Editors: Bloomberg News moves a combined business/general news budget at 13:30 New York time each business day. Graphics and photos can be found at www.bloomberg.com/photos or www.bloomberg.com/newsfeed.
Stories identified with the prefix PUBLISH in the slug have been shaped for newspaper use, and the suffix -TRIM indicates the original version has been shortened. All move times are New York time. Inquiries should be directed to Jon Bixby in content syndication, firstname.lastname@example.org or 1-212-617-5392. The main number for the department is 1-212-617-4300.
TOP BUSINESS NEWS
U.S. Stocks Fall as Greek Debt Concerns Offset Economic Data
U.S. stocks fell, following the biggest quarterly slump for the Standard & Poor’s 500 Index since 2008, as concern over the Greek debt crisis offset an unexpected rebound in manufacturing and construction spending. Developing. US-STOCKS-FINAL to move by 17:00. By Rita Nazareth. Also see GLOBAL-MARKETS-WRAP, US- OIL-MARKETS.
AMR Falls Most Since 2001 on Recession, Bankruptcy Concern
American Airlines parent AMR Corp. tumbled the most since September 2001 on growing concern the U.S. is nearing a return to recession and that the carrier may be forced to seek bankruptcy protection.
Today’s slide pointed toward a fifth straight drop for Fort Worth, Texas-based AMR, the longest streak in more than two months, and marked its biggest intraday plunge since Sept. 17, 2001. The shares dropped $1.05, or 35 percent, to $1.99 at 1:24 p.m. in New York Stock Exchange composite trading, after falling to $1.75. The stock was halted three times between about 12:58 p.m. and 1:21 p.m.
AMR has led declines this year among the largest U.S. airlines. It is headed toward a fourth consecutive annual loss, spurring bankruptcy speculation, as a slowing economy fuels investors’ belief that air travel will slump, said Ray Neidl, a Maxim Group LLC analyst in New York. Developing. Will update with closing share price by 17:00. By Mary Schlangenstein.
Chrysler Leads Truck-Driven September Results That Top Estimates
Chrysler Group LLC, driven by boosted deliveries of Ram pickups, led September U.S. auto sales gains that exceeded analysts’ estimates. General Motors Co. and Ford Motor Co. also beat estimates on Silverado and F-Series trucks.
Chrysler sales climbed 27 percent to 127,334, according to a regulatory filing, beating seven analysts’ average estimate for a 20 percent increase. GM deliveries rose 20 percent to 207,145 cars and light trucks, and Ford sales increased 9 percent to 174,860, the companies said in separate statements. Developing. Will include Toyota, Honda and industry results.By Craig Trudell and Tim Higgins. Also see MARCHIONNE-LABOR-UAW.
Falling Wages Threatening U.S. as Consumers May Cut Spending
Ninety-one percent of people in the U.S. labor force have a job. That may be the extent of the good news for these Americans, whose incomes tell a darker story.
Take-home pay, adjusted for prices, fell 0.3 percent in August, the third decrease in five months, and personal income dropped for the first time in two years, the Commerce Department reported last week. The declines followed news from the Census Bureau that median household income in 2010 fell to $49,445, the lowest in more than a decade, and the poverty rate jumped to 15.1 percent, a 17-year high.
While policy makers from Federal Reserve Chairman Ben S. Bernanke to President Barack Obama focus on cutting unemployment stuck near or above 9 percent since April 2009, the widespread stagnation in wages may offer a better explanation for the failure of economic growth to accelerate two years after the end of the recession. Workers’ ability to negotiate higher earnings won’t return until the job market strengthens, and flagging confidence has raised the risk that consumers may retrench. 1500. Moved at 4:55. By Sho Chandra and Steve Matthews.
U.S. Economy: Manufacturing Unexpectedly Gains on Exports
Manufacturing in the U.S. unexpectedly accelerated in September, propelled by gains in exports and production.
