National Briefing

Tuesday, July 22, 2008

INTERNET

Comcast Pressured Over Porn

New York's attorney general notified Comcast that the state will take legal action if the company -- the nation's second-largest Internet service provider -- doesn't agree to eliminate access to child pornography.

Attorney General Andrew Cuomo wants major Internet providers to agree on steps to remove newsgroups that contain child pornography and purge their servers of Web sites that contain child porn. New York has already reached such agreements with AT&T, AOL, Verizon Communications, Sprint Nextel and Time Warner Cable.

Comcast said in an e-mailed statement that it joined with other cable operators and 48 state attorneys general to sign a separate agreement on child-pornography prevention last week and that it anticipated signing Cuomo's code of conduct as well.

AUTOMOTIVE

Ford Expands Buyouts

Ford is giving hourly workers at 17 facilities another round of buyout and early retirement offers in an ongoing effort to match production with slumping sales. The Dearborn automaker said the buyout offers begin July 28 at facilities in Michigan and Ohio, including plants that have temporarily shut down or eliminated shifts. They include truck and sport-utility vehicle assembly plants, and stamping and parts operations.

Earlier this year, Ford announced corporate-wide buyout and early retirement offers for U.S. hourly workers. But only 4,200 took the offers, far below what the company had wanted.

MORTGAGE FINANCE

FDIC Sued Over Subprime Loans

The Federal Deposit Insurance Corp., which insures U.S. bank deposits, made subprime mortgage loans to borrowers in 2001 and 2002 that violated guidelines, according to a lawsuit by Beal Bank.

The FDIC made the loans after it took over Superior Bank as conservator in 2001 and operated its subprime mortgage business, according to court documents. Beal Bank sued in 2002, saying about a quarter of the 5,315 loans it bought from the regulator were defective.

"The loans sold to Beal, including the loans originated by the FDIC itself, violated Old Superior and New Superior's underwriting guidelines and almost every consumer protection and fair lending law, regulation and standard," Beal said in a court filing.

PHARMACEUTICAL

Cholesterol Drug Fails in Study

Merck and Schering-Plough's cholesterol drug Vytorin failed to prevent complications from heart-valve disease, a study showed. Shares of Schering fell 12 percent, and Merck dropped 6 percent.

Vytorin prescriptions have dropped since an earlier study found it worked no better than Zocor, another Merck drug and an ingredient in Vytorin, in reducing plaque buildup in the brain's main artery.

The two companies delayed releasing quarterly results until the end of the day to allow researchers to discuss the findings with reporters and analysts. Merck said its second-quarter profit rose 5 percent, to $1.77 billion, as it cut costs to offset falling sales of Vytorin, Zetia and asthma drug Singulair. Overall, revenue fell 1 percent, to $6.05 billion.

Schering-Plough's second-quarter profit dropped 23 percent, to $398 million on one-time charges. Sales rose 55 percent to $4.92 billion.

EARNINGS

Bank of America has become the latest in a string of big banks whose second-quarter earnings, while hurting from the impact of the credit crisis, still managed to beat Wall Street expectations. The company said that its profit fell 41 percent, to $3.41 billion from $5.76 billion in the comparable period a year earlier. Revenue grew 3.5 percent to $20.32 billion. The nation's second-largest bank said losses in its struggling mortgage operations were offset by gains in other parts of the company.

Texas Instruments reported a 4 percent drop in its second-quarter profit. Profit for the period ended June 30 was $588 million. Revenue declined 2 percent, to $3.35 billion. The chipmaker said a weakened economy and slower sales for cellphone chips dragged earnings down.

American Express said its second-quarter profit slid 38 percent due to a decline in consumer spending and deteriorating credit indicators. Profit for the period ended June 30 was $653 million, and revenue rose 8 percent, to $7.48 billion.

TREASURY BILLS

T-bill rates fell. The discount rate on three-month Treasury bills auctioned yesterday fell to 1.52 percent from 1.61 percent last week. Rates on six-month bills fell to 1.92 percent from 1.955 percent. The annualized return to investors is 1.547 percent for three-month bills, with a $10,000 bill selling for $9,961.58, and 1.966 percent for a six-month bill selling for $9,902.93. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 2.21 percent last week from 2.25 percent two weeks ago.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.