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Business Highlights

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Chinese investors swearing off stocks after price turmoil

BEIJING (AP) — Battered by market gyrations, Chinese small investors are swearing off stocks. That is setting back the ruling Communist Party’s hopes of encouraging widespread stock ownership to help transform its financial markets into tools to propel economic reform.

Despite a rebound in prices from their August lows, no significant new money from small investors has flowed into stocks, according to Guo Yanhong, a market strategist for Founder Securities.

Last year’s Chinese stock boom and disastrous bust has left a legacy of public distrust of financial markets along with a bill the ruling party has yet to disclose for its rescue.

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Even with Iran-Saudi tension, supply dictates price of oil

DALLAS (AP) — A persistent glut of oil is trumping Middle Eastern tension, extending the slump in oil markets into the new year.

The price of oil fell 30 per cent last year, following a 50 per cent plunge in 2014. The price is already down in early days of 2016. Even the breakoff of diplomatic relations between Saudi Arabia and Iran, two big oil-producing countries, failed to halt the slide.

Oil prices are likely to remain about where they are until either production drops or the world economy perks up and drives demand higher.

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Dividends on the chopping block as profit growth peters out

NEW YORK (AP) — The dividend gravy train is slowing down, threatening an important source of income for investors at a time when stocks are going nowhere.

About 500 companies cut or halted their dividends last year, the highest tally since the economy was crawling out of the Great Recession in 2009. Not only that, other companies got more reluctant to raise their payouts to shareholders, according to numbers released Tuesday by S&P Dow Jones Indices. The number of dividend increases was the lowest in four years.

Dividends, the share of profits that some companies distribute to investors, have been increasingly important because bonds still offer relatively low interest payments and stock prices have been flat.

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US auto sales hit an all-time high in 2015

DETROIT (AP) — Americans are buying more new cars than ever before.

U.S. auto sales hit a record high of 17.47 million in 2015, topping the old record of 17.35 million set in 2000. Analysts expect sales could go even higher this year as unemployment continues to decline and more young buyers enter the market. Low gas prices and historically low interest rates left more money in buyers’ pockets.

Automakers reported December and full-year sales Tuesday.

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Lumosity to pay $2M to settle deceptive ad allegations

WASHINGTON (AP) — The developer of Lumosity “brain training” games will pay $2 million to settle federal allegations that it misled customers about the cognitive benefits of its online apps and programs.

The Federal Trade Commission said Tuesday the company’s advertisements deceptively suggested that playing the games a few times a week could boost performance at work, in the classroom and even delay serious conditions like dementia. Under the settlement, Lumos Labs must contact its customers and offer them an easy way to cancel their subscriptions.

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Merck CEO: Eager for deals, strong prospects for new drugs

TRENTON, N.J. (AP) — Merck’s chief executive says the drugmaker is “raring to go” on deals this year, particularly for small and midsize acquisitions of companies or their experimental drugs.

CEO Kenneth Frazier, speaking Tuesday at a Goldman Sachs conference of CEOs of health care companies in Boston, also said he expects more approvals and growing sales from new cancer drug Keytruda. And Frazier predicted Merck will soon be a player again in the lucrative hepatitis C market.

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Drugmaker Lilly’s 2016 forecast misses Street expectations

INDIANAPOLIS (AP) — Eli Lilly has dropped a lower-than-expected 2016 forecast on Wall Street after wrapping up a year in which its stock soared above the broader market.

The drugmaker said Tuesday that it expects adjusted earnings in the new year to range between $3.45 and $3.55 per share, excluding charges like deal integration costs. It predicts revenue of between $20.2 billion and $20.7 billion.

Analysts forecast, on average, earnings of $3.65 per share on $21.36 billion in revenue, according to FactSet.

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Amazon: Cyber Monday shoppers ordered 23M items from sellers

NEW YORK (AP) — Amazon’s sellers had a strong Cyber Monday.

The largest U.S. retailer said Tuesday that customers ordered more than 23 million items from its sellers on Cyber Monday, the popular online shopping day after Thanksgiving. That was up 40 per cent from the previous year.

Meanwhile, Amazon’s investments in its “Fulfillment By Amazon” service seem to be bearing fruit, with 1 billion items delivered in 2015 for businesses selling on Amazon.

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Yahoo pulls plug on video hub as CEO refocuses company

SAN FRANCISCO (AP) — Yahoo pulled the plug on an online video hub that had once been envisioned as the beleaguered company’s answer to Netflix and YouTube.

The end of the Yahoo Screen is part of a purge being directed by CEO Marissa Mayer with hopes of generating greater profit elsewhere.

Mayer oversaw an overhaul of Yahoo Screen 16 months ago that came in the form of a new mobile application, thousands of clips from NBC’s “Saturday Night Live” and a wide variety of other popular TV shows. But Yahoo Screen never attracted the vast audiences that flock to Netflix and YouTube.

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Brash, fee-happy CEO of Spirit Airlines abruptly replaced

NEW YORK (AP) — Ben Baldanza, who led the industry push for more and more airline fees, is out as CEO of Spirit Airlines.

Spirit was losing money until Baldanza took over in 2006. He oversaw the airline’s transformation into an “ultra-low cost carrier” that didn’t include anything in its base fare and charged extra for seat assignments, snacks, soda, boarding passes and even the overhead bin. Known for his brash style, Baldanza said that if people didn’t like the fees, they could fly another airline.

Robert Fornaro, who led discount carrier AirTran before its sale to Southwest Airlines, will take over as CEO immediately.

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Malicious acts cause more airline deaths than accidents

WASHINGTON (AP) — Malicious acts surpassed accidents as the chief cause of airline deaths worldwide in 2015 for the second year in a row, according to an industry tally.

There were only eight accidental airline crashes last year accounting for 161 passenger and crew deaths — the fewest crashes and deaths since at least 1946, reflecting continued improvement in safety technology and aircraft design, according to Flightglobal, an aviation news and industry data company.

That tally of accidental deaths is far outpaced by the 374 killed when a German airliner was deliberately flown into a mountainside in the French Alps last March, and a Russian airliner packed with tourists exploded over Egypt in October.

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The Dow Jones industrial average gained 9.72 points, or 0.1 per cent, to 17,158.66. The Standard & Poor’s 500 index edged up 4.05 points, or 0.2 per cent, to 2,016.71. The Nasdaq composite fell 11.66 points, or 0.2 per cent, to 4,891.43.

U.S. crude fell 79 cents, or 2.1 per cent, to $35.97 a barrel in New York. Brent crude, a benchmark for international oils, fell 80 cents, or 2.1 per cent, to $36.42 a barrel in London. In other energy trading, wholesale gasoline fell 3.4 cents, or 2.6 per cent, to $1.257 a gallon and heating oil was nearly unchanged at $1.125 a gallon. Natural gas fell 0.9 cents to $2.325 per 1,000 cubic feet.