Oil Rises Past $131

By BAY AREA NEWS GROUP

Energy

Oil rises past $131 on Iran deadlock: Oil prices rose Monday on a threat of new sanctions against Iran and as Tropical Storm Dolly headed into the Gulf of Mexico, prompting a hurricane watch for parts of Texas and Mexico. Light, sweet crude for August delivery added $2.16 to settle at $131.04 a barrel on the New York Mercantile Exchange. It was oil’s first gain in a week. For drivers in the U.S., pump prices eased by a few pennies.

A gallon of regular gasoline now sells for an average just shy of $4.07, according to auto club AAA, the Oil Price Information Service and Wright Express. Diesel prices also pulled back, to an average of $4.818 a gallon.

Pharmaceuticals

Cholesterol drug misses study goal: In the latest disappointment for cholesterol pill Vytorin, a major European study in patients with heart valve disease found the drug didn’t prevent worsening of the disease or lower the need for valve surgery, sending its makers’ stock plunging. Results of a preliminary analysis of the just- completed study showed Vytorin, marketed jointly by Merck & Co. and Schering-Plough Corp., was no better than placebo at lowering the risk of major cardiovascular events — including heart attack, stroke, heart surgery and death — in patients with aortic stenosis. More than 5 million Americans have the disease to some extent, and it’s the No. 2 cause of heart surgery.

Shares of Kenilworth, N.J.-based Schering-Plough finished Monday down $2.49, or 11.6 percent, at $18.95, then dropped another 68 cents in after-hours trading. Shares of Whitehouse Station, N.J.- based Merck fell $2.35, or 6.2 percent, to $35.33, then dove another $2.49, or 7 percent, after hours.

Finance

American Express 2Q profit down 38%: American Express Co. said Monday its second-quarter profit tumbled 38 percent, well below Wall Street’s forecast, as consumer spending slowed and credit indicators deteriorated beyond the lender’s expectations.

For the period ended June 30, American Express reported net income of $653 million, or 56 cents per share, compared with $1.06 billion, or 88 cents per share, in the year-ago period. Analysts, on average, expected earnings of 83 cents per share on revenue of $7.6 billion, according to Thomson Financial. Revenue rose 8 percent to $7.48 billion from $6.94 billion in the second quarter of last year.

Toys

Hasbro profit beats Wall StREET view: Toymaker Hasbro Inc. said Monday second-quarter profit rose, helped by demand for products related to movies including “Iron Man” and “Star Wars.” However, shares fell as the company said it will increase prices for the second time this year on Sept. 1 to offset the rising cost of oil and commodities. The Pawtucket, R.I.-based company said profit rose to $37.5 million, or 25 cents per share, from $4.8 million, or 3 cents per share, a year earlier. Excluding a one-time year-ago expense related to repurchasing some warrants, net income fell 9 percent, but results beat the 22 cents per share that analysts polled by Thomson Financial, on average, predicted.

Security

Blackwater plans shift from security: Blackwater Worldwide said Monday that it planned a shift away from the security contracting business that earned it millions of dollars and made it a flash point in the debate over the use of security contractors in war zones. Blackwater executives say they have unfairly become a symbol for all contractors in Iraq and thus the company is a target for those opposed to the war. It plans to focus on training, aviation and logistics. The company has made hundreds of millions of dollars defending U.S. diplomats in Iraq, one of several government contracts that earned Blackwater more than $1 billion since 2001.

The State Department paid Blackwater more than $832 million to provide security in Iraq between 2004 and 2006, about half of the money under a no-bid contract awarded in June 2004, according to a report issued in October by the House Oversight and Government Reform Committee.

— Associated Press

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