Pennies are constantly proving their symbolic value. They are watched, pinched, exchanged for thoughts, and they keep our widely admired 16th president in view.

But as they weigh down our purses and pockets, pennies are not pulling their weight as an actual currency.

The shocking truth is that the penny &S220;accounts for about 58.4 percent of all coins circulating out there, but only contributes 7.5 percent of the value,&S221; the research firm IbisWorld states.

The quarter, by contrast, accounts for 56.8 percent of all coin value, the firm says.

At this point, it costs more to produce pennies than they are worth. Because pennies are such a losing proposition, the United States Mint has been producing fewer and fewer in recent years.

Even though penny production has dropped, there are 298.7 billion in circulation, according to IbisWorld &<51; in other words, nearly $3 billion worth.

That&S217;s still a pretty penny.

PHYLLIS KORKKI

The Count: When a Coin Doesn’t Pull Its Own Weight

NEW YORK – Athletic shoes seller Foot Locker Inc. on Thursday reported a loss for the third quarter as consumers spent less at its stores and it wrote down the value of its assets by $22 million.

The company, based in New York, lost $6 million, or 4 cents per share, in the quarter that ended Oct. 31. That compares with a profit of $24 million, or 16 cents per share, a year earlier.

Excluding the asset charge, its adjusted profit of 10 cents per share fell short of the 13-cent-per-share prediction of analysts polled by Thomson Reuters.

Its revenue fell 7 percent to $1.21 billion from $1.31 billion. Analysts had expected $1.19 billion.

"Our success in reducing expenses and tightly managing inventory helped to offset lower-than-anticipated sales in our U.S. operations," CEO Ken Hicks said in a statement.

Sales at stores open at least a year, a key retail measure, fell 8.2 percent during the quarter. The figure is a key measure of retailer performance because it compares existing stores and excludes those that open or close during the year.

Foot Locker shares fell 79 cents, or 7.5 percent, to $9.80 in after-hours trading Thursday after closing at $10.59, down 4.6 percent from a day earlier.

As of Wednesday's close, the shares had fallen 13 percent the past 52 weeks.

Foot Locker posts 3Q loss on charge, sales drop

ATLANTA – Gov. Sonny Perdue sent some good economic news home to Georgia from the Dubai Airshow.

Perdue said Monday that Wamar International is expanding its Georgia operations. The company will create 100 jobs over the next three years and 300 jobs over the next 10 years. Wamar will move its current manufacturing operation in Norcross to a site near Hartsfield-Jackson Atlanta International Airport

Star Navigation Systems Group, an aerospace technology company, will establish its U.S. headquarters in Atlanta which will create up to 20 jobs over the next 36 months.

Another aerospace company, Zodiac Services Americas, is expanding its College Park location, adding up to 26 jobs by the end of 2010 to its current 120-member Georgia work force.

Perdue is in Dubai on a trade mission.

Perdue makes jobs announcement from Dubai

When airlines charge extra fees, are they really just another fare increase in disguise?

It is not just a theoretical question to help travelers pass the time in an airport.

Congress has been furrowing its collective brow at the practice. An investigation is under way, and could lead to changes in this increasingly popular tactic that airlines use to bring in more revenue without raising fares.

Such fees have helped the industry offset the effects of the recession, by charging for things like checking bags, selecting seats and even for travel during the holidays.

The reason for the Congressional interest is money. Fees, for the most part, are not taxed, so the government is concerned it is missing out on extra revenue that could help airports.

Penny-pinching travelers may gripe about the fees, but this new inquiry could raise the ultimate cost of tickets, if airlines decide to pass along to their customers the cost of the additional taxes.

The outcome will hinge on the answer to a technical question: do the fees reflect what it costs the airlines to provide the extra service, or are they just an added charge for services the airlines have always provided?

The airlines prefer a different metaphor, and say these fees are akin to an &>24; la carte restaurant menu, allowing passengers to choose what they want as part of their trip.

But to Representative James L. Oberstar, Democrat of Minnesota, who has long followed industry issues, fees mean only one thing: &S220;They&S217;ve found a backdoor way to raise ticket prices.&S221;

He and Representative Jerry F. Costello, Democrat of Illinois, have asked the Government Accountability Office to investigate the practice. The office&S217;s first meetings with airlines began last month, and Mr. Oberstar said he expected to hold Congressional hearings for airline executives to justify the fees.

