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Reuters Business Summary

Reuters - Saturday, August 30

Consumer spending shrinks but confidence rises

WASHINGTON - Personal income tumbled unexpectedly in July and inflation-adjusted spending shrank as government economic stimulus waned, but consumer spirits rose this month, a hint the economy may muddle through its woes. Personal income fell 0.7 percent in July, the sharpest decline since a 2.3 percent plunge in August 2005, when Hurricane Katrina hit, the Commerce Department said on Friday. Analysts were expecting income to hold steady.

Dell warning on spending, oil weigh on Wall Street

NEW YORK - Stocks tumbled on Friday as the price of oil rose and a warning by computer maker Dell that companies worldwide are cutting back on technology spending spooked that sector. Economic data added to the market jitters heading into the long Labor Day weekend. A government report before the opening bell showed U.S. personal income fell unexpectedly in July while spending slowed as the effects of a government stimulus package wore off. An inflation measure hit a 17-year high.

Electric fault spurs big GM recall

DETROIT - General Motors Corp <GM.N> is recalling 857,735 vehicles equipped with a heated windshield wiper fluid system for a potential short-circuit problem, according to federal safety regulators. A short-circuit in the system may cause other electrical features to malfunction, create an odor or cause smoke, increasing the risk of a fire, the National Highway Traffic Safety Administration said on its website.

Google to go ahead with Yahoo deal: report

- Google Inc. <GOOG.O>, facing a U.S. Justice Department probe of its search-advertising partnership with Yahoo Inc. <YHOO.O>, will proceed with the agreement by early October, Bloomberg said. "We are going to move forward," Google Chief Executive Eric Schmidt said in an interview with Bloomberg Television on Thursday in Denver.

Nintendo lifts profit, shares soar

TOKYO - Nintendo Co boosted its annual profit outlook by 23 percent on white-hot demand for its Wii video game console and DS portable player, beating market expectations and sending its shares more than 8 percent higher. As consumers in the United States and Europe snap up its game machines, Nintendo hiked forecasts for the Wii 6 percent and for the DS 9 percent, pushing the company to the limits of current production capacity.

Boeing machinists union mulls final offer

CHICAGO - Boeing Co's <BA.N> largest union said on Friday it was dissecting the fine print" of the company's final contract offer and would make a recommendation to members by the end of the day on whether to approve the deal. The recommendation by leaders of the International Association of Machinists on what Boeing calls its "best and final" offer will either defuse or intensify the chance of a strike next week. A strike by the 27,000 IAM-represented employees could cost Boeing $3 billion a month.

Delphi says preparing revised reorganization plan

NEW YORK - Bankrupt auto parts maker Delphi Corp <DPHIQ.PK> is preparing a revised plan of reorganization to file with the U.S. Bankruptcy Court, but does not know when such a plan will be ready, a company spokesman said on Friday. "You can expect to see at some point the filing of a revised plan of reorganization," Lindsey Williams told Reuters. "I just don't have the time frame for you."

GM offers early retirement to U.S. salaried staff

DETROIT - General Motors Corp <GM.N> is offering early retirement incentives to about 28 percent of its U.S. salaried work force as part of its effort to reduce payroll expenses and conserve cash. The incentives were offered to about 9,000 U.S. employees, a person familiar with the plan said on Friday.

Oil rises to $117 on storm threat to U.S. output

LONDON - Oil rose by more than $1 to above $117 a barrel on Friday, as Tropical Storm Gustav was poised to enter the Gulf of Mexico, raising concerns about its impact on U.S. offshore oil and gas output. Energy companies braced for Gustav, shutting down production and evacuating personnel from offshore rigs. The U.S. Gulf of Mexico is home to a quarter of U.S. crude oil production and 15 percent of its natural gas output.

Microsoft buys ciao.com to boost e-shopping search

LONDON - Microsoft has agreed to buy Greenfield Online, owner of popular European price comparison website ciao.com, for about $486 million to boost its Internet search and e-commerce business in Europe. Microsoft, whose $47.5 billion bid to buy Yahoo earlier this year failed after a long battle, said on Friday the acquisition -- the latest in a series -- should help it build a more consumer-friendly, results-oriented search engine.

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