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Associated Press Updated: October 24, 2014 at 5:45 pm

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Market jolt is reality check for investors

NEW YORK (AP) — Sometimes a little fear is healthy for stock investors.

A violent lurch lower nine days ago knocked the Standard & Poor's 500 index down as much as 7.4 percent from its September peak as fears of a global economic slowdown intensified. Stocks have revived this week, thanks to strong corporate earnings, and on Friday the S&P 500 was marching toward its best performance in nearly two years.

How should investors view this intense flip-flop? As an overdue reminder that stocks aren't a one-way ride up.

While last week's slump doesn't technically count as a correction — defined as a 10-percent drop from a peak — that's how many professional investors view it.

In fact, such sell-offs often provide a base for another move higher in stocks, market observer say.

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Venezuelans brace for slump in oil prices

CARACAS, Venezuela (AP) — The falling oil prices that are providing relief to drivers around the world threaten to bring more misery to the life of Milagro Alvarez and millions of other Venezuelans, whose country depends almost exclusively on oil revenue.

The math teacher has been getting up before dawn each day and rushing out to hunt for disposable diapers, one of scores of products that have been in short supply due to price restrictions and currency controls put in place by the socialist government long before the slide in petroleum prices.

Now Venezuela is suddenly a lot less rich, and many fear those lines will just get longer.

The country with the world's largest oil reserves was struggling to keep shelves filled even when crude was selling for $100 a barrel or more. Now prices for benchmark Brent crude have fallen $28 in the past four months, to $86, the result of too much supply and weaker global demand.

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Out-of-patience investors sell off Amazon

NEW YORK (AP) — Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand strategy flooded into the stock as the company revolutionized shopping, upended the book industry and took on the cloud — even though its vast range of initiatives ate up all the company's profits.

After all, when Amazon.com filed for its IPO 17 years ago, it was very clear: the company would post losses for the "foreseeable future" while it invested in the business to drive bigger and bigger sales. Stockholders seemed to like playing Bezos' long game: shares more than quadrupled between 2010 and 2014 to over $400 apiece.

Lately, they've lost a little patience.

After the Seattle company on Thursday reported a huge third-quarter loss and issued a disappointing holiday forecast, the stock sold off by nearly 10 percent. It's now lost 28 percent of its value since the beginning of the year, closing at $287.06 Friday.

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What you need to know about massive air bag recall

DETROIT (AP) — U.S. investigators, automakers and a parts supply company are trying to figure out why some automobile air bags inflate with too much force, blowing apart metal canisters and sending shards flying at drivers and passengers.

So far, more than 12 million vehicles worldwide with air bags made by Japanese parts supplier Takata Corp. have been recalled for the problem. But safety advocates says as many as 25 million vehicles may be equipped with the faulty air bags in the U.S. alone. There have been recalls in Japan, Europe, China and other areas.

Many of the U.S. recalls have been limited to high-humidity areas in the South, but the boundaries of recall zones vary by manufacturer. All of this has confused car owners and even government safety regulators who published incorrect and incomplete lists of recalled models.

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Enticing low rates, but impact could be limited

WASHINGTON (AP) — With mortgage rates sliding for a fifth straight week, the possibility of locking in a rate below 4 percent is tempting for consumers and could unleash a wave of refinancing. It may even convince some Americans to buy their first home.

Yet there are limits to how far the wave can extend. Millions of homeowners already re-financed in 2013, when the average 30-year mortgage rate stayed below 4 percent until mid-year. And the overall housing market remains hampered by tight mortgage credit, rising home prices and stagnating incomes.

This week the average rate on the 30-year loan fell to 3.92 percent, mortgage company Freddie Mac reported Thursday. The average for a 15-year mortgage, a popular choice for people who are refinancing, retreated to 3.08 percent from 3.18 percent.

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US new-home sales close to flat in September

WASHINGTON (AP) — U.S. sales of new homes were nearly flat in September, after the government sharply revised downward what was initially an August surge in buying.

New-home sales edged up 0.2 percent last month to a seasonally adjusted annual rate of 467,000, the Commerce Department reported Friday. The report also revised down the August sales rate to 466,000 from 504,000.

The pace of sales for newly built homes has improved a mere 1.7 percent so far this year compared to 2013. Only the South has experienced gains in buying year-to-date, while purchases have fallen in the Northeast, Midwest and West.

Housing has struggled to fully rebound since the recession ended more than five years ago. Many potential buyers lack the savings and strong credit history needed to afford a home, causing them to rent or remain in their existing houses instead of upgrading.

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Procter & Gamble taking out its batteries

NEW YORK (AP) — Procter & Gamble plans to remove its batteries and make Duracell a stand-alone company.

The world's largest consumer products maker, which acquired Duracell in 2005, has been trimming its product lineup to focus on its top performers. After it finishes jettisoning more than half its brands around the globe over the next year or two, P&G said it will be left with about 70 to 80 brands.

If a split-off of Duracell occurs, P&G said its shareholders would have the option of exchanging some, none or all of their P&G shares for shares of the new Duracell company.

P&G also makes Tide detergent, Pampers diapers and Olay skin care.

The Procter & Gamble Co., based in Cincinnati, said Friday it prefers a spinoff of Duracell, but that it's considering a sale or other options for Duracell.

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Disney pens love letter to Japan with robot film

TOKYO (AP) — Disney executives call their next film "a love letter to Japanese culture." No wonder: This nation can't get enough of animation, especially Disney's.

Walt Disney Animation Studios is practically bending backward to woo Japanese moviegoers after the stupendous success of "Frozen." The fifth-highest-grossing movie of all time made more than $250 million of its total in Japan alone, nearly a third of its overseas numbers and more than five times what it made in France, according to Box Office Mojo.

"Frozen" is third of all time in Japan, behind "Titanic" and Japanese animation classic "Spirited Away," delivering success that even Disney executives acknowledge was surprising.

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By The Associated Press=

The Dow Jones industrial average rose 127.51 points, or 0.8 percent, to 16,805.41. The S&P 500 gained 13.76 points, or 0.7 percent, to 1,964.58. The Nasdaq composite climbed 30.92 points, or 0.7 percent, to 4,483.72.

Benchmark U.S. crude fell $1.08 to close at $81.01 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 70 cents to close at $86.13 on the ICE Futures exchange in London. Wholesale gasoline fell 2.5 cents to close at $2.182 a gallon. Heating oil fell 1.7 cents to close at $2.482 a gallon. Natural gas rose 0.1 cent to close at $3.623 per 1,000 cubic feet.

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