Business Highlights

AP News
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Posted: Nov 07, 2013 4:50 PM

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Twitter soars in market debut

NEW YORK (AP) — Shares of Twitter went on sale to the public for the first time Thursday, instantly leaping more than 70 percent above their offering price in a dazzling debut that exceeded even Wall Street's lofty hopes.

The social network that reinvented global communication in 140-character bursts was valued at $31 billion by the closing bell.

Twitter, which has never turned a profit in the seven years since it was founded, worked hard to temper expectations ahead of the IPO, but all that was swiftly forgotten with the stock's opening surge. The most anticipated initial public offering of the year was carefully orchestrated to avoid the glitches and eventual letdown that surrounded Facebook's first appearance on the Nasdaq 18 months ago.

Trading on the New York Stock Exchange under the symbol "TWTR," shares opened at $45.10, 73 percent above their initial offering price.

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US shows solid Q3 growth, but spending weakens

WASHINGTON (AP) — The U.S. economy showed surprising growth from July through September, just before the government's partial shutdown. But much of the gain came from a buildup in company stockpiles.

Consumers and businesses slowed their spending — a cautionary sign for the current quarter and early 2014.

Americans did purchase more autos and other long-lasting goods. Yet most analysts say the economy isn't showing enough underlying strength to cause the Federal Reserve to scale back its stimulus any time soon.

Overall, growth accelerated to a 2.8 percent annual rate in the third quarter, the Commerce Department said Thursday. That's up from a 2.5 percent rate in the April-June quarter. And it's nearly a full percentage point higher than economists had predicted.

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Average US rate on 30-year mortgage at 4.16 pct.

WASHINGTON (AP) — Average U.S. rates on fixed mortgages rose slightly last week but remained near historically low levels.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan increased to 4.16 percent from 4.10 percent last week, which was the lowest level in four months. The average on the 15-year fixed mortgage rose to 3.27 percent from 3.20 percent.

Rates have been falling since September when the Federal Reserve surprised investors by continuing to buy $85 billion a month in bonds. The purchases are intended to keep long-term interest rates low.

Slower hiring in recent months has many analysts predicting that the Fed will maintain the current pace of the bond purchases into early next year, which should keep mortgage rates low for the time being. The recent drop in mortgage rates could help boost home sales, which slowed in September after rates reached their highest averages in two years.

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US unemployment benefit applications fall to 336K

WASHINGTON (AP) — The number of people seeking U.S. unemployment benefits fell 9,000 to a seasonally adjusted 336,000 last week, bringing applications to pre-recession levels.

The Labor Department said Thursday that the less volatile four-week average dropped 9,250 to 348,250. The average was elevated by the 16-day partial government shutdown and backlogs in California that occurred because of computer upgrades. Weekly applications have fallen for four straight weeks.

Applications are a proxy for layoffs. The decline suggests companies are cutting very few workers. Still, they are not hiring many new ones. Falling applications are typically followed by more job gains. But hiring has slowed in recent months, rather than accelerated.

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Americans cut back on credit card use in September

WASHINGTON (AP) — Americans cut back on using their credit cards in September for the fourth straight month, but boosted borrowing in the category that covers auto loans and student debt.

Consumers increased their borrowing by $13.7 billion in September to a seasonally adjusted $3.05 trillion, the Federal Reserve reported Thursday. That is a record and follows a gain of $14.2 billion in August.

The increase was driven entirely by higher borrowing for auto and student loans, which rose $15.8 billion. Credit card debt fell $2.1 billion following a decline of $885 million in August. The string of declines in credit card debt will likely hold back consumer spending, which accounts for 70 percent of economic growth.

The measure of auto loans and student loans has risen 8.5 percent from a year ago and has increased in every month but one since May 2010. But credit card debt is essentially where it was a year ago.

Slow job growth and small wage gains have made many Americans more reluctant to charge goods and services. But at the same time, the weak economy is persuading more people to go back to school to learn new skills.

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Toll Bros buys Shapell homebuilding unit for $1.6B

HORSHAM, Pa. (AP) — Toll Brothers is buying the homebuilding business of Shapell Industries Inc. for about $1.6 billion in a move aimed at strengthening its position in California.

The announcement comes three days after Tri Pointe Homes Inc. said that it would combine with Weyerhaeuser Co.'s homebuilding business in a deal valued at about $2.7 billion. The transactions are the latest efforts being made by homebuilders to bolster their businesses in growing markets while the housing recovery continues.

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Nestle sells Jenny Craig in N. America, Oceania

GENEVA (AP) — Nestle, the world's biggest food and drink company, has sold off its weight management business Jenny Craig in North America, Australia, New Zealand and the Pacific Islands.

The Switzerland-based company said the business was sold to U.S. private equity firm North Castle Partners. The financial terms were not disclosed. The Jenny Craig business in France was not part of the transaction.

Jenny Craig, founded in 1983, had been part of Nestle's nutrition portfolio since 2006.

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By The Associated Press=

The Dow Jones Industrial average dropped 152 points, or 1 percent, to close at 15,593 Thursday. The Standard & Poor's 500 lost 23 points, or 1.3 percent, to 1,747. The Nasdaq composite fell 74 points, 1.9 percent, to 3,857.

Benchmark U.S. crude for December delivery fell 60 cents to $94.20 a barrel on the New York Mercantile Exchange. Wholesale gasoline fell 4 cents to $2.50 a gallon. Heating oil lost 3 cents to $2.84 a gallon. Natural gas gained 2 cents to $3.52 per 1,000 cubic feet.

Brent crude, the international benchmark, fell more sharply, dropping $1.78, or 1.7 percent, to $103.46 a barrel on the ICE Futures exchange in London.