Update on the latest business

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Associated Press

Posted on November 21, 2012 at 5:02 AM

WALL STREET

Stocks end flat after HP shocker and Fed warning

NEW YORK (AP) — Today brings the last full trading session of the week on Wall Street. The markets are closed Thanksgiving and then Wall Street has an abbreviated session Friday.

Falling oil prices and a surprise announcement of problems at Hewlett-Packard weighed on technology and energy stocks Tuesday. Stocks ended the session little changed.

HP plunged 12 percent after executives said that a company HP bought for $10 billion last year lied about its finances. CEO Meg Whitman said that there were "serious accounting improprieties" at the search-engine company, Autonomy.

The Dow dropped 7 points to close at 12,789. The Standard & Poor's 500 index rose less than a point at 1,388. The Nasdaq composite added a fraction to 2,917.

WORLD MARKETS

Asian stocks fall

BANGKOK (AP) — Asian stock markets were mostly lower today, shedding morning gains after European Union officials failed to release a loan payment to debt-mired Greece and postposed further action until next week.

European finance ministers adjourned a meeting in Brussels without granting Greece the next installment of an emergency bailout loan that has been on hold for months. The $40 billion loan is needed so that Athens can pay its bills and avoid running out of cash.

The aid is being delayed until officials can resolve a dispute over whether to give Greece an extra two years to get to a point where it can independently raise funds on bond markets.

Benchmark crude oil slipped but remained near $87 per barrel. The dollar gained against the euro and the yen.

ECONOMY-DAY AHEAD

Jobless claims, leading indicators due

WASHINGTON (AP) — Before the Thanksgiving holiday, there's some economic data due.

The Labor Department today releases weekly jobless claims. The Conference Board releases the index of leading economic indicators, while Freddie Mac reports on its weekly mortgage rate averages.

HP-AUTONOMY

HP claims fraud prompted $5B overpayment for co.

NEW YORK (AP) — Hewlett-Packard says it's the victim of a multi-billion dollar fraud at the hands of a British company it bought last year that it says lied about its finances.

HP CEO Meg Whitman said executives at Autonomy Corporation PLC "willfully" boosted the company's figures through various accounting tricks, which convinced HP to pay $9.7 billion for the company in October 2011.

Autonomy's former CEO said HP's allegations are false.

HP is now taking an $8.8 billion charge to align Autonomy's purchase price with what HP now says is its real value. HP says more than $5 billion of that charge is due to false accounting.

The revelation is another blow for HP, which is struggling to reinvent itself as PC and printer sales shrink. The company's stock hit a 10-year low during Tuesday trading.

HP's net loss for the fiscal fourth quarter, which ended Oct. 31, amounted to $6.85 billion, or $3.49 per share. That compares with net income of $239 million, or 12 cents per share, in the same period last year.

It was the second mammoth loss in a row for HP. In the third fiscal quarter, it lost a record $8.86 billion, or $4.49 per share. That was due to a charge for another acquisition — that of Electronic Data Systems, a technology consulting service that it bought for $13 billion in 2009. In that case, HP didn't blame improper accounting, just results that didn't live up to expectations.

HOSTESS-BANKRUPTCY

Hostess says talks to stave off shutdown fail

Hostess Brands Inc. lived to die another day.

UNDATED (AP) — The maker of Twinkies said Tuesday that it failed to reach an agreement with its second biggest union. As a result, Hostess plans to continue with a hearing on Wednesday in which a bankruptcy court judge will decide if it can shutter its operations.

The talks between Hostess and The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union came after the company declared last week that it would move to sell off assets in bankruptcy court. The company cited a crippling strike that was started on Nov. 9 by the union, which represents 30 percent of workers.

After making its case to liquidate on Monday, the judge noted that the two sides hadn't tried resolving their differences through mediation. Both sides agreed to mediation on Tuesday.

NEWS CORP-YES NETWORK

News Corp. to acquire stake in Yank' YES Network

NEW YORK (AP) — News Corp. is acquiring a 49 percent stake in the YES Network, a deal which gives the New York Yankees' owners hundreds of millions of dollars and values the channel at $3 billion.

Yankee Global Enterprises, Goldman Sachs and other investors will reduce their ownership as part of the transaction, and the team will receive $500 million.

The agreement raises the value of the YES Network to $3.8 billion in three years, when News Corp. must decide whether to take control. The Yankees also committed to stay on YES Network through 2042, subject to approval of the rights deal from Major League Baseball. The Yankees' existing agreement with YES runs through 2021 and the network has three five-year options.

News Corp., which owns Fox and The Wall Street Journal, may acquire an additional stake in the YES Network after three years that could bring its ownership to 80 percent. Yankee Global Enterprises, the team's parent company, would retain a significant minority stake.

Fox will make a $500 million payment to the Yankees for extending their broadcast rights, of which $300 million will be paid when the deal with News Corp. closes and $200 million in about three years, a person familiar with the situation told The Associated Press, speaking on condition of anonymity because some details of the pact had not been made public. The team's stake in the network will decline from 34 percent to 25 percent.

