IN BRIEF

NEW YORK

Gasoline supply worries send oil prices lower

Oil prices closed at their lowest level in five months Thursday as a lower-than-expected drop in U.S. gasoline supplies gave traders more reason to believe that a cooling economy is forcing Americans to drive less.

Light, sweet crude for October delivery fell $1.46 to settle at $107.89 a barrel on the New York Mercantile Exchange. It was the lowest settlement price for a front-month contract since April 4.

In its weekly inventory report, the Energy Department's Energy Information Administration said U.S. gasoline stocks fell by 1 million barrels to 194.4 million barrels for the week ended Aug. 29, less than the 1.8 million-barrel drop analysts surveyed by energy research firm Platts had expected.

Comcast wants ruling on violations reversed

Comcast Corp., the second-biggest U.S. high-speed Internet service provider, on Thursday asked a court to overturn a Federal Communications Commission ruling that it violated policies intended to keep the Internet open.

The commission on Aug. 1 found Comcast had improperly blocked peer-to-peer programs such as BitTorrent that are used to share videos and other files, and told the company to stop. Comcast said it temporarily slowed some users' service when its network was congested.

Cable companies are wrestling with how to keep high-speed Internet services operating smoothly as demand soars for features such as streaming video that place heavy demands on networks.

Comcast said last month that it plans to slow the top Internet speed for its heaviest users, rather than target specific programs.

Toll Bros. posts loss for fourth straight quarter

Toll Bros. Inc., the largest U.S. luxury homebuilder, reported its fourth straight quarterly loss as the deepening housing recession deterred buyers.

For the fiscal third quarter ended July 31, Toll had a net loss of $29.3 million, or 18 cents a share, reversing a profit of $26.5 million, or 16 cents, a year earlier.

Analysts polled by Bloomberg News forecast a loss of 35 cents a share.

Chief Executive Officer Robert Toll said the company's cancellations fell to the lowest in more than two years even as "explosive energy price increases, rising unemployment and severe mortgage and credit" conditions cut demand. Toll's revenue slid 34 percent as existing-home sales slid to a 10-year low in the second quarter.

Toll Bros. faces competition from foreclosures especially in the Southwest, including Las Vegas, Robert Toll said.

Sales have declined and foreclosures increased in the more than 20 states in which Toll offers homes, including Nevada, California, Florida and Arizona.

FRANKFURT, Germany

European banks leave key rates unchanged

The European Central Bank and the Bank of England left their key interest rates unchanged Thursday, reluctant to move them lower as rising prices offset the fear of weaker growth and recession.

In London, the Bank of England kept its benchmark rate steady at 5 percent.

The Frankfurt-based ECB left its interest rate at 4.25 percent and warned of slower economic growth this year of between 1.1 percent and 1.7 percent, while growth next year in the 15-nation euro zone was expected to be between just 0.6 percent and 1.8 percent.

The announcement sent the euro to a seven-month low against the dollar, dropping as low as $1.4323 before steadying somewhat to $1.4355 in late European trading.

SEATTLE

Boeing, machinists meet with mediator

Representatives from Boeing Co. and the Machinists union met with a federal mediator Thursday as the clock ticked on an unusual two-day contract extension after union production workers soundly rejected a contract offer and voted to strike.

Members of the union representing 27,000 aircraft assembly workers at the aerospace giant voted overwhelmingly Wednesday to strike for an unprecedented second time in three years, then learned both sides had agreed to a 48-hour contract extension at the request of Washington Gov. Chris Gregoire and federal mediators.

Boeing spokesman Tim Healy said Thursday that the mediator was trying to help the two sides find middle ground, but he had no information on the progress of the talks.

Mervyns files lawsuit against former owners

Mervyns, the mid-priced department store chain in bankruptcy proceedings, has filed a lawsuit against its former owners, including Target Corp., saying that the Wall Street investment firms that bought it in 2004 stripped Mervyns of its valuable real estate assets and set the company up to fail.

The $1.2 billion acquisition of Mervyns by a group of investors led by private investment firms Sun Capital Partners Inc. and Cerberus Capital Management was a "fraudulent transfer," according to the lawsuit filed Tuesday in federal Bankruptcy Court against 37 defendants.

Before the sale, Hayward, Calif.-based Mervyns owned stores in desirable locations and held leases at favorable below-market rates on other stores in its 177-store chain, the lawsuit said. To finance their leveraged buyout, the buyers borrowed hundreds of millions of dollars against that real estate while separating it from Mervyns' retail operations.

Sun Capital, Cerberus Capital and their partners then leased Mervyns' former properties back to the retailer at "substantially increased" rents in order to service debt incurred during the acquisition and to take profit from rising property values. The transaction "ultimately led to Mervyns' bankruptcy," the lawsuit said.

NEW YORK

Treasury prices rise as traders seek safety

Treasury prices rose moderately Thursday, as a plummeting stock market sent investors back into safer, fixed-income government securities.

The benchmark 10-year Treasury note rose 0.69 points to 103.13. Its yield fell to 3.62 percent from 3.70 percent late Wednesday, according to BGCantor Market Data. Yields move in the opposite direction from prices.

The 30-year long bond rose 0.97 points to 103.97, while its yield fell to 4.26 percent from 4.32 percent on Wednesday.