The Institute for Supply Management’s factory index climbed to 51.6 last month from 50.6 in August, the Tempe, Arizona-based group said today. A level of 50 is the dividing line between growth and contraction. The median forecast of 82 economists surveyed by Bloomberg News projected a drop to 50.5. By Bob Willis.
Another report today showed construction spending in the U.S. unexpectedly climbed in August, led by the biggest jump in state and local government outlays in more than two years. 850. Moved at 12:40. By Bob Willis. Also see ECONOMY-CONSTRUCTION.
Greece Passes Budget Backed by Creditors to Land Aid Payout
The Greek government said it passed a new budget backed by its international creditors, including larger deficits than previously forecast, as the country moves closer to securing an 8 billion-euro ($10.7 billion) aid payout needed to avoid default.
Prime Minister George Papandreou’s Cabinet also passed 6.6 billion euros of austerity measures last night to cut the 2012 deficit to 6.8 percent of gross domestic product, missing the 6.5 percent goal previously set with the European Union, International Monetary Fund and European Central Bank, known as the troika. Finance Minister Evangelos Venizelos previously said Greece would miss the targets. 940. Moved at 9:15. By Marcus Bensasson and Maria Petrakis
UnitedHealth Uses Cheap Hearing Aids to Boost Medicare Sales
UnitedHealth Group Inc., the largest U.S. health insurer by revenue, said it will sell a line of low-cost hearing aids to at least 36 million Americans with hearing loss in the first such program offered by an insurer.
The devices will be available to UnitedHealth customers through Medicare managed care and prescription drug plans for no out-of-pocket cost to some consumers and a co-pay of up to $649 for others depending on their plan, the company said in a statement. Hearing aids typically sell for from $2,000 to $4,000, according to the Minnetonka, Minnesota-based insurer. 680. Moved at 10:10. By Pat Wechsler.
Apple Cedes Surging India Smartphone Market to Nokia-RIM: Tech
Apple Inc., the world’s largest smartphone maker, is having trouble selling iPhones in India, a market with 602 million active subscribers.
Apple, which will introduce a new iPhone version tomorrow, ships fewer handsets to the world’s second-largest mobile-phone market than it does to Norway. Nokia Oyj and Research In Motion Ltd. sell more devices in India, where smartphone shipments are forecast to grow almost 70 percent a year until 2015, helping mitigate their market-share losses in the U.S. and Europe.
Sales for the world’s biggest company by market value are hindered because Indian wireless carriers, which started third- generation networks this year, have yet to offer nationwide services fast enough to take advantage of iPhone features, said Gus Papageorgiou, an analyst at Scotia Capital Inc. in Toronto. 960. Moved at 5:30. By Ketaki Gokhale.
Groupon’s Stumbles May Force Company to Pare Back Size of IPO
Groupon Inc., the largest online-coupon site, may have to settle for a smaller initial public offering as management gaffes, restated results and regulatory scrutiny leave investors leery of owning the stock.
The valuation might need to drop to as low as $3 billion to $5 billion to entice shareholders, said Josef Schuster, founder of IPOX Schuster LLC, which invests in IPOs. That’s a fraction of $25 billion that was said to be discussed as a potential valuation when Groupon met with underwriters earlier this year. It’s also below the $6 billion Google Inc. offered last year. 950. Moved at 9:00. By Douglas MacMillan. Embargoed for use at 12:01 a.m. Eastern time on Oct. 4.
Yahoo Strikes Alliance With ABC News as Alibaba Weighs Offer
Yahoo! Inc., the most-visited U.S. Web portal, struck a partnership with ABC News as China’s Alibaba Group Holding Ltd. said it may be interested in acquiring Yahoo.
ABC News, part of Walt Disney Co., will become the leading provider of news for Yahoo! News and editorial teams from both organizations will collaborate on stories for both websites, the companies said in a statement today. Yahoo and ABC News will also combine bureaus in New York, Washington and Los Angeles, they said. 520. Moved at 10:20. By Edmund Lee and Douglas MacMillan.
