NEW YORK- After the high-profile recalls of millions of lead-contaminated toys last year, a watchdog group said Wednesday that its tests found fewer toys with high levels of chemicals in them this year. But about a third of the toys tested still contained a worrisome level of chemicals.

Healthytoys.org, a project of The Ecology Center, a nonprofit environmental group based in Michigan, in collaboration with other groups, tested about 1,500 toys for a variety of chemicals, including lead, arsenic, cadmium and others.

About one third were found to have a significant level of chemicals, while two-thirds had low levels or none of the chemicals the group tested for. Lead was detected in 20 percent of toys, compared with 35 percent last year. About half of the toys tested were similar to toys tested last year.

“We did see a reduction in the amount of lead this year, so I think the attention on the issue last year and throughout this year helped reduce the amount of lead in products,” said Jeff Gearhart, research director for healthytoys.org. “The bad news is that there are still far too many toys with elevated levels of chemicals.”

The Ecology Center, which also tests for chemical content in other products, began testing toys last year after a spate of recalls. Most significantly, Mattel Inc. recalled more than 21 million Chinese-made toys on fears they were tainted with lead paint and tiny magnets that children could accidentally swallow.

About 3.5 percent of toys tested had lead levels above the current 600 parts per million federal standard that would trigger a recall of lead paint. The American Academy of Pediatrics recommends a level of 40 ppm of lead as the maximum that should be allowed in children’s products. Lead poisoning can cause irreversible learning disabilities and behavioral problems and, at very high levels, seizures, coma, and even death.

Following last year’s recalls, Congress passed legislation that lowers the allowed level of lead paint on toys to 90 ppm and sets a federal limit on lead content within toys for the first time. That measure goes to effect in February.

Toys that tested high for lead in the current study included a “High School Musical” crown necklace made for Disney by F.A.F. Inc. and a LeapFrog Leapster2 Wall-E game system. The Nintendo Wii tested high for bromine, which can be found in some flame retardants. A complete list can be found at www.healthytoys.org.

F.A.F. Inc., LeapFrog and Nintendo did not immediately return calls for comment.

Similar to last year, children’s jewelry remained the category with the most lead, Gearhart said, with 15 percent of jewelry samples containing lead levels above 600 ppm.

“We continue to recommend avoiding cheaper children’s jewelry,” Gearhart said.

Needham & Co. analyst Sean McGowan said he was skeptical of the analysis and said the portable X-ray fluorescence analyzer the group used is “notorious for false positives.”

“I am extremely leery of the test results without knowing how diligent the testing is,” he said.

Gearhart defended the method, however.

“The X-ray test method is used by hundreds of researchers in dozens of different industries to screen and analyze products,” he said. “We’re quite comfortable with the usefulness of it to screen toys and other consumer products.”

Joan Lawrence, vice president of standards and regulatory affairs at the Toy Industry Association trade group, said she could not comment specifically on the study because she hadn’t seen it, but said there are strict standards for substances in toys in this country.

“Federal legislation passed by Congress this summer makes standards even stricter,” she said. Though the legislation will not go into effect until February, “many companies have already readied their products to comply,” she said.

But Gearhart said the standards still weren’t strict enough.

“We feel existing standards not protective enough and have been pushing for improvements in those,” he said.

MUMBAI, India – Indian financial markets were closed Thursday after coordinated attacks by teams of gunmen across Mumbai, India’s financial capital, left at least 101 people dead, according to police.

It was unclear when trading would resume.

The attacks started Wednesday evening. Police and gunmen were exchanging occasional gunfire Thursday morning at two luxury hotels in the city and an unknown number of people were held hostage, said A.N. Roy, a top police official.

SECAUCUS, N.J. – Shareholders of Anheuser-Busch Cos. Inc. on Wednesday approved the $52 billion sale of the nation’s largest brewer to Belgium-based InBev SA, a deal that is set to create the world’s largest brewer.

The vote was the latest step necessary to form the company to be known as Anheuser-Busch InBev. The deal, reached in July, is expected to close by the end of the year.

