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Update on the latest business

Posted September 22

FINANCIAL MARKETS

Stocks rise

Stocks are climbing in midday trading on Wall Street, helped by a jump in prices for crude oil and other commodities.

High-dividend payers like real estate and phone companies are rising, a day after the Federal Reserve said it would keep interest rate near their historic lows.

Bond prices rose. The yield on the 10-year Treasury note fell to 1.61 percent.

UNEMPLOYMENT BENEFITS

US claims for jobless aid slide to lowest level since July

The number of Americans applying for unemployment benefits fell last week to the lowest level since July, more evidence that U.S. workers are enjoying job security.

The Labor Department says jobless claims slid by 8,000 to a seasonally adjusted 252,000. That matched the level in mid-July, which was the lowest since April. The less-volatile four-week average fell by 2,250 to 258,500.

Weekly claims have come in below 300,000 for 81 straight weeks, longest such streak since 1970.

Applications for unemployment benefits are a proxy for measuring layoffs. The low level of claims suggests that companies are holding onto staff.

The U.S. job market has been solid despite lackluster economic growth. Unemployment is at a healthy 4.9 percent, and employers have added 204,000 jobs a month over the past year.

MORTGAGE RATES

US average 30-year mortgage rate declines to 3.48 percent

Long-term U.S. mortgage rates edged lower this week.

Mortgage giant Freddie Mac says the average for the 30-year fixed-rate mortgage declined to 3.48 percent from 3.50 percent last week. The benchmark rate is down from 3.86 percent a year ago, and is close to its all-time low of 3.31 percent in November 2012.

The 15-year fixed mortgage rate eased to 2.76 percent from 2.77 percent.

Prices of long-term U.S. Treasury bonds rose, pushing their yields lower, as investors awaited the decision of the Federal Reserve Wednesday on interest rates. The Fed kept its key interest rate unchanged but signaled that it likely will raise rates before year's end. Long-term mortgage rates tend to track the yield on 10-year Treasury notes.

HOME SALES

US home sales dip in August as inventories plummet

Americans bought fewer homes in August, as a worsening inventory shortage appears to be pushing prices higher and sales totals lower.

The National Association of Realtors says sales of existing homes slipped 0.9 percent last month to a seasonally adjusted annual rate of 5.33 million, the second straight monthly decline. The setbacks occurred after a period of gains that have lifted home sales up 3 percent so far this year. But fewer people are listing their homes on the market, a problem that has intensified over the past year to limit sales.

The number of homes on the market has plunged 10.1 percent from a year ago to 2.04 million. As a result, prices are climbing. The median home sales price increased 5.1 percent from a year ago to $240,200.

LENNAR-WCI-ACQUISITION

Lennar and WCI join to create powerhouse in Florida

Lennar will spend $643 million to acquire luxury homebuilder WCI Communities Inc., tying up two of the largest home construction companies in Florida.

Despite the monthly decline reported this week by the Commerce Department, construction activity has accelerated for much this year. Builders are increasingly optimistic about sales growth, a reflection of how steady job gains are leading more Americans to purchase new houses and sign leases for new apartments.

On Tuesday, Lennar reported a 5 percent jump in third-quarter profit and its revenue continues to rise as it delivers more homes. Deliveries climbed 7 percent to 6,779 homes, while new orders rose 8 percent to 7,018 homes. Lennar also said that there was a 3 percent increase in the average sales price of homes delivered.

The deal, for $23.50 per share, marks a 37 percent premium to WCI's closing price Wednesday. It will be half in cash and half in Lennar stock.

The boards of both companies have approved the deal, which must still get the nod from WCI shareholders.

BUFFETT-WELLS FARGO

Buffett won't discuss Wells Fargo scandal until November

Billionaire Warren Buffett doesn't plan to talk about employee misconduct at Wells Fargo before November, when he is required to file a quarterly update on its stock portfolio.

Buffett's Berkshire Hathaway owns roughly 10 percent of the bank.

Buffett told the Fox Business Network he plans to remain silent for now on misconduct at Wells Fargo that led to the firings of about 5,300 bank employees and a $185 million fine.

Regulators determined that bank employees opened millions of unauthorized accounts to meet sales quotas.

Berkshire has been Wells Fargo's largest shareholder, and Buffett has praised CEO John Stumpf.

TRUMP-ENERGY

Trump calls for rolling back energy regulations

Donald Trump is calling for a dramatic expansion in domestic energy exploration, combined with a dramatic scale-back of regulations meant to protect the environment and public land.

The Republican presidential nominee was speaking Thursday at the Shale Insight conference in Pittsburgh.

He said that as president, he would open federal lands and off-shore areas for energy exploration.

He also wants to eliminate regulations intended to protect America's fresh water and limit carbon emissions from power plants.

Trump has advocated an "America first" energy policy.

He is contrasting that with Democratic rival Hillary Clinton, who has advocated a move away from dirty fossil fuels.

"It's war," he says.

UNITED STATES-CLIMATE CHANGE

US, others call for rapid phase-out of heat-trapping HFCs

The United States and other countries are ramping up pressure on world leaders to quickly phase out the use of a chemical contributing to global warming.

The White House says more than 100 countries are calling for an "early freeze date" for hydrofluorocarbons, or HFCs. The freeze date is when nations must cap their use of HFCs, refrigerants that are more potent heat-trapping gases than carbon dioxide.

Secretary of State John Kerry is hosting a gathering of the countries Thursday in New York.