TOP GENERAL NEWS
U.S. Budget Aides Had ‘Significant Concerns’ About Solyndra
Officials at the White House Office of Management and Budget expressed “significant concerns” about the Energy Department’s oversight of Solyndra LLC last year, well before the solar panel maker filed for bankruptcy on Sept. 6.
A memo released by staff for Democrats on the House Energy and Commerce Committee showed officials from the Energy Department disagreed with the OMB assessment, saying that a new manufacturing plant being built with the help of a $535 million U.S. loan guarantee awarded in September 2009 was on time and on budget. 330. Moved at 13:20. By Jim Snyder.
Syrian Forces Kill 10 as Opposition Unites Against Assad
Syrian forces killed at least 10 protesters demanding the ouster of President Bashar al-Assad as opposition groups set up a council to coordinate efforts to end his 11-year rule.
The Syrian National Council will include the head of Syria’s Muslim Brotherhood, an Islamic political party banned in the country, as well as Kurdish and other groups, Burhan Ghalioun, a political sociologist at Paris’s Sorbonne University and member of the council, told reporters in Istanbul yesterday. Assad’s crackdown on dissenters threatens the country with civil war, he said. 630. Moved at 8:35. By Massoud A. Derhally and Emre Peker.
Navy Trims Lockheed Role in Largest Missile Launcher System
The Navy is taking over management control and reducing Lockheed Martin Corp.’s role in a bid to cut costs on the sea service’s largest missile launching system.
Instead of paying Lockheed to acquire and integrate the components of the Mark 41 Vertical Launching System, as it has since the 1980s, the Navy is buying the mechanical launch platform directly from London-based BAE Systems Plc, formerly a Lockheed subcontractor.
Lockheed, based in Bethesda, Maryland, will continue to provide and install electronics, which account for about 55 percent of the missile launcher’s production cost, said Toan Nguyen, the Navy’s program manager for the system. BAE’s portion accounts for the other 45 percent.
The shift to in-house integration will result in “significant” savings because the Navy will avoid fees Lockheed charged to acquire equipment and labor costs it billed for overseeing BAE’s work, said Captain Timothy Batzler, the Navy’s major program manager for surface ship weapons, in a Sept. 12 interview. 1000. Moved at 11:10. By Nick Taborek. Editors: this Bloomberg Government story moved earlier and is being made available to newspapers today.
GRAPHIC: BGOV_LOGO_07251. Bloomberg Government logo Size: 1C X 2in. (45.9 mm X 50.8mm). Available now.
Infection Detection Wins Nobel Prize for Three Scientists
Three scientists won the Nobel Prize in medicine for research illuminating how the body’s immune system recognizes infection and marshals an attack against it, an award that came three days too late for one of the men.
Jules A. Hoffmann, born in Luxembourg, and Bruce A. Beutler, an American, will share half the 10 million-kronor ($1.5 million) award for studying gene mutations that helped explain how the body activates its first line of defense against microscopic invaders, the Nobel Assembly said today in a statement. Ralph M. Steinman, born in Canada, died before learning that he was to receive the other half of the award for his research into cells that regulate and help adapt the defense mechanisms. 1080. Moved at 12:35. By Naomi Kresge, Reg Gale and Albertina Torsoli.
One in 53 West Virginia Drivers to Hit a Deer, State Farm Says
One in 53 drivers in West Virginia will probably hit a deer in the next 12 months as motorists navigate roads that wind through forests, according to State Farm Mutual Automobile Insurance Co.
The state had the highest rate of such collisions in the 12 months ended June 30, according to a statement today from Bloomington, Illinois-based State Farm, the largest U.S. auto insurer. West Virginia was the most crash-prone state for the fifth straight year, and the latest rate compares with 1 in 42 in last year’s report, according to the company. 440. Moved at 12:05. By Maryellen Tighe.