August A. Busch IV, Anheuser-Busch’s president and chief executive, said the decision to sell was a difficult one.

“In the end, the board determined that the InBev proposal is in the best interest of our shareholders,” he said in a statement. “The merger also provides a promising future for our beer brands and for all stakeholders — employees, wholesalers, retailers and our consumers.”

The new company brings about the end of the more than 150 years of family rule of the St. Louis-based company, though the newly combined company’s North American headquarters will stay there. InBev has said it will keep open all 12 of Anheuser-Busch’s North American breweries.

Anheuser-Busch, known for brands like Bud Light and Budweiser, said this summer it was accepting the buyout from InBev worth $70 a share. The deal ended back-and-forth wrangling between the two sides, with Anheuser-Busch spurning InBev’s unsolicited offers at first, claiming they were bad for business and were an “illegal scheme” that threatened to defraud shareholders. But the company eventually agreed.

Shareholders of InBev, known for brands like Stella Artois and Beck’s, approved the deal in September.

The deal gives InBev a key inroad to the U.S. market, where Anheuser-Busch dominates with about a 50 percent share. InBev, meanwhile, has a small fraction. It also gives the company about one-fifth of the markets in China and Russia, two areas poised for growth.

InBev has said it wants to tap into Anheuser-Busch’s marketing power and make its top-selling Budweiser and Bud Light brands into global powerhouses like Coca-Cola or Pepsi.

Leadership for the new company has already been decided, pulling from executives within both companies. Luiz Fernando Edmond will lead North American operations, leaving his post as InBev’s president of Latin America North.

David A. Peacock, an Anheuser-Busch vice president, will become Anheuser-Busch president and oversee U.S. operations and management of the Budweiser and Bud Light brands.

August Busch IV will move into a non-executive role, but will be on the new company’s board.

———

A look at Anheuser-Busch and InBev

Anheuser-Busch’s shareholders approved the sale of the company to Belgium-based InBev on Wednesday. Here’s a look at the $52 billion deal:

• Anheuser-Busch InBev will be the world’s largest brewery, producing an estimated 460 million hectoliters of beer annually.

• InBev’s strategy is to increase sales of Budweiser and Bud Light in overseas markets where the beers are currently niche products.

• InBev CEO Carlos Brito, who will head the new company, has said Budweiser will become a global product along the lines of Coca-Cola or Pepsi.

• While Anheuser-Busch spends hundreds of millions of dollars annually in marketing, the company has focused mostly on its U.S. customers.

Source: InBev SA

MEXICO CITY – Mexico’s inflation has reached its highest level in seven years, hitting an annual rate of 5.8 percent in October, the central bank reported Friday.

The bank said its National Consumer Price Index rose 0.31 percent from September, when inflation was at 5.5 percent.

The bank said that the services sector was hit by a hike in cement prices, which affected the housing market. Prices also are higher for tourism packages, electricity, low-octane gasoline and some food, including onions, melons and chicken.

Consumers, however, are seeing a drop in prices for telephone service and avocado, eggs, apples, rice, and oranges.

Inflation has not been this high since 2001, when it hit 5.9 percent. Inflation last year was 3.7 percent.

The bank projected that inflation in the fourth quarter would be between 5.5 and 6 percent, dropping to 3.5 percent for 2009 as a whole.

The bank has increased its interest rates three times this year to slow inflation, but last month it kept it at 8.25 percent to protect the peso, which has been battered by the global economic turmoil.

LONDON – World stock markets slumped Thursday despite interest rate cuts across in Europe, including a much bigger than anticipated reduction from the Bank of England, as investors continued to fret about the outlook for the global economy.

The FTSE 100 index of leading British shares closed down 258.32 points, or 5.7 percent, at 4,272.41, while Germany’s DAX was 353.30, or 6.8 percent, lower at 4,813.57. France’s CAC-40 was down 230.86 points, or 6.4 percent, at 3,387.25.

The Dow Jones index of leading U.S. shares was down 301.39 points, or 3.3 percent, at 8,837.88. Thursday’s losses on the Dow come a day after a nearly 500 point decline Wednesday.

