Business Highlights

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Discounts spur surprising Aug. retail sales gains

NEW YORK (AP) - This year's back-to-school season isn't as big a bust for retailers as they feared - or as last year's - but it's not great either.

Americans are spending only when the item and price are just right, according to August reports from major chains released Thursday that showed shoppers bought a little more than a year ago.

Analysts expect stores will need to keep discounting to get shoppers to spend this fall and for the holiday season while they grapple with job worries and tight credit.

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Data shows jobless claims drop, retail sales rise

WASHINGTON (AP) - A weak economy got a little lift Thursday with new data suggesting companies aren't pursuing mass layoffs and stores are a little busier.

New applications for unemployment benefits declined for a second straight week after rising in the previous three. Retailers reported surprisingly strong sales in August. And more people signed contracts to buy homes.

Economists were mildly encouraged by the news, which followed several downbeat reports on housing and weaker economic growth last week. But few saw signs that the economy is gaining momentum.

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Second Gulf spill puts moratorium back in question

NEW YORK (AP) - Just when America's ban on offshore exploration seemed like it might end, another disaster in the Gulf of Mexico put Big Oil back on the defensive.

An offshore production platform owned by Mariner Energy Inc. caught fire Thursday morning about 200 miles west of BP's blown-out well. The incident raised more doubts in Congress about the risks of offshore drilling.

The Obama administration had been mulling a quick end to its drilling moratorium, now that BP has brought its leaking well under control. White House spokesman Robert Gibbs said the Mariner explosion shouldn't affect a decision on the ban, and he would not link it with BP's well.

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Burger King sets sights overseas after $3.26B sale

CHICAGO (AP) - Burger King's new ruler could help its empire expand.

Burger King Holdings Inc. sealed a deal Thursday to sell itself for $3.26 billion to 3G Capital, an investment firm with strong ties to Latin America. The fast-food chain's chairman and CEO, John Chidsey, said the deal will help it expand more rapidly overseas.

Chidsey, who will become co-chairman of the company after the tender offer is complete, said the $24-per-share deal also brings 3G Capital's experience and contacts abroad.

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Stocks move higher following jobs, housing reports

NEW YORK (AP) - Stocks rose Thursday, extending their gains from the day before, after reports on housing, manufacturing and jobs all indicated that the economy continues to grow.

The Dow Jones industrial average rose 50 points, having jumped 254 on Wednesday thanks to strong reports on manufacturing in the U.S. and China. Broader indexes also rose.

Trading was somewhat muted ahead of the government's closely watched monthly report on employment due out Friday.

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Dell cedes data-storage maker 3Par to HP

SEATTLE (AP) - Dell Inc. is walking away from a bidding contest with rival Hewlett-Packard Co. for data-storage maker 3Par Inc.

Dell said Thursday it won't match HP's offer to pay $33 per share for 3Par, or about $2.07 billion. Dell's decision came barely an hour after 3Par announced it had received Dell's revised offer of $32 per share and then the even stronger bid from HP.

In a statement, 3Par said Dell's revised offer contained new terms that it found unacceptable, including a multiyear reseller agreement with Dell that would remain in effect even if 3Par were to be bought by another company.

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Bernanke: Shut down banks if they threaten system

WASHINGTON (AP) - Federal Reserve Chairman Ben Bernanke told a panel investigating the financial crisis that regulators must be ready to shutter the largest institutions if they threaten to bring down the financial system.

Bernanke also said while testifying before the Financial Crisis Inquiry Commission that it was impossible for the Fed to rescue Lehman Brothers from bankruptcy in 2008 because the Wall Street firm lacked sufficient collateral to secure a loan. Lehman's former chief executive told the panel a day earlier that the firm could have been saved, but regulators refused to provide help.

The Fed chief presented his analysis of the crisis and views on potential systemwide risks as the panel approaches the end of its yearlong investigation into the Wall Street meltdown.

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More Dems buck plan to let taxes increase for rich

WASHINGTON (AP) - Congress seems increasingly reluctant to let taxes go up, even on wealthier Americans.

Worried about the fragile economy and their own upcoming elections, a growing number of Democrats are joining the rock-solid Republican opposition to President Barack Obama's plans to let some of the Bush administration's tax cuts expire.

Democratic leaders in Congress still back Obama, but the willingness to raise taxes is waning among the rank and file as the stagnant economy threatens the party's majority in the House and Senate.

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Oh snap! New baby carrot campaign mimics junk food

NEW YORK (AP) - Baby carrot farmers are launching a campaign that pitches the little, orange, crunchy snacks as daring, fun and naughty - just like junk food.

A group of 50 producers hopes the 'Eat 'Em Like Junk Food' effort starting next week will double the $1 billion market in two or three years.

The goal is to get people to think of baby carrots as a brand they can get excited about - not just a plain, old vegetable. A website, http://www.babycarrots.com, features metal music and deep male voices chanting "Baby. Carrots. Extreme." On social networking site Twitter, the campaign's account suggests people eat them "like there's no tomorrow (maybe there won't be...)"

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By The Associated Press

The Dow Jones industrial average rose 50.63, or 0.5 percent, to close at 10,320.10.

Broader indexes also rose. The Standard & Poor's 500 index rose 9.81, or 0.9 percent, to 1,090.10, while the Nasdaq composite index rose 23.17, or 1.1 percent, to 2,200.01.

Benchmark oil for October delivery rose $1.11 to settle at $75.02 a barrel on the New York Mercantile Exchange.

Natural gas for October delivery lost 1.1 cents to settle at $3.751 per 1,000 cubic feet.

In other Nymex trading in October contracts, heating oil added 2.12 cents to settle at $2.0623 a gallon and gasoline gained 3.25 cents to settle at $1.9216 a gallon.

In London, Brent crude rose 58 cents to settle at $76.93 a barrel on the ICE Futures exchange.