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Business Highlights

Associated Press Updated: June 15, 2015 at 6:03 pm
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Why a higher-rate era may not pain economies and individuals

WASHINGTON (AP) — Consumers, businesses and investors are facing an era of higher borrowing costs as some of the lowest global interest rates in modern history begin to rise.

Yet the message from most economists is a reassuring one: Rates won't likely climb fast or high enough to inflict much damage on economic recoveries in the United States or Europe. Borrowers and investors may feel some short-term pain but should manage fine in the long run.

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Target selling pharmacy, clinic businesses to CVS Health

Target will sell its pharmacy and clinic businesses to CVS Health in the latest twist behind a push from big retailers to become all things to all customers.

The nation's second-largest drugstore chain will pay about $1.9 billion to run Target's in-store health operations and expand what they offer for customers who have come to expect that they will be able to fill a prescription when they shop at Target.

Drugstores, grocers and big retailers like Target and Wal-Mart all have been pushing into each other's turf for several years now, blurring traditional retail boundaries, as they try to attract customers who want to make fewer stops when they go shopping.

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Saudi Arabia opens $585B stock market to foreign investors

DUBAI, United Arab Emirates (AP) — Saudi Arabia's stock market, valued at $585 billion, opened up to direct foreign investment for the first time Monday, as the kingdom seeks an economic boost amid low global oil prices.

The opening of the Tadawul Saudi Stock Exchange allows companies, particularly those that are not in the oil business, to raise money straight from foreign investors, with the goal of expanding businesses, diversifying the economy and creating more jobs for the kingdom's growing population. Before Monday, foreigners only could access the market indirectly, through a local Saudi institution, which was costly and complicated.

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Amid Brazil's economic crisis, consumers struggle with debt

RIO DE JANEIRO (AP) — Francisco Xavier emerges from a payday loan shop, his brow more furrowed with worry than when he entered. His loan request was denied, and he has no idea how he is going to pay out-of-control bills, including credit card payments that gobble up nearly half his monthly income.

Xavier, a taxi driver, is among the rapidly burgeoning ranks of "super debtors" — people who rose into the middle class during Brazil's nearly decade-long boom, but now find themselves drowning in debt as Latin America's largest economy stalls, causing inflation to heat up and unemployment to rise.

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Crowdfunding for kids' summer programs takes off

NEW YORK (AP) — This summer, thousands of young people will go to camp, attend prestigious academic programs and even study filmmaking in Paris thanks to online crowdfunding sites like Kickstarter and Indiegogo.

Donors can help middle schoolers learn computer programming in Pennsylvania, support a leadership academy for Virginia teens or send children of incarcerated California parents to sleepaway camp.

There are no statistics for the number of children and teens whose summer activities are being financed through crowdfunding, but Kelsea Little, a spokeswoman for GoFundMe, said fundraising for summer camps is skyrocketing on the site.

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US judge gives partial victory to ex-AIG CEO in bailout case

WASHINGTON (AP) — A federal judge handed a partial victory to the former CEO of American International Group, who claimed the government's bailout of the insurance giant in the heat of the financial crisis was unfairly punitive.

Judge Thomas Wheeler ruled Monday to validate the allegation made in the lawsuit by former AIG Chairman and CEO Maurice Greenberg. But the judge rejected Greenberg's demand for some $40 billion in damages for himself and other AIG shareholders from the government.

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US factory output down in May, hurt by oil refining cuts

WASHINGTON (AP) — U.S. factory output slipped in May, hurt by a decline in oil refining that overshadowed solid gains by automakers.

The Federal Reserve said Monday that manufacturing output declined 0.2 percent last month, as productivity has basically been flat since January. Manufacturing has been hurt by the stronger dollar, higher oil prices reducing equipment orders and activity at refiners, and previously by cold winter weather at the start of the year.

