Business Highlights

AP News
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Posted: Dec 21, 2011 7:20 PM
Business Highlights

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Economy ends tough 2011 on a surprising upswing

WASHINGTON (AP) _ The economy is ending 2011 on a roll.

The job market is healthier. Americans are spending lustily on holiday gifts. A long-awaited turnaround for the depressed housing industry may be under way. Gas is cheaper. Factories are busier. Stocks are higher.

Not bad for an economy faced with a debt crisis in Europe and, as recently as this summer, scattered predictions of a second recession at home. Instead, the economy has grown faster each quarter this year, and the last three months should be the best.

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ECB lends banks $639 billion over 3 years

FRANKFURT, Germany (AP) _ Struggling banks snapped up $639 billion in cheap loans from the European Central Bank on Wednesday, a sign of just how hard or expensive it has become to borrow from each other.

The huge demand for newly available three-year loans comes as fears rise that heavily indebted European governments could default and force banks and other bond holders to take big losses.

The loans to 523 banks surpassed the $578 billion in one-year loans extended in June 2009, when the global financial system was reeling from the collapse of the U.S. investment bank Lehman Brothers. It was the biggest ECB infusion of credit into the banking system in the 13-year history of the euro.

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Holiday shopping season is strong

NEW YORK (AP) _ The holiday shopping season is wrapping up to be bigger than anyone expected. Now, retailers are holding their breath and hoping consumers will keep spending in the final days before Christmas.

Sales from November through Saturday rose 2.5 percent, compared with the same period a year ago, according to research firm ShopperTrak, which did not give a dollar figure. Online, shoppers have spent almost $32 billion online for the holiday season so far, a 15 percent increase from a year ago, according to comScore, which tracks Web use.

The increases are good news for retailers, but they're not out of the woods just yet. The final week before Christmas, which includes four of the top 10 holiday shopping days, can account for up to 20 percent of sales for the season.

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BofA in $335M settlement over Countrywide loans

Bank of America agreed to pay $335 million to resolve allegations that its Countrywide unit engaged in a widespread pattern of discrimination against qualified African-American and Hispanic borrowers on home loans.

The settlement with the U.S. Justice Department was filed Wednesday with the Central District court of California and is subject to court approval. The DOJ says it's the largest settlement in history over residential fair lending practices.

According to the DOJ's complaint, Countrywide charged over 200,000 African-American and Hispanic borrowers higher fees and interest rates than non-Hispanic white borrowers with a similar credit profile. The complaint says that these borrowers were charged higher fees and rates because of their race or national origin rather than any other objective criteria.

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Home purchases up, but earlier sales look weaker

WASHINGTON (AP) _ The number of Americans who bought previously occupied homes rose last month. But the National Association of Realtors says it overstated about 3.5 million sales during and after the Great Recession, showing the housing market remains much weaker than previously thought.

The private trade group says sales rose 4 percent last month to a seasonally adjusted annual rate of 4.42 million. That's below the roughly 6 million sales a year that economists say are consistent with a healthy housing market. But it's ahead of 2008's revised sales, now considered the worst in 13 years.

The nearly 4.2 million homes sold last year are far fewer than the nearly 7.1 million sold at the peak of the housing boom in 2005. This year is on pace to slightly exceed last year's total of about 4.25 million.

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KB Home 4Q net income falls but tops Street's view

LOS ANGELES (AP) _ KB Home is increasingly catering to more affluent homebuyers in markets where there is less competition from homes up for resale and foreclosures, and the strategy is paying off.

The homebuilder reported on Wednesday that its fiscal fourth-quarter profit fell 20 percent on rising expenses. Its shares fell 52 cents, or 6.7 percent, to $7.22 as broader markets also slumped.

But the company's recent trends show improvement. KB's new home orders jumped 38 percent from year earlier and home deliveries rose 4 percent. The average selling price of the builder's homes rose 3 percent.

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Walgreen 1Q profit drops on Express Scripts fight

NEW YORK (AP) _ Walgreen's first-quarter earnings fell more than 4 percent due in part to a slow flu season and its split with the Express Scripts pharmacy network.

A three-year contract between the companies ends at the end of 2011. Since June, Walgreen and Express Scripts have said they were preparing to stop doing business. Walgreen gets $5.3 billion in annual revenue from Express Scripts, but the Deerfield, Ill., company has said it would rather give that up than continue filling unprofitable prescriptions.

President and CEO Greg Wasson said that the company had made one last attempt last week to come to terms with Express Scripts, but the two sides were unable to resolve their differences over the rates that Express Scripts pays to fill prescriptions.

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New FAA rules to help end flying while sleepy

WASHINGTON (AP) _ The government told passenger airlines Wednesday they'll have to do more to ensure pilots aren't too tired to fly, nearly three years after the deadly western New York crash of a regional airliner flown by two exhausted pilots.

The Federal Aviation Administration's update of airline pilot work rules, some of which dated to the 1960s, reflects a better understanding of the need for rest and how night shifts and traveling through time zones can increase errors.

Carriers have two years to adapt to the new rules. The FAA estimated the cost to the industry at $297 million over 10 years, a fraction of the $2 billion a year that an airline trade association had estimated the draft proposal released by FAA over a year ago would cost.

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White Castle burger chain considers alcohol sales

COLUMBUS, Ohio (AP) _ White Castle, a 90-year-old hamburger chain known for its square "slider" burgers, is sipping on the idea of offering alcoholic beverages as it tests beer and wine sales at a restaurant in Indiana.

The food famously craved by stoners in the 2004 movie "Harold & Kumar Go to White Castle" can be had with a glass of wine or a domestic or seasonal beer at a Lafayette, Ind., restaurant that fuses a conventional White Castle with a new concept for the company called Blaze Modern BBQ. Wine costs $4.50 and beers start at $3.

Other fast-food restaurants also are dabbling with alcohol. Earlier this year, Burger King opened the Whopper Bar South Beach, a restaurant in Miami Beach offering beer, and Starbucks Corp. has been testing beer and wine at a few sites.

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By The Associated Press(equals)

The Dow Jones industrial average edged up 4.16 points, less than 0.1 percent, to close at 12,107.74. The Standard & Poors 500 rose 2.42 points to 1,243.72. The Nasdaq composite fell 25.76 points, or 1 percent, to 2,577.97.

Benchmark crude rose $1.43 to finish at $98.67 a barrel in New York. Brent crude was up 98 cents, ending at $107.71 a barrel in London.

In other energy trading, heating oil rose 6 cents to finish $2.9087 per gallon, and gasoline futures rose 4 cents to end at $2.6199 per gallon. Natural gas rose 3 cents to finish the day at $3.1550 per 1,000 cubic feet.