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Friday, March 12, 2010

Business Highlights

Trade deficit shrinks as auto and oil imports drop

WASHINGTON (AP) - The U.S. trade deficit unexpectedly shrank in January, reflecting a big drop in imports of oil and foreign cars. American exports also fell, a potential blow to hopes that the economic recovery will be aided this year by U.S. sales abroad.

The Commerce Department said that the trade deficit declined to $37.3 billion in January, a drop of 6.6 percent from a revised December deficit of $39.9 billion. Economists had been expected the deficit to widen to $41 billion.

U.S. exports dipped 0.3 percent, reflecting weaker sales of a wide variety of products from civilian aircraft and machinery to agricultural products. But imports dropped by a larger 1.7 percent as both oil and foreign cars saw big declines.


Stocks climb for 3rd day as financial shares rise

NEW YORK (AP) - A rally in financial stocks Thursday helped the market extend its grind higher to a third day.

The Standard & Poor's 500 index cleared an important hurdle watched by traders when it closed just above its January peak to set a new 17-month high. That could bring some hesitant buyers into the market.

The Dow Jones industrial average rose 44.51, or 0.4 percent, to 10,611.84.

Stocks have traded in a narrow range since the Labor Department said on Friday that employers cut fewer jobs in February than analysts expected. The market is looking for more signs of progress. The week's quiet trading comes as investors look for more signs about the direction of the economy.


Greece hit by strikes, clashes over austerity plan

ATHENS, Greece (AP) - Clashes between riot police and rock-throwing, masked youths broke out during a demonstration Thursday in central Athens by tens of thousands of striking workers protesting austerity measures that the Greek government has said it has no choice but to implement.

The debt-ridden country is under intense pressure from both markets and the European Union to reduce its deficit from 12.7 percent of economic output in 2009 to 8.7 percent this year. Last week, Greece introduced a harsh $6.5 billion austerity package that cut civil servants' wages, froze pensions and raised consumer taxes.


Slowly, Americans are regaining their lost wealth

WASHINGTON (AP) - Americans are recovering their shrunken wealth - gradually. Household net worth rose last quarter, mainly because the healing economy boosted stock portfolios. But the gain was slight. And it was less than in the previous two quarters.

The Federal Reserve said Thursday that net worth rose 1.3 percent in the fourth quarter to $54.2 trillion. It marked the third straight quarter of gains. But economists say consumers would need a stronger and more prolonged increase in their wealth to persuade them to ratchet up spending.


Gov't may seek more authority on vehicle safety

WASHINGTON (AP) - Government vehicle safety regulators may seek greater authority to investigate defects in cars and trucks and are weighing a range of new safety requirements in response to Toyota's recall of more than 8 million vehicles over brake and acceleration problems.

David Strickland, head of the National Highway Traffic Safety Administration, said Thursday his agency will take a "hard look" at the power it has to set safety standards for automakers.

But one lawmaker at a House hearing said the agency's problems seem to have more to do with "ineptitude" and lack of money than with insufficient powers.


Citigroup CEO says bank on path to profitability

NEW YORK (AP) - Citigroup Inc. is poised to return to "sustained profitability" as it sheds risky assets and focuses on emerging markets, CEO Vikram Pandit said Thursday.

Investors embraced his bullish view, sending Citigroup shares up 5.6 percent to $4.18.

Pandit didn't give a timetable for returning to profitability. But he said Citigroup, the hardest hit U.S. bank during the financial crisis, sees big opportunities in emerging markets including Latin America and Asia, which generated about half of Citigroup's 2009 revenue.

In 2009, Citigroup lost $1.61 billion, or 80 cents per share. It lost $27.68 billion, or $5.61 per share in 2008.


BP to pay $7 billion for Devon exploration rights

LONDON (AP) - BP is expanding its dominant oil and gas operations in the Gulf Mexico and dropping anchor off Brazil with a $7 billion deal to buy exploration rights from Devon Energy.

BP will get the rights for 10 exploration blocks in Brazil and others in the Gulf of Mexico and in the Caspian Sea near Azerbaijan. BP also is selling a 50 percent stake in its Kirby oil sands interests in Canada to Devon for $500 million. The companies will form a joint venture as Devon beefs up its North American onshore portfolio.

BP PLC already is the largest leaseholder in the Gulf of Mexico with more than 650 blocks producing over 400,000 barrels of oil equivalent daily.


Senator to offer his US financial regulation bill

WASHINGTON AP) - Unable to muster bipartisan agreement on key banking provisions, the chairman of the Senate Banking Committee said Thursday he will offer his own version of a sweeping overhaul of financial regulations without Republican support. "Clearly, we need to move along," Sen. Christopher Dodd, a Democrat, said.

A month of talks between Dodd and Republican Sen. Bob Corker had found common ground, but details on key provisions, including consumer protections and other sticking points, remained unsettled.

Dodd said he hoped the Senate could act on a bill sometime in the next three months.


Smithfield Foods sees profit in 3Q, tops forecasts

PORTLAND, Ore. (AP) - Smithfield Foods Inc., the nation's largest hog producer and pork processor, reported a profit on Thursday for its third quarter after more than a year of losses.

Meat companies have struggled for two years with a mix of high feed prices, low demand and industry consolidation battered their profitability but they are showing signs of recovery.

The company reported that it earned $37.3 million, or 22 cents per share, for the quarter, up from a loss of $105.7 million, or 74 cents per share, in the same quarter a year earlier, when Smithfield said the cycle reached its lowest point.

The Dow Jones industrial average rose 44.51, or 0.4 percent, to 10,611.84.

The S&P 500 index advanced 4.63, or 0.4 percent, to 1,150.24, above its Jan. 19 close of 1,150.23. The Nasdaq composite index rose 9.51, or 0.4 percent, to 2,368.46 for its sixth straight advance.

Benchmark crude for April delivery rose 2 cents to settle at $82.11 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil was virtually unchanged, settling at $2.115 a gallon, and gasoline dropped 1.31 cents to end the trading session at $2.272 a gallon.

In London, Brent crude lost 20 cents to settle at $80.28 on the ICE futures exchange.