The Associated Press

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Greece, Italy turn to experts for way out of debt

ATHENS, Greece (AP) â¿¿ Europe's financial crisis eased Thursday as Greece installed a respected economist to replace its prime minister and Italy appeared poised to do the same â¿¿ both hoping that monetary experts can do better than the politicians who drove their nations so deeply into debt.

The announcement in Athens â¿¿ coupled with the prospect that volatile Italian Prime Minister Silvio Berlusconi will be ushered out soon â¿¿ quieted market fears, at least for now, that turmoil in Europe could threaten the global economy.

But significant challenges remain in both debt-heavy Mediterranean countries.

Greece's new prime minister, Lucas Papademos, a former vice president of the European Central Bank, must quickly secure the crucial loan installment without which his country will go bankrupt before Christmas, and approve the EU's $177 billion bailout deal.

In Italy, lawmakers have to pass new austerity measures over the next few days. However, expectations that respected economist Mario Monti will lead an interim technocratic government after Berlusconi goes helped lift the gloom.

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MF Global's dive shows few changes on Wall Street

WASHINGTON (AP) â¿¿ After countless new rules designed to make Wall Street safer, it's come to this: Another securities firm has collapsed from risky, poorly disclosed bets.

Not enough, in other words, has changed since the U.S. financial system nearly toppled three years ago.

The bankruptcy filing last week by MF Global Holdings Ltd. didn't freeze lending and panic investors around the world, as Lehman Brothers' did in 2008. But the rapid fall of the firm run by former New Jersey Gov. Jon Corzine shows risky behavior persists, despite a vast regulatory overhaul.

As lenders abandon Italy this week and stocks plummet on fear that defaults in Europe are all but inevitable, those new rules are about to be put to the test. One question no one can answer: Is the financial system, with its expanding web of connections that even experts can't trace, any safer?

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Bernanke seeks to reassure vets in weak economy

WASHINGTON (AP) â¿¿ Federal Reserve Chairman Ben Bernanke on Thursday tried to reassure U.S. soldiers, a group hit hard by high unemployment, that the Fed is working to strengthen the economy.

In a speech at a military base in El Paso, Texas, Bernanke told the soldiers and their families that the Fed is trying to lower unemployment. He talked about the Fed's policies of keeping short-term rates near zero and buying securities to try and reduce longer-term rates, such as mortgages.

Many veterans of the Iraq and Afghanistan wars are returning home to find few jobs and limited prospects. The unemployment rate for veterans of those wars was 12.1 percent in October. That's up from 10.6 percent a year ago and well above the national average of 9 percent.

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Unemployment aid hits 7-month low, trade gap falls

WASHINGTON (AP) â¿¿ The outlook for American jobs and trade looked a little brighter Thursday, despite growing uncertainty overseas.

The number of people who applied for unemployment benefits last week fell to a seasonally adjusted 390,000, the Labor Department said Thursday. That's the fewest since April.

The U.S. trade deficit narrowed to $43.1 billion in September, its lowest point of the year, the Commerce Department said. Foreign sales of American-made autos, airplanes and heavy machinery pushed exports to an all-time high.

The data suggest layoffs are easing and the economy grew slightly better over the summer than the government had estimated a month ago.

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Rate on 30-year mortgage below 4 percent for second time

WASHINGTON (AP) â¿¿ The average rate on the 30-year fixed mortgage fell below 4 percent for just the second time in history.

Freddie Mac said Thursday the rate on the 30-year fixed loan fell to 3.99 percent, down from 4 percent last week. Five weeks ago, it dropped to a record low of 3.94 percent, according to the National Bureau of Economic Research.

The average rate on the 15-year fixed mortgage fell last week to 3.30 percent from 3.31 percent. Five weeks ago, it hit a record low of 3.26 percent.

Mortgage rates track the yield on 10-year Treasury note, which fell this week as investors shifted money into safer Treasurys amid fears Europe's debt crisis could worsen.

Low mortgage rates have done little to boost home sales. Rates have been below 5 percent for all but two weeks this year. Yet home sales are on pace to be the lowest in 14 years.

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Federal government runs $98.5 billion deficit in October

WASHINGTON (AP) â¿¿ The federal government started the budget year with a smaller October deficit than a year ago, modest progress after three straight years of $1 trillion-plus full-year deficits.

The deficit for October, the first month of the 2012 budget year, totaled $98.5 billion, the Treasury Department said Thursday. That's down from $140.4 billion in October 2010.

Even with the improvement, the deficit remains extraordinarily high by historical standards and will keep pressure on lawmakers as they debate spending cuts and tax increases.

