Business Highlights

SAN JOSE, Calif. - Apple Inc.'s fiscal fourth-quarter profit jumped 67 percent and easily beat Wall Street expectations, capping a record-breaking year that saw unprecedented momentum in its Mac business, ceaseless consumer interest in its iPod players and a successful introduction of its newest endeavor, the iPhone.

For the three months ended Sept. 30, Apple said Monday it earned $904 million, or $1.01 per share, compared with $542 million, or 62 cents per share, in the year-ago quarter.

Revenue totaled $6.22 billion, compared with $4.84 billion in the same quarter last year.

Analysts surveyed by Thomson Financial were expecting earnings of 86 cents per share on sales of $6.07 billion.

Apple's stock price, which has more than doubled since January, rose $3.94, or 2.3 percent, to close at $174.36. After the earnings report, shares climbed $9.50, more than 5 percent, in extended trading.

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BRUSSELS, Belgium - Microsoft Corp. dropped a nearly decade-long legal battle with European regulators Monday, agreeing to key parts of an antitrust ruling that has already led to hundreds of millions in fines.

The world's largest software company will slash the royalties it charges rivals for interoperability information needed to make programs that work smoothly with Microsoft's ubiquitous Windows operating system. It will make access to the data easier for open source developers who the EU said are now 'virtually the only alternative for users.'

Microsoft said it would not appeal a EU Court of First Instance decision on Sept. 17 that turned down its challenge to a 2004 European Commission order that found it guilty of monopoly abuse.

Daily phone calls between EU Competition Commissioner Neelie Kroes and Microsoft CEO Steve Ballmer over the past three weeks - and a dinner near her Dutch hometown - culminated in a deal early Monday.

The major issues with Microsoft have been resolved, Kroes said, cautioning that Microsoft could still face penalties for overcharging royalties on interoperability information. Backdated daily fines would stop as of Oct. 22.

Kroes said the EU order set a precedent for Microsoft's future behavior in other areas - such as its Office software and its new Windows Vista operating system.

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NEW YORK - Bear Stearns Cos. and China's government-controlled Citic Securities Co. agreed Monday to invest $1 billion in each other and combine some operations in Asia, giving the U.S. brokerage an entrance into the insular Chinese financial sector.

The investment is the biggest of its kind between a U.S. and Chinese financial institution, and highlights China's increasing strength in global financial markets. For Bear Stearns, battered this summer by the slumping mortgage markets, the pact positions it as a bigger player in one of the world's fastest-growing economies.

Bear Stearns Chief Executive James Cayne, who labeled the agreement as 'historic,' has been struggling in the past few years to expand overseas and better compete with larger rivals.

Under the agreement, Citic will invest about $1 billion and receive securities that convert over time into a roughly 6 percent equity stake in Bear Stearns. The Beijing-based investment bank has an option to acquire up to a 9.9 percent stake, which would make it one of Bear's largest shareholders.

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NEW YORK - Wall Street finished a back-and-forth session higher Monday as investors overcame some of their nervousness about the credit markets and uneven earnings and found solace in the technology sector.

Several companies including drug maker Merck & Co. reported decent third-quarter results, but investors were unhappy with rival drug maker Schering Plough Corp.'s results. They were also mindful of the downbeat profit outlooks from several blue chip companies last week.

Still, after an early slide, the market seemed to grow optimistic about Apple Inc.'s earnings, which did top Wall Street's expectations when the company reported after the closing bell. The eager anticipation of the report sent tech stocks higher, and by early afternoon, other stocks were tagging along.

Disappointing earnings and Standard & Poor's downgrade of another series of mortgage-backed securities sent stocks plunging Friday, taking the Dow Jones industrials down 366 points.

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NEW YORK - Oil futures prices fell Monday amid concerns about economic growth and on profit-taking ahead of the November contract's expiration. However, doubts about a possible ceasefire between Turkey and Kurdish rebels in Iraq helped crude pare some of oil's losses.

The stock market's sharp downturn Friday has reignited concerns that the economy might be slowing, cutting demand for oil and petroleum products.

