Business Highlights

AP News
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Posted: Feb 21, 2012 6:05 PM
Business Highlights

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Greek bailout wards off disaster _ for now

BRUSSELS (AP) _ A second $172 billion bailout, and a deep debt write-off for financially stricken Greece, will ward off a financial disaster in Europe.

Economists, however, only give the deal a slim chance of putting the country on the path to economic recovery _ and steadying its place in Europe's currency union.

Agreement on the bailout, reached early Tuesday after an all-night summit of finance ministers seven months after it was first proposed, will give Greece $172 billion in loans through 2014 from other eurozone governments and the International Monetary Fund. It's the country's second bailout, following a $146 billion rescue secured in 2010 that didn't return the country to solvency.

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Dow breaks 13,000 but can't hold gains

NEW YORK (AP) _ It came and went in a flash, a number on a board for seconds at a time, but its symbolic power couldn't be dismissed.

The Dow Jones industrial average, powered higher all year by optimism that the economic recovery is finally for real, crossed 13,000 on Tuesday for the first time since May 2008.

The last time the Dow occupied such rarefied territory, unemployment was a healthy 5.4 percent, and Lehman Brothers was a solvent investment bank. Financial crises happened in other countries, or the history books.

The milestone Tuesday came about two hours into the trading day. The Dow was above 13,000 for about 30 seconds, and for slightly longer at about noon and 1:30 p.m., but couldn't hold its gains. It finished up 15.82 points at 12,965.69.

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FDA: New suppliers to ease 2 cancer drug shortages

TRENTON, N.J. (AP) _ Federal regulators have approved new suppliers for two crucial cancer drugs, easing critical shortages that had been ratcheting up fears that patients, particularly children with leukemia, would miss lifesaving treatments.

But there are currently 283 separate prescription drugs in short supply or unavailable nationwide, and regulators and manufacturers say shortages are a long-term problem that will continue to give patients and doctors nightmares.

On Tuesday, the Food and Drug Administration said it will temporarily allow importation of a replacement drug for Doxil, a drug for recurrent ovarian or bone marrow cancer. The Johnson & Johnson drug hasn't been available for new patients for months because J&J's contract manufacturer had to shut down production over serious quality lapses.

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Netflix bolsters video library as new threat looms

SAN FRANCISCO (AP) _ Netflix's Internet video service is adding more marquee attractions as it braces for a new competitive threat from cable-TV provider Comcast Corp.

As part of an effort to offer more exclusive material, Netflix locked up the right to show "The Artist" and other movies from The Weinstein Co. before the films are released to leading pay-TV channels such as Showtime and HBO.

Just a few hours after Tuesday's announcement about that multiyear deal, Comcast unveiled plans to undercut Netflix with a less expensive version of a service that will stream old TV series and movies to devices with high-speed Internet connections.

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Wal-Mart's 4Q results show rebounding US business

NEW YORK (AP) _ Wal-Mart Stores Inc.'s business offers valuable insight into how Americans are reacting in the slow economic recovery: they will spend, but only if they believe they're getting the lowest prices.

The world's largest retailer guaranteed holiday shoppers that they'd get the lowest prices on merchandise. As a result, bargain-hungry shoppers flocked to Wal-Mart in the fourth quarter, helping it to record its first increase store traffic in at least two years. But the company's profit margins suffered.

Wal-Mart said Tuesday that revenue at stores open at least a year at its U.S. namesake business rose 1.5 percent in the quarter, slightly below the 1.6 percent gain analysts polled by FactSet had expected. Overall, it's U.S. business had a 2.1 percent increase in revenue at stores opened at least a year, including a 5.4 percent rise at Sam's Clubs.

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Home Depot 4Q net income climbs on sales spike

NEW YORK (AP) _ Home Depot Inc. said Tuesday that its fiscal fourth-quarter net income rose 32 percent as homeowners spent more on renovation projects in part due to the mild weather in the U.S.

Coping with prolonged weakness in the housing market, home-goods sellers like Home Depot have adjusted to the fact that fewer consumers are making large-scale home renovations by cutting costs and improving services such as online shopping.

But the sales increase at the largest U.S. home-improvement retailer shows there may be pent-up demand for home improvement, even during the winter, and it offers a glimmer of hope amid the housing slump.

