Business Highlights

AP News
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Posted: Oct 26, 2010 5:49 PM
Business Highlights

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Ford keeps rolling as net income jumps, debt eases

DEARBORN, Mich. (AP) _ Ford is on a roll. Its popular new cars and trucks are grabbing a bigger share of the U.S. market. It's about to erase a big chunk of its health care debt. And it's adding a significant number of jobs for the first time in five years.

On Tuesday, the automaker said it made $1.7 billion from July through September, a jump of nearly 70 percent from a year earlier and its sixth consecutive quarter in the black.

The news puts Ford further ahead of its rivals as the U.S. auto industry slowly turns around. Chrysler has yet to make a profit after a stay in bankruptcy last year. General Motors is making money but losing market share _ and is still partly government-owned.

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Toyota, Honda lead quality rankings but GM gains

DETROIT (AP) _ The most problem-free cars and trucks are made by Honda and Toyota, but Ford is closing in fast and General Motors is making big quality improvements, according to Consumer Reports magazine's 2010 reliability rankings.

Ford and GM continue to narrow the large quality gap that once separated Toyota and other Asian automakers from their Detroit rivals. Large overhauls of American car companies in the last few years have resulted in fewer brands and better vehicles from Detroit.

This year's rankings, based on a survey of about 960,000 magazine subscribers, also restored recommended ratings for several recalled Toyota models and bumped up a pair of Korean brands. Chrysler, however, continued to languish.

Consumer Reports ratings are widely used by buyers shopping for cars and trucks. The magazine is the third-largest factor used by Americans to pick vehicles, topped only by brand loyalty and recommendations from friends and family.

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Stocks eke out gains on mixed earnings

NEW YORK (AP) _ Mixed earnings reports and a stronger dollar helped stocks finish about where they started Tuesday.

The Dow Jones industrial average wavered within a 100-point range as traders attempted to parse the direction of the economy amid a drop in home prices, a batch of weak earnings reports and a slight rise in consumer confidence.

Stocks started the day with losses after disappointing results from Texas Instruments Inc., U.S Steel Corp., Bristol-Myers Squibb Co. Du Pont, one of the 30 companies that make up the Dow average, fell 1 percent even though it beat estimates. Investors have been having high expectations this season with three out of every four companies besting analyst estimates.

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Steel industry's outlook gloomy on slower growth

The steel industry's outlook has dimmed with the unevenness of the global economy. Sales have dropped, prices have fallen, costs have risen and some companies see more tough times ahead.

Some of the world's biggest steel manufacturers turned in third-quarter performances on Tuesday that fell short of expectations they had just three months ago. They say slow economic growth worldwide is hurting the industry in a number of sectors. Steel is used in everything from construction to automobiles, appliances and other consumer products.

As China tries to slow its economy, steel makers there may try to undercut U.S. companies by selling their products overseas at lower prices. U.S. companies must then slash prices to compete.

United States Steel Corp. Chairman and CEO John Surma said he has noticed an increase in imports, particularly from South Korea, which will lead to lower shipments and lower prices for his company.

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GlaxoSmithKline settles bad drug case for $750M

BOSTON (AP) _ British pharmaceutical company GlaxoSmithKline PLC will pay $750 million to settle allegations that it knowingly manufactured and sold adulterated drugs, including the popular antidepressant Paxil, federal prosecutors in Massachusetts said Tuesday.

U.S. Attorney Carmen Ortiz announced that the London-based company will pay $150 million in criminal fines and $600 million in civil penalties related to faulty manufacturing processes at its plant in Cidra, Puerto Rico.

The company allowed several drugs to be adulterated between 2001 and 2005, including Paxil CR, a skin-infection ointment called Bactroban, and an anti-nausea drug called Kytril. The company said the plant closed in 2009 due to declining demand for the medicines made there.

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Consumer confidence rises only slightly in October

NEW YORK (AP) _ Americans' confidence in the economy stayed stuck in gloomy territory in October, with Wall Street's gains in recent months not boosting spirits much.

