Business Highlights

AP News
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Posted: Jan 27, 2012 5:24 PM
Business Highlights

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Economy grew 2.8 percent in Q4, but outlook is hazy

WASHINGTON (AP) _ The economy grew late last year at a pace that in normal times would suggest it's healthy.

But the 2.8 percent annualized growth rate in the October-December quarter _ the fastest pace since the spring of 2010 _ isn't being cheered by most economists or investors. That's because growth would have to be much stronger to significantly reduce unemployment. And signs in the data point to slower growth ahead.

For all of last year, the economy grew just 1.7 percent. That was just more than half the growth in 2010. The outlook for 2012 is slightly better. The Federal Reserve estimates growth of roughly 2.5 percent for the year.

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Activists and bloggers fear Twitter censorship

SAN FRANCISCO (AP) _ Bloggers and activists from China, the Middle East and Latin America said Friday that they were concerned that new Twitter policies could allow governments to censor messages and stifle free expression.

Thursday's announcement that Twitter had refined its technology to censor messages on a country-by-country basis raised fears that the company's commitment to free speech may be weakening. Twitter is trying to broaden its audience and make more money by expanding around the globe.

Twitter sees the censorship tool as a way to ensure individual messages, or tweets, remain available to as many people as possible while it navigates a gauntlet of various laws around the world.

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Private sector unions add members as jobs return

WASHINGTON (AP) _ Union membership grew slightly last year, giving labor leaders hope that a period of steep decline has finally bottomed out.

The number of unionized workers increased by about 50,000 to nearly 14.8 million members in 2011, the Bureau of Labor Statistics reported Friday. The increase comes after unions lost nearly 1.4 million members over the previous two years.

Still, unions' share of the overall workforce fell, from 11.9 percent to 11.8 percent, as state and local governments trimmed thousands of jobs to address budget shortfalls. That's the lowest percentage of union workers since the Great Depression in the 1930s.

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North America boosts Ford in 4Q

DEARBORN, Mich. (AP) _ For Ford, there's no place like home.

North America propped up the company in the fourth quarter as the European debt crisis and flooding in Thailand hurt profits elsewhere. Ford Motor Co.'s shares took a hit after the company missed Wall Street's expectations but trimmed their losses once the company promised better _ if still bumpy _ results in 2012.

Ford reported $13.62 billion in net income. Investors shrugged off the result because most of that came from an accounting change. Without that, earnings totaled $1.1 billion, or 20 cents a share.

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Finance chiefs reassure CEOs over European crisis

DAVOS, Switzerland (AP) _ Leading finance chiefs sought to reassure anxious global business leaders on Friday that Europe is on track to solve its crippling debt crisis before it drags other economies down. Europe's top banker said investors, burned after trusting the region's governments too much, now trust them too little.

The finance chiefs said the picture in Europe has changed over the past two months as the European Central Bank has loaned billions of euros to fragile banks, indebted countries have pushed through convincing reforms and EU leaders have come near to building a closer fiscal union that would make their common currency stronger.

Several also signaled Friday that Greece is close to clinching a crucial debt-reduction deal with private bondholders _ a key element in Europe's efforts to stem a two-year debt crisis that is causing ripples around the globe. The crisis is a central topic at the World Economic Forum, an annual gathering of government and business leaders at the Swiss ski resort of Davos.

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Justice unit to probe mortgage-backed securities

WASHINGTON (AP) _ Federal and state law enforcement officials announced Friday that they have launched a fraud-fighting unit, starting with 55 prosecutors and investigators, to root out wrongdoing in the market for residential mortgage-backed securities.

Attorney General Eric Holder told a news conference that the team will benefit from existing probes and disclosed that investigators have issued civil subpoenas to 11 financial institutions in recent days, with the prospect that "more will follow." He said bringing full enforcement resources to bear will help expose abuses and hold violators accountable.

Residential mortgage-backed securities are the big investment packages of what turned out to be near-worthless mortgages that bankrupted many investors and contributed to the nation's financial crisis.

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As US slows, P&G turns to developing markets

NEW YORK (AP) _ Emerging markets are playing a bigger role in Procter & Gamble Co.'s growth, in another sign that U.S. companies are courting new customers overseas as American shoppers get tapped out.

The maker of Tide laundry detergent, Crest toothpaste and Pampers diapers said Friday that its market value grew 9 percent in developing countries over the latest quarter, but just 2 percent in North America and 0.5 percent in Western Europe. That news came as P&G reported a 49 percent drop in profit for the second fiscal quarter, hobbled by higher costs for materials and a big write-down on the value of two of its business units.

Developing markets like Africa and parts of Latin America and Asia now make up almost 37 percent of P&G's sales, up from 27 percent five years ago. That growth was buoyed by recent expansions like toothpaste offerings in Nigeria and fabric softener in Indonesia. In the same period, the share of sales that P&G makes in the U.S. dropped to 37 percent from 43 percent.

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Altria 4Q profit falls 9 percent, CEO to retire

RICHMOND, Va. (AP) _ Marlboro maker Altria Group Inc. said Friday that its fourth-quarter profit fell about 9 percent on lease, legal and restructuring charges even as higher prices and gains from its smokeless tobacco products helped bolster sales.

The owner of the nation's biggest cigarette maker, Philip Morris USA, also announced that CEO Michael E. Szymanczyk will retire in May following the company's annual shareholder meeting. Altria's board has selected Martin J. Barrington to replace him as CEO and chairman. David R. Beran will serve as president and chief operating officer.

The company also disclosed that it has entered into an agreement with an affiliate of Fertin Pharma A/S to develop non-combustible nicotine-containing products. Several other tobacco companies have announced similar initiatives to seek cigarette alternatives as demand declines.

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Fitch downgrades 5 eurozone nations

FRANKFURT, Germany (AP) _ Fitch Ratings downgraded the debt of Italy, Spain and three other countries that use the euro on Friday, as European leaders work on several fronts to contain the continent's government-debt crisis.

The lower government-debt ratings for Italy, Spain, Belgium, Cyprus and Slovenia could make it more expensive for these countries to borrow.

Fitch said its decision was based on the deteriorating economic outlook in Europe, a concern that Europe's bailout fund is not large enough and a belief that European leaders are not acting quickly or boldly enough to prevent the debt crisis from worsening.

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By The Associated Press(equals)

The Dow Jones industrial average ended down 74 points, or 0.6 percent, at 12,660.46. The Standard & Poor's 500 fell 2.10 points to 1,316.33. The Nasdaq composite edged up 11.27 to 2,816.55.

Benchmark oil fell 14 cents to finish at $99.56 per barrel after climbing as high as $100.63 per barrel earlier in the session. Brent crude rose 67 cents to end at $111.46 per barrel in London.

Natural gas prices rose 7 cents, or 2.8 percent, to finish at $2.68 per 1,000 cubic feet. Heating oil futures rose 2 cents to end at $3.07 per gallon. Gasoline futures rose 8 cents to end at $2.92 per gallon.