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Manufacturing in New York state shrinks in June

WASHINGTON (AP) — Factory activity in New York state contracted in June, a sign that manufacturers are likely still held back by a strong dollar and cutbacks in investment by oil and gas drillers.

The Federal Reserve Bank of New York said Monday that its Empire State manufacturing index fell to negative 2 this month, down from plus 3 in May. Any reading above zero indicates expansion.

A measure of new orders also fell into negative territory, evidence that factory output in the state may remain low. Shipments grew but at a slower pace. A gauge of hiring ticked up as manufacturers in the state added jobs at a faster pace.

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Foreign ownership of US Treasury securities drops in April

WASHINGTON (AP) — Foreign holdings of U.S. Treasury securities fell in April, the first setback since October.

Total holdings slipped to $6.14 trillion, down 0.6 percent from the record level of $6.18 trillion in March, the Treasury Department reported Monday.

China, the No. 1 foreign holder of U.S. government debt, boosted its holdings a slight 0.2 percent to $1.26 trillion in April following a 3 percent rise in the previous month. The big March advance allowed China to regain the top spot in foreign ownership of Treasury securities after having relinquished the No. 1 ranking in February.

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Honda adds 1M Civics, Accords to passenger air bag recall

DETROIT (AP) — At the insistence of U.S. safety regulators, Honda is adding more than a million of its most popular vehicles to a growing recall for air bags that can explode with too much force.

The company said Monday it's expanding a previous recall of passenger air bag inflators from high-humidity states to the entire nation. That will add just over a million 2001 to 2005 Civics and 2003 to 2007 Accords to the recall. The two sedans are Honda's No. 2 and No. 3 sellers so far this year in the U.S.

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Paris Air Show kicks off with Airbus-Boeing rivalry

PARIS (AP) — Airbus is betting on big jets as the future of aviation, while rival Boeing is gambling on smaller ones — but both sold scores of planes of all sizes at the Paris Air Show on Monday, defying predictions of slowing demand.

As industry heavyweights gathered in force at the Le Bourget airfield outside the French capital on the opening day of the 51st edition of the world's oldest air show, the informal race between the European and American plane makers produced promises or firm orders for more than 200 aircraft.

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United Technologies announces exit from helicopter business

HARTFORD, Conn. (AP) — United Technologies Corp. announced Monday it is shedding Sikorsky Aircraft, and whether it ultimately sells or spins off the helicopter maker, the union that represents its workers and local officials are confident that the exodus of well-paid manufacturing jobs in Connecticut will not play out again.

Following a three-month review, the aerospace and building systems conglomerate said it will focus on high-technology products for the aerospace and building industries.

Mayor John A. Harkins of Stratford, where Sikorsky is based, doesn't see the manufacturer leaving.

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Vast data warehouse raises HealthCare.gov privacy concerns

WASHINGTON (AP) — A government data warehouse that stores personal information on millions of HealthCare.gov customers is raising privacy concerns at a time when major breaches have become distressingly common.

A government privacy assessment dated Jan. 15 says data "is maintained indefinitely at this time," but the administration said Monday no final time frame has been decided, and the National Archives has recommended a 10-year retention period.

Known as MIDAS, the system is described on a federal website as the "perpetual central repository" for information collected under President Barack Obama's health care law.

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By The Associated Press=

The Dow Jones industrial average fell 107.67 points, or 0.6 percent, to 17,791.17. The Standard & Poor's 500 index slid 9.68 points, or 0.5 percent, to 2,084.13. The Nasdaq composite lost 21.13 points, or 0.4 percent, to 5,029.97.

Benchmark U.S. crude slipped 44 cents to close at $59.52 a barrel in New York. Brent crude, a benchmark for international oil used by many U.S. refineries, declined $1.26 to close at $62.61 in London. Wholesale gasoline fell 2.2 cents to close at $2.10 a gallon. Heating oil fell 2 cents to close at $1.87 a gallon. Natural gas climbed 14 cents to close at $2.90 per 1,000 cubic feet.

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