Business Highlights

AP News
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Posted: Sep 02, 2011 5:52 PM
Business Highlights

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Employers add no net jobs in August; rate unchanged

WASHINGTON (AP) _ Employers stopped adding jobs in August, an alarming setback for an economy that has struggled to grow and might be at risk of another recession.

The government also reported that the unemployment rate remained at 9.1 percent. It was the weakest jobs report since September 2010.

Stocks tumbled on the news. The Dow Jones industrial average sank more than 250 points.

Total payrolls were unchanged in August, the first time since 1945 that the government has reported a net job change of zero. Economists warned that the economy can't keep growing indefinitely if hiring remains stalled.

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Obama halts controversial EPA regulation

WASHINGTON (AP) _ President Barack Obama on Friday scrapped his administration's controversial plans to tighten smog rules, bowing to the demands of congressional Republicans and some business leaders.

Obama overruled the Environmental Protection Agency _ and the unanimous opinion of its independent panel of scientific advisers _ and directed administrator Lisa Jackson to withdraw the proposed regulation to reduce concentrations of ground-level ozone, smog's main ingredient. The decision rests in part on reducing regulatory burdens and uncertainty for businesses at a time of rampant uncertainty about an unsteady economy.

The announcement came shortly after a new government report on private sector employment showed that businesses essentially added no new jobs last month _ and that the jobless rate remained stuck at a historically high 9.1 percent.

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Feds sue biggest US banks over risky mortgages

NEW YORK (AP) _ The government has sued the nation's largest banks, along with a handful of other financial institutions and executives, for violating federal and state laws in the sale of home mortgage-backed securities.

Among the 17 institutions targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.

Home mortgage-backed securities were risky investments whose collapse after the real-estate bust helped fuel the financial crisis that erupted in late 2008.

The lawsuits were filed Friday by the Federal Housing Finance Agency, which oversees mortgage buyers Fannie Mae and Freddie Mac.

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Starbucks CEO hosts town hall on politics

PORTLAND, Ore. (AP) _ Starbucks CEO Howard Schultz changed how America drinks coffee. Now, he wants to change the political system.

The leader of the coffee giant says U.S. political leaders have created a "crisis of confidence" with their political wrangling that is wreaking havoc on the economy. He said he wants to give a voice to all citizens by hosting a national telephone forum on Tuesday.

He's also running ads in the New York Times and USA Today ahead of the event, featuring an open letter that urges Americans to participate in the forum and insist politicians end their hyper-partisan behavior.

Schultz, who heads Seattle-based Starbucks, which operates more than 17,000 stores globally, said he was moved to hold the forum after receiving hundreds of emails and letters from citizens. They were struggling to find jobs, keep their homes or send their children to school given the economic conditions.

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Quake risk to reactors greater than thought

WASHINGTON (AP) _ The risk that an earthquake would cause a severe accident at a U.S. nuclear plant is greater than previously thought, 24 times as high in one case, according to an AP analysis of preliminary government data. The nation's nuclear regulator believes a quarter of America's reactors may need modifications to make them safer.

The threat came into sharp focus last week, when shaking from the largest earthquake to hit Virginia in 117 years appeared to exceed what the North Anna nuclear power plant northwest of Richmond was built to sustain.

The two North Anna reactors are among 27 in the eastern and central U.S. that a preliminary Nuclear Regulatory Commission review has said may need upgrades. That's because those plants are more likely to get hit with an earthquake larger than the one their design was based on. Just how many nuclear power plants are more vulnerable won't be determined until all operators recalculate their own seismic risk based on new assessments by geologists, something the agency plans to request later this year. The NRC on Thursday issued a draft of that request for public comment.

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AstraZeneca shares fall on flat Crestor results

Drugmaker AstraZeneca PLC's big gamble, an attempt to prove its top-selling drug works better than rival cholesterol blockbuster Lipitor, appears to have backfired.

A study meant to show AstraZeneca's cholesterol drug Crestor prevents plaque buildup in heart arteries better than Pfizer Inc.'s Lipitor showed no clear advantage for Crestor.

Two generic versions of Lipitor, the world's top-selling drug for several years, are expected to hit the U.S. market on Nov. 30. Analysts wrote Friday that the study result will make it hard for the British drugmaker to argue patients would fare better on its Crestor than on much-cheaper generic versions of Lipitor.

AstraZeneca shares fell $1.61 or 3.5 percent, to close at $45.08. The company released preliminary study results earlier in the day.

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Campbell Soup adjusted profit beats expectations

Campbell Soup Co.'s soup revenue cooled in the fourth-quarter, but stronger sales of Goldfish crackers, Milano Melts cookies and other items helped the food maker deliver adjusted results that beat Wall Street expectations.

The company, based in Camden, N.J., is trying to regain ground it lost after several years of declining soup sales as shoppers curbed their soup consumption, stopped stocking their pantries or shifted to competitor's brands. Campbell is in the early stages of a turnaround plan that includes adding high-end soups and broadening offerings in snacks, beverages and other categories.

Like many food companies, Campbell has had to adjust to the desires of shoppers who eat at home more often but are still selective about how they spend their limited grocery budgets. Campbell's soup remains popular with baby boomers and seniors, but the company has struggled to reach a broader audience and is trying a new strategic direction to boost its top and bottom lines.

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Flooded fields in North Dakota lead to higher pasta prices

PLAZA, N.D. (AP) _ Consumers are paying more for pasta after heavy spring rain and record flooding prevented planting on more than 1 million acres in one of the nation's best durum wheat-growing areas.

North Dakota typically grows nearly three-fourths of the nation's durum, and its crop is prized for its golden color and high protein. Pasta makers say the semolina flour made from North Dakota durum produces noodles that are among the world's best.

This year's crop, however, is expected to be only about 24.6 million bushels, or about two-fifths of last year's. Total U.S. production is pegged at 59 million bushels, a little more than half of last year's and the least since 2006, according to the U.S. Department of Agriculture.

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By The Associated Press(equals)

The Dow Jones industrial average lost 253.31 points to close at 11,240.26. It was the biggest fall in two weeks. The Standard & Poor's 500 index fell 30.45, or 2.5 percent, to 1,173.97.

The Nasdaq composite fell 65.71, or 2.6 percent, to 2,480.33.

Benchmark crude fell $2.48, or 2.8 percent, to finish at $86.45. Brent crude, used to price oil in many international markets, fell $1.96 to end at $112.33 per barrel In London.

Heating oil fell 5.44 cents to finish at $2.9974 per gallon and gasoline futures lost 5.31 cents to finish at $2.8396 a gallon. Natural gas fell 17.8 cents, or 4.4 percent, to end the day at $3.872 per 1,000 cubic feet.