TOP STORIES -- Oct. 3-8

September Job Report Weaker Than Expected

The nation’s economy added a weaker-than-expected 96,000 net nonfarm jobs in September, the Labor Department said, raising concerns about the recovery’s strength while sharpening campaign rhetoric about President Bush’s economic record.

The job increase, lower than consensus forecasts of a 150,000 gain, followed a revised boost of 128,000 jobs in August and was the fourth straight month of relatively weak employment growth. Unemployment remained unchanged at 5.4%, in line with expectations.

The government also revised upward, by 236,000 jobs, its preliminary estimate for job creation in the 12 months ended in March 2004. But that revision, subject to final modification in February, still leaves President Bush with an estimated net drop of 585,000 jobs during his term.

Democratic presidential candidate Sen. John F. Kerry seized on the report as further evidence of the “failures” of Bush’s economic policies. Bush administration officials said the job report, though not as strong as hoped for, nonetheless showed a growing economy.

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Chiron Plant Closure Cuts Flu Vaccine Supply

U.S. public health officials warned of serious flu vaccine shortages after the company that supplies half the nation’s flu shots said it could not provide any vaccine this season.

The warning came after British health authorities in effect shut down for three months a Chiron Corp. factory in Liverpool, England, because of unspecified manufacturing problems. The plant makes Chiron’s entire U.S. supply of flu vaccine.

Chiron, based in Emeryville, Calif., said the surprise closure of the facility meant the company would be unable to ship vaccine before the flu season ended.

Chiron and French drug maker Aventis Pasteur are the only providers of flu shots to the United States. The companies had planned to deliver 100 million doses, 20% more than for last year’s flu season. Now just 54 million doses will be available.

Chiron Chief Executive Howard Pien emphasized that Chiron remained committed to the flu vaccine business and was in the process of investing $100 million to improve the Liverpool factory. But the company said its profit for 2004 would be one-quarter of what it had forecast just last month.

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Howard Stern to Jump to Sirius Satellite Radio

Shock jock Howard Stern told listeners that he was abandoning traditional broadcasting for satellite radio -- a money- losing, unregulated, subscriber-only medium that reaches a fraction of his millions of listeners.

In an announcement, Stern said his popular morning talk show would switch in January 2006, from Viacom Inc.’s Infinity Broadcasting to Sirius Satellite Radio, where the heavily fined broadcaster could at last escape Federal Communications Commission scrutiny.

With the five-year deal, Stern becomes by far the best-known broadcast personality to migrate to satellite radio -- and the first with the potential to catapult it to mainstream popularity.

But the deal is fraught with risks for both sides. Stern is trading his vaunted broadcasting perch for a role at a niche “satcaster.” Sirius, which along with rival XM Satellite Radio has struggled for listeners and financial stability, is betting heavily that Stern will bring 1 million new subscribers. Sirius will pay $100 million a year for the show.

“I’m going to the future of radio,” Stern told his listeners. “I think radio the way we’ve done it is becoming obliterated.”

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U.S., Europe Intensify Boeing-Airbus Battle

The long-standing rivalry between the world’s two largest aircraft makers escalated into an international trade brawl as the U.S. announced that it was filing a formal complaint against the European Union over what it called unfair government subsidies provided to Airbus.

The European Union countered with its own complaint, alleging that Chicago-based Boeing Co. receives “massive subsidies” from the U.S. in violation of a decade-old accord.

The dueling complaints filed with the World Trade Organization set in motion what is likely to be one of the most heated and challenging trade disputes as the two remaining large commercial aircraft manufacturers vie for dominance.

At stake may well be Boeing’s $22-billion-a-year commercial aircraft business, which for the first time last year sold fewer passenger jets than Airbus.

Under WTO guidelines, the two sides have a 60-day “cooling-off period” before a panel is convened to review the complaints. A decision is usually made in about a year.

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Retailers Post Tepid Gains in September

Shoppers spent tentatively in September for the fourth month in a row, and retailers posted only modest sales gains.

