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Byline: -- Staff and Wire Services

Northwest loses ruling on strike

MINNEAPOLIS -- A federal bankruptcy judge on Thursday denied a Northwest Airlines Corp. request to block a strike by its flight attendants that could begin as soon as Aug. 25.

Northwest immediately said it would appeal.

Judge Allan Gropper in New York wrote that he does not have the authority to block a strike as Northwest had requested.

Flight attendants have said they may begin random, unannounced strikes after 9:01 p.m. CDT Aug. 25 unless Northwest negotiates a new contract with them. Northwest imposed pay cuts and work rules on flight attendants last month after they voted down a negotiated settlement.

Report indicates slowing economy

NEW YORK -- An indicator of future economic activity dipped in July, suggesting a slowdown in economic growth in coming months. A cooling housing market was the main culprit.

The Conference Board, an industry-based research group based in New York, said its Index of Leading Economic Indicators fell 0.1 percent last month following an increase of 0.1 percent in June and a 0.5 percent decline in May. Analysts had expected an increase of 0.1 percent.

The index, which is aimed at forecasting economic activity in the next three to six months, stood at 138.1, below its high so far this year of 139.1 in January.

Five of the ten components of the leading index rose in July, led by weekly manufacturing hours, stock prices and consumer expectations. The biggest drag on the index was a marked decline in housing permits, followed by jobless claims and money supply.

Gap stock suffers as earnings drop

SAN FRANCISCO -- Gap Inc., operator of the Banana Republic, Gap and Old Navy retail chains, said Thursday that second-quarter earnings fell by more than 50 percent due to flat sales and ``aggressive'' discounting.

Based on the ``disappointing'' quarterly results and sales for the month- to-date, Gap also reduced its earnings outlook for the full year. Shares fell 8 cents to close at $17.30 on the NYSE, and slid 65 cents, or nearly 4 percent, to $16.65 in aftermarket trading on the INET electronic exchange.

For the quarter ended July 29, net income dropped to $128 million, or 15 cents per share, from $272 million, or 30 cents per share, for the same period last year.

Sales were flat at $3.72 billion, and sales at stores open at least one year fell 5 percent, compared with a prior-year decrease of 3 percent.

The results were a penny ahead of Wall Street estimates, and beat analysts' consensus estimate for revenue of $3.69 billion, according to a poll by Thomson Financial.

Barnes & Noble has strong Q2

NEW YORK -- Barnes & Noble Inc., the nation's largest bookseller, reported a 23 percent increase in second-quarter earnings, as lower costs for goods and rent helped offset declining sales in the absence of a blockbuster title.

The New York-based retailer said Thursday that for the quarter ended July 29, net income increased to $16.6 million, or 24 cents per share, from $13.5 million, or 18 cents per share, a year ago. The latest quarter includes stock-based compensation costs of 4 cents per share.

Sales decreased 1 percent to $1.16 billion from $1.17 billion last year, largely due to year-ago sales of best-seller ``Harry Potter and the Half- Blood Prince.''

Results were in line with company guidance of 22 cents to 26 cents per share, and beat Wall Street expectations for profit of 23 cents, though sales were shy of analysts' $1.19 billion consensus estimate according to a poll by Thomson Financial.