Business Highlights


Economy brightens as consumers spend, layoffs slow

WASHINGTON (AP) â¿¿ Economic reports suggest employers are laying off fewer workers, businesses are ordering more computers and appliances, and consumers are spending with more confidence. Combined, the data confirm the economy is improving, and further job gains are expected in 2011.

The economy's outlook is brightening even though hiring has yet to strengthen enough to reduce an unemployment rate near 10 percent.

The number of people applying for unemployment benefits fell last week to a seasonally adjusted 420,000, the Labor Department said Thursday. That's the second-lowest level since July 2008.


Mortgage rates edge down after 5 weeks of gains

NEW YORK (AP) â¿¿ Rates on fixed mortgages dipped after rising for five weeks in a row.

Still, they remain more than a half-point higher than last month and are at the highest level since late spring.

Freddie Mac said Thursday the average rate on a 30-year fixed mortgage slipped to 4.81 percent from 4.83 percent in the previous week. Last month, the rate reached a 40-year low of 4.17 percent, but has since been edging higher.

The average rate on the 15-year loan, a popular refinance option, also fell to 4.15 percent from 4.17 percent. It hit 3.57 percent in November, the lowest level on records starting in 1991.

Rates had been rising since early November as investors shifted money out of Treasurys and into stocks on expectations that the recent tax-cut plan will boost economic growth and potentially increase inflation. The sell-off comes even as the Federal Reserve buys up $600 billion in bonds to try to lower interest rates.


Jo-Ann Stores being taken private for $1.6 billion

NEW YORK (AP) â¿¿ Fabric and craft store chain Jo-Ann Stores Inc. is being taken private by investment firm Leonard Green & Partners LP for about $1.6 billion, the latest in a series of billion-dollar retail buyouts.

The deal is the most recent in a flurry of retail buyouts that have occurred in the past three months. Last month preppy fashion retailer J. Crew Group Inc. agreed to be purchased for $3 billion in a deal that also involves Leonard Green & Partners, along with private equity firm TPG Capital.

And in October Gymboree Corp. agreed to be acquired by Bain Capital in a $1.8 billion deal that closed in November.

Private equity buyouts such as these are on the rise after a lull during the recession. Industry experts believe many of the recent deals were for companies that investment firms feel are stable and safe, making them attractive. But they're also a bet that consumer spending, which has shown signs of life, will continue to rebound.


Obama to re-nominate Nobel Prize winner to Fed

WASHINGTON (AP) â¿¿ President Barack Obama will resubmit the failed nomination of a Nobel Prize-winning economist to the Federal Reserve, even though he faces even stronger opposition from the next Congress.

The nomination of Peter Diamond fizzled when the Senate adjourned Wednesday without acting on it. But the White House said Thursday that the president will press ahead on the nomination.

Diamond, a professor at the Massachusetts Institute of Technology, is an authority on Social Security, pensions and taxation. He shared the Nobel Prize in economics that was awarded in October. But Senate Republicans have opposed his nomination, questioning his practical experience and research.


Portugal's debt rating downgraded by Fitch

LONDON (AP) â¿¿ Portugal had its credit rating downgraded Thursday by the Fitch Ratings agency amid mounting concerns over the country's ability to raise money in the markets to finance its hefty borrowings.

Fitch said it was reducing its rating on the country's debt by one notch to A+ from AA- and warned that further downgrades may be in the offing by maintaining its negative outlook.


GM recalls almost 100,000 vehicles due to 2 issues

NEW YORK (AP) â¿¿ General Motors Co. is recalling almost 100,000 vehicles to fix two problems that could cause the rear axle to lock and the passenger-side airbag not to work.

GM says in postings with the National Highway Traffic Safety Administration that the airbag recall affects almost 96,000 2005 to 2007 model year versions of the Cadillac CTS.

The axle recall affects almost 1,300 2011 model year versions of the Cadillac Escalade, Chevrolet Avalanche 1500 and Silverado 1500, as well as the GMC Sierra 1500.


Hungary's debt rating downgraded by Fitch

LONDON (AP) â¿¿ Fitch Ratings agency downgraded Hungary's debt to one notch above junk status, citing budget plans that it warned are ill-considered but that the country's lawmakers approved soon after on Thursday.

Fitch said it was concerned about the government's economic strategy even though it has pledged to get the budget deficit below 3 percent of national income next year. The agency also said it was concerned that a heavy debt load makes the country particularly vulnerable to global economic shocks.


IRS says tax changes will cause some filing delays

WASHINGTON (AP) â¿¿ Some taxpayers will be unable to file returns until mid-to-late February because of recent tax breaks approved by Congress in its lame-duck session, the IRS said Thursday.

Congress approved tax breaks for higher education tuition, state and local sales taxes and out-of-pocket expenses for teachers in kindergarten through high school.

The IRS will need the extra time to reprogram its computers, but the delays will be minimal for taxpayers who itemize deductions and normally have to wait for financial documents.


Christmas Eve work shutdown to spell mobbed malls

NEW YORK (AP) â¿¿ It's Black Friday, The Sequel. Stores are rolling out deals and expect to be swimming in shoppers on Christmas Eve as stragglers take advantage of a day off work. For retailers, the last-minute rush caps the best year since 2007, and possibly ever.

With Christmas falling on a Saturday this year, Friday is a holiday for most U.S. workers. That lets shoppers hit the stores first thing in the morning.

___ By The Associated Press

The Dow Jones industrial average rose 14 points, or 0.1 percent, to close at 11,573.49. The broader Standard & Poor's 500 index fell 2.07, or 0.2 percent, to 1,256.77. The Nasdaq composite index fell 5.88, or 0.2 percent, to 2,665.60.

All three indexes ended the shortened trading week higher. The Dow rose 0.7 percent. The S&P 500 rose 1 percent, and the Nasdaq 0.8 percent.

Benchmark crude rose $1.03 to settle at $91.51 on the New York Mercantile Exchange.

While oil and gasoline prices are climbing, the price of one of the main heating sources in the nation â¿¿ natural gas â¿¿ is falling. It's down about 11 percent in the past two weeks. On Thursday natural gas lost 6.9 cents to settle at $4.083 per 1,000 cubic feet on the Nymex.

In other Nymex trading, heating oil rose 1.23 cents to settle at $2.5408 per gallon and gasoline gained 1.81 cents to settle at $2.4426 per gallon.

In London, Brent crude rose 60 cents to settle at $94.25 on the ICE Futures exchange.

Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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