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Business news in brief

In the Region

Merck weighs animal-product sale

Merck & Co. Inc. is considering selling some of its veterinary medicine assets or the animal-health business of Schering-Plough Corp., which Merck is preparing to acquire. Whitehouse Station, N.J.-based Merck, which has major operations in the Philadelphia area, has a 50-50 partnership with France's Sanofi-Aventis in a business called Merial. It sells some popular pet medicines - flea-and-tick blocker Frontline and chewable heartworm preventer Heartgard. The venture had $684 million in first-quarter sales. Schering-Plough sells more than 15 animal-medicine products, including antibiotics, fertility treatments, and a number of vaccines for livestock. The unit had sales of $630 million in the first quarter. - AP

Nursing home unionizes

Employees at a county-run nursing home in Media have voted to unionize. The Pennsylvania Association of Staff Nurses and Allied Professionals said yesterday's vote by employees of Fair Acres Geriatric Center was 125-70, with 85 percent of eligible employees voting. The union is to represent 230 employees of the nursing home run by Delaware County. The union says it expects to begin contract negotiations within the next few weeks. - AP

Hearing today on mortgage program

The Pennsylvania House Commerce Committee has scheduled a public hearing in Philadelphia for today on legislation that would expand the city's mortgage-diversion program to the rest of the state. The bill, introduced by Rep. Michael McGeehan (D., Phila.), would require each county to establish a program to bring defaulted borrowers and lenders together to work on an agreement that would prevent foreclosures. The hearing is scheduled from 1 to 4 p.m. in Room 696 of City Hall. - Harold Brubaker


Appeals court halts sale

A federal appeals court in Manhattan has halted Chrysler L.L.C.'s sale of the bulk of its assets to Italy's Fiat Group S.p.A. pending an appeal by a trio of Indiana state pension and construction funds. The U.S. Court of Appeals for the Second Circuit said late Tuesday that it would hear arguments in the case tomorrow afternoon in New York, according to the Indiana treasurer's office. Chrysler had hoped to close the sale by the end of week, pending regulatory approval. Chrysler has maintained that the deal with Fiat Group is its only hope of avoiding selling itself off piece by piece. If the sale does not close by June 15, Fiat has the option of pulling out of the deal. In addition, production at Chrysler's manufacturing plants remains halted pending the closing of the sale. - AP

Citi seeks OK on increasing shares

Citigroup Inc. will seek authorization from investors to increase its outstanding common shares to as much as 60 billion, from a current limit of 15 billion. The new amount was disclosed by the New York-based banking company in a filing with the Securities and Exchange Commission. The bank needs investors to approve the share-count increase as part of the bank's effort to bolster equity after the Federal Reserve's "stress tests" last month. - Bloomberg News

Services shrink at slower pace

Service industries in the United States shrank at a slower pace in May, while job losses mounted, indicating that an economic recovery will be slow to develop. The Institute for Supply Management's index of nonmanufacturing businesses, which make up almost 90 percent of the economy, climbed less than forecast to 44 from 43.7 in April, the group reported. ADP Employer Services estimated companies cut 532,000 workers from payrolls. The ISM index was projected to rise to 45, according to the median forecast in a Bloomberg News survey of 70 economists. Readings less than 50 signal contraction. - Bloomberg News

Factory orders rise for second time

Orders to U.S. factories rose 0.7 percent in April, the second increase in three months and further evidence that manufacturers may be recovering. Still, the Commerce Department's report was below analysts' expectations of a 0.9 percent increase. The department also sharply marked down the March figure to a 1.9 percent drop, compared with the 0.9 percent decline previously reported. Shipments fell 0.2 percent, the ninth consecutive drop, though at a much slower pace than the 1.8 percent fall in March. - AP

Valero plunges after forecast

Valero Energy Corp. shares fell nearly 18 percent after the refiner said it expected to report a second-quarter loss and would sell 40 million new shares. Valero shares dropped $3.98 to close at $18.40 on the New York Stock Exchange, its biggest decline since Oct. 15. Other U.S. refiners also tumbled, including a 13 percent plunge by Tesoro Corp., also based in San Antonio, and a 7.5 percent slide by Sunoco Inc., Philadelphia. Valero said after regular U.S. trading ended Tuesday that it expected a second-quarter net loss of 50 cents a share because of production disruptions (including extended down time at its Delaware City refinery), rising crude prices, and a narrowing of profit margins on diesel. - Bloomberg News

More support for offshore drilling

A new poll of coastal residents from New York to Virginia finds more favoring offshore energy exploration than opposed. The Monmouth University (N.J.) Life on the Mid-Atlantic Coast poll finds 46 percent of coastal residents surveyed favor ocean drilling, up from 33 percent in 2007. Thirty-seven percent are opposed, and 12 percent expressed no opinion. Forty-seven percent said they believed rising sea levels were a natural phenomenon. Thirty-eight percent said they were man-made, and 10 percent blamed both equally. The telephone poll questioned 1,006 coastal residents of New York, New Jersey, Delaware, Maryland, and Virginia from April 21 to 28. It has a sampling error margin of plus or minus 3.1 percentage points. - AP

Yields fall on money funds

The average seven-day yield on taxable money market funds was 0.15 percent this week, down from 0.16 percent last week, according to iMoneyNet Inc. A seven-day yield is an annual yield that is based on the preceding seven days' level of income by the fund. The average yield on tax-free funds was 0.23 percent this week, down from 0.26 percent last week. - Rhonda Dickey