So far this year, United States airlines have taken in more than $3 billion in fees. If all those fees were subject to the same 7.5 percent excise taxes as fares, then the government would have at least $225 million more to distribute to airports for improvements and expansions.

Airline executives said they were cooperating fully with the Congressional investigation, but were concerned that it might result in even higher prices for consumers, who are already paying an average of $10 each in baggage and other fees, which the airlines call ancillary revenue.

&S220;It falls in the category, first, do no harm,&S221; said David Castelveter, spokesman for the Air Transport Association, the industry&S217;s trade group.

But Mr. Oberstar says airlines may be doing themselves long-term harm. The money collected from excise taxes is a primary source of federal financing for airports, which ultimately helps both the airlines and their customers.

&S220;Maybe we have to teach them a lesson, and make them pay their fair share,&S221; Mr. Oberstar said of the airlines.

The airlines counter that the recession has forced them to think up new revenue streams. This fall, for example, they began adding a surcharge on tickets booked during the most popular travel days during Thanksgiving, Christmas and spring break.

&S220;We have been aggressive and creative,&S221; John Tague, president of United Airlines, told analysts last month. And it has paid off: United collects about $13 in fees per passenger, or 30 percent more than the industry average.

Collectively, the nine biggest airlines lost $236 million between July and September, which is usually the strongest quarter for travel during the year, according to Airlinefinancials.com, which tracks industry trends.

Along with the overall drop in travel, revenue from business travelers, a major source of income for United and other carriers, was down 25 percent in the third quarter, after falling 40 percent earlier this year.

&S220;There&S217;s no opportunity here for a full revenue recovery until we get premium travel back,&S221; Mr. Tague said. &S220;And it&S217;s not clear how long that will take.&S221;

Southwest Airlines has been a holdout in charging many fees. So far, it has not started charging to check the first two bags, although it is exploring ways to collect more revenue from passengers when it overhauls its frequent-flier program.

&S220;We all know if we charged money, we&S217;d get the bag fee, but we&S217;d lose the customer,&S221; its chief executive, Gary Kelly, said last month. &S220;We believe we&S217;re ahead of the game by not charging a bag fee.&S221;

Robert W. Mann, an industry analyst, said airlines were making a mistake by giving passengers another reason to resent them, and by creating a new incentive for them to search harder for the lowest possible fare.

He added that the airlines should have been clearer on their Web sites and in their ads about the charges for things that were once included in the ticket price.

&S220;There&S217;s a right way, and a wrong way, and the wrong way is what the airlines have done,&S221; Mr. Mann said.

Mr. Mann got his own fee surprise when he flew JetBlue Airways from Orlando to New York in October.

He arrived early at the airport, and asked to rebook his flight. He was told he could do so for $40. The aisle seat he wanted cost him another $25.

&S220;It&S217;s different than buying a car, and adding on the options packages,&S221; he said. &S220;It&S217;s almost as if airlines have turned this on its head and said, &S216;We&S217;ll sell you the Toyota, but the four tires are extra.&S217;&<60;&S221;

Worried About Losing Tax Revenue, Congress to Investigate Airlines’ Fees

WASHINGTON -- The United States federal government ran a deficit of $176 billion in October, the first month of the 2010 fiscal year, the Treasury Department reported Thursday. Receipts were $135 billion, the Treasury said, while outlays were $311 billion. The deficit was a little higher than a congressional estimate of $175 billion and marked the 13th consecutive monthly budget shortfall. A year ago in October the deficit was $156 billion.

U.S. Ran Deficit Of $176 Billion In October

COLUMBUS, Ohio – After Richard Handy of Fairfield received an e-mail from a conservative group calling Gov. Ted Strickland's proposed delay of Ohio's income tax cuts a "retroactive tax increase," Handy fired off a few passionate words to some state senators.

"I am absolutely against changing the rules in the middle of the game," wrote Handy in an Oct. 19 e-mail about Strickland's proposal to delay the final 4.2 percent reduction in income taxes to close an $850 million budget gap.

"I am sure the vast majority of Ohioans agree with me in opposing this idiotic proposal ... If Ohio needs more money, STOP SPENDING! That's what budgets are for."

