Business Highlights

AP News
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Posted: Dec 28, 2011 5:44 PM
Business Highlights

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Last-minute holiday shopping gives lift in finale

NEW YORK (AP) _ The holiday shopping season turned out to be two seasons split by a big lull.

A surge in buying in the two weeks before Christmas coupled with a record-breaking Black Friday gave retailers a solid season. The doldrums between the buying binges show how shoppers have learned to wait for the discounts they know will come.

For Dec. 1-24, spending rose 4.7 percent compared with the same period last year, according to research firm ShopperTrak. In November, it rose 4.1 percent. A 4 percent increase is considered a successful season. A combined figure for the whole season won't be available until after Dec. 31.

The increase is good news for the economy, because it shows shoppers were willing and able to fund a holiday splurge. Consumer spending, including major items such as health care, accounts for 70 percent of the economy.

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Economists: Obama's policies `fair' or `poor'

WASHINGTON (AP) _ President Barack Obama gets mediocre marks for his handling of the economy and Mitt Romney easily outpolls his Republican rivals in an Associated Press survey of economists.

The economy _ and who bears responsibility for it _ is likely to be a decisive issue when voters to go the polls next November.

The economy is still struggling to recover from the Great Recession of 2007-2009. The housing market remains weak and a debt crisis in Europe threatens growth in 2012. The unemployment rate is at a recession-level 8.6 percent, up from 7.8 percent when Obama took office in January 2009. That month, the recession was already more than a year old.

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Against odds, Lipitor became world's top seller

TRENTON, N.J. (AP) _ Lipitor, the best-selling drug in the history of pharmaceuticals, is the blockbuster that almost wasn't.

When it was in development, the cholesterol-lowering medicine was viewed as such an also-ran it almost didn't make it into patient testing.

By the time Lipitor went on sale in early 1997, it was the fifth drug in a class called statins that lower LDL or bad cholesterol. The class already included three blockbusters, drugs with sales of $1 billion a year or more. Normally, that would make it very tough for a latecomer to sway many doctors and patients to switch.

But a 1996 study showed Lipitor reduced bad cholesterol dramatically more than the other statins, from the very start of treatment and even more so over time. A striking graph of those results helped Lipitor sales representatives turn it into the world's best-selling drug ever, with more than $125 billion in sales over 14 1/2 years.

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US warns Iran against closing key oil passage

TEHRAN, Iran (AP) _ The U.S. warned Iran on Wednesday it will not tolerate any disruption of traffic through the Strait of Hormuz after Iran threatened to choke off the vital Persian Gulf oil transport route if Washington imposes sanctions targeting its crude exports.

The increasingly heated exchange raises new tensions in a standoff that has the potential to spark military reprisals and propel oil prices to levels that could batter a global economy already grappling with a European debt crisis.

Iran's navy chief boasted Wednesday that it would be "very easy" for his country's forces to close the strategic Strait of Hormuz, the passage at the mouth of the Persian Gulf through which a sixth of the world's oil passes daily. It was the second such threat in two days following a warning by Iran's vice president that Tehran was close.

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Citigroup selling Belgian retail assets

NEW YORK (AP) _ Citigroup Inc. is selling its Belgian consumer business to French bank Credit Mutuel Nord Europe as the New York bank continues to sell off operations that it deems are outside its core business.

The company didn't disclose the deal's terms.

Citigroup and other banks hurt by 2008's financial meltdown and the economic downturn have been selling off "non-core" divisions. For example, Citigroup sold a $1.7 billion private equity portfolio to a French bank in June.

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Morgan Stanley to cut 580 jobs in New York

NEW YORK (AP) _ Of the 1,600 job cuts announced earlier this month by Morgan Stanley, 580 will be at its home base in New York.

The relentless tug of the dismal economy is hitting employees in the banking sector hard, and it's no surprise that many of the job cuts are hitting the epicenter of the financial industry. Citigroup, with its headquarters a seven-minute drive up Park Ave. from Morgan Stanley in Manhattan, said recently that it would eliminate 4,500 jobs, or about 1.5 percent of its global workforce of 267,000, over the next few quarters.

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Movie crowds dip to 16-year low as apathy lingers

LOS ANGELES (AP) _ Hollywood has more tricks in its bag than ever with digital 3-D and other new film tools. Yet as the images on screen get bigger and better, movie crowds keep shrinking _ down to a 16-year low as 2011's film lineup fell well short of studios' record expectations.

Through New Year's Eve on Saturday, projected domestic revenues for the year stand at $10.2 billion, down 3.5 percent from 2010's, according to box-office tracker Hollywood.com. Taking higher ticket prices into account, movie attendance is off even more, with an estimated 1.28 billion tickets sold, a 4.4 percent decline and the smallest movie audience since 1995, when admissions totaled 1.26 billion.

Just what has put the movie business in the dumps is anyone's guess _ though safe bets include the tight economy, rising ticket prices, backlash against parades of sequels or remakes, and an almost-limitless inventory of portable and at-home gadgetry to occupy people's time.

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Italy raises $14 billion at much lower cost

ROME (AP) _ Strong demand for short-term Italian government debt on Wednesday pushed the country's borrowing costs lower and suggested investors have become less jittery about an imminent default by the eurozone's third-largest economy.

Italy raised $14 billion in a pair of auctions at sharply lower rates than those it was forced to pay just a month ago when investor concerns over the ability of the country to service its massive debts became particularly acute and effectively prompted a change in government.

The sharp decline in Italy's borrowing costs could be a signal that commercial banks from the 17 countries that use the euro diverted some of the money they tapped from emergency loans from the European Central Bank last week to buy the bonds of heavily indebted governments. It may also suggest rising investor confidence in Italy's recent efforts to reduce its long-term debt through a variety of austerity measures.

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Afghanistan, China sign first oil contract

KABUL, Afghanistan (AP) _ Afghanistan's government signed a deal Wednesday with China's state-owned National Petroleum Corporation, allowing it to become the first foreign company to exploit the country's oil and natural gas reserves.

The contract, which covers the northeastern provinces of Sari Pul and Faryab, is the first of several such blocks to be put on the market in coming months, Afghan Minister of Mines Wahidullah Shahrani said during the signing ceremony.

Bidding information for blocks in neighboring Balkh province will be released at the end of February, and for the western Herat province by next summer, he said.

Afghanistan has been seeking to find ways to exploit some of its mineral wealth to offset the loss of revenues when foreign aid and spending drops when international combat troops leave by the end of 2014. The government has been keen to develop an oil-extraction and refining capability for the landlocked nation, which is entirely reliant on fuel imports from neighboring Iran and Central Asian nations.

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By The Associated Press(equals)

The Dow Jones industrial average fell 139.94 points, or 1.1 percent, to 12,151.41. The S&P 500 fell 15.79 points, or 1.3 percent, to 1,249.64. The Nasdaq composite declined 35.22 points, or 1.3 percent, to 2,589.98.

In New York benchmark crude fell $1.98 to finish at $99.36 a barrel. Brent crude fell $1.71 to end at $107.56 a barrel in London.

In other energy futures trading, heating oil fell 2 cents to finish at $2.89 a gallon, gasoline fell 4 cents to end at $2.65 a gallon and natural gas fell 3 cents to finish the day at $3.08 per 1,000 cubic feet.