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Holiday spending pushes Macy's 4Q profit higher

NEW YORK (AP) _ A strong holiday shopping season and hearty online sales pushed Macy's Inc.'s fourth quarter net income up 12 percent. That topped Wall Street's expectations, and the department store chain's stock hit a 52-week high.

Macy's, which runs upscale Bloomingdale's as well as Macy's stores, has been outperforming mid-price peers such as Kohl's Inc. and J.C. Penney Co., which will report their quarterly results on Thursday and Friday, respectively.

Chairman, President and CEO Terry Lundgren called the holiday season "terrific" in a statement. The company's success over the holidays was crucial because the season can account for as much as 40 percent of a retailer's annual revenue. The company also is reaping the benefit of tailoring its merchandise to local markets and locking up more exclusive brands.

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Barnes & Noble fiscal 3Q net income falls

NEW YORK (AP) _ Barnes & Noble said Tuesday that its fiscal third-quarter net income fell 14 percent, as rising costs offset higher sales. The company also said it will introduce a cheaper Nook Tablet.

In its latest salvo in the tablet competition Amazon.com, Barnes & Noble said it will sell a Nook Tablet device with 8 gigabytes of memory for $199. Its current 16GB device sells for $249. Amazon.com's Kindle Fire also has 8GB and sells for $199. In addition Barnes & Noble cut the price of the Nook Color to $169 from $199. It has fewer tablet-like features than the Nook Tablet.

New York-based Barnes & Noble has been investing heavily in its Nook business. Revenue from Nook e-readers and its digital catalog rose 38 percent to $542 million. That includes the actual selling prices for e-books, rather than the commission received on selling them, as well as all deferred e-reader device revenue. The company estimates it has a 27 percent to 30 percent share of the U.S. e-book market.

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Johnson & Johnson CEO Bill Weldon to retire in April

TRENTON, N.J. (AP) _ Johnson & Johnson's longtime CEO, Bill Weldon, is retiring in April, following an embarrassing string of product recalls over more than two years that has cost the health care giant hundreds of millions of dollars and consumer trust.

The maker of Band-Aids and biotech drugs said Tuesday that Weldon will remain chairman of the board for the time being, while ceding the chief executive post to Alex Gorsky, head of the medical device and diagnostics business. The official transfer will be on April 26, the day of the company's next annual shareholders meeting.

Since January 2011, Gorsky has been vice chairman of J&J's executive committee, the senior leadership team. Besides the medical devices and diagnostics unit, which J&J claims is the largest business of its kind in the world, Gorskey oversees 140 manufacturing facilities around the world. He's also in charge of both government affairs and policy, and the company's venture capital subsidiary, called the Johnson and Johnson Development Corp.

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AT&T CEO takes $2 million pay cut over T-Mobile deal

NEW YORK (AP) _ AT&T Inc.'s board cut CEO Randall Stephenson's 2011 pay by $2.08 million because he engineered the failed deal to buy T-Mobile USA, according to a regulatory filing Tuesday.

Opposition from federal antitrust regulators forced the Dallas-based phone company to give up on the $39 billion deal in December. That meant it had to hand over $4.2 billion in cash and spectrum rights to T-Mobile as a so-called "break-up fee" to compensate T-Mobile for the failure.

Looking at that $4.2 billion charge, AT&T's board cut Stephenson's cash bonus by 25 percent, and cut his stock award by 6 percent, for a total of $2.08 million.

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By The Associated Press(equals)

The Dow Jones industrial average finished up 15.82 points at 12,965.69. The Standard & Poor's 500 index surpassed 1,363, its peak from April 2011, during the day but closed at 1,362.21, up 0.98 point. The Nasdaq composite, which is heavy with technology stocks and trading at levels not seen since December 2000, closed down 3.21 points at 2,948.57.

Benchmark crude rose by $2.65 to end the day at $106.25 per barrel in New York. That's the highest price for oil since May 4. Brent crude, used to price foreign oil varieties imported by U.S. refineries, rose by $1.61 to finish at $121.66 in London.

In other energy trading, heating oil rose by 5 cents to end at $3.24 per gallon and gasoline futures rose by 5 cents to finish at $3.07 per gallon. Natural gas futures fell by 6 cents to end at $2.63 per 1,000 cubic feet.