BUSINESS BRIEFS
New jobless claims highest since March '02
Associated Press
WASHINGTON — The nation's jobs market sent a fresh cry of distress as the number of newly laid off people unexpectedly hit the highest level in more than six years, a Labor Department report showed yesterday.
The faltering economy and tight credit have forced companies to cut back, and as the job market shrinks, consumer spending may dwindle, too. Companies are laying off workers as they struggle with slowing customer demand, harder-to-get credit and high costs for fuel and other raw materials.
New applications filed for unemployment benefits rose last week by a seasonally adjusted 7,000 to 455,000, the department said in its weekly report. That was the most since late March 2002.
OIL PRICES AGAIN TOP $120 A BARREL
NEW YORK — Oil prices jumped back above $120 a barrel yesterday, halting a steep three-day slide after Kurdish rebels claimed responsibility for a fire at a key Turkish pipeline that supplies Western countries.
Light, sweet crude for September delivery rose $1.44 to settle at $120.02 a barrel on the New York Mercantile Exchange, after prices alternated between positive and negative territory. Gasoline futures also rose, while heating oil and natural gas futures finished lower.
At the pump, retail gas prices tumbled further overnight. A gallon of regular fell on average just more than a penny to $3.849, more than 6 percent off record-highs above $4 a gallon reached last month, according to auto club AAA, the Oil Price Information Service and Wright Express.
CITIBANK SETTLES WITH REGULATORS
WASHINGTON — Citigroup Inc. will buy back more than $7 billion in auction-rate securities and pay $100 million in fines as part of settlements with federal and state regulators, who said the bank marketed the investments as safe despite liquidity risks.
Citigroup will buy back the securities from nearly 40,000 investors nationwide under separate accords announced yesterday with the Securities and Exchange Commission, New York Attorney General Andrew Cuomo and other state regulators. The buybacks are not expected to cause significant losses for Citigroup; they must be completed by November.
LONG-TERM CAR QUALITY UP 5%
DETROIT — Compact and midsize cars are showing gains in long-term quality, says J.D. Power, which is good news for drivers looking to downsize into more fuel-efficient vehicles.
Power's Vehicle Dependability Study, out yesterday, shows that long-term quality is up 5 percent industrywide. Improvements in small and compact cars made up more than half of those gains.
Power said customers reported 75 percent more problems after three years of owning a car than during the first 90 days. Five of the top 10 problems reported in early ownership — such as excessive wind noise and noisy brakes — also cropped up in later years.
Lexus came in at the top of the dependability study for the 14th year in a row. Last year, Buick tied Lexus for first place. This year, it came in sixth.
GOOGLE'S AOL DEAL SOURING
SAN FRANCISCO — In an assessment that could lead to a substantial charge against its future profits, Google Inc. believes its $1 billion investment in advertising partner AOL is souring.
The Mountain View-based company disclosed in a quarterly report filed late yesterday with the Securities and Exchange Commission that the 5 percent AOL stake that it bought in 2005 "may be impaired." Impairment is an accounting term used to describe an acquisition or investment that has eroded.
Unless there is an about-face, the acquiring company eventually must absorb a charge on its books to account for the diminished value of its holdings.
