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Business Highlights

Posted September 16

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Americans take on more mortgage debt as housing recovers

The Fed's quarterly report on household wealth showed that Americans' net worth climbed 1.2 percent during the April-June quarter, to $89.1 trillion.

Stock and mutual fund portfolios increased 2.3 percent to $21.2 trillion. Housing wealth rose 1.9 percent to $25.6 trillion. The value of checking and savings accounts, as well as pension entitlements, also climbed. Mortgage debt rose 2.5 percent in the second quarter at a seasonally adjusted annual rate, the biggest quarterly gain in more than eight years.

Household wealth, or net worth, reflects the value of homes, stocks and other assets minus mortgages, credit card debt and other borrowing.

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Sit-down chains suffer as diners opt for convenience

Customers have been walking away from sit-down chains as convenience and affordability take precedence.

Ruby Tuesday said this week that its CEO is resigning, and the chain forecast another quarter of lower sales as it closes locations. It's the latest of several established restaurant players that are retrenching, changing management or scrambling to adapt as people have more food choices all around them.

Those suffering the most appear to be the ones where people sit down for waiter service and pay more.

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Deutsche Bank: No plan to pay $14B Justice Dept. settlement

Deutsche Bank AG said Friday it does not intend to pay $14 billion to settle civil claims with the U.S. Department of Justice for its handling of residential mortgage-backed securities and related transactions.

The Frankfurt, Germany-based lender said negotiations over the amount of the settlement are just beginning.

Deutsche Bank is among many financial institutions investigated over dealings in shoddy mortgages in the run-up to the 2008 financial crisis. The government has accused the banks of misleading investors about the quality of their loans.

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Software company says it warned Tesla

The company that made the camera and computer system for Tesla Motors' semi-autonomous Autopilot says the electric car maker ignored its warnings of safety problems.

Mobileye said Friday that it warned Tesla, prior to the release of Autopilot, not to allow drivers to use the system without their hands on the steering wheel. The system Tesla rolled out in the fall allows drivers to remove their hands, while the car takes control.

Mobileye's statement escalates a public spat with Tesla and will almost certainly draw the interest of two federal agencies investigating the death of a driver while using Autopilot in a May crash in Florida. At issue is whether Tesla rolled out the system before it was ready.

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Sinkhole leaks fertilizer plant's water into Florida aquifer

More than 200 million gallons of contaminated waste water from a fertilizer plant in central Florida leaked into one of the state's main underground sources of drinking water after a massive sinkhole opened up beneath a storage pond, a phosphate company said Friday.

Mosaic, the world's largest supplier of phosphate, said the hole opened up beneath a pile of waste material called a "gypsum stack." The 215-million gallon storage pond sat atop the waste mineral pile. The company said the sinkhole is about 45 feet in diameter.

Mosaic says it's monitoring groundwater and has found no offsite impacts.

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Johnson & Johnson to buy Abbott's vision unit for $4.33B

Johnson & Johnson says it is paying more than $4.3 billion in cash to buy the eye health unit of Abbott Laboratories to boost its vision business.

The unit, called Abbott Medical Optics, makes lasers and other equipment used for cataract surgery and laser vision correction procedures. It also makes eye drops and contact lens cleaners.

Johnson & Johnson says the purchase will enter it into the cataracts surgery market. The New Brunswick, New Jersey, company says the deal will also help its vision business, which includes Acuvue contact lenses.

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House panel to probe Wells Fargo opening of accounts

A House panel is starting an investigation of Wells Fargo amid a growing scandal over its opening of millions of unauthorized accounts.

The House Financial Services Committee on Friday announced an investigation of the allegedly illegal activity by Wells Fargo employees to meet aggressive sales goals as well as the role of federal regulators in the debacle.

California and U.S. regulators fined San Francisco-based Wells Fargo & Co. a combined $185 million last Thursday. The bank says it has refunded to customers $2.6 million in fees charged for products that were sold without authorization.

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Chipotle exec back on job after cocaine possession charges

Chipotle says its top marketing executive is back on the job after he was placed on leave this summer due to drug possession charges.

Mark Crumpacker is Chipotle's chief creative and development officer and had been in charge of the company's efforts to win back customers after an E. coli outbreak sent sales plunging.

Chipotle Mexican Grill Inc. placed Crumpacker on leave in June after a news report said he was one of the customers named in a New York cocaine ring indictment. The 53-year-old executive turned himself to face cocaine possession charges on July 5.

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US consumer prices ticked up 0.2 percent in August

U.S. consumer prices edged up 0.2 percent in August as a surge in medical care offset flat readings for food and energy.

Core inflation, which excludes the volatile categories of food and energy, rose 0.3 percent, the Labor Department reported Friday. It was the biggest monthly increase since February. The climb in core inflation was led by a record jump in drug prices and the biggest rise in doctor and hospital charges in a quarter-century.

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FAA contemplating whether millions of drones will fill skies

So many people are registering drones and applying for drone pilot licenses that federal aviation officials said they are contemplating the possibility of millions of unmanned aircraft crowding the nation's skies.

Earl Lawrence, director of the FAA's drone office, said new registrations are coming in at a rate of 2,000 a day. By comparison, the FAA says there are 260,165 manned aircraft registered in the U.S. Since the Federal Aviation Administration created a drone registration system, more than 550,000 unmanned aircraft have been registered with the agency.

The FAA now forecasts there will be more than 1.3 million licensed drone pilots by 2020.

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AP, other media sue FBI for details on iPhone hacking tool

The Associated Press and two other news organizations sued the FBI on Friday to learn who the government paid and how much it spent to hack into an iPhone in its investigation of last year's San Bernardino, California shooting.

The lawsuit seeks records about the FBI's contract with an unidentified vendor who provided a tool to unlock the phone used by Syed Rizwan Farook, who with his wife killed 14 people at a holiday gathering of county workers in December 2015.

The mysterious transaction cut short a legal dispute in which the government sought to force Apple Inc. to unlock the phone.

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The Dow Jones industrial average fell 88.68 points, or 0.5 percent, to 18,123.80. The Standard & Poor's 500 index lost 8.10 points, or 0.4 percent, to 2,139.16. The Nasdaq composite fell 5.12 points, or 0.1 percent, to 5,244.57.

Benchmark U.S. crude lost 88 cents to $43.03 per barrel in New York. Brent crude, used to price international oils, fell 82 cents to $45.77 per barrel. Heating oil fell 1 cent to $1.41 a gallon, wholesale gasoline rose 3 cents to $1.46 a gallon and natural gas rose 2 cents to $2.948 per 1,000 cubic feet.

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