An Associated Press public records request for constituent correspondence to legislative leaders on the tax proposal found that most was fueled by organized interests — the anti-tax group Americans for Prosperity that opposed it, and school teachers and employees and mental health service providers that supported it.

Some Republicans have argued that because current law has the last tax cut in place and because withholding for the tax year has already started, Strickland's tax proposal is a tax increase.

But the relatively light feedback from constituents in comparison to other legislative issues, including the budget earlier this year, suggests that most Ohioans are not particularly inflamed by the tax talk.

Lawmakers considering what to do about the budget gap received both dry form letters distributed among like-minded individuals and more personal — and sometimes humorous — pleas.

"CUT SPENDING! That's what my husband and I are doing, that's what my neighbors are doing," wrote Alice Martin of Huron to Republican Senate President Bill Harris of Ashland on Oct. 20. "I'll bet your wife could explain it to you!"

Peg Carter fired off a few quick words when she was crunched for time.

"I don't have much time here at the library internet because I have ice cream in the car," Carter wrote. "I do think that Ohioans who are still working, are able to accept a tax freeze — in light of your pay cuts — in order to provide help for those who have lost their jobs because of the economy."

The tax proposal approved by the Democratic-controlled House and pending in the Republican-controlled Senate includes a 5 percent pay cut for lawmakers.

Teachers and employees from several school districts used form letters, the most common e-mails sent to legislative leaders on the issue. Democratic lawmakers have said that delaying the tax reduction will protect school funding from both state and federal cuts, even naming the proposal the Education Funding Protection Act.

"My district cannot afford to lose state and federal funding," Debra McRoberts of Westerville told Harris in an Oct. 19 missive. "This will force our district to reduce learning opportunities for students and lead to further elimination of education employees."

The same letter was sent to Harris and House Speaker Armond Budish, D-Beachwood, from school personnel in Mount Vernon, Perrysburg, Sunbury, Shelby, Mansfield and other towns.

Many e-mails sent to Republican leaders opposing the tax proposal called it a "retroactive tax increase," a description the Strickland administration said is inaccurate. Several constituents said they received an e-mail from Americans for Prosperity describing it as "retroactive."

The state constitution bans retroactive laws. And Ohio Department of Taxation spokesman John Kohlstrand noted that "retroactive" is a legal term. He said a retroactive tax hike would be, for example, if lawmakers changed the tax rate for the 2008 tax year after that year is over.

Proposed delay of Ohio tax cuts spurs e-mails

LAWRENCEVILLE, N.J. &<51; For now, the nation&S217;s biggest preparatory schools are protecting students like Ivy Alphonse-Leja, who depends on financial aid to attend the Lawrenceville School.

&S220;There was never a concern that I could not come back next year,&S221; she said recently.

The question is whether the schools, which, like their university brethren, suffered significant declines in their endowments as financial markets withered, can continue to offer that same promise to incoming students.

The question goes to the heart of the prep schools&S217; longtime efforts to open up their classrooms to promising students of all incomes, and not just the children of wealthy families. Adding to the pressures on the schools are the increasing financial woes of their students.

The schools are left with limited options. This is a bad time to dip more deeply into their endowments. Raising tuition would just mean that &S220;more of their families may qualify for financial aid because their incomes may become insufficient to pay tuition bills,&S221; said Amy Falls, who oversees the endowment for Phillips Academy in Andover, Mass. And attracting gifts from alumni may get harder if the downturn continues or tax laws change.

Lawrenceville has decided to keep its financial aid budget flat for now, and that means &S220;somewhat fewer newcomers receive aid next year,&S221; the school&S217;s chief financial officer, Wesley R. Brooks, said. Phillips Exeter Academy, in Exeter, N.H., has also decided to keep its financial aid budget the same as it was last school year, said Julie Quinn, the spokeswoman for the school. None of the schools want to find themselves in the predicament that the Albuquerque Academy is in. The academy, a private day school in New Mexico, suffered a 20 percent decline in its endowment, and its prospects for raising new money are especially limited. Much of its investments were in real estate, and there is little hope for that coming back anytime soon. Next year, for the first time in its history, Albuquerque Academy will not be able to provide financial aid to all needy students.

