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Business Highlights

Source : AP
Last Updated: Tue, Aug 07, 2012 22:16 hrs

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Bank scandals tarnish London's reputation

LONDON (AP) — It's been a tense summer in the City of London as one bank after another has faced allegations of massive misbehavior.

Bankers in the British capital, which has for centuries been a center for global business, fear its reputation has been tarnished indelibly and that a heavy-handed regulatory crackdown is looming.

First came U.K. bank Barclays. Its chief executive, Bob Diamond, was forced to step down last month after U.S. and British authorities fined the bank $453 million for manipulating a key market interest rate. Other banks are being investigated for their part in the scandal.

Then there was HSBC, another big London-based bank. It faces fines of up to $1 billion after the U.S. Senate issued a damming report last month alleging it had failed to stop the laundering of Mexican drug money.

Back in May, JPMorgan Chase & Co. disclosed a surprise $2 billion trading loss — later upgraded to $5.8 billion — racked up by its London office in a portfolio designed to hedge against risks the company takes with its own money.

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S&P closes over 1,400 for first time in 3 months

NEW YORK (AP) — It was a day of milestones for the stock market.

Stronger corporate earnings reports and expectations that central banks will act to support the economy powered the Standard & Poor's 500 index past 1,400 for the first time in three months. The index rose 7.12 points to close at 1,401.35 on Tuesday. Energy stocks increased the most of the 10 industry groups tracked by the index.

The Nasdaq composite index marked a milestone of its own: the first close above 3,000 since early May. The Nasdaq rose 25.95 points to 3,015.86.

The S&P hasn't closed above 1,400 since May 2, and the Nasdaq hasn't closed above 3,000 since May 3.

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US employers post the most jobs in 4 years

WASHINGTON (AP) — U.S. employers posted the most job openings in four years in June, a positive sign that hiring may pick up.

The Labor Department said Tuesday job openings rose to a seasonally adjusted 3.8 million in June, up from 3.7 million in May. That's the most since July 2008. Layoffs fell.

The data follow Friday's report that said employers in July added the most jobs in five months. A rise in openings could signal better hiring in the coming months. It typically takes one to three months to fill a job.

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US consumers cut back on credit card use in June

WASHINGTON (AP) — Americans cut back on credit card use in June, further evidence that high unemployment and slow growth has made consumers more cautious about spending.

Overall consumer borrowing rose because of increases in auto and student loans. The Federal Reserve says total borrowing increased 3 percent to $2.58 trillion in June from May. That's just below the all-time high reached in July 2008.

Credit card debt fell 5 percent to $864.6 billion. That's only 1.6 percent above the post-recession low reached in April 2011. Americans have been relying less on credit cards since the 2008 financial crisis and Great Recession.

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Bernanke: Students must be wise with college loans

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke says students need to be careful when investing in their education.

Bernanke says taking on debt to pay for college can be an important way of increasing one's earning potential. But higher education can also become a financial burden if it doesn't lead to a good job, he warns.

Student loan debt has steadily increased since the Great Recession and totaled more than $900 billion in March, according the Federal Reserve Bank of New York.

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Freddie Mac posts $1.2 billion net income for 2Q

WASHINGTON (AP) — Government-controlled mortgage giant Freddie Mac posted net income of $1.2 billion for the second quarter and isn't requesting any additional federal aid for the period.

The government rescued Freddie and larger sibling Fannie Mae in September 2008 after massive losses on risky mortgages threatened to topple them.

Taxpayers have spent about $170 billion to rescue Fannie and Freddie, the costliest bailout of the 2008 financial crisis. It could cost about $200 billion more to support the companies through 2014 after subtracting dividend payments, according to the government.

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Disney beats 3Q profit views but revenue misses

LOS ANGELES (AP) — The Walt Disney Co.'s profit for the third quarter beat analyst estimates but revenue came up short due to unchanged revenue at its movie studio despite a surge in profit from "The Avengers."

Net income rose 24 percent to $1.83 billion, or $1.01 per share. There were minor adjustments that had no impact on the per-share results, which exceeded the 93 cents per share expected by analysts polled by FactSet.

Revenue rose 4 percent to $11.09 billion, short of the $11.32 billion expected by analysts.

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CVS Caremark profit jumps 18 percent; boosts outlook

CVS Caremark Corp.'s second-quarter net income jumped 18.4 percent, as its drugstores took business from rival Walgreen and an expansion of its pharmacy benefits management segment pushed revenue higher.

The Woonsocket, R.I., company's earnings topped Wall Street expectations, and it raised and narrowed its 2012 forecast.

CVS Caremark said a recently settled split between rival drugstore chain Walgreen Co. and Express Scripts Holding Co. sent more customers to CVS drugstores, and it aims to keep many of them. The split added between 6.5 million and 7 million prescriptions for CVS pharmacies in the quarter. That contributed about 3.5 cents per share to earnings after adding 3 cents in the first quarter.

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Express Scripts 2Q profit falls 49 percent

ST. LOUIS (AP) — Express Scripts says its earnings fell 49 percent in the pharmacy benefits manager's second quarter, as it wrapped up its $29 billion acquisition of competitor Medco Health Solutions.

The St. Louis company earned $170.9 million, or 21 cents per share, in the three months that ended June 30. That compares to earnings of $334.2 million, or 66 cents per share, in last year's second quarter. Revenue more than doubled to $27.69 billion with the acquisition.

Excluding acquisition costs, the company would have earned 88 cents per share.

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Experts: Calif refinery fire will boost gas prices

RICHMOND, Calif. (AP) — A major fire at one of the country's biggest oil refineries that sent scores of people to hospitals with complaints of breathing problems will push gas prices above $4 a gallon on the West Coast, analysts said Tuesday.

The fire, which sent plumes of black smoke over the San Francisco Bay area, erupted Monday evening in the massive Chevron refinery about 10 miles northeast of San Francisco. It was out early Tuesday, although officials were still conducting a controlled burn.

California's average price Tuesday for a gallon of regular gasoline was at $3.86.

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By The Associated Press(equals)

The Dow Jones industrial average rose 51.09 points to 13,168.60. The Standard & Poor's 500 index rose 7.12 points to close at 1,401.35. The Nasdaq rose 25.95 points to 3,015.86.

In New York, benchmark U.S. crude increased $1.47 to finish at $93.67 per barrel. Brent crude, which is used to price international varieties of oil, rose $2.45, or 2.2 percent, to end at $112 per barrel, in London.

Wholesale gasoline rose 6.91 cents to finish at $2.9913 per gallon. Heating oil rose 5.71 cents to end at $2.9980 per gallon. Natural gas rose 5.6 cents to finish at $2.9640 per 1,000 cubic feet.

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