Business Highlights

Stocks post their best week since July

NEW YORK (AP) ¿ The stock market is keeping its momentum going, giving shares their best week in more than two months.

Moderate gains on Friday led by health care and utility companies pushed stocks to a 4 percent gain for the week, their best performance since July. The Dow Jones industrial average gained 78 points to 9,864.94, reaching its highest level in a year.

Bond prices tumbled, extending the previous day's losses, as the Treasury market struggled to absorb $71 billion of new supply auctioned off this week in the government's ongoing efforts to fund its stimulus programs.

The market's performance was a fitting way to commemorate the second anniversary of the record highs set by the Dow and the Standard & Poor's 500 index, which closed at 14,164.53 and 1,565.15 respectively. It was after reaching those milestones that the market began what turned into a cataclysmic slide that ended March 9.

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Citigroup dumps Phibro, avoids showdown with US

NEW YORK (AP) ¿ Citigroup Inc. is removing one of the irritants in its relationship with the government, its Phibro commodities trading division that is paying one trader an estimated $100 million this year.

The deal announced Friday carries a tradeoff for Citigroup: While the $250 million sale to Occidental Petroleum Corp. means a bit less government scrutiny, it also means the bank is losing hundreds of millions of dollars in annual income that could help repay $49 billion in bailout money.

Phibro, which makes most of its money through oil and natural gas trades, earned an average $371 million annually during the past five years. Citigroup sold it for about $250 million, which means Occidental could recoup its investment in less than a year.

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Aug. trade deficit narrows unexpectedly to $30.7B

WASHINGTON (AP) ¿ The U.S. trade deficit unexpectedly narrowed in August as exports posted a small gain, while imports fell on a big drop in demand for foreign oil.

The fourth straight rise in exports was an encouraging sign that the global economy has started to recover from a severe recession that began in the United States and quickly spread to other parts of the world. But many economists expect the deficit to rise in coming months on the back of a rebounding U.S. economy, which will start importing more foreign products.

The Commerce Department said Friday that the trade deficit declined 3.5 percent to $30.7 billion, surprising economists who had expected higher oil prices to push the imbalance to $33 billion. Oil prices did shoot up, but the volume of shipments dropped sharply in August.

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Iconic Hummer brand sold to Chinese manufacturer

DETROIT (AP) ¿ Hummer, the off-road vehicle that once epitomized America's love for hulking trucks, is now in the hands of a Chinese heavy equipment maker.

General Motors Co. and Sichuan Tengzhong Heavy Industrial Machinery Corp. finally signed the much-anticipated deal for GM to sell the brand on Friday.

Tengzhong will get an 80 percent stake in the company, while Hong Kong investor Suolang Duoji, who indirectly owns a big stake in Tengzhong through an investment company, will get 20 percent. The investors will also get Hummer's nationwide dealer network.

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Job competition toughest since recession began

WASHINGTON (AP) ¿ The number of job seekers competing for each opening has reached the highest point since the recession began, according to government data released Friday.

The employment crisis is expected to worsen as companies stay reluctant to hire. Many economists expect a jobless recovery, putting pressure on President Barack Obama and congressional Democrats to stimulate job creation.

There are about 6.3 unemployed workers competing, on average, for each job opening, a Labor Department report shows. That's the most since the department began tracking job openings nine years ago, and up from only 1.7 workers when the recession began in December 2007.

The highest point after the 2001 recession was 2.8 workers per opening in July 2003, as the economy suffered through a jobless recovery.

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Oil prices nearly flat as dollar strengthens

UNDATED (AP) ¿ Oil prices were essentially flat to end the week after Federal Reserve Chairman Ben Bernanke said this week that interest rates will have to be raised when the economy recovers in order to avoid inflation.

It has been the weak dollar that has attracted billions in investments in energy markets this year because oil is priced in the U.S. dollar, essentially making crude cheaper globally.

The dollar bounced back on Friday following Bernanke's comments, and crude prices rose only 8 cents after they had rallied strongly Thursday wheat he U.S. currency hit a 14-month low against the euro.

Benchmark crude for November delivery settled at $71.77 on the New York Mercantile Exchange.

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FCC launches probe of Google Voice service

WASHINGTON (AP) ¿ Federal regulators will look into complaints by AT&T Inc. that Google Inc.'s free messaging and calling service, Google Voice, blocks calls to rural communities where local phone companies charge high connection fees.

The Federal Communications Commission on Friday sent a letter to Google requesting information about its Voice service, which lets people sign up for one number that can route incoming calls to cell, office or home phones. The service also lets users place calls, including international calls, at low rates.

As part of a broader quarrel with Google, AT&T has complained that Google Voice blocks calls to phone numbers in some rural communities to reduce the access charges it must pay. So-called "common carrier" regulations prevent AT&T and other big phone companies from blocking those same calls.

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Ag report forecasts record corn, soybean crops

DES MOINES, Iowa (AP) ¿ Record harvests are being forecast for corn and soybean farmers despite earlier concerns over a cool growing season.

In a report released Friday, the National Agricultural Statistics Service forecasts record yields for corn and record production for soybeans.

Corn production is estimated at 13 billion bushels, up 8 percent from 2008. If true, it will be the second highest production since 2007, when 13.04 billion bushels were harvest.

Yields are forecast to average a record 164.2 bushels per acre, up more than 10 bushels from 2008.

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Kimberly-Clark to buy I-Flow in $276M deal

DALLAS (AP) ¿ Kimberly-Clark Corp. said Friday that it will add higher-margin medical devices to its health care unit by purchasing health care company I-Flow Corp. in a cash deal valued at approximately $276 million excluding acquired cash and cash equivalents.

Kimberly-Clark, maker of Huggies diapers and Kleenex tissues, will start a tender offer to buy all of Lake Forest, Calif.-based I-Flow's outstanding stock at $12.65 per share, or about $324 million. The per share price represents an 8 percent premium to I-Flow's Thursday closing price of $11.76.

The planned acquisition follows a Monday announcement by Kimberly-Clark in which the Dallas-based company said it bought Baylis Medical Co.'s pain management business for an undisclosed sum.

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USA Today to post 17 percent drop in circulation

NEW YORK (AP) ¿ USA Today expects to report the largest decline in circulation in its 27-year history, threatening its No. 1 position among U.S. dailies as the growth of online news and the slump in travel pummel the newspaper.

While most large dailies are struggling to hold on to print subscribers and newsstand sales, USA Today is being hurt by a drop in traffic at airports and hotels, the newspaper's mainstay. It also increased the price of single copies to $1 from 75 cents last December.

In a memo to staff Friday, USA Today publisher David Hunke said the average circulation at the Gannett Co.-owned newspaper was 1.88 million from April through September. That marks a loss of 398,000 copies, or 17 percent, from the same period the year before at the newspaper, which is printed on weekdays only. By The Associated Press

The Dow rose 78.07, or 0.8 percent, to 9,864.94, its highest close since Oct. 6 last year.

The S&P 500 index rose 6.01, or 0.6 percent, to 1,071.49, while the Nasdaq composite index rose 15.35, or 0.7 percent, to 2,139.28.

Benchmark crude for November delivery rose 8 cents to settle at $71.77 on the New York Mercantile Exchange.

In other Nymex trading, heating oil rose by less than a penny to $1.8528 and gasoline fell by 1.117 to settle at $1.768 a gallon. Natural gas for November delivery lost 19.3 cents to settle at $4.77 per 1,000 cubic feet.

In London, Brent crude rose 23 cents to settle at $70 per barrel on the ICE Futures exchange.

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

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