Business Highlights

AP News
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Posted: Aug 24, 2011 5:58 PM
Business Highlights

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Financial turmoil intensifies home buyers' anxiety

The past month wasn't exactly a confidence-booster for would-be home buyers and sellers.

They've witnessed a turbulent stock market, a downgrade of U.S. credit, a European debt crisis and a sluggish U.S. economy.

And now many say they're even more hesitant _ a retreat that could further delay a rebound in housing. It could hold back the overall economy, too.

"I have people who are just waiting and waiting, who just haven't pulled the trigger even though they have the down payment," said John Stearns, senior mortgage banker at American Fidelity Mortgage outside Milwaukee. "There's a lot of kicking tires. A lot of people saying they just won't do it."

Their unease explains why applications for home mortgages sank last week to nearly a 15-year low. What's more, sales of new homes fell more than expected in July _ and analysts think the financial turmoil may be accelerating that slide this month.

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Survey: Overhaul may push employee benefits shift

INDIANAPOLIS (AP) _ Nearly one of every 10 midsized or big employers expects to stop offering health coverage to workers after insurance exchanges begin operating in 2014 as part of President Barack Obama's health care overhaul, according to a survey by a major benefits consultant.

Towers Watson also found in its July survey that another one in five companies are unsure about what they will do after 2014. Another big benefits consultant, Mercer, found in a June survey of large and smaller employers that 8 percent are either "likely" or "very likely" to end health benefits after the exchanges start.

The surveys, which involved more than 1,200 companies, suggest that some businesses feel they will be better off dropping health insurance coverage once the exchanges start, even though they could face fines and tax headaches. The percentage of companies that are already saying they expect to do this surprised some experts. If they follow through it could start a trend that chips away at employer-sponsored health coverage, a long-standing pillar of the nation's health system.

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Higher durable-goods orders ease economic worries

WASHINGTON (AP) _ A surge in demand for autos and aircraft drove orders for long-lasting manufactured goods higher in July, easing fears that the economy might be on the verge of another recession.

The rebound in the auto industry helped offset a decline in orders for most other factory goods.

Stocks rose after the better-than-expected report showed the biggest increase in durable-goods orders since March, when the Japan earthquake disrupted supply chains and slowed auto production.

Overall orders for durable goods rose 4 percent last month, the Commerce Department said Wednesday.

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Budget deficit slips to $1.28 trillion; red ink continues

WASHINGTON (AP) _ After months of unrelieved gloom and discord, Congress and President Barack Obama are starting to make a dent in the federal budget deficit. It's projected to shrink slightly to $1.28 trillion this year, and bigger savings from this month's debt ceiling deal are forecast over the next decade.

No one's celebrating. There will be plenty of red ink for years to come.

The nonpartisan Congressional Budget Office projected Wednesday that annual budget deficits will be reduced by a total of $3.3 trillion over the next decade, largely because of the deficit-reduction package passed by Congress earlier this month. The office also forecast persistently high unemployment, a troubling political prospect for President Barack Obama in the crucial months of his campaign to win a second term.

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Google settles pharmacy ad probe for $500 million

PROVIDENCE, R.I. (AP) _ Google Inc. has agreed to pay $500 million to settle a government investigation into the Internet search leader's distribution of online ads from Canadian pharmacies illegally selling prescription drugs to U.S. consumers.

The settlement means Google will not face criminal prosecution for accusations that it improperly profited from ads promoting Canadian pharmacies that illegally imported drugs into the U.S., Rhode Island U.S. Attorney Peter F. Neronha said. It is the first time an Internet search engine is being held responsible for illegal distribution of drugs.

The settlement delivered a stinging rebuke to Google, whose motto is "don't be evil." In announcing the settlement, authorities left little doubt that Google had misbehaved. From its vantage point, Google crossed into a shady area of prescription-drug advertising in pursuit of higher profits, which have boosted its stock price and enriched its employees since the company's initial public offering in 2004.

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Hertz, GE partner in China electric autos venture

SHANGHAI (AP) _ Rental car company Hertz Global Holdings and General Electric plan to partner in offering electric vehicles in China and expanding the charging networks needed to run them.

An agreement signed in Shanghai's "Auto City" of Anting on Wednesday calls for building hundreds of charging stations in major Chinese cities including Shanghai and Beijing, Hertz executives said.

The plan aligns with the government's effort to promote commercialization of new energy vehicles as a way to reduce oil imports and help curb pollution. Setting up the infrastructure to charge such vehicles is viewed as a key hurdle toward enticing consumers to switch from cars that run on gasoline or diesel to electric vehicles.

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Nokia launches 3 mass-market smartphones

HELSINKI (AP) _ Nokia on Wednesday unveiled three mass-market smartphones, as the troubled handset maker struggles against top-end competitors and cheaper producers in a market it once ruled as the innovative technology bellwether.

The new models, based on the Symbian platform, include what the Finland-based company calls the world's smallest touch-screen smartphone and one with an exceptionally bright display.

The launch of the Nokia 600, 700 and 701 comes five months after Nokia introduced its first smartphones to run on the updated Symbian software, with new icons, enhancements and a faster browser. It said they were made with an "extensive use" of eco-friendly materials, have long battery life and include power saving features.

Nokia is being increasingly squeezed in the low end market by Asian manufacturers like ZTE and in the high end by the makers of smartphones like Apple Inc.'s iPhone and Research in Motion's BlackBerry.

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Burger King introduces oatmeal to breakfast menu

PORTLAND, Ore. (AP) _ Burger King is adding oatmeal to its breakfast menu as the struggling fast-food chain tries to reinvent itself.

The world's second-largest burger chain says the move balances out its menu to offer customers a healthier breakfast option. It is also an attempt by the company to catch up with competitors and expand its appeal beyond its traditional burger-and-fries base to boost its sagging sales.

Burger King began offering Quaker Oatmeal, available in original and fruit-topped maple for $1.99, in all of its stores on Monday.

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By The Associated Press(equals)

The Dow Jones industrial average closed rose 143.95 points, or 1.3 percent, at 11,320.71.

The Standard & Poor's 500 index rose 15.25 points, or 1.3 percent, to 1,177.60. The Nasdaq rose 21.63, or 0.9 percent, to 2,467.69.

Benchmark U.S. crude fell as traders waited for possible moves by the Fed to stimulate the economy. West Texas Intermediate crude lost 28 cents to end at $85.16 per barrel in New York.

In other Nymex trading, heating oil rose 1.98 cents to finish at $2.9690 per gallon and gasoline futures added less than a penny to end at $2.7558 per gallon. Natural gas lost 7.1 cents to finish at $3.922 per 1,000 cubic feet.