&S220;The core of our mission is accessibility to everyone,&S221; said Albuquerque&S217;s treasurer, Gary L. Gordon, who graduated from the academy and sends his two children there. &S220;Other schools don&S217;t have as a mission to help so many families in so many ways. They have a much larger capacity for giving programs and they have so much money coming in that they don&S217;t have to worry.&S221;

Now Albuquerque has to rethink its core mission.

The outlook for other schools seems less severe. The budget cuts so far at the other big prep schools in the country, most of them in the Northeast, have been noticeable, but are not likely to be as deep if the markets recover.

Lawrenceville laid off 6 percent of its staff. Phillips Exeter Academy is trimming all its budgets, including the one for recruiting. Andover, where the value of the endowment fell 15.1 percent, is using &S220;restraint&S221; in hiring.

Ms. Falls said that Andover planned to continue to meet all the financial needs of students it accepts. The school was in a relatively good position last year, she said, because the endowment had raised about 5 percent in cash, which meant it did not have to sell investments that had plummeted in value.

Nevertheless, she said, &S220;We have sharpened our pencils a lot.&S221; It may become more difficult to raise money, she said. &S220;People&S217;s tax rates are going up. There will be less to go around. So everybody has to be thoughtful.&S221;

And some schools are even increasing their commitment to financial aid despite steep drops in their endowments. The Peddie School, in Hightstown, N.J., for instance, is increasing its financial aid budget by 8 percent despite an 18.6 percent drop in the endowment&S217;s return. &S220;We felt it was important to maintain our strong commitment to the policy,&S221; said Sean Casey, the school&S217;s director of communications.

Many of the prep schools also have the advantage of being generally conservative in their investments. As a result, they did relatively better when the markets turned down than the big universities &<51; their endowments generally declined 20 percent or less, while Harvard&S217;s and Yale&S217;s returns were down over 24 percent.

Prep Schools Face Cuts in Student Aid

LONDON – Government-controlled Royal Bank of Scotland Group PLC on Friday reported a net loss of 1.8 billion pounds ($3 billion) but that underlying profits had improved and lending to companies increased 5 percent.

Full recovery from its near collapse a year ago will take years, its chief executive Stephen Hester said.

For the three months ending Sept. 30, RBS reported total income of 7.1 billion pounds, compared to 8.6 billion pounds a year earlier.

However, the bank booked impairment losses of 3.3 billion pounds, up from 1.3 billion a year earlier. Impairments for the first three quarters of this year rose to 10.8 billion pounds.

Without the impairments, operating profit rose 55 percent to 1.75 billion pounds.

Hester said the results affirmed his confidence that RBS can recover as a strong company.

"The results also show the headwinds we face and the legacy we are purposefully working out of," he said. "As I have repeatedly said, the journey will take some years."

Royal Bank of Scotland posts $3 billion Q3 loss

SAN FRANCISCO -- Chrysler Group LLC, now managed by Italian auto maker Fiat SPA , said Tuesday that U.S. October sales dropped 30% to 65,803 vehicles from 94,530 in the year ago period. By brand, U.S. October sales of Chrysler models fell 36% to 12,815 units a year ago, while sales of the Jeep brand dropped 37% to 13,500, and Dodge brand sales declined 22% to 26,265. Total truck sales for the month fell 31% to 48,247 vehicles, and car sales fell 30% to 17,556 units.

Chrysler U.S. October Sales Fall 30%

NEW YORK (Reuters) – The U.S. economy has been kick-started into growth but stock investors still face an uncertain outlook as Wall Street gears up for comments from the Federal Reserve and a key report on employment this week.

The Fed&&9;s policy statement could signal fewer liquidity measures for markets, while nonfarm payroll data and the Institute for Supply Management surveys on the manufacturing and services sectors will give early indications of how the economy is faring in the fourth quarter.

Investors are nervous that monetary and fiscal stimulus measures may be ended too soon.

"If the government pulls out too early and they are not spending, (and) the consumer is not spending, you&&9;ve got a big issue," said Anthony Conroy, head trader for BNY ConvergEx, an affiliate of the Bank of New York.

The bankruptcy of CIT Group Inc (CIT.N) on Sunday will also feed pessimism about the economy this week, traders said. The century old commercial lender was brought down by the global credit crisis that left it unable to fund itself, while the recession left it with too many bad loans.

