US economy adds 80,000 jobs in another weak month
WASHINGTON — The American job machine has jammed. Again.
The economy added only 80,000 jobs in June, the government said Friday, erasing any doubt that the United States is in a summer slump for the third year in a row.
It was the third consecutive month of weak job growth. From April through June, the economy produced an average of just 75,000 jobs a month, the weakest quarter since July through September 2010.
The unemployment rate stayed at 8.2 percent — a recession-level figure, even though the Great Recession has technically been over for three years.
The numbers could hurt President Barack Obama's odds for re-election.
Get ready for the end of record corporate profits
NEW YORK — For almost three years, no matter what has rattled the financial markets — a debt crisis in Europe, high gasoline prices, a slower economy — investors have been soothed by rising corporate profits.
The storyline became as predictable as a soap opera's. But when the latest round of corporate earnings starts rolling in next week, look for a twist: Profits are expected to fall.
Stock analysts expect earnings for companies in the Standard & Poor's 500 index to decline 1 percent for April through June compared with the year before, according to S&P Capital IQ, the research arm of S&P.
That would break a streak of 10 quarters of gains that started in the final quarter of 2009.
Over recent weeks, a motley collection of chain stores, steel producers and technology titans have warned of slowing profits. They all point to similar culprits — flagging sales to Europe and slower economic growth in China.
Yahoo, Facebook settle patent dispute, ad alliance
SAN FRANCISCO — Facebook and Yahoo have agreed to settle a patent dispute, averting a potentially lengthy battle over the technology running two of the Internet's most popular destinations.
In dropping the lawsuits, the companies agreed to license their patents to each other. They are also agreeing to an advertising alliance that expands their existing partnership.
The advertising alliance could help Yahoo recover some of the revenue that it has been losing as marketers shift more of their spending to a larger and more engaged audience on Facebook's online social network.
Friday's settlement involves no exchange of money and comes after a months-long patent squabble between the two Internet icons.
Retailers sue Pfizer, charge generic Lipitor delay
TRENTON, N.J. — Five large drug and grocery chains are suing Pfizer Inc. and a second drugmaker, alleging they conspired to delay sales of cheap generic versions of the blockbuster cholesterol drug Lipitor.
Lipitor, the world's top-selling drug ever, had peak sales of nearly $13 billion a year several years ago. Sales dropped sharply after it got U.S. generic competition on Nov. 30.
The lawsuit, filed Thursday by Walgreen Co., the Kroger Co. and three other retailers in U.S. District Court in Trenton, N.J., claims generics should have been available nearly two years earlier, when Lipitor's original patent expired.
The suit accuses Pfizer of patent fraud as well as "illegal, anti-competitive conduct" with generic drugmaker Ranbaxy Laboratories of India to block other generic drugmakers from selling versions of Lipitor, called atorvastatin calcium, until recently.
Best Buy to cut 2,400 jobs in turnaround effort
NEW YORK — Electronics retailer Best Buy Co. is laying off 600 staffers in its Geek Squad technical support division and 1,800 other store workers as it seeks to restructure operations and improve results.
The cuts amount to about 1.4 percent of the company's total staff of 167,000.
Best Buy spokesman Bruce Hight says the layoffs are part of the company's "ongoing turnaround plan." In March, the company said it would implement a restructuring designed to trim $800 million in costs.
Since then, interim CEO Mike Mikan, who is in the running for permanent CEO, has vowed there will be "no sacred cows" as the company reviews its business.
Dynegy Inc. seeks bankruptcy protection as part of reorganization plan
NEW YORK — Dynegy Inc. said Friday that it has filed for bankruptcy protection as part of a plan to reorganize after years of wrestling with falling electricity prices.
The Houston power company, which operates and sells electricity on the open market, said the Chapter 11 filing won't affect its primary assets. Dynegy's coal and natural gas-fired power plants are owned by separate subsidiaries that aren't part of the bankruptcy filing.
Friday's filing is part of an ongoing plan to manage its debts that surpassed $5 billion last year. One of its subsidiaries, Dynegy Holdings, filed for bankruptcy protection in November.