For all of the 2012 budget year, the Congressional Budget Office predicts the deficit will be $973 billion. That's lower than the $1.3 trillion imbalance from the budget year that ended Sept. 30, the second-biggest deficit ever. But it would be higher than any previous deficit before fiscal year 2009.

The government ran an all-time record deficit of $1.41 trillion in 2009, and a $1.29 trillion imbalance in 2010.

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Merck: Promising drugs in late-stage testing

WHITEHOUSE STATION, N.J. (AP) â¿¿ Merck & Co. said Thursday it has revamped its research operations to make them more productive, has started a new four-pronged business strategy to increase revenue and profit and has some exciting drugs on the horizon.

The drugmaker also boosted its quarterly dividend by 4 cents to 42 cents per share this quarter â¿¿ the first increase since 2004. That was just before Merck pulled painkiller Vioxx from the market because it increased heart attack and stroke risk. Merck's shares rose sharply.

Merck's pipeline of experimental drugs includes what could be several important new medicines for patients and shareholders, company executives told analysts during a daylong business briefing at Merck headquarters in Whitehouse Station, N.J. And Merck, the world's No. 3 drugmaker by revenue, has eight new products for which it will seek U.S. approval in 2012 or 2013.

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Kohl's 3rd-quarter profit rises

NEW YORK (AP) â¿¿ Department store operator Kohl's Corp. said Thursday that its third-quarter profit rose 20 percent, helped by strong sales of exclusive brands from Jennifer Lopez and Marc Anthony.

Kohl's, based in Menomonee Falls, Wis., raised its full-year outlook, and says it's counting on continued spending during the holiday period. Its shares jumped 2 percent in trading.

Kohl's, like many department stores with moderately-priced merchandise, is facing challenges in getting its middle-income shoppers to spend. Kohl's results underscore a trend that's playing out in stores across the country in this down economy. Shoppers are focused on getting the cheapest prices on basics like T-shirts but willing to spend a premium to snag affordable luxuries.

Kohl's stepped up its marketing and deepened promotions on some basic items during the quarter, which drew deal-seeking shoppers. But customers were also lured into stores by the Jennifer Lopez and Marc Anthony collections, which hit stores in mid-September and feature such items as $69.99 platform shoes and $70 wool ponchos.

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Disney 4th-quarter beats Street on pay TV growth

LOS ANGELES (AP) â¿¿ Disney said Thursday that its fourth-quarter net income rose 30 percent, thanks to higher spending by theme park visitors and growth at pay TV operations ESPN and Disney Channel.

The Walt Disney Co.'s movie studio profits grew, helped by the theatrical re-release of "The Lion King" in 3-D. The growth occurred in spite of lower revenue in home entertainment. Consumer products sales and profits grew and the company trimmed losses at its interactive unit.

Net income in July through September rose to $1.09 billion, or 58 cents per share. Disney posted net income of $835 million, or 43 cents per share, for the same period last year.

Excluding one-time items, Disney's adjusted earnings came to 59 cents per share, beating the 54 cents expected by analysts polled by FactSet.

Revenue rose 7 percent to $10.43 billion, also beating the $10.37 billion expected by analysts.

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Starbucks acquires juice business for $30M

Starbucks Corp. hopes to do for juice what it's done for coffee.

The Seattle-based company that changed the way Americans drink their cup of Joe said Thursday that it acquired by juice maker Evolution Fresh Inc. for $30 million as part of a larger effort to move beyond just offering coffee.

Starbucks said it plans to "reinvent" the $1.6 billion super-premium juice segment with its purchase of Evolution, which is based in San Bernardino, Calif. The company plans to open a new chain of health and wellness stores in the coming year that will carry Evolution products such as juices and simple foods. Details are still thin on the new chain, but Starbucks described it as a retail model that has never been seen before.

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By The Associated Press(equals)

The Dow Jones industrial average rose 112.92 points, or 1 percent, to close at 11,893.86. The S&P 500 index gained 10.60, or 0.9 percent, to 1,239.70. The Nasdaq rose 3.50 points, or 0.1 percent, to 2,625.15.

Benchmark crude rose $2.04, or 2.1 percent, to finish at $97.78 per barrel in New York. Brent crude rose $1.40 to end at $113.71 a barrel in London.

In other energy trading, heating oil rose 5.25 cents to finish at $3.1511 per gallon, while gasoline futures fell less than a penny to end at $2.6368 per gallon. Natural gas finished virtually unchanged at $3.65 per 1,000 cubic feet.

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