Jobless claims show labor market may slow recovery

WASHINGTON (AP) ¿ New claims for jobless aid fell less than expected last week, and the number of people continuing to receive unemployment benefits rose ¿ further signs that any economic recovery will be hindered by a weak job market and flat incomes.

Most economists think the recession is over, but they say the jobless rate will keep rising until at least next summer as the economy struggles to mount a sustained recovery.

The nation's major retailers on Thursday reported lackluster results from August back-to-school sales. Results in established stores fell 2.1 percent in August compared with the same month last year, a compilation of 31 retailers' results by the International Council of Shopping Centers and Goldman Sachs indicated. Some major discounters managed to exceed expectations.


Retail sales fall in August, but drops are easing

NEW YORK (AP) ¿ Shoppers limited their back-to-school purchases and stayed focused on necessities in August, resulting in the 12th straight month of declining sales for retailers. But there were signs the holiday season could be less dismal than feared.

Despite the weakness many reported, retailers overall did better in August than analysts expected. Some lower-priced chains, such as TJMaxx and Old Navy, even saw sales rise compared with a year earlier, though upscale stores' sales slipped.

There have been encouraging reports from the housing and manufacturing sectors that the economy is stabilizing, but any recovery will have to include an uptick in consumer spending because it accounts for about 70 percent of economic activity.


Stocks break 4-day slide ahead of jobs report

NEW YORK (AP) ¿ Investors moved back into stocks after a four-day slide on hopes that a key government report on unemployment will confirm that the economy is gaining strength.

The Dow Jones industrial average tacked on 64 points Thursday to 9,344.61 after sliding 300 points since Friday. Stocks held to a tight range for much of the day in light trading as some investors squeezed in late-summer vacations. Those remaining braced for the August jobs report, which is due before the opening bell Friday.

The biggest gains came in the final half-hour, with the Dow doubling its advance, as some traders looked to buy ahead of the jobs data, while reports from retailers offered more insight into consumers' troubles.


Airbus-Boeing ruling could end up hurting both

WASHINGTON (AP) ¿ However the World Trade Organization rules Friday on a trade dispute between Boeing and Airbus, its decision could help slowly loosen the grip the two plane makers have held on the lucrative market for commercial aircraft.

On the surface, the WTO will decide a 5-year-old U.S. complaint that European governments unfairly financed Airbus' climb to the No. 1 position. The ruling also may signal how much other nations should be allowed to subsidize their industries. China's aviation industry, for example, wants to compete with Boeing and Airbus for a share of the jetliner market, expected to be worth $3.2 trillion over the next 20 years.

The WTO decision is not expected to have much immediate effect on Airbus and Boeing.


EU delays Oracle-Sun deal, probing database market

SAN FRANCISCO (AP) ¿ Oracle Corp. figured its $7.4 billion buyout for Sun Microsystems Inc. could skate through antitrust scrutiny, folding Sun into a technology powerhouse when Sun badly needs the lifeline. Both companies will have to wait.

European Union regulators applied the brakes Thursday, launching a formal antitrust probe that shatters Oracle's goal of completing the acquisition this summer. The U.S. Department of Justice has already approved the deal.

The investigation is focused on whether Oracle will gain too much power in the market for database software, which underpins most things people do in business or on the Web. It helps companies manage and retrieve data they've stored, such as payroll or sales information. Typing in a search term, for example, forces a Web site to scour a database and spit out an answer.


No floor in sight for natural gas; prices plunge

NEW YORK (AP) ¿ Natural gas prices tumbled again Thursday, hitting new seven-year lows as the country pares down on energy usage and more unused supply is put into storage.

On Monday, Spokane, Wash.-based utility Avista Corp. said it wants to reduce natural gas prices for its Oregon customers to the lowest levels in five years. And in the Midwest, Alliant Energy Corp. and Wisconsin Public Service Corp. both predicted heating bills would drop around 20 percent.

Natural gas for October delivery gave up 20.7 cents to settle at $2.508 per 1,000 cubic feet on the New York Mercantile Exchange. Prices dropped as low as $2.50 per 1,000 cubic feet ¿ the lowest since March 2002 ¿ after the government reported that U.S. natural gas supplies grew again last week and are now nearly 18 percent above the five-year average.


European Central Bank keeps rate steady

FRANKFURT (AP) ¿ The European Central Bank has left its benchmark rate unchanged at 1 percent as markets wait for word that it may raise its economic forecasts.

The ECB, which sets interest rates for the 16 countries that use the euro, will explain its decision at a press conference later Thursday. The bank is also expected to deliver new forecasts on inflation.

The bank's key refinancing rate has stood at 1 percent ¿ a record low ¿ since May as the bank moved to get cash flowing among European banks and help them during the world financial crisis.


Schumer: Change SEC funding after Madoff failure

WASHINGTON (AP) ¿ A key senator wants to change how the Securities and Exchange Commission is funded, saying the agency must be buttressed to prevent future disasters like its failure to detect the multibillion-dollar fraud run for decades by Bernard Madoff.

Sen. Charles Schumer, D-N.Y., a member of the Senate Banking Committee, plans to propose legislation next week that would dedicate all the annual revenue collected by the SEC to its budget instead of turning over a large portion of the fees paid by public companies and other entities that register stock with the agency to the Treasury Department for the government's coffers.


Diebold selling US voting machine unit

NORTH CANTON, Ohio (AP) ¿ ATM maker Diebold Inc. has sold its much-criticized U.S. voting-machine business to its bigger competitor, Election Systems & Software Inc. of Omaha, Nebraska.

Diebold, based in North Canton, announced the sale of its Allen, Texas-based subsidiary Premier Election Solutions Inc. on Thursday and said it will get $5 million plus payments representing 70 percent of collections of the unit's accounts receivable as of Aug. 31.

Diebold said it would disclose the additional payments at a later date.

Diebold expects to recognize a pretax loss on the deal in the range of $45 million to $55 million.


Treasury backs down in clash with bailout watchdog

WASHINGTON (AP) ¿ The Treasury Department has decided not to challenge the independence of the government watchdog agency that Congress created to oversee spending of the $700 billion rescue package for the financial sector.

The confrontation between Treasury and the Special Inspector General for the Troubled Asset Relief Program, SIGTARP, had prompted congressional complaints that the Obama administration was seeking to restrain the work of inspector general Neil Barofsky.

This week, Barofsky declared in a letter to lawmakers that Treasury had, in effect, acknowledged that he is not subject to Treasury's supervision. By The Associated Press

The Dow rose 63.94, or 0.7 percent, to 9,344.61.

The S&P 500 index rose 8.49, or 0.9 percent, to 1,003.24, while the Nasdaq composite index rose 16.13, or 0.8 percent, to 1,983.20.

Benchmark crude for October delivery fell 9 cents to settle at $67.96 a barrel on the Nymex.

Natural gas for October delivery gave up 20.7 cents to settle at $2.508 per 1,000 cubic feet on the New York Mercantile Exchange.

In other Nymex trading, gasoline for October delivery lost 1.58 cents to settle at $1.7928 a gallon and heating oil fell by 1.55 cents to settle at $1.735 a gallon.

In London, Brent crude dropped 54 cents to settle at $67.12 on the ICE Futures exchange.

Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.