Dynegy Inc., the parent, now plans to merge with Dynegy Holdings to remove a layer of the corporate structure and keep its assets under one holding company. The company said that it's necessary for Dynegy Inc. to file for bankruptcy protection to make the merger happen.
UK agency opens criminal probe of bank rate fixing
LONDON — Britain's Serious Fraud Office said Friday that it has formally opened a criminal investigation of the manipulation of a key market interest rate that has shaken Barclays.
The bank was fined $435 million last week by U.S. and British agencies for making false reports of its borrowing costs between 2005 and 2009, specifically of the London interbank offered rate, or LIBOR, which influences the costs of a range of financial instruments including home mortgages.
Regulators are known to be looking into similar allegations against other banks in Britain and elsewhere.
Spanish, Italian borrowing rates rising again
MADRID — Borrowing rates for Spain and Italy rose to distressing levels again on Friday, signaling a resurgence in concern over Europe's debt crisis just one week after markets cheered leaders' decision to help financially weaker states.
Both Spain's and Italy's yields fell sharply earlier this week in a wave of euphoria after European leaders agreed to channel aid directly to troubled banks, without further burdening a country's debt. They also agreed to make it easier for countries to get rescue loans and for the European bailout fund to buy bonds from other investors, which would lower countries' borrowing rates.
The summit decisions were generally seen as a step in the right direction in the resolution of the crisis, but the feeling is that more needs to be done, and faster.
Samsung posts record-high profit for 2nd quarter
SEOUL, South Korea — Smartphones powered Samsung Electronics Co. to record quarterly earnings, but its shares fell Friday as lower-than-expected overall sales underlined the threat from Europe's economic malaise.
The world's largest maker of memory chips, mobile phones and flat-screen panels estimated its second-quarter operating profit at between 6.5 trillion won and 6.9 trillion won ($5.7 billion and $6.1 billion), a 79 percent jump from a year earlier. Analysts said the sharp rise was driven by Galaxy smartphone sales.
But the South Korean company's guidance for second quarter revenue of between 46 trillion won and 48 trillion won was below the average market forecast of around 50 trillion won. The chronic European debt crisis is taking a toll on demand in Europe, North America and China, which are key markets for manufacturers of personal computers, televisions, mobile phones and home appliances.
AP Interview: AutoChina tycoon baffled by US probe
SHANGHAI — One of China's biggest commercial vehicle dealerships is among the dozens of Chinese companies with shares listed in the U.S. that have been targeted by short-sellers for alleged financial abuses or probed by regulators.
Its case highlights how gray shades of business dealings in China can run afoul of American rules in black and white.
Founded by tycoon Li Yonghui, AutoChina is based in the hardscrabble northern Chinese city of Shijiazhuang and says it has 512 branches and has leased more than 33,000 trucks since it launched in 2008.
In an interview with The Associated Press, Li seems genuinely puzzled by his company's predicament.
A probe of AutoChina by the Securities and Exchange Commission into allegations of market manipulation is complicated by frictions between U.S. and Chinese authorities over the sharing of financial information, a lack of transparency, and outright clashes of business cultures and practices. It was delisted from the Nasdaq last year after falling behind on its financial reporting.
By The Associated Press(equals)
The Dow Jones industrial average fell 124.20 points, or 1 percent, to 12,772.47. The Standard & Poor's 500 fell 12.90 points, or 0.9 percent, to 1,354.68. The Nasdaq composite index fell 38.79 points, or 1.3 percent, to 2,937.33.
Benchmark U.S. crude dropped by $2.77, or 3.2 percent, Friday to end the week at $84.45 per barrel in New York.
Brent crude, which helps set the price of imported crude used to make gasoline, fell by $2.51, or 2.5 percent, to end the day at $98.19 per barrel in London.
The price of natural gas fell 17 cents to finish at $2.78 per 1,000 cubic feet in New York. In other futures trading, heating oil fell by 6 cents to end at $2.71 per gallon, and gasoline futures gave up 5 cents to finish at $2.72 per gallon.