AP Executive Morning Briefing

The top business news from The Associated Press for the morning of Tuesday, June 5, 2007:

Chinese Stocks Rebound in Late-Day Rally

SHANGHAI, China (AP) _ Chinese stocks rebounded in volatile trading Tuesday following their sharpest one-day drop in three months as strong buying by institutions offset selling by retail investors. The benchmark Shanghai Composite Index gained 2.6 percent to 3,767.10 after a rollercoaster session that saw the index plunge as much as 7.2 percent earlier in the day. It fell 8.3 percent on Monday _ the benchmark's sharpest decline since an 8.8-percent drop Feb. 27 triggered a global market sell-off.

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Avaya OKs $8.2B Private Equity Buyout

BASKING RIDGE, N.J. (AP) _ TPG Capital is embarking on its second big telecom venture in two weeks, joining with another private equity firm, Silver Lake, in an $8.2 billion bid for Avaya Inc. Avaya said Monday night that it has agreed to the firms' offer of $17.50 in cash per share, two weeks after wireless phone company Alltel Corp. announced its $24.7 billion buyout by TPG Capital and Goldman Sachs Group Inc.'s GS Capital Partners.

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Stocks Eke Out Gain After China Drop

NEW YORK (AP) _ Wall Street recovered from a mostly down session Monday, eking out a gain as investors brushed off another slide in Chinese stocks. The market had little in the way of corporate or economic news to give it direction, but while it was in negative territory for much of the day, in the end it shook off an 8.3 percent slide in the benchmark Shanghai Composite Index. The Chinese index had its biggest one-day drop since the Feb. 27 plunge that set off a brief global market selloff as the Chinese government attempts to cool the country's market boom. Investors used Monday to adjust positions after both the Standard & Poor's 500 index and Dow Jones industrial average surged to record closes in the previous session. The market was encouraged by economic data released last week that suggested the economy was slowing, but not too quickly, and inflation remained in check.

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Palm Sells 25 Pct. Stake to Private Firm

SAN JOSE, Calif. (AP) _ Faced with mounting competition in the smart-phone market, Palm Inc. is selling a quarter of its company to a private equity firm to arm itself with new leadership, most notably the former technical guru behind the iPod. The deal with Elevation Partners _ which agreed to invest $325 million for a 25 percent stake in Palm _ will infuse new talent in the handheld computer pioneer as it battles stiffening competition that will only get tougher with Apple Inc.'s June 29 launch of the iPhone.

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Murdoch Meets With Bancroft Family

NEW YORK (AP) _ Rupert Murdoch stepped up his campaign to woo the family that controls Dow Jones & Co. on Monday, meeting with key members of the Bancroft family in person to offer assurances that The Wall Street Journal would continue its long tradition of excellence under his stewardship. The family had initially rebuffed Murdoch's $5 billion offer for the company in early May, but last Thursday they agreed to meet with him. In a statement, the family said they were most concerned about protecting the editorial independence and integrity of the Wall Street Journal.

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Hyundai Grabs Lead in Auto Quality Study

DETROIT (AP) _ When it comes to car quality, think Korean. Hyundai Motor Co. leads in five categories in the annual vehicle quality study released Monday by Strategic Vision Inc., a San Diego-based market research company and consultant to automakers. Hyundai's rise in the rankings is only the latest sign of the improved overall quality and declining number of defects in today's cars and trucks, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

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Investigators Find Gap in Stock Options

WASHINGTON (AP) _ There is a multibillion-dollar gap between what public companies book as expenses for their executives' stock options and what they report to the IRS under two different sets of rules, according to Senate investigators and a key senator who is seeking to change the reporting system. The discrepancy, with far greater deductions for stock options being reported to the Internal Revenue Service, is costing the Treasury billions of dollars, Sen. Carl Levin, D-Mich., said Monday. He is proposing that the gap be closed in legislation requiring uniform regulations.

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Oil Prices Drop in Asian Trading

SINGAPORE (AP) _ Oil prices retreated Tuesday amid easing concerns about a cyclone approaching the Persian Gulf and on expectations that a midweek report would show that U.S. gasoline stockpiles rose last week. Light, sweet crude for July delivery fell 12 cents to $66.09 a barrel in Asian electronic trading on the New York Mercantile Exchange mid-afternoon in Singapore.

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Factory Orders Post Weak Advance

WASHINGTON (AP) _ Orders to U.S. factories posted a weaker-than-expected gain in April as declines in demand for cars, planes and boats offset strength in business investment. The Commerce Department reported Monday that factory orders increased by 0.3 percent in April, the weakest showing in three months. It was less than half of the 0.8 percent increase that analysts had been expecting.

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Krispy Kreme Widens 1Q Losses

WINSTON-SALEM, N.C. (AP) _ Krispy Kreme Doughnuts Inc. said Monday its fiscal first-quarter loss widened as the doughnut maker continued its recovery from a bad stumble several years ago. In the quarter ended April 29, the doughnut maker said its net loss was $7.4 million, or 12 cents per share, compared with a net loss of $6 million, or 10 cents per share, in the year-earlier quarter. Revenue fell to $110.9 million from $119.4 million a year earlier.

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Gold Prices

LONDON (AP) _ Gold bullion opened Tuesday at a bid price of $672.50 a troy ounce, down from $673.70 late Monday.

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Japan Markets

TOKYO (AP) _ Japanese stocks rose for a fourth straight session Tuesday, led by technology and pharmaceutical shares. Investors were heartened by modest gains on Wall Street overnight and shrugged volatility in Chinese shares.

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Dollar-Yen

TOKYO (AP) _ The euro hit a new record high against the yen in Asia Tuesday as the muted reaction on Wall Street to the plunge in Chinese stocks eased concerns that players were bailing out of yen-carry trades.

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