Business Highlights

Stocks rise on oil price drop, mixed economic data

NEW YORK (AP) — The stock market notched its second straight daily advance Thursday, with investors assuaged by a pullback in oil prices and some better-than-expected economic data.

Wall Street has been worried about cash-strapped consumers paring back their spending, so it was pleased that the energy markets gave up early gains that briefly drove crude oil above $125 a barrel.

In other positive signs, the Philadelphia Federal Reserve said regional manufacturing activity is contracting in May at a much slower pace than in April, while major companies including General Electric Co. and CBS Corp. were making deals.

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Icahn to Yahoo board: Sell to Microsoft or leave

SAN FRANCISCO (AP) — Spurred on by outraged shareholders, activist investor Carl Icahn notified Yahoo Inc. Thursday that he will lead a revolt to oust Chief Executive Jerry Yang and the rest of the Internet company's board unless they renew negotiations with Microsoft that fell apart May 3 when the two sides couldn't agree on a price.

To pressure Yahoo, Icahn has nominated an alternate slate of directors to replace the current board in an election scheduled July 3 at Yahoo's annual meeting.

If the uprising is successful, an Icahn-led board presumably would fire Yang as CEO and try to negotiate a sale to Microsoft.

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Industrial output falls, second time in 3 months

WASHINGTON (AP) — Industrial output plunged in April as factories making everything from autos to heavy machinery felt the adverse effects of the weak economy.

Analysts held out hope that production will revive in the second half of the year, helped by the government's economic stimulus checks.

Industrial production dropped 0.7 percent last month, the Federal Reserve reported Thursday, more than double the decline that economists had expected.

Manufacturing output dropped 0.8 percent, with half of that weakness coming from large cutbacks in auto production.

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Bernanke: Banks must get better at foreseeing risk

WASHINGTON (AP) — Commercial banks and other financial institutions need to beef up their ability to detect and protect themselves against risks like the credit and mortgage debacles, Federal Reserve Chairman Ben Bernanke said Thursday.

The trio of crises — housing, credit and financial — have exposed weaknesses in financial firms' so-called risk-management practices. That is their ability to sufficiently detect and hedge against risks.

Banks and other financial players have racked up multibillion-dollar losses when investments in complex mortgage-backed securities soured with the collapse of the housing market.

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Oil falls as options expire; gas prices rise

NEW YORK (AP) — Oil futures ended a whipsaw session slightly lower Thursday as the expiration of options played havoc with prices, driving crude near record high levels at times and down by more than $3 a barrel at others.

Retail gas prices, meanwhile, advanced past $3.77 a gallon.

Contributing to the volatility, the June crude oil contract expires next week. Oil prices sometimes trade erratically as investors square positions ahead of a contract expiration.

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CBS in $1.8B deal for online news, info site CNet

NEW YORK (AP) — Media and entertainment company CBS Corp. is buying CNet Networks Inc., an online news and information provider, for $1.8 billion in cash in its latest bid to expand its reach on the Internet, the companies announced Thursday.

The price of $11.50 per share represents a massive premium of 45 percent over CNet's closing stock price on Wednesday, and appears to get CNet out of a nasty battle with one of its largest shareholders, which had been agitating for a shake-up at the company after its stock slumped.

Like other media companies, CBS has been working quickly to expand its online audience as more viewers and advertisers go there.

The CNet acquisition is the largest since the company brought on the technology executive Quincy Smith in late 2006 to lead its digital strategy.

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Blockbuster swings to 1Q profit on US sales growth

DALLAS (AP) — Blockbuster Inc. said Thursday it swung to a first-quarter profit on lower expenses and improved domestic sales, bolstering the movie rental company chairman's belief that a turnaround plan is working.

The Dallas-based chain said its earnings after preferred dividends totaled $42.6 million, or 20 cents per share, in the three months ended April 6. That compared with a loss of $51.8 million, or 27 cents per share, a year earlier.

A 2.9 percent increase in same-store sales in the U.S. included a jump of nearly 20 percent in merchandise sales, the sort of revenue the company had in mind when it proposed last month to buy electronics retailer Circuit City Stores Inc.

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Department stores hurt by slumping apparel sales

MILWAUKEE (AP) — Department store stalwarts J.C. Penney Co., Nordstrom Inc. and Kohl's Inc. all reported steep drops in first-quarter profits Thursday as Americans snubbed apparel to focus on basic necessities at discounters in a challenging economy.

The three department store chains all predicted the softening sales environment would continue this year, as consumers grapple with soaring food and fuel costs.

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TD Ameritrade selects COO Tomczyk as next CEO

OMAHA, Neb. (AP) — TD Ameritrade Holding on Thursday said its chief operating officer, Fred Tomczyk, will become chief executive in October, replacing Joe Moglia.

Moglia will retire as CEO on Oct. 1 and become chairman of the Omaha, Neb.-based company.

Tomczyk joined the company last year and has overseen technology, retail sales and investment advisory. He worked at TD Bank Financial Group from 2000 to 2007.

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Maverick oilman Pickens puts $2B bet on wind power

HARTFORD, Conn. — Maverick oilman T. Boone Pickens' plan for a mammoth wind farm in the Texas Panhandle is a $2 billion bet that Congress will extend a tax credit critical to the environmentally friendly industry.

Pickens' company, Mesa Power, is purchasing hundreds of wind turbines from General Electric Co. to create the Pampa Wind Project, which will eventually cover 400,000 acres and generate enough power for more than 1.3 million homes.

Pickens said the total cost of the deal will grow to between $10 billion and $12 billion after the initial $2 billion investment in GE's turbine technology.

The entire four-phase project is forecast for completion in 2014. It will eventually have 4,000 megawatts of capacity.

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By The Associated Press

The Dow Jones industrial average rose 94.28, or 0.73 percent, to 12,992.66.

Broader stock indicators advanced more than 1 percent to their highest closing levels since Jan. 3. The Standard & Poor's 500 index rose 14.91, or 1.06 percent, to 1,423.57, and the Nasdaq composite index rose 37.03, or 1.48 percent, to 2,533.73.

Light, sweet crude for June delivery fell 10 cents to settle at $124.12 a barrel on the New York Mercantile Exchange after rising as high as $126.64 earlier in the session, and falling as low as $120.75 later in the day. Oil prices reached a trading record of $126.98 a barrel on Tuesday.

June natural gas futures fell 19.9 cents to settle at $11.399 per 1,000 cubic feet on the Nymex.

In other Nymex trading Thursday, June gasoline futures fell 1.46 cents to settle at $3.1658 a gallon, and June heating oil futures rose 0.46 cent to settle at $3.6224 a gallon.

In London, June Brent crude fell 61 cents to settle at $121.25 a barrel on the ICE Futures exchange.

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