The filing, one of the largest in U.S. corporate history, was widely expected and analysts said it will be an underlying negative for stocks, but not a dominant downside driver.

S&P 500 stock index futures opened slightly lower on Sunday and the U.S. dollar edged higher as news of the bankruptcy spurred traders to reduce risk-taking.

U.S. stocks slumped on Friday in a stark reminder that investors remain highly sensitive to signs of economic weakness. The Standard & Poor&&9;s 500 Index (.SPX) closed out its first down month in eight on October&&9;s final trading day as investors questioned the sustainability of the rally.

"You got a spurt that was stimulus driven," said Fred Dickson, a market strategist at D.A. Davidson & Co. in Lake Oswego. "The common belief right now is that the economy will move forward in the fourth quarter, but probably at a little slower pace than in the third quarter."

Financial markets are bracing for a possible change of wording in the Federal Open Market Committee&&9;s statement, expected on Wednesday at the end of its two-day meeting, that could hint interest rates are headed higher late next year.

That, and any hint the Fed may start to pull back some of the liquidity it has been providing to markets through its debt purchases, could hurt stocks.

"If you got language along those lines that suggested that they could be raising maybe a little bit earlier than what folks were expecting, then yes, I would expect the market to sell off on that news," said Thomas Wilson, a managing director in the institutional investments and private client group at Brinker Capital in Berwyn, Pennsylvania.

MORE PINK SLIPS IN OCTOBER

The number of jobs cut by U.S. employers is expected to have fallen in October. But a negative surprise like last month, when the unemployment rate hit its highest level in 26 years, could undermine confidence in the economic recovery, driving stocks lower.

The nonfarm payrolls data, due on Friday, is expected to show U.S. employers cut 175,000 jobs in October, according to economists polled by Reuters. In comparison, September&&9;s job cuts totaled 263,000, far exceeding economists&&9; forecast.

The U.S. unemployment rate is forecast to rise to 9.9 percent in October from September&&9;s 9.8 percent.

Third-quarter earnings season is winding down, but a few bellwethers could offer further insight into the economy.

Earnings and the outlook from Ford Motor Co (F.N), the only U.S. car manufacturer to avoid bankruptcy, could be an important indication of how auto sales might fare without government help.

Ford&&9;s report on Monday will be followed by U.S. auto sales data the next day. Analysts and executives expect total U.S. vehicle sales to rise to an annual rate of about 9.8 million units in October, up from 9.2 million the month before.

U.S. auto sales boomed in August as &&6;3 billion in the federal government&&9;s "cash for clunkers" incentives drove sharp gains.

HOUSING BY THE NUMBERS

Pulte Homes Inc (PHM.N), the largest U.S. home builder after its merger with Centex Corp over the summer, is set to report earnings on Wednesday. The comments of its management will be watched closely for signs the nascent U.S. housing recovery is finding firmer ground.

Pending home sales, due on Monday, are expected to be unchanged in September after jumping 6.4 percent in August.

Talk of ending an &&6;8,000 tax credit for first-time home buyers, which helped support the housing market, has ruffled investors. The tax credit is set to expire on November 30.

Congress was considering a proposal to extend the tax credit. But before a deal is cut, it remains a wild card for markets.

(Reporting by Edward Krudy; Editing by Jan Paschal)

Wall St Week Ahead: Goodbye to all that stimulus?

The federal stimulus program has saved or created nearly 650,000 jobs through aid to states, infrastructure projects and federal contracts, the Obama administration claimed Friday morning, adding that officials believe they are on track to meet their goal of 3.5 million jobs over two years.

The new figures are based on reports being released today from 131,000 recipients of the stimulus money and are intended to give the clearest sense to date of how many jobs are being created or saved directly by the stimulus. Until this month, most jobs figures have been based on the estimates of economists &<51; not actual reports.

The figures do not include jobs indirectly created by the money pumped into the economy through tax cuts, unemployment benefits and aid to states for Medicaid. If those were included, the administration estimates, the tally would rise to more than 1 million jobs saved or created.

Vice President Joseph R. Biden Jr. said that the reports would show that 640,239 jobs were created directly.

&S220;There is strong and mounting evidence that the recovery act is putting people back to work,&S221; Mr. Biden said at a news conference in Washington, where he noted that economists have credited the stimulus with helping the economy grow in the last quarter.

