S&P report: China's banks most at-risk

China's banks are the most at-risk to a financial crisis and a bailout of the industry would cost about $650 billion, Standard & Poor's said in a report on the global financial system.

"State bank lending to unproductive companies or overheated industries is a particular point of vulnerability in China," the report said. "Standard & Poor's is concerned about the growth of rural credit cooperatives, the weakest segment of China's banking system."

China, the world's seventh-largest economy, aims to slow growth to 7 percent this year from a seven-year high of 9.1 percent in 2003. In the event of a crisis, writing off all of China's nonperforming loans and recapitalizing the banks would cost about $650 billion, or 40 percent of the country's forecast gross domestic product this year, Standard & Poor's estimated.

American shares fall after letter publicized

DALLAS - Shares of American Airlines' parent fell 6 percent Thursday after the former president of the pilots' union said the company's financial returns have been nearly $1 billion short of projections since last year and will get worse.

American and other carriers have been hurt by high fuel costs and fallout from the war in Iraq. However, the company would have missed financial targets even without those factors, said the former union leader, John Darrah.

Shares in AMR Corp. fell 69 cents to close at $10.66 Thursday on the New York Stock Exchange after Darrah's 14-page note to fellow pilots was made public.

Fort Worth, Texas-based AMR lost $166 million in the first three months of the year, down from a $1.04 billion loss in the same period last year.

Stockbrokers due $8 million, judge says

NEWARK, N.J. - A New Jersey judge has ruled that former Smith Barney stockbrokers are due $8 million from the company's deferred compensation plan, a lawyer for the brokers said Thursday.

The ruling is the first to award damages to brokers, and affects about 160 in New Jersey, said their attorney, Bruce H. Nagel. Similar lawsuits, involving thousands of brokers, are pending in Florida, Colorado, Connecticut, Louisiana, Massachusetts and Texas, he said.

The company is expected to appeal, Nagel said.

Oil, gas flowing again in Nigeria

LAGOS, Nigeria - Energy giant Total S.A.'s subsidiary said it was pumping oil and gas again Thursday, ending a six-day shutdown over fears that a threatened oil union strike could bring violence.

Elf Nigeria, Total's subsidiary in Africa's leading oil-producing nation, agreed to give five top oil-field jobs to Nigerians, unions said, answering their immediate complaint that supervisor positions were going to expatriates.

Production resumed by midday and was expected to return to full capacity within 12 to 24 hours, an Elf Nigeria spokesman said.

Total's U.S.-traded shares rose 71 cents to close at $98.71 Thursday on the New York Stock Exchange.

Logging approved for site of forest fire

GRANTS PASS, Ore. - The U.S. Forest Service signed off on a plan Thursday to log thousands of acres of trees killed by a huge forest fire in 2002.

Under the plan, loggers will be allowed to cut 370 million board feet of timber, enough to build 24,000 homes, from about 20,000 acres of federal land over the next two years.

The area was burned two summers ago when four fires started by lightning merged into the nation's biggest and costliest blaze of the year. It burned across 500,000 acres, threatened 17,000 people and cost $153 million to fight.

Fixed-rate mortgages take a sharp dive

HARTFORD, Conn. - Homeowners who put off refinancing got a piece of welcome news this week: Fixed-rate mortgages fell sharply to their lowest levels since late April. This week's tumble in the 30- and 15-year rates was sparked by last week's report that job creation in June was weaker than expected, said Joel Naroff of Naroff Economic Advisors in Holland, Pa.

Thirty-year home loans averaged 6.01 percent this week, with an average 0.6 point, down sharply from 6.21 percent last week, according to Freddie Mac's Primary Mortgage Market Survey. The 30-year average fell for the third consecutive week.

CORRECTION: Terrier story error

In a story about Boston terriers in Thursday's Business section, dog breeder Joyce Fletcher said she is careful about who buys her terriers only because "there are no bad dogs, only bad owners." Incorrect information was attributed to her.