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Business Highlights

322 days ago

By The Associated Press

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European leaders' breakthrough defied expectations

Europe's leaders finally rose to the challenge of a debt crisis that has hobbled economic growth and threatened the global financial system.

Markets roared their approval after leaders of the 27 European Union countries backed bold ideas to help weak countries cope with rising debt levels and frail banks.

For the first time in 19 summits since the start of the crisis, the EU leaders defied low expectations by announcing plans to bail out banks, without increasing the financial burden on strapped governments; ease borrowing costs on Italy and Spain; seek stronger, centralized regulation to European banks' rescue floundering countries, without forcing them to make painful budget cuts if they've already made economic reforms; and tie their budgets, currency and governments more tightly.

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BlackBerry maker RIM running out of time

The maker of the BlackBerry is running out of time.

Research In Motion Ltd.'s stock fell to a nine-year low Friday, a day after the Canadian company said phones running its upcoming BlackBerry 10 operating system won't be available until after the holiday shopping season.

Sales of the once-pioneering BlackBerry phones, which now look ancient next to the latest iPhones and Android devices, fell 41 percent in the latest quarter and likely won't pick up again until new phones come out.

By then, it might be too late for RIM. When the new BlackBerrys go on sale in the first three months of 2013 _ assuming there won't be yet another delay _ people will have even more choices.

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AB InBev to buy out Modelo for $20.1 billion

BRUSSELS _ Anheuser-Busch InBev agreed Friday to buy the half of Corona maker Grupo Modelo it doesn't already own for $20.1 billion, in a deal that will greatly increase the size and dominance of the world's largest brewer.

The acquisition would bring under one company many of the world's best-known beer brands _ Corona, Modelo and Pacifico would join AB InBev's Budweiser, Beck's and Stella Artois, among others.

The combined company would have annual sales of $47 billion, and employ 150,000 workers in 24 countries.

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World markets surge after Europe finds rescue plan

Financial markets around the world stormed higher Friday after European leaders came up with a breakthrough plan to rescue banks, relieve debt-burdened governments and restore investor confidence.

Previous market rallies tied to progress in Europe have proved temporary. But for the day, at least, global stock markets were jubilant.

The Dow Jones industrial average climbed 277 points, its second-biggest gain this year, and stocks advanced even further in Europe, in strong and weak countries alike.

The price of oil posted its biggest one-day increase in more than three years, and other commodities shot higher _ signs of hope that a deal in Europe will remove a big barrier to a healthier world economy.

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New sanctions target Iranian oil

NEW YORK _ The U.S. and Europe want to deprive Iran of the oil income it needs to run its government and, most importantly, fund what they believe is an effort to build a nuclear weapon. Their efforts are entering a new phase this week.

The U.S. as of Thursday will penalize banks that do oil deals with Iran, while European nations will embargo imports of Iranian oil starting Sunday. These measures were announced in December and January, but lawmakers gave countries and the oil markets until this week to adjust.

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US consumer spending and wages flat in May

WASHINGTON _ U.S. consumers spent no more in May than in April after seeing almost no gain in their pay. The lack of growth in consumer spending and wages suggests that a faltering job market is slowing the economy.

The Commerce Department said Friday that consumer spending was unchanged in May. Income growth edged up 0.2 percent, but that was mostly because of gains from investments. Wages, the largest component of income, were essentially flat.

Americans cut back spending on cars and other long-lasting manufactured goods, even though they paid less for gas. Consumers did increase how much they spent on services for the second straight month, one of the few positive signs.

The government also said spending after adjusted for inflation was weaker in April and March than first thought.

Consumer spending drives roughly 70 percent of economic activity. The mostly disappointing report suggests growth in the April-June quarter could be weaker than the previous quarter's modest 1.9 percent annual pace.

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Toyota to recall Lexus SUVs to fix floor mat

DETROIT _ Toyota's problems with runaway acceleration just won't go away.

Three years after the company recalled its first cars to fix the problem, it has identified two more models at risk, the 2010 Lexus RX 350 and RX 450H SUVs.

Toyota said Friday it will recall 154,000 of the luxury SUVs because their floor mats can trap the gas pedal and cause the SUVs to speed up without warning. U.S. safety regulators, who asked Toyota to recall the vehicles, may investigate whether the company reported the problem fast enough.

Toyota's action adds to a string of embarrassing safety recalls that began in 2009. The Japanese automaker has recalled more than 14 million vehicles globally to fix problems including sticky gas pedals and floor mats. The recalls tarnished the company's sterling reputation for reliability and cut into sales. Toyota says it thought the acceleration problem had been solved when it began selling the SUVs.

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Peter Madoff pleads guilty in NYC, blames brother

NEW YORK _ The younger brother and business partner of disgraced financier Bernard Madoff pleaded guilty Friday to charges he doctored documents for years, but he insisted he knew nothing about his brother's historic Ponzi scheme and was "in total shock" when he found out about it.

An emotional Peter Madoff, 66, entered the plea in a deal that permits him to remain free on $5 million bail pending his Oct. 4 sentencing. He agreed not to contest a 10-year prison sentence and, several hours later, emerged from the courthouse into a rush of cameras and a car that awaited him.

The plea to charges of conspiracy and falsifying records came in the same Manhattan courthouse where Bernard Madoff was led away in handcuffs in 2009 to serve a 150-year sentence. Federal prosecutors said the investigation was ongoing.

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Dollars & Scents: Coty plans to raise $700M in IPO

NEW YORK _ Coty Inc., known for its celebrity fragrances and OPI nail polish, is set to put its best face forward on the stock market.

The beauty products maker is planning to raise $700 million in an initial public offering, moving on after dropping a $10.7 billion takeover bid for its much larger rival, Avon.

The New York company, which touts fragrances by Jennifer Lopez, Celine Dion and Halle Berry, plans to list under the "COTY" ticker symbol.

Coty, founded in Paris in 1904, has managed to successfully broaden its business to cover an array of personal health and beauty needs. While some consumers may not know the company's name offhand, they more than likely have used some of its brands including Sally Hansen and philosophy.

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Iconic Atari turns 40, tries to stay relevant

NEW YORK _ A scruffy, young Steve Jobs worked at Atari before he founded Apple. "Pong," one of the world's first video games, was born there, as was "Centipede," a classic from the era of quarter-guzzling arcade machines. "Call of Duty" creator Activision was started by four of Atari's former game developers.

The iconic video game company turns 40 years old this week, much slimmer these days as it tries to stay relevant in the age of "Angry Birds" and "Words With Friends."

But Atari's influence on today's video games is pervasive.

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By The Associated Press(equals)

The Dow Jones Industrial average closed up 277.83 points, only a sliver below its high for the day. The Standard & Poor's 500 index soared 2.5 percent. The rally left the S&P with a gain of 8.3 percent at the halfway mark for the year.

Benchmark U.S. crude jumped by $7.27, or 9.4 percent, on Friday to end the week at $84.96 per barrel in New York. Brent crude, which helps set the price of imported oil, rose by $6.44, or 7 percent, to $95.51 per barrel in London.

In other futures trading, heating oil added 14.41 cents, about 6 percent, to finish at $2.696 per gallon and wholesale gasoline added 11.3 cents, or nearly 5 percent, to end at $2.7272 per gallon. Natural gas rose by 10.2 cents, nearly 4 percent, to finish the week at $2.824 per 1,000 cubic feet.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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