Business Highlights

SAN FRANCISCO (AP) - Microsoft Corp. has pounced on slumping Internet icon Yahoo Inc. with an unsolicited takeover offer of $44.6 billion in its boldest bid yet to challenge Google Inc. s dominance of the lucrative online search and advertising markets.
The surprise offer of $31 per share, made late Thursday and announced Friday, seizes on Yahoo s weakness while Microsoft tries to muscle up in a high-stakes battle with Google likely to define the technology landscape for years to come.
In a statement Friday, Yahoo said it will "carefully and promptly" study Microsoft s bid.
With its profits steadily sliding, Yahoo s stock slipped to a four-year low earlier this week and a new management team has been trying to steer a turnaround but sees more turbulence through 2008.
NEW YORK (AP) -- Wall Street capped a week of big gains with another sizable advance Friday after investors set aside anxiety over news that the economy lost jobs last month and focused on Microsoft Corp. s bid for Internet company Yahoo Inc. and a possible rescue plan for the troubled bond insurance sector.
The Dow Jones industrial average and the Standard & Poor s 500 index each rose more than 4 percent for the week, their steepest gains since March 2003.
Stocks fluctuated at times Friday, however, as investors weighed seemingly contradictory readings on the economy. Wall Street was pleased by Microsoft s $44.6 billion bid for Yahoo. Merger news, which often energizes stocks, has been in short supply for months. But the mix of economic news reminded investors of the continuing fallout from the housing and mortgage crisis.
WASHINGTON (AP) -- In a shower of pink slips, U.S. employers cut jobs last month for the first time in more than four years, the starkest signal yet that the economy is grinding to a halt if it hasn t already toppled into recession.
Conditions are deteriorating, according to the latest employment snapshot by the Labor Department, which showed nervous employers slicing payrolls by 17,000. The country hadn t seen such a nationwide job loss since 2003, when employers were still struggling to recover from the last previous recession.
Job losses were widespread in January. Factories, construction companies, mortgage brokers and real-estate firms were among those eliminating jobs -- casualties of the housing bust and credit crunch. The government cut jobs for the first time since last July.
HOUSTON (AP) -- Beating its own record to rack up the largest annual corporate profit in American history, Exxon Mobil Corp. said Friday it earned $40.6 billion for the year, reaping the benefits of crude-oil prices around $100 a barrel.
Exxon Mobil also topped its own record for profit in a single quarter, posting net income of $11.7 billion for the final three months of the year -- about $1 billion more than the same period in 2005, the previous quarterly record.
Chevron Corp., No. 2 behind Exxon Mobil among U.S. oil companies, also had its best year ever in 2007, saying Friday that it banked a profit of $18.7 billion.
KANSAS CITY, Mo. (AP) -- President Bush pressed Congress to pass an economic rescue package, saying Friday s labor report marking the end of a 52-month streak of national job growth was another "troubling" sign that the economy is sputtering.
Bush toured Hallmark Cards Inc. in the nation s heartland to push a plan of tax rebates for millions of people and tax breaks for companies. The stimulus package, passed by the House, has hit roadblocks in the Senate.
The president spoke just hours after the Labor Department reported that employers cut 17,000 jobs in January -- the first such reduction in more than four years.
NEW YORK (AP) -- Oil prices fell sharply Friday, closing well under $90 a barrel after a string of dismal economic reports renewed worries that a possible U.S. recession could stunt oil demand.
Responding to recent price declines, OPEC said Friday it will maintain current oil output levels.
The week ended with the Labor Department reporting that employers cut 17,000 jobs last month, the first reduction in more than four years and a sign that the economy continues to weaken. Construction spending also fell by a record amount, according to the Commerce Department, reflecting a sharp pullback in residential building.
VIENNA, Austria (AP) -- OPEC decided Friday to keep pumping oil at present levels -- a rebuff to Washington and a possible prelude to cutting production as early as next month if the shaky U.S. economy puts a dent in demand.
The decision was taken despite U.S. urging -- backed by other major consumers -- for more oil on the market to cool prices and relieve inflationary pressures that have contributed to fears of a global economic downturn.
But the 13-nation Organization of Petroleum Exporting Countries would not be swayed from arguments that supplies were adequate and that speculators and geopolitical jitters, not oil availability, were driving the market.
WASHINGTON (AP) -- Government regulators said Friday the connection between Pfizer s anti-smoking drug Chantix and serious psychiatric problems is "increasingly likely."
The Food and Drug Administration said it has received reports of 37 suicides and more than 400 of suicidal behavior in connection with the drug. In November, the agency began investigating reports of depression, agitation and suicidal behavior among patients taking the popular twice-daily pill.
The agency s announcement comes two weeks after Pfizer added stronger warnings to the drug. In doing so, the company stressed that a direct link between Chantix and the reported psychiatric problems has not been established, but could not be ruled out.
DETROIT (AP) -- All major automakers except for General Motors Corp. saw their U.S. sales drop in January to start what industry analysts have predicted will be the worst auto sales year in the United States in more than a decade.
GM, led by strong crossover vehicle sales, reported an increase of 2.6 percent in January when compared with the same month last year.
But Toyota Motor Corp., which had seen strong growth last year, said Friday its January light vehicle sales dropped 2.3 percent, to 171,849 in January from 175,850 in January 2006. Its performance still was strong enough to beat Ford for the No. 2 U.S. sales spot.
SHANGHAI, China (AP) -- Alcoa Inc. and Aluminum Corp. of China jointly acquired 12 percent of the shares of global mining company Rio Tinto PLC in a deal believed to be worth $14.05 billion, the companies said Friday.
It is the largest overseas investment ever by a Chinese company, Aluminum Corp. of China said, and could very well obstruct a bid from Anglo-Australian mining giant BHP Billiton for Rio Tinto.
Alcoa said it contributed $1.2 billion (810 million euros) to the total investment.
WASHINGTON (AP) -- The Federal Reserve said Friday it will provide $60 billion in fresh cash to commercial banks in two auctions in February and will keep holding auctions every other week for as long as needed to ease the credit crisis.
The new auctions, to be held on Feb. 11 and Feb. 25, will mark the fifth and sixth times the Fed has used a new auction process announced in December to provide cash-strapped banks with extra reserves.
LOS ANGELES (AP) -- The Walt Disney Co. said on Friday it signed Chief Executive Robert Iger to a new five-year deal that will pay him a base salary of at least $2 million a year through 2013.
He could also receive $10 million or more each year in bonuses.
In a statement Friday, the Burbank, Calif.-based company s board of directors praised Iger s job performance, noting the executive presided over record revenues, net income and earnings per share.
Iger s previous contract was set to expire Sept. 30, 2010. His new contract runs through Jan. 31, 2013.
By The Associated Press
The Dow Jones industrial average rose 92.83, or 0.73 percent, to 12,743.19 after climbing more than 200 points Thursday.
Broader stock indicators also moved higher. The Standard & Poor s 500 index rose 16.87, or 1.22 percent, to 1,395.42, and the Nasdaq composite index advanced 23.50, or 0.98 percent, to 2,413.36.
Light, sweet crude for March delivery dropped $2.79 to settle at $88.96 a barrel on the New York Mercantile Exchange. In London, Brent crude futures settled $2.77 lower at $89.44 a barrel on the ICE Futures exchange.
Heating oil futures decreased 8.02 cents to settle at $2.4489 a gallon a gallon, while gasoline prices lost 7.38 cents to $2.2834 a gallon.
Natural gas futures declined 33.4 cents to settle at $7.740 per 1,000 cubic feet.
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