But traders also sold to lock in profits from a rally in which oil futures jumped almost 14 percent in less than two weeks. Light, sweet crude for November delivery reached a record $90.07 a barrel on Friday morning; it settled Monday at $87.56, down $1.04 from Friday's close on the New York Mercantile Exchange.

However, oil regained some ground before the close on concerns that an expected Kurdish cease-fire might not have much effect. Turkey has rejected such cease-fire declarations in the past, saying it would fight until all rebels surrender or are killed.

Turkish forces were seen moving toward the Iraq border on Monday after an attack by Kurdish rebels that left 12 soldiers dead and eight missing. Crude traders worry that a Turkish incursion into Iraq would cut oil supplies from northern Iraq.

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NEW YORK - American Express Co., one of the nation's biggest credit-card issuers, said Monday that higher spending by cardholders pushed third-quarter profit up 10 percent.

The credit-card brand - known for its relatively wealthy and well-vetted customer base - reported that quarterly profit rose to $1.07 billion, or 90 cents per share, from $967 million, or 79 cents per share. Revenue rose 11 percent to $6.95 billion from $6.27 billion.

Analysts surveyed by Thomson Financial had projected earnings of 85 cents per share on $7.27 billion of revenue, meaning that American Express beat the earnings estimate even though it fell short on the revenue side. American Express during the past few quarters has complained to analysts that their revenue estimates are too diverse to make an accurate projection.

American Express also said it had seen an increase in delinquencies. The company said it again padded reserves for loan losses, along with other financial services companies, amid worsening U.S. credit conditions.

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TRENTON, N.J. - Pharmaceutical companies Schering-Plough Corp. and Merck & Co. posted strong sales Monday from their joint venture on cholesterol drugs, but otherwise their third-quarter earnings reports - and investor reaction - were strikingly different.

Whitehouse Station-based Merck surpassed analysts' expectations and saw its shares rise as much as 3 percent, while cross-state partner Schering-Plough fell shy of what Wall Street anticipated and its shares plunged more than 13 percent.

Merck posted a 62 percent increase in its third-quarter profit, as revenues jumped by double digits, and it boosted its full-year earnings forecast.

It reported net income of $1.53 billion, or 70 cents per share, for the July-September period, up from $940.6 million, or 43 cents per share, a year earlier. Revenues totaled $6.07 billion, up 12 percent.

Excluding one-time items, net income would have been 75 cents per share - 6 cents above the consensus forecast of analysts surveyed by Thomson Financial.

Its shares rose $1.53, or 2.9 percent, at $54.64 Monday, near their 52-week high of $55.14.

Schering-Plough's profits more than doubled, but without one-time gains it missed Wall Street expectations.

The Kenilworth-based company said net income rose to $713 million, or 45 cents per share, from $287 million, or 19 cents per share, a year ago. Revenue climbed 9 percent to $2.81 billion.

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By The Associated Press

The Dow rose 44.95, or 0.33 percent, to 13,566.97, after falling more than 100 points early in the session.

Broader stock indicators finished higher, with tech stocks leading. The S&P 500 index rose 5.70, or 0.38 percent, to 1,506.33, and the technology-dominated Nasdaq composite index rose 28.77, or 1.06 percent, to 2,753.93.

The Russell 2000 index of smaller companies added 11.29, or 1.41 percent, to 810.08.

Light, sweet crude for November delivery reached a record $90.07 a barrel on Friday morning; it settled Monday at $87.56, down $1.04 from Friday's close on the New York Mercantile Exchange.

December oil, meanwhile, fell 93 cents to settle at $86.02 a barrel on the Nymex.

Other energy futures followed crude lower. November gasoline fell 3.53 cents to settle at $2.1334 a gallon, and November heating oil fell 1.97 cents to settle at $2.3109 a gallon.

November natural gas fell 15 cents to settle at $6.891 per 1,000 cubic feet. Natural gas prices are under pressure from unseasonably warm temperatures in the north and Midwest and a forecast that this winter will be warmer than normal.

In London, December Brent crude dropped 52 cents to settle at $83.27 a barrel on the ICE Futures exchange.