revenue still lackluster

SAN FRANCISCO (AP) _ Yahoo Inc. shuffled through another quarter of sluggish growth, a performance that may further test the patience of the Internet company's already restless shareholders.

The third-quarter results announced Tuesday also seem likely to intensify the pressure on CEO Carol Bartz to end a four-year financial funk amid speculation that the company could become a takeover target because of its slumping stock price.

Yahoo made some progress on the earnings front, thanks largely to cost-cutting moves since Yahoo hired Bartz to orchestrate a turnaround 21 months ago.

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J&J US sales of OTC products fall 40 pct in 3Q

U.S. sales of Johnson & Johnson's nonprescription medicines plunged 40 percent in the third quarter as an embarrassing string of product recalls hurt sales and consumer trust. That, combined with the lingering global recession and some initial price cuts from the health care overhaul, contributed to anemic earnings for the health care giant.

The maker of baby shampoo, contraceptives and biologic drugs on Tuesday reported a 2 percent increase in profit for the quarter that ended Sept. 30, but that was due to a $196 million jump in other income from divestitures and a lower tax bill.

Third-quarter net income edged up to $3.42 billion, or $1.23 per share, beating analysts' expectations of $1.15 per share. A year earlier, net income was $3.35 billion, or $1.20 per share.

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Coca-Cola 3Q net income rises 8.4 percent

NEW YORK (AP) _ U.S. sales for Coca-Cola Co. extended their rebound in the third-quarter, coupling with strong performance abroad to push the world's largest soft drink maker's net income up 8.4 percent.

The second consecutive quarter of improvements in its North American drinks business is encouraging news for Coca-Cola after four years of declines. The company also raised the value of shares it expects to buy back this year to $2 billion from $1.5 billion.

The company, based in Atlanta, said Tuesday it earned $2.06 billion or 88 cents per share in the three months ending Oct. 1, up from $1.9 billion or 81 cents per share last year. Excluding one-time items related to restructuring, the company earned 92 cents per share.

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New York Times Co. reports 3Q loss

NEW YORK (AP) _ The New York Times Co. reported a small loss for the third quarter on Tuesday, hurt by one-time expenses and another drop in print advertising revenue.

The publisher of The New York Times, The Boston Globe, the International Herald-Tribune and 15 other daily newspapers has been trying to offset declines in its traditional newspaper business with revenue from its Web operations. But a jump in online ad dollars was not enough to offset declines in print.

The Times Co. said it expects print advertising in the last three months of the year to improve "modestly" from the third quarter but did not offer specifics.

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By The Associated Press

The Dow Jones industrial average fell 165.07, or 1.5 percent, to 10,978.62. Standard & Poor's 500 index fell 18.81, or 1.6 percent, to 1,165.90, while the Nasdaq composite index fell 43.71, or 1.8 percent, to 2,436.95.

Benchmark oil for November delivery closed down $3.59, or 4.3 percent, to settle at $79.49 a barrel on the New York Mercantile Exchange. It was the first time oil settled below $80 a barrel since September.

Gasoline futures fell even more sharply than oil, nearly 5 percent to settle at $2.0483 cents a gallon. The futures had tracked oil higher, and also rose because strikes at oil refineries in France had made investors nervous about supply disruptions.

Heating oil fell nearly 9 cents to settle at $2.1893 a gallon. In London, Brent crude fell $3.27 to settle at $81.10 a barrel on the ICE Futures exchange.

Natural gas, however, rose 2.4 percent, to $3.513 per thousand cubic feet. Natural gas is insulated from global supply and demand trends because so much is produced domestically.