Business Highlights

AP News
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Posted: Feb 24, 2012 5:56 PM
Business Highlights

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AP IMPACT: Lender's own probe links it to suicides

MUMBAI, India (AP) _ First they were stripped of their utensils, furniture, mobile phones, televisions, ration cards and heirloom gold jewelry. Then, some of them drank pesticide. One woman threw herself in a pond. Another jumped into a well with her children.

Sometimes, the debt collectors watched nearby.

More than 200 poor, debt-ridden residents of Andhra Pradesh killed themselves in late 2010, according to media reports compiled by the government of the south Indian state. The state blamed microfinance companies _ which give small loans intended to lift up the very poor _ for fueling a frenzy of overindebtedness and then pressuring borrowers so relentlessly that some took their own lives.

The companies, including market leader SKS Microfinance, denied it.

However, internal documents obtained by The Associated Press, as well as interviews with more than a dozen current and former employees, independent researchers and videotaped testimony from the families of the dead, show top SKS officials had information implicating company employees in some of the suicides.

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S&P 500 index hits highest point since June 2008

NEW YORK (AP) _ A two-point gain was enough to push the S&P 500 index to its highest level since June 2008, three months before the collapse of Lehman Brothers and the darkest days of the financial crisis.

The S&P 500 index closed at 1,365.74, beating its 2011 closing high by two points.

For the second day this week, the Dow Jones industrial average nudged above 13,000 then pulled back. It rose 29 points in the morning but wavered in the afternoon. The Dow dropped 1.74 points to close at 12,982.95. American Express was the leading stock among the 30 that make up the average, gaining 1.2 percent.

It was a similar story on Tuesday, when the Dow flitted above 13,000 three times but ended the day lower. The average hasn't closed above 13,000 since May 19, 2008.

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Miracle diet pill? A safe drug is elusive

WASHINGTON (AP) _ The battle of the bulge has been a big, fat failure for U.S. drugmakers. But that hasn't stopped them from trying.

For nearly a century, scientists have struggled to make a diet pill that helps people lose weight without side effects that range from embarrassing digestive issues to dangerous heart problems.

Earlier this week, a government panel recommended the FDA approve the latest diet drug Qnexa. The recommendation raises hopes that the U.S. could approve the first anti-obesity drug in more than a decade. It also highlights how challenging it is to create a pill that fights fat in a variety of people without negative side effects. Even Qnexa was previously rejected over concerns that it can cause heart palpitations and birth defects if taken by pregnant women.

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Judge awards iPhone user $850 in throttling case

SIMI VALLEY, Calif. (AP) _ When AT&T started slowing down the data service for his iPhone, Matt Spaccarelli, an unemployed truck driver and student, took the country's largest telecommunications company to small claims court. And won.

His award: $850.

Pro-tem Judge Russell Nadel found in favor of Spaccarelli in Ventura Superior Court in Simi Valley on Friday, saying it wasn't fair for the company to purposely slow down his iPhone, when it had sold him an "unlimited data" plan.

Spaccarelli could have many imitators. AT&T has some 17 million customers with "unlimited data" plans who can be subject to throttling. That's nearly half of its smartphone users. AT&T forbids them from consolidating their claims into a class action or taking them to a jury trial. That leaves small claims actions and arbitration.

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Oil prices rising to near 2011 highs

NEW YORK (AP) _ Oil prices are approaching last year's highs as tensions increase over Iran's nuclear program. The rise pushed gasoline prices on Friday to a national average of $3.65 per gallon, the highest ever for this time of year.

Western nations fear Iran is building a nuclear weapon and have been trying to force it to open its facilities to inspection. Iran has refused, turning away international inspectors this week for the second time this month. The United Nations said Friday that Iran has responded to the recent scrutiny by speeding up production of higher-grade enriched uranium, feeding concerns that it is developing a bomb.

As both sides dig in for a protracted standoff, investors are snapping up oil contracts in case fighting breaks out in the heart of the one of the world's biggest oil-producing regions.

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New-home sales dip after 4 straight monthly gains

WASHINGTON (AP) _ Sales of new homes dipped in January but the final quarter of 2011 was stronger than first estimated.

The Commerce Department said Friday that new-home sales fell 0.9 percent last month to a seasonally adjusted annual rate of 321,000 homes. That followed four straight months of gains in which home sales rose 10 percent.

The gains came after the government upwardly revised October, November and December's figures. December's annual sales pace of 324,000 was the highest in a year.

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New Nike shoe with outer space theme causes frenzy

Sneaker fanatics who lined up outside stores overnight got their first crack Friday at a new outer-space themed Nike basketball shoe, getting so unruly in some cities that police were called to restore order.

More than 100 deputies in riot gear quelled a crowd in Orlando, Fla., where the release of the $220 Foamposite Galaxy coincides with this weekend's NBA All-Star Game. In at a mall in Hyattsville, Md., one person was arrested for disorderly conduct.

The shoes, part of a space-themed collection, are a draw for so-called "sneakerheads" who collect signature sports footgear and can resell it online at a marked-up price, sometimes for hundreds more than retail.

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Penney reports 4Q loss dragged down by charges

NEW YORK (AP) _ J.C. Penney Co. reported a loss of $87 million in the fourth quarter due in part to costs related to its bold new pricing strategy that involves ditching blockbuster sales for everyday low prices.

In recent years, Penney has suffered because its core middle-income customers have been among those hardest hit by the weak economy. It's also failed to make its stores fun places to shop. But under new CEO Ron Johnson, the retailer is overhauling just about every aspect of its business, including pricing.

At the core of the retailer's plan is making pricing in its stores more predictable for customers and breaking the cycle of heavy discounting that has depressed the chain's profits and hurt its image. The new plan officially kicked off on Feb. 1, right after the end of the company's fiscal fourth quarter.

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Kenneth Cole offers to take company private

NEW YORK (AP) _ Fashion designer Kenneth Cole is offering to pay about $148.5 million to buy the rest of Kenneth Cole Productions Inc., saying it would compete more effectively as a privately-held company.

But it appears investors want more than he is offering.

Cole, who serves as chairman and chief creative officer, currently holds about 47 percent of the stock and approximately 89 percent of its voting power.

The offer disclosed Friday would give stockholders $15 per share in cash, a 15 percent premium to the company's Thursday closing price. The deal values the whole company at $280 million.

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By The Associated Press(equals)

The Dow Jones industrial average dropped 1.74 points to close at 12,982.95. The S&P 500 index closed at 1,365.74, beating its 2011 closing high by two points. The Nasdaq composite index rose 6.77 points to 2,963.75.

Benchmark West Texas Intermediate crude rose by $1.94 to end the week at $109.77 per barrel in New York. Brent crude rose by $1.85 to finish at $125.47 per barrel in London.

In other energy trading, heating oil rose by 2 cents to finish at $3.32 per gallon, while gasoline futures rose by 4 cents to end at $3.15 per gallon. Natural gas prices fell by 7 cents to finish the week at $2.55 per 1,000 cubic feet.