Any hopes that lower borrowing costs around Europe would fuel a rally in stocks soon dissipated and investors continued to book profits following recent sharp gains amid mounting fears about the state of the world economy. Rate cuts often boost stocks in the short term and can support growth, but on Thursday investors were not impressed, especially with the ECB decision.

While the Bank of England slashed its benchmark rate by 1.5 percentage points to 3.0 percent, a level not seen since 1955 and its biggest single cut since March 1981, the European Central Bank and the Swiss National Bank — in an unscheduled decision — opted for more modest half-point reductions. Central banks also cut rates in Denmark and the Czech Republic.

The Bank of England’s bigger than anticipated rate cut stoked expectations that the European Central Bank would be more aggressive than expected. Its decision to cut by only a half-percent disappointed investors looking for more boldness.

“The prospects for the euro-zone avoiding recession now look virtually non-existent, and the ECB will be challenged to change its relatively conservative approach quickly to boost prospects across the continent, before a bad situation gets decidedly worse,” said Ben Read, managing economist at the Center for Economic and Business Research.

The failure of the FTSE to rally strongly in the wake of the Bank of England’s aggressive interest rate cut indicated that the bank may have further reinforced fears about the length and depth of the recession in Britain.

“What does the Bank know that the rest of us don’t?” said Andrew Milligan, head of global strategy at Standard Life Investments.

“The Bank of England’s inflation report due out next week should provide the answer, giving investors full and detailed information about its views on the depth and extent of the British recession and how far inflation might fall in 2009,” he added.

Europe’s indexes had already been lower in the wake of hefty losses Wednesday on Wall Street and in Asia overnight as investors fretted about the global economy. Japan’s Nikkei index was down 6.5 percent at 8,899.14, and Hong Kong’s Hang Seng Index 7.1 percent lower at 13,790.04.

Stocks around the world have enjoyed a strong rally over the last week or so, partly on relief that the U.S. presidential election was coming to an end.

However, investors know that President-elect Barack Obama will have his work cut out to improve the U.S.’s immediate economic prospects and that Inauguration Day is still more than two months away.

Further proof of the scale of the downturn in the U.S. emerged Thursday with jobless claims data fanning investors’ worries that the economy is in recession.

New claims for unemployment benefits did dip by 4,000 to a seasonally adjusted level of 481,000, according to the Labor Department. But jobless claims above 400,000 are considered recessionary levels, and have run above that figure for 16 weeks.

The run of bad claims data has ratcheted up fears that Friday’s closely-watched U.S. jobs report for October will end up being much worse than anticipated.

Earlier, South Korea’s benchmark Kospi index broke a five-session winning streak to dive 7.6 percent. Markets in Singapore, Australia and mainland China also dropped sharply.

Concerns about the global economic outlook hit oil prices too. They were down $4.35 a barrel to $60.95 a barrel. Oil prices have fallen by around 60 percent since peaking at $147.27 a barrel in mid-July.

Disappointment about the European Central Bank’s interest rate cut hit the euro, which was down 0.8 percent at $1.2855. Elsewhere, the dollar was up 0.1 percent at 98.30 yen.

AP Business Writers Tim Paradis in New York and Jeremiah Marquez in Hong Kong contributed to this report.

WASHINGTON – The economies of the United States, Europe and Japan are expected to contract in 2009 as part of the first annual decline by the advanced economies since World War II, the International Monetary Fund said Thursday.

Governments should adopt economic stimulus packages to counteract the slowdown, the IMF said, while central banks “in some countries” should cut interest rates further. The fund didn’t specify which countries.

The development of stimulus packages “should be one of the highest priorities for governments to pursue at this stage,” said Olivier Blanchard, the fund’s chief economist.

“We see room for additional fiscal stimulus in the U.S.,” as well as in Europe and China, said Jorg Decressin, chief of the IMF’s World Economic Studies Division.

Conditions have deteriorated so much in the month since the IMF released its semiannual World Economic Outlook that the fund cut its forecast for the developed countries’ economies to a decline of 0.3 percent, from a previous estimate of 0.5 percent growth.