Most of the jobs claimed in the reports are likely to be those that were saved, especially by school districts that have said they were able to avoid layoffs after the stimulus provided billions of dollars of education aid to cash-strapped states. Whether that many teachers would actually have been laid off without the stimulus is not clear, though. In New York City, for instance, officials have said that the stimulus allowed them to save thousands of teaching jobs, but it would have been politically difficult for Mayor Michael R. Bloomberg to lay off that many teachers while running for re-election.

The actual figures are expected to be posted on the government&S217;s Web site later Friday.

The jobs reports come a day after the government announced that the economy grew by 3.5 percent during the quarter that ended in September, ending the longest economic contraction since World War II. But while many economists credited the $787 billion stimulus program with spurring some of that growth, questions remained on one of the most wrenching problems of the downturn: joblessness.

With unemployment at 9.8 percent, and many economists predicting that it will rise still higher before the economy adds jobs again, questions about the stimulus program&S217;s effectiveness at creating jobs have been swirling in Washington.

Republicans have cited the high unemployment figure &<51; which is well above the worst-case scenario the Obama administration gave earlier this year &<51; as a proof of failure of the program, which they overwhelmingly opposed. Democrats have said the recession was simply more severe than most economists predicted earlier this year, and they credit the stimulus program with helping avert a second Great Depression.

White House Chalks Up 650,000 Jobs to Stimulus

Wall Street opened down on Wednesday morning as investors digested a report on United States durable goods orders and awaited a report on new home sales.

Major stock averages dropped even as the government released a report showing a 1 percent rise in orders for durable goods in September &<51; the second increase in the last three months. The increase met expectations, but total orders were still down 24.1 percent compared with a year ago, a sign that economic recovery may be slow to materialize.

Durable goods, which include items like refrigerators and planes, open a window into the health of the manufacturing industry, and provide a preview of how busy factories will be in the month ahead. Rises in durable goods orders can lead to more jobs and are considered central to the growth of the economy.

After the report was released, the Dow Jones industrial average dropped by 0.231 percent, and the Standard &&8; Poor&S217;s 500-stock index fell 0.267 percent in pre-market trading.

Investors were also keeping an eye on a report on new home sales to be released at 10 a.m., which will have implications for the construction job market as well as consumer spending on items like furniture.

And investors are also waiting to see if more rosy earnings reports will come from big energy companies, following the news on Tuesday that BP had exceeded expectations in its third-quarter profits.

Financial stocks were down slightly as news that GMAC Financial Services was seeking a third round of bailout financing from the U.S. government spread through the market.

Overseas, the Nikkei stock average in Japan closed 1.35 percent down at 1,0075.05. European markets were also dropped in afternoon trading, with the FTSE 100 down 0.014 percent, the DAX in Germany index down.003 percent, and the CAC-40 in France dropped .028 percent.

Stocks Are Mixed Ahead of Economic Reports

Newspaper sales moved sharply lower this year, falling about 10 percent in the six months ended Sept. 30 compared to the same period last year, according to figures released on Monday by the Audit Bureau of Circulation.

Circulation has been sliding since the early 1990s, but in the last few years, the pace of the decline has accelerated sharply. In the same six-month period a year ago, circulation fell at roughly half the rate. The decline has been attributed to the continued migration of readers to the Web, the deep recession, newspapers intentionally shedding unprofitable circulation and, in some cases, waning reader interest as budget cuts reduce the content of the papers.

As it had warned, circulation for USA Today suffered a steep drop, in part a reflection of the slump in the hotel and airline industries, which distribute most of that paper&S217;s copies. USA Today, printed only on weekdays, fell from almost 2.3 million to 1.9 million, a 17.1 percent drop, losing the top spot in weekday circulation for the first time since the 1990s to The Wall Street Journal.

The Journal&S217;s circulation, at just over 2 million, rose 0.6 percent. It is one of a very few papers to sell online subscriptions, which are counted in the circulation total, helping The Journal defy the industry-wide decline for several years.

The New York Times&S217; weekday circulation fell 7.3 percent, to about 928,000, after two decades above 1 million. It continued to have by far the largest Sunday circulation, at 1.4 million, down 2.7 percent.