Coaxing shoppers out of their shells will be the major challenge for retailers heading into the holiday season. That could mean they'll be continuing to push big discounts.

The Conference Board, a private research group, said its Consumer Confidence Index rose to 50.2 from a revised 48.6 in September. Economists surveyed by Thomson Reuters expected 49.2.

September's reading was the index's lowest point since February. An index of 90 indicates a healthy economy.

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Foreclosures push home prices down in many cities

WASHINGTON (AP) _ Home prices are falling further, suggesting a bottom hasn't been reached in many metro areas.

Millions of foreclosures are expected to pour onto the market in the coming years. That's likely to force prices down and hurt even cities that had begun to rebound. Investigations into banks' foreclosure paperwork could further deter buyers and weigh down prices.

The past few months have been the worst time in a decade for the housing market. Few people have bought homes, and among the small pool of buyers, many have purchased foreclosures and other distressed properties.

The impact was apparent Tuesday when Standard & Poor's/Case-Shiller released its latest index for home prices in 20 major U.S metro areas. The average price for all markets fell 0.2 percent in August and 15 cities posted declines.

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Bristol-Myers Squibb sees 3Q profit dip 2 percent

TRENTON, N.J. (AP) _ Bristol-Myers Squibb Co. posted a slight decline in third-quarter profit Tuesday as its restrained spending was offset by flat sales of its drugs, lower income from its partners and bigger discounts to government because of the health care overhaul.

Bristol-Myers, which sells blood thinner Plavix, the world's second best-selling drug, reported third-quarter net income of $949 million, or 55 cents per share. That's down nearly 2 percent from $966 million, or 48 cents per share, in the year-ago quarter.

Chief Executive Lamberto Andreotti told analysts on a conference call that approval of the company's experimental drug to prevent organ transplant rejection is being held up by the Food and Drug Administration until multiple problems are fixed at its manufacturing plant in Manati, Puerto Rico.

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Kimberly-Clark says 3Q profit falls; cuts forecast

NEW YORK (AP) _ Consumer products maker Kimberly-Clark Corp. said Tuesday that its third-quarter net income fell 19 percent as making its top-selling tissues and diapers got more expensive, and the company cut its forecast for the full year.

The results fell short of analysts' expectations, and shares of the maker of Huggies diapers and Kleenex tissues fell nearly 6 percent.

Costs for key materials such as pulp, polymer resin and oil-based materials rose $265 million in the quarter, the highest quarterly increase the company has ever seen.

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DreamWorks Animation 3Q profit doubles

LOS ANGELES (AP) _ DreamWorks Animation SKG Inc. said Tuesday that its third-quarter earnings doubled thanks to the international box office results from "Shrek Forever After."

Net income hit $39.8 million, or 47 cents per share. A year earlier, it was $19.6 million, or 23 cents per share. Revenue rose 39 percent to $189 million, from $135 million a year ago.

Analysts surveyed by Thomson Reuters forecast a profit of 35 cents per share on revenue of $163 million.

DreamWorks is the earliest movie studio to report quarterly results, which give a glimpse into how consumers are spending their entertainment dollars. It has said 2010 will be its best year ever. Its third movie of the year, "Megamind," will be widely released in the U.S. on Nov. 5.

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By The Associated Press

The Dow Jones industrial average rose 5.41 points, or 0.1 percent, to 11,169.46. The Standard & Poor's 500 index rose 0.02 to 1,185.64, while the technology-focused Nasdaq composite index rose 6.44, or 0.3 percent, to 2,497.29.

Benchmark crude for December delivery rose 3 cents to settle at $82.55 a barrel on the New York Mercantile Exchange.

In other Nymex trading in November contracts, heating oil was off 0.5 cent to settle at $2.2500 a gallon and gasoline gained 1.67 cents to settle at $2.0940 a gallon. Natural gas gained 3.7 cents to settle at $3.395 per 1,000 cubic feet.

In London, Brent crude rose 12 cents to settle at $83.66 a barrel on the ICE Futures exchange.