Business Highlights

AP News
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Posted: May 23, 2011 5:53 PM
Business Highlights

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Cisco sued for helping China build Golden Shield

WASHINGTON (AP) _ Members of the Falun Gong spiritual movement have filed a lawsuit against Cisco Systems Inc. accusing it of supplying the Chinese government with computer-networking equipment used to spy on and persecute dissidents.

In a lawsuit filed last week, a group of Falun Gong practitioners alleges that Cisco provided networking gear and technical assistance to build and operate an elaborate system of Internet controls used by the Chinese government to track the online behavior of its citizens and block content it does not like.

The lawsuit accuses Cisco of aggressively marketing and customizing its products for the system, known as the Golden Shield Project, with the understanding that the technology would be used for spying on dissident groups such as the Falun Gong. By using Cisco equipment, the lawsuit said, government officials were able to monitor dissidents' activities, including online meetings of Falun Gong congregations. The lawsuit said some dissidents were detained, tortured and even killed as a result; others disappeared.

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Campbell's 3Q profit up, but US soup sales slump

NEW YORK (AP) _ Campbell Soup Co. said Monday that its U.S. soup sales fell in its third quarter as it ditched the heavy discounts and found consumers stocked up less.

But its overall results beat expectations as its baked goods and snacks which include Pepperidge Farm products, Goldfish crackers and Milano cookies sold well.

Campbell, known for its soups in iconic red and white cans, said that despite the drop in U.S. soup sales, it will step up advertising and new product offerings to drive demand rather than relying on price cuts.

The company, like all food makers, is also facing higher food costs and plans to raise prices in the U.S. to offset that.

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Deal sites appeal to shoppers and businesses alike

Groupon is adding 150 employees a month at its U.S. headquarters and trains them in a church because the conference rooms at its headquarters aren't big enough. Ideeli has crammed so much electronic equipment into its New York office that the power goes out every day.

And at LivingSocial, well, the living is a little too social. Its third office in Washington, open just two months, ran out of room so fast that employees have to work at narrow desks in the hallway.

Deal-a-day websites blast email offers for deep discounts, sometimes good for only a few hours. And they're becoming so popular that their offices are starting to look as crowded as their subscribers' inboxes.

In just three years, the business model has changed local advertising, delivering faster results than other marketing methods. Store owners get immediate revenue and can see exactly how many customers an offer brings in.

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Chrysler plans to repay government loans Tuesday

MACOMB TOWNSHIP, Mich. (AP) _ Chrysler CEO Sergio Marchionne says his company will save $300 million in interest per year when it repays government loans on Tuesday.

The company will repay roughly $7.5 billion in loans to the U.S. and Canadian governments. Chrysler is taking out new bank loans and selling bonds to make the payment.

Chrysler got about $10.5 billion from the U.S. to survive bankruptcy in 2009. It has repaid some of the money and plans to give the U.S. $5.9 billion on Tuesday.

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AP-GfK Poll: Medicare doesn't have to be cut

WASHINGTON (AP) _ Most Americans say they don't believe Medicare has to be cut to balance the federal budget, and ditto for Social Security, a new poll shows.

The Associated Press-GfK poll suggests that arguments for overhauling the massive benefit programs to pare government debt have failed to sway the public. The debate is unlikely to be resolved before next year's elections for president and Congress.

Americans worry about the future of the retirement safety net, the poll found, and 3 out of 5 say the two programs are vital to their basic financial security as they age. That helps explain why the Republican Medicare privatization plan flopped, and why President Barack Obama's Medicare cuts to finance his health care law contributed to Democrats losing control of the House in last year's elections.

Medicare seems to be turning into the new third rail of politics.

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Volcanic cloud heads to Scotland; flights canceled

LONDON (AP) _ A dense ash cloud from an Icelandic volcano blew toward Scotland on Monday, causing airlines to cancel flights, forcing President Barack Obama to shorten a visit to Ireland, and raising fears of a repeat of last year's huge travel disruptions in Europe that stranded millions of passengers.

Britain's Civil Aviation Authority said it appears that ash from the Grimsvotn (GREEMSH-votn) volcano could reach Scottish airspace as early as Tuesday and affect other parts of the U.K. and Ireland later in the week.

British Airways suspended all its flights for Tuesday morning between London and Scotland, and Dutch carrier KLM canceled more than a dozen flights to and from Scotland and northern England at the same time. Two smaller domestic airlines also announced flight disruptions.

Still, authorities say they don't expect the kind of massive grounding of flights that followed last year's eruption of the Eyjafjallajokull volcano in Iceland because systems and procedures have been improved since then and the cloud is currently not expected to move over continental Europe.

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Explosion at China iPad factory shows supply risks

BEIJING (AP) _ An explosion at one of two factories that make Apple's new iPad 2 highlights the risks of a global manufacturing strategy that has cut costs but concentrates production in a few locations.

Foxconn Technology Group, the contractor that manufactures Apple's iPhones and iPads, said Friday's blast in the western city of Chengdu killed three employees and injured 15. The Taiwanese company said production was suspended but did not respond to questions Monday about how supplies of iPads might be affected.

Foxconn said the blast was caused by combustible dust in a workshop that polished products. It said operations in workshops that do similar work at its other factories in China would be suspended pending an investigation.

Estimates by industry analysts of the impact on iPad production ranged from minimal to up to 2.8 million units in lost output. That is equal to just over half the number sold in the first three months of this year but Apple says sales are so strong it already is struggling to keep up with demand.

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European debt crisis shakes markets again

LONDON (AP) _ Europe's debt crisis returned to shake markets on Monday as fears over the solvency of Greece combined with concerns that Spain, or even Italy, may be dragged into the turmoil that has already seen three euro countries bailed out.

Investors watched aghast last week as top policymakers clashed over how to deal with Greece's mountain of debt.

While policymakers at the European Central Bank warned of the catastrophic effects of a Greek debt restructuring, officials in Brussels suggested a delay in bond repayments could help give Greece more time to regain market trust.

Amid the confusion, Fitch on Friday downgraded Greece further below junk status and on Monday cut Belgium's outlook, while Standard & Poor's lowered Italy's rating outlook on the weekend. Tensions were further heightened on Sunday when Spain's governing Socialists took a battering at regional polls as voters protested against austerity at a time when one in five people are looking for work.

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By The Associated Press(equals)

The Dow Jones industrial average fell 130.78 points, or 1.1 percent, to close at 12,381.26. The Standard & Poor's 500 index fell 15.9, or 1.2 percent, to 1,317.37 All but a handful of stocks in the S&P 500 fell. The Nasdaq composite index fell 44.42, or 1.6 percent, to 2,758.9.

Benchmark crude for July delivery lost $2.40, or 2.4 percent, to settle at $97.70 per barrel on the New York Mercantile Exchange. In London, Brent crude gave up $2.29 or 2 percent, to settle at $110.10 per barrel on the ICE Futures exchange.

In other Nymex trading, heating oil lost 7.12 cents to settle at $2.8471 per gallon and gasoline futures added 0.23 cent to settle at $2.9381 per gallon. Natural gas gained 10.3 cents to settle at $4.393 per 1,000 cubic feet.