The countries are trying to finalize a deal to add the chemical to a global ozone treaty. They're hoping to adopt the amendment next month in Rwanda.

The White House says philanthropic groups including the Hewlett Foundation and Bill Gates are pledging $53 million to energy efficiency.

HIDDEN GULF SPILL

Accord reached on documents in ongoing Gulf leak

Environmental attorneys and an energy company have agreed to work out differences over the confidentiality of documents concerning an ongoing oil leak in the Gulf of Mexico from an offshore site damaged by Hurricane Ivan in 2004.

Environmental groups and Taylor Energy agreed during a Thursday federal court hearing to negotiate supplemental language for a 2015 settlement agreement over how and when to release information on Taylor's response to the leak.

At issue are volumes of documents that Taylor Energy says include confidential information about oil spill containment technology developed for the company.

A 2015 Associated Press investigation revealed evidence that the leak was worse than the company or the federal government had earlier reported.

Government experts believe oil is still leaking at the site. Taylor has said persistent sheens are coming from residual oil oozing from seafloor sediment.

TESLA-MICHIGAN

Tesla sues Michigan, challenges law requiring dealer sales

Tesla has sued Gov. Rick Snyder and other state officials, challenging a 2014 law that ensures automakers can only sell through franchised dealerships.

The federal lawsuit filed Thursday seeks a declaratory judgment that the "anti-Tesla" law is unconstitutional and an injunction to prevent its enforcement.

Michigan last week denied Tesla's application for a license to sell directly to consumers in Michigan, citing the law that's backed by big auto companies and their dealerships.

Tesla Motors Inc. says it prefers that new legislation be enacted but was told recently by lawmakers that no hearing will be held. Tesla says it will "fight for the rights of Michigan consumers to be able to choose how they buy cars in Michigan."

A spokesman says Snyder doesn't comment on pending lawsuits.

TESLA-AUTOPILOT

Tesla update halts automatic steering if driver inattentive

Tesla says an update to its Autopilot system will disable automatic steering if a driver doesn't keep their hands on the wheel.

Version 8.0 of Tesla's software began moving over the Internet to its electric vehicles Wednesday night.

Earlier versions warned the driver and slowed the car to a stop if no hands were detected on the steering wheel. It's unclear if the cars will still do that. Automatic steering won't resume until the car is parked.

The new version of Autopilot also relies more on radar than cameras. Tesla says the change should help avoid crashes like the one that killed a driver in Florida last May.

Tesla says the software also will move the cars around slower vehicles that are partially off the right side of the road.

VOLKSWAGEN-UNION

UAW competitor at Volkswagen plant loses certification

A group billing itself as a competitor to the United Auto Workers union at the Volkswagen plant in Tennessee has failed to meet minimum enrollment standards under the German automaker's internal labor policy.

Volkswagen announced to workers on Thursday morning that the UAW has once again been verified as representing at least 45 percent of workers at the plant, qualifying the union for the top tier of the policy, which enables the UAW to interact regularly with management and have a meeting space within the plant.

But Volkswagen has declined to engage in collective bargaining with the UAW over wages and working conditions. Meanwhile, the company says the rival American Council of Employees no longer meets its policy's bottom tier, which requires 15 percent representation.

WTO-AEROSPACE DISPUTE

US claims win in dispute with EU over aerospace subsidies

The Obama administration says it has won an important victory in a World Trade Organization dispute with the European Union over subsidies to airplane manufacturer Airbus.

The WTO found in June 2011 that the EU provided billions of dollars in subsidized financing to Airbus. The EU subsequently claimed to have come into compliance, but the United States disagreed and requested that a compliance panel intervene.

The Obama administration says the panel has confirmed the U.S. was correct. Plus, it says the panel found that the EU had provided billions of dollars more in subsidies, causing lost exports worth tens of billions of dollars for Boeing Co.

United States Trade Representative Michael Froman says the panel's finding is "a sweeping victory for the United States and its aerospace workers."

UNITED NATIONS-AVIATION SECURITY

UN to call for stepped up security for planes and airports

The U.N. Security Council is expected to call for stepped up screening and security checks at airports worldwide to "detect and deter terrorist attacks" on civil aviation.

A draft of the Security Council resolution calls on all countries to tighten security at airport buildings, share information about possible threats, and provide advance passenger lists to national authorities.

The Associated Press obtained the draft ahead of the council meeting Thursday. It comes amid growing international concern about attacks on airplanes and airports including in Ukraine, Brussels and Istanbul.

The document expresses the council's concern "that terrorist groups continue to view civil aviation as an attractive target, with the aim of causing substantial loss of life, economic damage" and air links between countries.

TURKEY-US-SECURITY WARNING

US asks citizens to avoid Starbucks, others in Turkish city

The United States has warned its citizens to avoid Starbucks coffee shops and other businesses catering to Westerners in the Turkish city of Gaziantep, near the border with Syria.

In a security warning sent to U.S. citizens Thursday, the U.S. Embassy said Turkish police were investigating a "terror cell" in Gaziantep that could be targeting "shopping centers, Starbucks, Big Chef Restaurants" and other businesses in the city.

The warning did not specify the organization that is under investigation.

Turkey has suffered a series of bombings by Islamic State group or Kurdish militants in the past year, including an IS attack on Istanbul's main airport.

At least 54 people were killed in a suicide bomb attack on a Kurdish wedding in Gaziantep last month. Authorities blamed the attack on IS militants.

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