TIME WARNER-CEO

Bewkes extended as Time Warner CEO through 2017

NEW YORK (AP) — Time Warner says it has extended the term of CEO Jeff Bewkes (BYOO-kus) for another five years through 2017.

Under the terms of the new deal, Bewkes' base salary and bonus target will remain unchanged. The agreement also provides for annual long-term incentive awards that are tied to financial performance and shareholder returns.

The company's lead independent director, Stephen Bollenbach, said in a statement that Bewkes has, in his words, "proven visionary when it comes to navigating the digital landscape."

Bewkes has been chief executive since 2008. He was president and chief operating officer for two years before that, and chairman of the entertainment and networks group from July 2002 to December 2005. He was also chairman and CEO of the premium pay TV channel HBO from May 1995 to July 2002.

WAL-MART-LABOR

NLRB still investigating Wal-Mart dispute

NEW YORK (AP) — Federal labor officials said Tuesday they don't expect to decide before Thursday on whether to seek an injunction on behalf of Wal-Mart Stores Inc. to stop a union-backed group from encouraging worker walk-outs that are expected to culminate Friday. That's the traditional start of the holiday shopping season.

The world's largest retailer, based in Bentonville, Ark., on Friday filed an unfair labor practice charge with the National Labor Relations Board against the United Food and Commercial Workers International Union. It said the demonstrations organized by union-backed OUR Walmart threaten to disrupt its business and intimidate customers and other store workers.

Meanwhile, OUR Walmart filed its own charge on Tuesday with the labor board. It cited attempts by Wal-Mart to deter workers from participating in what the group believes to be legally protected walkouts.

Nancy Cleeland, a spokeswoman at the NLRB, said Monday that the board aimed to move quickly to assess the merit of Wal-Mart's complaint since it involved charges of illegal picketing. If the labor board decides in Wal-Mart's favor, the matter still must go to district court.

JC PENNEY-MOODY'S

Moody's knocks JC Penney ratings 1 step lower

NEW YORK (AP) — Moody's Investors Service is cutting its long-term ratings for J.C. Penney Co. one step lower into non-investment of junk grade status.

Moody's lowered the department store chain's corporate family and probability of default ratings to "B3" from "Ba3." The outlook is "negative."

Moody's says the downgrades reflect its expectation that J.C. Penney's fourth-quarter profitability will take a big hit as a result of the need to clear excess inventory.

Combined with continued sales declines in the fourth quarter, J.C. Penney will end up with significantly lower profits and ultimately a 2012 credit profile that warrants an even lower "Ca" rating, Moody's says.

Earlier this month, J.C. Penney reported a wider-than-expected third-quarter loss on a revenue drop of nearly 27 percent.

GREECE-FINANCIAL CRISIS

Greek PM presses for deal on loan

ATHENS, Greece (AP) — Greece has reacted with dismay to the European Union's failure to agree to release vital rescue loan funds for the debt-ridden country, with the prime minister warning it was not just Greece's future that hangs in the balance.

The delay prolongs uncertainty over the future of Greece, which faces a messy default that would threaten the entire euro currency used by 17 EU nations.

Prime Minister Antonis Samaras stressed that Greece has done what its creditors from the EU and International Monetary Fund required. "Our partners, along with the IMF, also must do what they have committed to doing," he said.

He said that "it is not just the future of our country, but the stability of the entire eurozone" that depend on the success of negotiations in coming days

JAPAN-TRADE

Japan logs 4th straight trade deficit in October

TOKYO (AP) — Japan logged its fourth straight monthly trade deficit in October as the European debt crisis and strained business ties with China over a territorial dispute reduced exports.

The Ministry of Finance said Wednesday that imports exceeded exports by $6.7 billion, the biggest deficit for October since at least 1979, when the ministry began keeping comparable records.

Exports for the month fell 6.5 percent from a year earlier while imports slipped 1.6 percent.

For years, Japan ran huge trade surpluses, which frequently caused trade friction with the U.S. But since last year, Japan has been regularly registering trade deficits as it shifts more production overseas and faces greater competition from Asian rivals such as South Korea, Taiwan and China. The strong yen as also made it expensive for Japan's major automobile and electronics makers to produce at home.

This year, Japan has registered trade deficits every month except February and June.

SUPERSTORM-NIELSEN RATINGS

Superstorm wipes out New York's Nielsen ratings

NEW YORK (AP) — Superstorm Sandy has wiped out New York's Nielsen ratings for the month of November.

The company measuring television ratings says it won't report its New York market results for November because so many of its sample homes were affected by the storm. Right after Sandy hit, some 450 of the 960 homes in the metropolitan area used by the company were out of power or worse.

The ratings are used for bragging rights by local news programs and to set prices for ads run in the New York market. Without the November numbers, the stations will have to negotiate new rates with their advertisers. Nielsen's Pat McDonough says the storm had less of an impact on Nielsen's national sample.

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