Among the nation&S217;s largest newspapers, the biggest decline was reported by The San Francisco Chronicle, whose weekday circulation, about 252,000, was down 25.8 percent. The Star-Ledger of Newark and The Dallas Morning News each fell more than 22 percent on weekdays, and about 19 percent on Sundays.

Over all, the audit bureau said that of the hundreds of newspapers whose reports it had so far, weekday circulation was down 10.6 percent, and Sunday was down 7.5 percent. In the same period a year ago, both declines were under 5 percent, and even that was a marked acceleration from the previous years.

Two major papers, The Denver Post and The Seattle Times, reported significant circulation gains after their main competitors went out of business.

U.S. Newspaper Circulation Falls 10%

LAFAYETTE, La. – IberiaBank Corp. has opened three new mortgage offices in Alabama and two in Georgia.

The company recently acquired the assets and liabilities of CapitalSouth Bank, a Birmingham, Ala.-based company shut by federal regulators.

The Alabama offices are in Montgomery, Auburn and Prattville. The Georgia offices are in Valdosta and Columbus.

Lafayette-based IberiaBank now has 43 mortgage offices in 10 states.

IberiaBank opens new mortgage offices in Ala., Ga.

Filed at 9:24 a.m. ET

NEW YORK (Reuters) - Merck & Co <MRK.N>, slated to acquire Schering-Plough Corp <SGP.N> later this year, reported better-than-expected earnings due to cost controls and strong sales of its diabetes and HIV treatments.

Merck on Thursday reported net income of $3.42 billion, or $1.61 per share, in the third quarter. That compared with $1.09 billion, or 51 cents per share, in the year-earlier period.

Excluding special items, including a $1.7 billion after-tax gain from the sale of its Merial animal health business and restructuring charges, Merck earned 90 cents per share. Analysts on average expected 82 cents per share, according to Thomson Reuters I/B/E/S.

Merck said the profit beat was largely due to controls on its marketing and administrative expenses, as well as costs of its materials and products.

Global company sales rose 2 percent to $6.05 billion, a bit higher than Wall Street's expectations of $6 billion. Revenue would have risen 5 percent if not for the stronger dollar, which lowers the value of overseas sales.

To pave the way for its planned $41 billion purchase of Schering-Plough, Merck in July agreed to sell its half stake in the Merial pet care business for $4 billion to long-standing partner Sanofi-Aventis SA <SASY.PA>.

Merck is expected to reap huge cost savings from the Schering-Plough merger by cutting 15 percent of their combined workforce. It will acquire a number of valuable Schering-Plough drugs, including arthritis treatment Remicade, overseas rights to a promising newer arthritis treatment called Simponi (golimumab) and a potential blockbuster blood-clot preventer now in late-stage studies.

Many analysts have hailed the purchase of Schering-Plough, saying it has a more promising roster of drugs in late-stage trials than far-larger Merck. Moreover, Remicade and other Schering drugs could shore up Merck at a time when a number of its own drugs are posting disappointing sales.

During the quarter, sales of Merck's Gardasil vaccine against cervical cancer fell 22 percent to $311 million, hurt by overseas competition from GlaxoSmithKline's <GSK.L> rival Cervarix vaccine.

Combined sales of cholesterol fighters Vytorin and Zetia, sold in partnership with Schering-Plough, fell 7 percent to $1 billion. The drugs have lost favor with many doctors following a pair of clinical trials that cast doubt on their effectiveness.

Quarterly sales of Merck's blood-pressure drugs Cozaar and Hyzaar slipped 3 percent to $861 million, hurt by competition from Novartis AG's <NOVN.VX> Diovan.

But Januvia, a new type of diabetes pill, continued to make inroads with doctors and patients, with sales growing 30 percent to $491 million. And HIV treatment Isentress, which also works by a new mechanism of action, jumped 84 percent to $197 million.

Sales of asthma drug Singulair, Merck's biggest product, rose 5 percent to $1.1 billion. Although that is a slowdown from 16 percent growth in the second quarter, it reflects a continuing rebound for Singulair, whose sales had declined in recent quarters due to concerns it might increase suicide risk.

Shares of Merck rose 16 cents, or 0.5 percent, to $32.84 in premarket trading.

(Reporting by Ransdell Pierson, editing by Maureen Bavdek, Dave Zimmerman)

Merck Beats Profit Forecasts, Helped by Cost Cuts