IBT Staff Reporter

The U.S. commercial paper market shrank again last week and has lost 11 percent of its value in just a month, according to Federal Reserve data showing credit markets remain troubled.

U.S. stocks fell on Thursday as financial stocks dropped on credit worries, overshadowing earlier optimism about technology company profits. Lehman Brothers slashed earnings estimates on four top Wall Street banks, adding its voice to the chorus of widely followed research analysts warning credit turmoil would cut into bank profits.

Toys R Us Inc is recalling 27,000 wooden coloring cases that were made in China and sold under its Imaginarium brand because lead was found in the printed ink on the art set's outer packaging and in some watercolor paints.

Hotels and airlines are bracing for softer demand as the economy shows signs of slowing, but the pain may not hit the travel industry for months.

Morgan Stanley has completed the UK's first residential property derivative trade with an embedded exotic option.

Thornburg Mortgage Inc said on Thursday it raised $500 million by selling convertible preferred stock, a move that will boost funding and allow it to resume making new loans after getting hit by a credit squeeze.

Gold cut losses in late European trade on Thursday, but remained vulnerable as the dollar gained against the euro and stocks fell as concern over global credit conditions hurt sentiment again, analysts said.

Pakistani President Pervez Musharraf has yet to decide whether to step down as army chief, a spokesman said on Thursday, as former Prime Minister Nawaz Sharif announced he would return home from exile on September 10.

The U.S. Justice Department and other authorities have stepped up investigations into several large European banks for violating sanctions against Iran, Libya, Cuba and Sudan, the Financial Times reported in its online edition.

Thousands of Greeks besieged banks on Thursday, clamoring for state compensation for damage caused by the country's worst wildfires which burned on in some areas one week into the crisis.

Mattel has only itself to blame for a huge toy recall that has stoked global alarm about Chinese-made goods, state media said on Thursday, charging that a slew of foreign safety scares had exposed a protectionist agenda.

Credit Agricole, reported a 0.6 percent rise in second-quarter net profit on Thursday, which beat an average forecast, and said the U.S. subprime mortgage crisis has had a limited impact on it.

Freddie Mac, the nation's second-largest source of home loan funding, said on Thursday its second-quarter net income fell 45 percent from a year earlier as more borrowers defaulted on their loans.

H&R Block Inc, the largest U.S. tax preparer, said it was trying to renegotiate the sale of its Option One Mortgage Corp unit and would get out subprime lending after its quarterly loss more than doubled.

The U.S. economy grew at an annual rate of 4 percent in the second quarter, as strong business investment led the fastest pace of expansion since early last year, the government reported on Thursday. However, the rebound in growth is not likely to be sustained. Policy makers and analysts may scale back estimates for U.S. growth in the coming quarters due to disruptions in the financial markets worldwide from rising defaults in subprime mortgages.

LG Electronics announced its first premium camera mobile phone on Thursday and an executive told Reuters the company aimed for 10-15 percent of this market segment within about a year.

Video-sharing Web site YouTube said on Wednesday that it has reached a deal with British licensing organizations that collect royalties on behalf of 50,000 composers, songwriters and publishers.

Apple Inc shares rose more than 5 percent on Wednesday on growing expectations that the company will announce a revamped line of iPods next week. The new units may have a large touch screen similar to the iPhone.

Consumer electronics maker Sony Corp. on Thursday said it introduced a new U.S. version of its Sony Walkman that includes the ability to play digital video, the latest potential rival to Apple Inc.'s dominant iPod media player.

The summer dry spell for video games came to an end last week with the arrival of BioShock, the creepy underwater shooter that has won rave reviews and flown off store shelves. The main bulk of important games this year won't come out until November, but the next month or two will see the release of quite a few other hot games.

Robust business investment helped push U.S. second-quarter growth ahead at an upwardly revised 4 percent annual rate, the government reported on Thursday, the fastest pace since early last year but one that is unlikely to be sustained.

General Electric Co said on Thursday it is considering pulling out of the consumer lending business in Japan, as tighter regulation has crimped profits across the industry, but said nothing has been decided yet.

The head of Toyota Motor Corp, the world's biggest automaker, said on Thursday he expects further cooperation between truck affiliates Isuzu Motors Ltd and Hino Motors Ltd to better compete in global markets.

Biotech company Actelion is due to report results from clinical trials of two key drugs at the weekend, and positive results could further boost its already highly valued stock, analysts said.

German drug maker Merck KGaA's Merck Serono unit won European Commission approval to market a new formulation of its Rebif drug to treat relapsing multiple sclerosis, the company said on Thursday.

Sears Holdings Corp said on Thursday that its quarterly profit fell 40 percent as sales declined and the retailer marked down prices for shoppers coping with a tough economy.

CITIC Securities, China's biggest listed brokerage, said on Thursday it has raised 25 billion yuan ($3.31 billion) in a heavily oversubscribed new share offer to finance expansion.

General Motors of Canada will cut about 1,000 jobs at a truck plant in Oshawa, Ontario, in January amid slumping pick-up sales, the Globe and Mail newspaper said in its online edition on Thursday.

Chip giant Intel Corp. is optimistic amid steady PC demand and a rollout of new products