BUSINSES NEWS FEATURES
Koch Brothers Flout Law Getting Richer With Secret Iran Sales
In May 2008, a unit of Koch Industries Inc., one of the world’s largest privately held companies, sent Ludmila Egorova- Farines, its newly hired compliance officer and ethics manager, to investigate the management of a subsidiary in Arles in southern France. In less than a week, she discovered that the company had paid bribes to win contracts.
She immediately notified her supervisors in the U.S. A week later, Wichita, Kansas-based Koch Industries dispatched an investigative team to look into her findings, Bloomberg Markets magazine reports in its November issue.
Egorova-Farines wasn’t rewarded for bringing the illicit payments to the company’s attention. Her superiors removed her from the inquiry in August 2008 and fired her in June 2009, calling her incompetent, even after Koch’s investigators substantiated her findings. She sued Koch-Glitsch in France for wrongful termination.
Koch-Glitsch is part of a global empire run by billionaire brothers Charles and David Koch, who have taken a small oil company they inherited from their father, Fred, after his death in 1967, and built it into a chemical, textile, trading and refining conglomerate spanning more than 50 countries.
Koch Industries is obsessed with secrecy, to the point that it discloses only an approximation of its annual revenue -- $100 billion a year -- and says nothing about its profits. 3550. Moved at 9:55. By Asjylyn Loder and David Evans.
PHOTO: The cover of the November 2011 issue of Bloomberg Markets magazine.
Marchionne Risks Chrysler Arbitration Over Union Contract: Cars
Chrysler Group LLC Chief Executive Officer Sergio Marchionne is pressing the United Auto Workers for a cheaper contract than his rivals, taking a hard-line stance that may push the talks into arbitration.
Marchionne wrote a letter criticizing UAW President Bob King for his efforts. When talks have stumbled, he has declared new deadlines, rather than open-ended extensions. And now, he wants to remove a cap on the number of entry-level workers, according to two people familiar with the negotiations.
“He has taken a harder line and Chrysler is in a different situation because their balance sheet isn’t as beautiful and the profits haven’t started to fall in,” said Kristin Dziczek, a labor analyst with the Center for Automotive Research in Ann Arbor, Michigan. 1280. Moved at 11:15. By Tim Higgins, Keith Naughton and Tommaso Ebhardt.
Google Takes Page From Sunday Newspaper With New ‘Circulars’ Ads
Google Inc. is on a quest to make Internet advertising look more like the Sunday paper.
The online-search giant is working with advertisers such as Best Buy Co. and Macy’s Inc. to create Web-based circulars, similar to the ad inserts included in newspapers. The new service will be available starting tomorrow, Mountain View, California-based Google said.
“Retail in general is a large category for us,” Nick Fox, vice president of product management at Google, said in an interview. “They’re trying to understand what the answer is in the digital age to the offline print circular. They’re trying to understand how to get their online visitors into their stores. And this is our answer to that.” 370. Moved at 9:00. By Brian Womack. Embargoed for use at 12:01 a.m. Eastern time on Oct. 4.
Jim Beam Maker Chases Women With Skinnygirl Cocktails: Retail
Beam Inc., the newly constituted maker of Jim Beam bourbon, has decided to chase women.
Having spent 216 years catering to guy’s guys -- tattooed singer Kid Rock is a pitchman -- Beam is touting Courvoisier cognac infused with red wine, tart Pucker vodka and low-calorie Skinnygirl cocktails. Beam becomes a separately traded company tomorrow, after splitting from Fortune Brands Inc.
“Two years ago, 100 percent of our marketing was geared to men,” Global Chief Marketing Officer Kevin George said in an interview. “We weren’t talking to women in any specific way.”
Not that Beam Chief Executive Officer Matt Shattock, 49, is abandoning men. He aims to boost sales faster than the industry with higher-margin versions of existing brands, such as Beam Devil’s Cut and Makers 46. He also wants to expand Beam, Teacher’s Scotch whisky and other primary brands overseas. 850. Moved at midnight. By Duane D. Stanford.
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