Overall, the IMF now expects the world economy to grow at a 2.2 percent pace in 2009, down from its projection last month of 3 percent.

The U.S. economy will shrink by 0.7 percent, down from last month’s forecast that it would grow by 0.1 percent, the IMF said. The 15 countries that use the euro will decline by 0.5 percent, down from last month’s projection of 0.2 percent growth, the IMF said.

The slowdown stems from two primary factors, including “a dramatic fall in confidence by consumers and firms,” Blanchard said. “After holding up for a long time, they simply have gotten scared and decided to spend less.”

The second cause has been the “migration of the financial crisis to emerging markets,” as major international banks continue to cut back on debt, Blanchard said.

The sharp drop in commodity prices also contributed. Oil, for example, has fallen by more than half since reaching record levels of $147 a barrel in July.

Adjusting for changes in population, Decressin said the slowdown is comparable to the recessions of the 1970s and early 1980s.

The IMF expects an economic recovery to begin in late 2009.

MEXICO CITY – Mexico’s peso was settling in around 13 to the dollar and the stock market was rallying Thursday on news that the U.S. Federal Reserve had offered a $30 billion line of credit to Mexico and other nations.

The Mexican stock market’s key IPC index was up 5 percent to 20,104 in mid-morning trading.

The central bank also offered $400 million in its daily auction, but received no bids, indicating the peso was stabilizing, at least temporarily.

In a bid to boost the sagging peso, the bank has been offering $400 million in reserves at auction each day at the previous day’s closing price plus 2 percent. It draws bids only when the peso’s losses exceed the difference.

The currency has reached a record low of more than 14 to the dollar in recent weeks.

On Wednesday, the central bank announced a “swap” accord with the U.S. Federal Reserve and the central banks of Korea, Brazil and Singapore. Under the deal, the countries will have access to $30 billion in credit until April 30.

Bank of Mexico President Guillermo Ortiz said Mexico was not immediately planning on dipping into the funds.

But Banamex economic analyst Jose Miguel Torres wrote Wednesday in a note to investors that news of the swap helped ease investor fears, which had “recently reached levels inconsistent with the fundamentals” of the economy.

NEW YORK – In a stark acknowledgment of the tough times ahead in the credit card industry, American Express Co. said Thursday that it plans to cut 7,000 jobs, or about 10 percent of its worldwide work force, in an effort to slash costs by $1.8 billion in 2009.

The New York-based credit card issuer said it is also suspending management level salary increases next year and instituting a hiring freeze.

The job cuts will be across various business units, but will primarily focus on management positions, the company said.

Additionally, American Express said it plans to scale back investments in technology and marketing and business development, and streamline costs associated with some rewards programs. The company also expects to cut expenses for consulting and other professional services, travel and entertainment and general overhead.

As a result, American Express plans to take a restructuring charge of between $240 million and $290 million in the fourth quarter.

The company has been gearing up for a big restructuring for some time, first announcing in July that it planned to reduce overall costs and staffing levels, and take a related charge during the second half of the year.

“We’ve been engaged for the past few months in an intensive, companywide review of priorities and staffing levels,” said Kenneth I. Chenault, chairman and chief executive, in a statement. “The re-engineering program we announced today will help us to manage through one of the most challenging economic environments we’ve seen in many decades. It will also put us in position to ramp up investment spending as economic conditions improve so that we can take advantage of the substantial opportunities that will be available to us over the medium to long term.”

Last week, American Express reported a better-than-expected 24 percent decline in third-quarter profit. But the report echoed recent results from JPMorgan Chase & Co., Citigroup Inc. and Capital One Financial Corp. showing that the credit card environment is worsening as cardholders have trouble paying off debt and pull back their spending.

Even a company like American Express, which prides itself on catering to a more well-heeled clientele, is not immune.

The company’s customers tend to be more affluent than those of other card companies, but they are more heavily concentrated in California and Florida, where the slumping housing market is taking a toll. American Express also has a higher percentage of small-business customers, and small businesses tend to miss payments more than individuals, executives have said.