Although a 2.4% increase in comparable-store sales outshined August’s gloomy results, it didn’t offer any hint that holiday shopping would get off to a roaring start.

Gains from a late Labor Day, which pushed more school shopping than usual into September, were offset by high gasoline prices and hurricanes, according to the International Council of Shopping Centers.

Among California-based retailers, Gap Inc. logged a disappointing 3% decline in same-stores sales, or sales at stores open at least a year. Wet Seal Inc. of Foothill Ranch saw an 8% same-store drop. But Bebe Stores Inc. of Brisbane reported an increase of 17.6%. Anaheim-based Pacific Sunwear of California Inc. logged a 9.8% gain.

Nationwide, drugstores and wholesale clubs led the retail pack with gains of 7.1% and 6.6%, respectively. Higher-end retailers held their own. But stores catering to lower-income consumers didn’t fare all that well.

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Marketing of Genentech Drug Is Focus of Probe

Genentech Inc. said the U.S. attorney’s office in Philadelphia was conducting an investigation into the marketing of the company’s top-selling drug, Rituxan.

South San Francisco-based Genentech said it received a subpoena requesting documents related to promotion of Rituxan, used to treat non-Hodgkin’s lymphoma. More than $1.3 billion of the drug was sold last year in the United States.

Genentech is cooperating with the inquiry, a spokeswoman said. She declined to elaborate on what marketing practices the government was looking into.

A spokesman for the U.S. attorney’s office in Philadelphia declined to comment on the Genentech investigation, which is both civil and criminal.

Federal authorities have been examining other drug companies’ marketing practices.

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FTC Files Lawsuit Over CortiSlim Ads

Federal regulators said they had sued the marketers of CortiSlim, a widely advertised dietary supplement, alleging that they made false claims about its ability to help people swiftly shed pounds.

The Federal Trade Commission lawsuit charges that Window Rock Enterprises Inc. of Brea and Infinity Advertising Inc. of Anaheim made “deceptive efficacy claims” about CortiSlim in broadcast and print ads, in infomercials and on websites.

The suit, filed in federal court in Los Angeles, asks that an unspecified amount of money be refunded to customers.

An attorney for Window Rock said the company had signed an agreement with the FTC to stop any “offensive advertising.” He said that the marketing claims resulted from overenthusiasm.

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PeopleSoft CEO Misled Analysts, Director Says

Former PeopleSoft Inc. Chief Executive Craig Conway was fired in part because he intentionally misled analysts about the negative effects that Oracle Corp.’s hostile bid was having on the software maker’s customers, a PeopleSoft director said.

Remarks from Steven Goldby, on PeopleSoft’s board since 2000, came on the first day of testimony in Delaware Chancery Court. Oracle is seeking to nullify Pleasanton, Calif.-based PeopleSoft’s “poison pill” provision to thwart unwelcome suitors.

Conway acknowledged that he embarked on a campaign to “vilify” Oracle. But he denied any personal animosity. Instead, Conway told the Delaware court, he was trying to rally employees and customers nervous about Oracle’s tender offer.

On Friday, Oracle Chairman Larry Ellison said he was considering lowering his bid below the current offer of $21 a share.

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AES Plans to Build More Power Plants

Independent power supplier AES Corp., encouraged by an improved outlook for the state’s electricity market, said it would build more generating plants in Southern California.

Arlington, Va.-based AES said the power plants, which could take several years to begin operation, would “reduce the risk of power shortages” in the state. But some industry observers, though applauding AES’ action, caution that California still faces potential power shortages in the next three years.

AES is planning to add as many as 500 megawatts of electricity -- enough to power about 375,000 homes -- but California is poised to lose 4,000 to 8,000 megawatts in coming years from plants expected to be shuttered.

Still, AES’ move marked a lately rare occasion when an outside power supplier was willing to add resources in California.

For a preview of this week’s business news, please see Monday’s Business section.