AP
Business Highlights
Friday October 17, 6:58 pm ET

Home construction falls sharply in September

WASHINGTON (AP) -- Construction of new homes plunged by a bigger-than-expected amount in September as builders slashed production yet again, putting the country on track to build the fewest homes this year in more than six decades.

A barometer of future building also dropped, falling to the weakest level in more than 25 years. Analysts blamed the renewed swoon on the financial crisis which erupted with force this fall, raising new anxieties among potential home buyers and making it harder for builders to get construction loans.

Stocks end back-and-forth session mixed

NEW YORK (AP) -- Wall Street ended a tumultuous two-week run relatively quietly Friday, finishing another back-and-forth session mixed as investors were cheered by signs of easing in the credit markets and managed to absorb lackluster economic news with equanimity. But while there was less volatility than during recent sessions, analysts warned that the market still faces rough times.

The expiration of options contracts helped tug stocks in different directions. Still, the Dow Jones industrial average traded within a narrower range than it had in much of the past two weeks and ended down 127. The market's big rallies on Monday and Thursday gave all the major indexes gains of well over 3 percent for the week -- but that was just a partial recovery from the devastating double-digit drops of the previous week.

$894 million deal ends pain of Pfizer's lawsuits

TRENTON, N.J. (AP) -- Drug giant Pfizer Inc. has reached an $894 million deal to settle the bulk of the lawsuits over its withdrawn pain reliever Bextra, following the lead of rival Merck & Co., which is spending five times as much to settle Vioxx suits.

The Pfizer agreement also would end lawsuits over its popular Celebrex, the only one of the three -- all in the same class of anti-inflammatory drugs and all linked to elevated risk of heart attacks and strokes -- still on the market.

The world's biggest drugmaker said Friday it has agreements in principle to end up to 92 percent of personal injury lawsuits brought by people claiming Bextra and Celebrex caused heart attacks, strokes or other harm.

Mervyns says it will liquidate all stores

NEW YORK (AP) -- Ailing department store chain Mervyns LLC, which had been operating for almost five decades, has become the latest merchant headed for extinction.

The retailer, which filed for Chapter 11 bankruptcy protection in July, said Friday that it plans to begin liquidation sales at its remaining 149 stores and wind down its business. The Hayward, Calif.-based chain said liquidation sales during the holiday season were the best way to maximize value for the company's creditors after exhausting all its options, including the sale of the company.

It also cited a fierce retail environment and declining liquidity as factors forcing the company's liquidation. Mervyns now operates mainly in California and has seen its sales drop further as the state is among the hardest hit by the real estate slump.

Schlumberger 3Q revenue soars; leaner times ahead

HOUSTON (AP) -- Schlumberger reported its revenues jumped 24 percent during the third quarter but the world's largest oilfield services company said Friday that the global economic crisis will undoubtedly take a toll.

With a barrel of oil going for more than $100 for most of the quarter, Schlumberger reported net income of $1.53 billion, or $1.25 per share, compared with $1.35 billion, or $1.09 per share, during the same period last year.

A violent hurricane season cut away 4 cents per share in profits for the quarter, Schlumberger said. Without the disruptions, diluted earnings-per-share would have been $1.29.

Honeywell 3Q profit rises 16 percent

WASHINGTON (AP) -- Honeywell International Inc. said Friday third-quarter earnings rose 16 percent on higher sales in its building controls division but trimmed its 2008 forecast as it prepares for a likely recession and slow growth in foreign markets.

The Morristown, N.J.-based company narrowed its profit forecast for 2008, dropping the top end of its outlook by five cents while raising the low end by a penny. Honeywell now expects earnings to range $3.76 to $3.80 per share on sales of $37.2 billion, short of analysts predictions.

Shares of Honeywell, which makes products such as airplane and fire safety equipment, fell $1.56, or 5 percent, to $29.37 Friday.

Oil rises above $71 on expectations of OPEC cut

NEW YORK (AP) -- Oil prices recovered some ground Friday, rallying above $71 a barrel on speculation that OPEC could slash output in an effort to stop crude's downward spiral. But pump prices kept falling and appeared poised to drop below $3 a gallon nationally -- a level not seen in eight months.

Light, sweet crude for November delivery rose $2 to settle at $71.85 a barrel on the New York Mercantile Exchange after earlier rising as high as $74.30. On Thursday, prices lost $4.69 to settle at $69.85 a barrel.

Despite Friday's modest rally, oil is still down $75 -- or 51 percent -- since catapulting to a record high of $147.27 on July 11.

Europeans call for plan on valuing derivatives

BRUSSELS, Belgium (AP) -- European Union regulators called Friday for a clear plan on valuing some of the shadowy high-risk credit derivative investments that have played a key role in the global financial crisis.

Billions of dollars have been wiped off banks' balance sheets in recent months on fears that some complex investments may be based on assets that are nearly worthless -- such as housing loans that may not be paid back when a recession puts people out of work.

The market for derivatives, whose value has estimated at around $600 trillion, boomed in the last decade as investors sought new ways to parcel out risk.

UPS to raise rates by 5.9 percent on average

NEW YORK (AP) -- United Parcel Service Inc. on Friday announced a general rate increase of 5.9 percent for 2009.

UPS, the world's largest package delivery company will raise ground shipment rates by an average of 5.9 percent and increase rates on air express and international shipments bound from the U.S. by an average of 4.9 percent.

The rate hikes take effect Jan. 5.

By The Associated Press

The Dow fell 127.04, or 1.41 percent, Friday to 8,852.22, after falling 261 points in the early going and rising 302 points -- a 563-point range.

Broader stock indicators showed more modest declines. The Standard & Poor's 500 index fell 5.88, or 0.62 percent, to 940.55, while the Nasdaq composite index fell 6.42, or 0.37 percent, to 1,711.29.

Light, sweet crude for November delivery rose $2 to settle at $71.85 a barrel on the New York Mercantile Exchange after earlier rising as high as $74.30. On Thursday, prices lost $4.69 to settle at $69.85 a barrel.

In other Nymex trading, heating oil futures rose 4.61 cents to settle at $2.1569 a gallon, while gasoline futures rose 4.41 cents to settle at $1.661 a gallon. Natural gas for January delivery rose 9.1 cents to settle at $7.306 per 1,000 cubic feet.

In London, December Brent crude rose $1.76 to settle at $69.60 a barrel on the ICE Futures exchange.