Business Highlights

AP News
Posted: Sep 23, 2011 6:03 PM
Business Highlights


Global leaders struggle to calm recession fears

WASHINGTON (AP) _ The world's economic powers struggled on Friday to get on top of a European debt crisis that is threatening to drag the global economy back into recession.

Officials gathered for three days of discussion pledged to push forward to fulfill the goals of a program in which the Group of 20 major economies promised stronger cooperation to jump-start global growth and help Greece avoid a destabilizing default.

Private economists questioned whether the latest plan unveiled by the G-20 countries Thursday night went far enough to deal with market concerns that a Greek default is a virtual certainty and threatens to destabilize other highly indebted European countries.


AP IMPACT: Hospital drug shortages deadly, costly

TRENTON, N.J. (AP) _ A drug for dangerously high blood pressure, normally priced at $25.90 per dose, offered to hospitals for $1,200. Fifteen deaths in 15 months blamed on shortages of life-saving medications.

A growing crisis in the availability of drugs for chemotherapy, infections and other serious ailments is endangering patients and forcing hospitals to buy from secondary suppliers at huge markups because they can't get the medications any other way.

An Associated Press review of industry reports and interviews with nearly two dozen experts found the shortages _ mainly of injected generic drugs that ordinarily are cheap _ have delayed surgeries and cancer treatments, left patients in unnecessary pain and caused hospitals to give less effective treatments. That's resulted in complications and longer hospital stays.


Fannie Mae cited for failing to stop robo-signing

WASHINGTON (AP) _ Fannie Mae missed chances to catch law firms illegally signing foreclosure documents and its government overseer did not take the right steps to ensure Fannie was doing its job, according to a federal watchdog.

The Federal Housing Finance Agency's inspector general said in a report Friday that Fannie failed to establish an "acceptable and effective" way to monitor foreclosure proceedings between 2006 and early 2011. FHFA then failed to ensure it was complying with demands that it clean up its programs.

Mortgage industry employees _ including law firms employed by Fannie Mae _ signed documents they hadn't read and used fake signatures on foreclosure cases across the country. The practices, known collectively as "robo-signing," resulted in a suspension of foreclosures last fall and a probe by all 50 state attorneys general into how corners were cut to keep pace with the crush of foreclosure paperwork.


BofA settlement pushes up home default notices

NEW YORK (AP) _ It's no secret that Bank of America wants to put its mortgage-related woes behind it. But it appears that a key $8.5 billion settlement with large investors is playing a role in pushing many more people into foreclosure.

The number of homes across the country that received an initial default notice _ the first step in the foreclosure process _ jumped 33 percent in August from July, the foreclosure listing firm RealtyTrac reported last week. It was the largest monthly increase since August 2007, right after the housing bubble had burst.

Now a preliminary analysis reveals the largest escalation of foreclosures came from Bank of America. Just in California, default notices sent by Bank of America soared 96 percent in August from the previous month.

The dramatic rise is particularly evident in certain California towns and cities. For instance, notices surged 95 percent in Fresno and 76 percent in Sacramento.


KB Home posts wider loss for fiscal third quarter

LOS ANGELES (AP) _ KB Home on Friday became the latest major homebuilder to report a surge in new home orders for the closing months of summer and said it anticipates the sales increase will continue next year.

The company posted a wider third-quarter loss than a year earlier, however, as completed home sales tumbled 31 percent.

Orders for new homes jumped 40 percent for the quarter that ended Aug. 31. An increase in the number of KB Home developments with houses available helped, but the improvement mainly resulted from comparison with an easy year-ago sales benchmark.

Like most builders, KB saw orders slow in the second half of last year after homebuyer tax credits expired at the end of April 2010. Sales of new homes nationwide remained weak through last summer and much of the fall and, even with the incentive, new home sales in 2010 were the lowest on records going back 47 years.


Dish takes Blockbuster shot at reeling Netflix

SAN FRANCISCO (AP) _ The Blockbuster video store chain is seeking some revenge against its old nemesis Netflix by offering a less expensive way to watch videos online and rent DVDs through the mail.

The attack announced Friday is being mounted by satellite-TV provider Dish Network, which bought Blockbuster out of bankruptcy court for $234 million five months ago.

Blockbuster, once the video rental king, had filed for bankruptcy when it couldn't counter the threat posed by Netflix Inc., whose DVD-by-mail service and subsequent expansion into Internet video streaming revolutionized home entertainment.

Netflix now reigns as the largest U.S. video subscription service with about 24 million customers, but it's in a weakened position after raising prices as much as 60 percent and announcing the spinoff of its DVD-by-mail service as "Qwikster." Those moves, made in the past two months, have triggered a Netflix customer rebellion that Blockbuster and Dish Network Corp. are jumping on.

The lure: a DVD-by-mail and Internet video package that Blockbuster and Dish Network are selling for as low as $10 per month. That's the same price Netflix charged until it split its streaming service from DVDs. But there's a catch. To get Blockbuster's new "Movie Pass," you have to subscribe to Dish Network's pay-TV service.


Solyndra leaders invoke 5th Amendment at hearing

WASHINGTON (AP) _ Top executives from a bankrupt California solar energy company declined to testify before a congressional hearing investigating their half-billion dollar government loan.

Solyndra Inc. CEO Brian Harrison and the company's chief financial officer, Bill Stover, both invoked their Fifth Amendment right to decline to testify to avoid self-incrimination.

Harrison told the House Energy and Commerce Committee Friday: "On advice of counsel, I respectfully decline to answer any questions."

Stover did the same.

Lawmakers from both parties said they were disappointed, but said that silence from the two executives would not stop them from pursuing their investigation into a $528 million loan that Solyndra Inc. received from the Energy Department in 2009.


California governor signs compromise on Internet taxes

SAN FRANCISCO (AP) _ Gov. Jerry Brown signed legislation Friday that postpones new sales-tax rules that would have affected online purchases in California, granting more time for traditional and online retailers to lobby Congress for a national standard on the high-stakes issue.

The bill, crafted as a compromise among, traditional retailers and California lawmakers searching for ways to raise revenue, delays until at least September 2012 online tax rules that were implemented as part of this year's state budget package.

Under the compromise, Amazon will drop a ballot referendum planned for next year to overturn the law passed earlier in the summer, a move that promised an ugly and expensive campaign fight between online and traditional retailers.


By The Associated Press(equals)

The Dow Jones industrial average rose 37.65 points Friday, or 0.4 percent, to close at 10,771.48. The S&P 500 index rose 6.87 points Friday, or 0.6 percent, to 1,136.43. The Nasdaq rose 27.56, or 1.1 percent, to 2,483.23.

Benchmark U.S. oil fell 66 cents to finish at $79.85 per barrel.

Brent crude, which is used to price many kinds of oil produced overseas, fell $1.52 to end at $103.97 per barrel.

In other energy trading, heating oil fell 5.2 cents to finish at $2.8059 per gallon, gasoline futures dropped 1.93 cents to finish at $2.5244 per gallon and natural gas fell less than a cent to end the day at $3.701 per 1,000 cubic feet.