Business Highlights

AP News
Posted: Jun 21, 2011 6:12 PM
Business Highlights


FDA issues graphic cigarette labels

RICHMOND, Va. (AP) _ Rotting teeth and gums. Diseased lungs. A sewn-up corpse of a smoker. Cigarette smoke coming out of the tracheotomy hole in a man's neck.

Cigarette packs in the U.S. will have to carry these macabre images in nine new warning labels that are part of a campaign by the Food and Drug Administration to use fear and disgust to discourage Americans from lighting up.

The labels, announced on Tuesday, represent the biggest change in cigarette packs in the U.S. in 25 years.

At a time when the drop in the nation's smoking rate has come to a standstill, the government is hoping the in-your-face labels will go further than the current surgeon general warnings toward curbing tobacco use, which is responsible for about 443,000 deaths a year in the U.S.


Walgreen says it will split with Express Scripts

NEW YORK (AP) _ Walgreen Co. said that it is willing to walk away from more than $5 billion in annual revenue because pharmacy benefits manager Express Scripts doesn't pay it enough to fill prescriptions.

If the companies don't settle their dispute, people whose prescription benefits are handled by Express Scripts won't be able to get their prescriptions filled at the biggest drugstore chain in the U.S., and Walgreen would give up about 7 percent of its annual revenue.

The announcement Tuesday follows a similar contract fight a year ago between Walgreen and CVS Caremark Corp. that was resolved less than two weeks after it became public.

The impasse with Express Scripts overshadowed news that Walgreen's net income climbed 30 percent in its third fiscal quarter.


Fed's soon-to-end bond buying likely aided economy

WASHINGTON (AP) _ It would drop interest rates and lift stock prices. It would ignite inflation. It was useless.

Opinions of the Federal Reserve's program to buy $600 billion in Treasury bonds diverged sharply after the Fed unveiled it in November.

Now, as the Fed wraps up its latest policy meeting Wednesday, the bond purchases are about to expire. In the end, most experts suggest, they probably didn't hurt and might have helped the economy, at least temporarily.

The bigger question, though, is: What happens now?


Stocks rise for fourth straight day on Greek hopes

NEW YORK (AP) _ Stocks are closing higher for the fourth day running on hopes that a vote of confidence in the Greek government will help the country avoid a default.

The vote of confidence in Greece's government, which passed late Tuesday, could reassure investors that the country will push through budget cuts required for getting another installment of emergency loans. Worries that a default by Greece could upend financial markets have kept investors on edge since early May.


AP IMPACT: Tritium leaks found at many nuke sites

BRACEVILLE, Ill. (AP) _ Radioactive tritium has leaked from three-quarters of U.S. commercial nuclear power sites, often into groundwater from corroded, buried piping, an Associated Press investigation shows.

The number and severity of the leaks has been escalating, even as federal regulators extend the licenses of more and more reactors across the nation.

Tritium, which is a radioactive form of hydrogen, has leaked from at least 48 of 65 sites, according to U.S. Nuclear Regulatory Commission records reviewed as part of the AP's yearlong examination of safety issues at aging nuclear power plants. Leaks from at least 37 of those facilities contained concentrations exceeding the federal drinking water standard _ sometimes at hundreds of times the limit.

While most leaks have been found within plant boundaries, some have migrated offsite. But none is known to have reached public water supplies.


JPMorgan to pay $153.6M to settle fraud charges

WASHINGTON (AP) _ JPMorgan Chase & Co. has agreed to pay $153.6 million to settle civil fraud charges that it misled buyers of complex mortgage investments just as the housing market was collapsing.

J.P. Morgan Securities, a division of the powerful Wall Street bank, failed to tell investors that a hedge fund helped select the investment portfolio and then bet that the portfolio would fail, the Securities and Exchange Commission said.

The settlement announced Tuesday is one of the most significant legal actions targeting Wall Street's role in the 2008 financial crisis. It comes a year after Goldman Sachs & Co. paid $550 million to settle similar charges.


Home sales fall to 2011 low; few 1st-time buyers

WASHINGTON (AP) _ Fewer people bought previously occupied homes in May, lowering sales to their weakest point of the year.

Home sales sank 3.8 percent last month to a seasonally adjusted annual rate of 4.81 million homes, the National Association of Realtors said Tuesday. That's far below the roughly 6 million annual sales rate typical in healthy housing markets.

Since the housing boom went bust in 2006, sales have fallen in four of the past five years. Analysts say they expect sales to level off at about 5 million a year. That's not much better than the 4.91 million homes sold last year, the worst showing in 13 years.


Gannett laying off 700 more workers amid ad slump

McLEAN, Va. (AP) _ The nation's largest newspaper publisher is laying off another 700 employees to cope with an unrelenting advertising slump.

Gannett, the owner of USA Today and more than 80 other daily U.S. newspapers, hoped to complete the cuts Tuesday. The layoffs are occurring at most Gannett newspapers but not at USA Today.

The payroll reductions represent about 2 percent of Gannett's 32,600 employees. The layoffs are Gannett Co.'s biggest in two years and are the latest austerity measures triggered by a steep drop in newspaper advertising that began in 2006.


Barnes & Noble 4Q loss wider than expected

NEW YORK (AP) _ Barnes & Noble reported a deeper fourth-quarter loss than analysts expected Tuesday as the bookseller continues to invest in its e-book reader Nook and as liquidation sales by rival Borders hurt its revenue.

The results come as the largest U.S. specialty book retailer considers a $1 billion takeover offer from cable mogul John Malone's Liberty Media Corp. Barnes & Noble declined to give 2012 guidance as it considers the bid.

Barnes & Noble has been spending heavily on its e-book readers and e-bookstore in an effort to stay afloat amid changes in how people read books and tough competition from discounters and online retailers that brought down its chief rival Borders Group. Borders filed for bankruptcy protection in February.


By The Associated Press

The S&P 500 index rose 17 points, or 1.3 percent, to close at 1,296.

The Dow Jones industrial average rose 110, or 1 percent, to 12,190. The Nasdaq composite rose 58, or 2.2 percent, to 2,687.

Benchmark West Texas Intermediate for July delivery rose 14 cents to settle at $93.40 per barrel on the New York Mercantile Exchange. It was the last day of trading for the July contract and most of the trading had shifted to the August contract, which rose 54 cents to settle at $94.17 per barrel. It was as high as $95.10 a barrel before it retreated.

In other Nymex trading, heating oil gave up 4.20 cents to settle at $2.8900 per gallon and gasoline futures lost 2.89 cents to settle at $2.8826 per gallon. Natural gas added 7.1 cents at $4.388 per 1,000 cubic feet.

In London, Brent crude lost 74 cents to settle at $110.95 per barrel on the ICE Futures exchange.