The Associated Press
Unemployment could stay high as US economy slows
WASHINGTON (AP) - High unemployment isn't going away - not as long as the economy grows as slowly as it did in the April-June quarter.
Weak consumer spending held growth to an annual rate of just 1.5 percent, even less than the 2 percent rate in the first quarter. And few expect the economy to accelerate in the second half of the year as Europe's financial woes and a U.S. budget crisis restrain businesses and consumers.
The growth estimate Friday from the Commerce Department suggested that the U.S. economy could be at risk of stalling three years after the recession ended. Economists generally say even 2 percent annual growth would add only about 90,000 jobs a month. That's too few to drive down the unemployment rate, which is stuck at 8.2 percent.
Fragile European economy dampens CEOs' outlook
NEW YORK (AP) - Deteriorating financial conditions in Europe are weighing down companies' profits. And hope of salvation from other regions - such as China, Brazil and the U.S. - is starting to dim as those economies weaken.
That's the message from this week's parade of second-quarter earnings from some of the world's largest companies.
One CEO after another told investors and Wall Street analysts that Europe was making them nervous.
Tough EU stance? It's in Germany's culture
BERLIN (AP) - Head to the checkout at an Ikea in Stockholm to pay for your new leather corner sofa and with the swipe of a Visa card it's yours. Don't try that in Berlin - that'll be (EURO)1,699 ($2,080) up front please.
It's that financial culture - a deep-seated aversion to debt and an emphasis on responsibility - that makes Chancellor Angela Merkel's hardline approach to solving the European financial crisis so popular in Germany.
The attitude shows up in all walks of life, from the daily trip to the grocery store to putting a roof over your head.
The economy is so reliant on cash for transactions small and big, a way to ensure you don't spend more than you have, that Germany pushed hard for the (EURO)500 note to replace its popular 1,000 mark bill when it joined the common currency.
Administration projects $1.2 trillion 2012 budget deficit
WASHINGTON (AP) - The White House predicts this year's federal budget deficit will end up at $1.2 trillion, marking the fourth consecutive year of trillion dollar-plus deficits during President Barack Obama's administration.
The bleak figures, while expected, are sure to add fuel to the already heated presidential campaign, in which Obama's handling of the economy and the budget is a main topic. Friday's release came as the government announced that U.S. economic growth slowed to an annual rate of just 1.5 percent in the second quarter of this year, as consumers cut back sharply on spending.
The White House budget office also predicts for this year that the economy will grow at a modest 2.6 percent annual rate and that the jobless rate will average 8 percent. It forecasts modest growth of 2.6 percent next year - down from the 3.0 percent it predicted in February - before rising to 4.0 percent in 2014. Unemployment would remain above 7 percent through the end of 2014, registering at 7.3 percent, the report predicts.
Google: Didn't delete Street View data after all
LONDON (AP) - After being caught spying on people across Europe and Australia with its Wi-Fi-slurping Street View cars, Google had told angry regulators that it would delete the ill-gotten data.
Google broke its promise.
Britain's Information Commissioner's Office (ICO) received a letter from Google in which the company admits it kept a "small portion" of the electronic information it intended to dump.
The ICO said in a statement that Google Inc. had agreed to delete all that data nearly two years ago, adding that its failure to do so "is cause for concern."
Chevron 2Q net income slips 7 percent
NEW YORK (AP) - Soaring profit at Chevron's refineries eased some of the pain of a weaker second quarter.
The oil giant said Friday that net income fell nearly 7 percent to $7.21 billion, or $3.66 per share. But the results beat expectations thanks to a strong performance from its refinery business.
Like its peers, the oil giant is struggling to find and replace its sources of petroleum. The world's slowing economy has also pushed down prices for the crude it sells.
But the lower prices had benefits. Profits at Chevron's refining and marketing business rose 80 percent. Its refineries paid less for oil while selling gasoline at higher prices on the U.S. West Coast. Pump prices there remained well above the national average last quarter because of supply problems in the region. The business also sold about $200 million in assets, including its stake in a South Korean energy business.
Merck's 2Q net falls on charges, but sales rise
Shares of drugmaker Merck & Co. surged over 4 percent to a new high for the year Friday as its second-quarter results easily beat Wall Street expectations - just as generic competition is set to start decimating sales of its top-selling medicine, Singulair.
The world's third-biggest drugmaker by revenue maintained its profit forecast despite net income dropping 11.4 percent as higher sales were offset by unfavorable currency rates and acquisition and restructuring costs. Still, adjusted profit was up 9 percent, and it was Merck's sixth straight quarter with revenue and adjusted income both up.
The maker of diabetes pill Januvia and asthma and allergy medicine Singulair said net income was $1.79 billion, or 58 cents per share. That was down from $2.02 billion, or 65 cents per share, a year earlier, when results were boosted by a one-time, $700 million tax settlement gain.
McKesson to pay $151M to settle drug-pricing suit
SAN FRANCISCO (AP) - McKesson Corp. will pay $151 million to 29 states and the District of Columbia to settle a lawsuit alleging the company inflated prices of hundreds of prescription drugs, causing state Medicaid programs to overpay millions of dollars in reimbursements, officials said Friday.
The agreement with San Francisco-based McKesson, one of the country's largest drug wholesalers, settles allegations that the company deliberately inflated drug prices by as much as 25 percent from 2001 to 2009.
An investigation by state and federal agencies found that McKesson overbilled for more than 1,400 brand-name drugs from 2001 to 2009. They include commonly prescribed medications such as Adderall, Allegra, Ambien, Celexa, Lipitor, Neurontin, Prevacid, Prozac and Ritalin, officials said.
Management shake-up at JPMorgan; Zames is COO
NEW YORK (AP) - JPMorgan Chase, which is reeling from the fallout of a big trading loss at one of its divisions, announced a broad reshuffling of its top management on Friday.
It was the second round of management reorganization at the nation's largest bank since it revealed the loss that has ballooned to up to $5.8 billion from an initial estimate of $2 billion. The loss has prompted two congressional hearings and led to investigations from international regulators.
The loss has also come to represent the risky bets taken at large banks that can jeopardize the global financial system barely four years after the financial crisis that hurtled the country into the deepest recession since the Great Depression.
Delta shuts down Comair; workers given notice
CINCINNATI (AP) - Delta Air Lines is shutting down its shrunken, 35-year-old regional carrier Comair at the end of September as it switches to bigger jets. It is sending termination notices to Comair's 1,700 remaining employees.
Comair is down to 290 flights a day. More than 1,000 Comair employees are in the Cincinnati and northern Kentucky region, some 700 of those in Kentucky.
Comair has slashed its fleet, flights and workforce in the last seven years. Delta said the smaller regional planes are expensive to fly because they are not as fuel-efficient and cost more to maintain as the fleet ages.
By The Associated Press(equals)
The Dow Jones industrial average rose 187.73 points to 13,075.66. The Standard & Poor's 500 jumped 25.95 to 1,385.97. The Nasdaq composite index rose 64.84 to 2,958.09.
Benchmark U.S. crude added 74 cents on Friday to finish at $90.13 per barrel in New York. Brent crude, which sets the price for oil imported into the U.S., added $1.21 to end at $106.47 per barrel in London.
In other futures trading, natural gas prices fell by 9.5 cents to end at $3.01 per 1,000 cubic feet. Heating oil added 2.1 cents to finish at $2.89 per gallon, while wholesale gasoline rose 7.4 cents to end the week at $2.89 per gallon.