BRIEFCASE.

Byline: - Staff and Wire Services

Palm, Microsoft team up on phone

SAN FRANCISCO - Palm Inc. is teaming up with Microsoft Corp. to launch a Windows-based version of the Treo smart phone, marking the first time the handheld-computer pioneer will sell a device based on its former rival's software.

The new Treo 700 will be offered through Verizon Wireless, according to market analyst Rob Enderle and other industry sources.

The three companies have scheduled a news conference for Monday. Spokesmen for Palm, Verizon Wireless and Microsoft declined to comment.

The new device will run on Windows Mobile 5.0, the latest version of the operating system that has been challenging Palm OS for years.

As Rita weakens, crude cost dips

NEW YORK - Crude oil prices dropped sharply Friday, the second straight day of declines, as traders welcomed news that Hurricane Rita had weakened, suggesting that damage to refinery capacity in the Gulf could be less severe than originally feared.

Refineries in the projected path of the hurricane were shuttered by Friday, including facilities operated by BP PLC, Royal Dutch Shell PLC and Exxon Mobil Corp. Nineteen of Texas' 26 refineries, with a combined daily capacity of nearly 5 million barrels, have been shut, according to the Energy Information Agency.

Sears losing share of appliance sales

ATLANTA - A trip to look for a new appliance increasingly means a trip to the nearest Lowe's or Home Depot.

The two home-improvement giants are steadily enlarging their share of the appliance market and gaining ground on longtime leader Sears.

``Home improvement centers are growing so rapidly,'' said analyst Philip Zahn with Fitch Ratings. ``People think less of going to the mall to make a purchase like (appliances).''

Sears remains in the No. 1 spot by a fairly wide margin. But its market share dropped nearly 4 percentage points, to 33.1 percent of units sold in the second quarter. That's down from 36.9 percent in the year-ago quarter, according to Louisville, Ky.-based Stevenson Co., which tracks appliance market share.

China won't alter dollar exchange

SHANGHAI, China - China's central bank took a step toward further flexibility in its foreign exchange system Friday, announcing that it was widening the daily range for trading between the yuan and three other currencies - but not the U.S. dollar.

The yuan's exchange rate against the euro, yen and Hong Kong dollar will be allowed to fluctuate up to 3 percent above or below their opening levels, up from the previous band of 1.5 percent in either direction, according to a statement posted on the central bank's Web site.

But the central bank held firm its grip on the yuan's exchange rate to the U.S. dollar, keeping the daily trading band steady at 0.3 percent in either direction, as determined when authorities revalued the yuan July 21.

At that time, the central bank scrapped the yuan's decade-long peg to the U.S. dollar and instead allowed it to trade against a basket of currencies. It also allowed the yuan to gain 2.1 percent against the dollar, to 8.11 yuan per dollar from a previous rate of 8.27 yuan to the dollar.

U.S. is pressured on farm subsidies

PARIS - The United States is under growing pressure to make difficult concessions on farm subsidies after a Friday meeting with three other trade powers failed to break a deadlock that threatens global trade talks.

Washington so far has resisted demands that it come up with an offer to cut market-distorting farm aid, saying it first wants to see moves by trade partners to reduce agricultural import tariffs.

But the European Union took a step in that direction Friday, presenting a detailed but tentative tariff-cutting offer at talks with U.S. Trade Representative Rob Portman and ministers from India and Brazil.

With just three months remaining before a Hong Kong summit at which 148 governments are supposed to agree on a framework global trade treaty, expectations for a U.S. gesture on farm subsidies are mounting.