“Cardmember spending is likely to remain soft,” Chenault said in a statement last week. “Loan growth will be restrained, in part because of the steps we are taking to reduce credit risks, and credit indicators are likely to reflect the continued downturn in the economy and throughout the housing sector.”

American Express has been able to finance its operations amid the tight credit markets, but the efforts have been tougher and more costly.

Shares rose $1.23, or 4.9 percent, to $26.44 in morning trading. Shares have traded between $20.50 and $61.55 in the past 12 months.

MEXICO CITY – Mexico’s peso was rising on Wednesday from historic lows, leaving a central bank auction of dollars without any takers.

The peso was trading at 12.9 to the dollar at late morning Wednesday — a healthy jump from 13.4 on Monday and from a brief brush with 14 to the dollar on Oct. 23.

The central bank twice offered $400 million at auction on Wednesday, but received no offers. It was part of a program to bolster the peso, which was sagging as investors fled to dollars to meet obligations abroad in recent weeks.

The bank has been offering $400 million in reserves at auction each day at the previous day’s closing price plus 2 percent, drawing bids only when the peso’s losses exceed the difference.

The central bank has sold about 15 percent of its foreign currency reserves to support the peso.

Mexico’s stock market also showed signs of recovery Wednesday, with the key IPC up 3.5 percent to 19,282 in midday trading.

Dustin Reid, senior currency strategist at ABN Amro in Chicago, said that the peso remains so volatile that “you could easily see 10 percent on either side of current levels.”

On Monday, the central bank announced a plan to shore up domestic financial markets by buying back as much as 150 billion pesos ($18 billion) in government debt related to a 1990s bank rescue and obtaining $5 billion in financing from international organizations.

The Associated Press

SHANGHAI, China – An anti-piracy tactic by Microsoft Corp. that turns some computer users’ screens black has set off a wave of indignation among Chinese consumers, posing renewed problems for the software maker in the huge China market.

In the week since Microsoft deployed an updated anti-piracy tool here, some Chinese have fumed about what they see as an invasion of privacy. Users of legitimate software have been turning their own screens black in protest. One authorized user complained to the police.

“It’s a crime,” said Beijing lawyer Dong Zhengwei, who filed a complaint against Microsoft with the Public Security Ministry. The ministry hasn’t responded. “The black-screen plan implies that Microsoft can hack all its users, not just the pirates,” Dong said. “That’s not fair.”

At issue is Windows Genuine Advantage, a tool Microsoft uses to assess, over the Internet, whether a PC has one of the pirated copies of Windows that flourish in developing countries. The tool was developed after Windows XP was released, but has since been added to updated copies of the operating system. The technology was built into Vista, the latest edition of Windows, from the start.

As the tool scans for pirated copies of Windows, it logs certain information about computers, notifies users if it detects illegal copies or counterfeits — and urges them to get a legitimate copy.

Windows Genuine Advantage has been in use worldwide for several years. The update that started to affect Chinese PC users last week did exactly what it was intended to do: get people’s attention.

Now when the tool detects a fake copy of Windows, it turns the PC’s desktop black, replacing the user’s background image. Though the user can override the blackout, it reappears every 60 minutes.

In all other ways, the blacked-out computer still works, thanks in part to an outcry last year. In Microsoft’s first attempt to step up notifications for pirated software, Windows Genuine Advantage crippled Vista’s snappy user interface and disabled other features. Microsoft backed down and settled on the blacked-out desktop as a compromise.

Users not yet affected can avoid getting hit by disabling Windows’ automatic update feature, though they then might miss security fixes. But for people who have already been detected as having illegitimate Windows, software patches to avoid the black screen are now circulating online.

Microsoft defended its actions, saying the company complies with Chinese law. It issued a statement promising its anti-piracy campaign would not be used to collect personal information. It is also offering steep discounts on some software to give consumers an affordable legal alternative, with home and student versions of Microsoft Office down to 199 yuan ($29) from 699 yuan ($102).

But that hasn’t mollified many Chinese computer users. Their outrage points to continuing problems for the world’s largest software maker in what is projected to become the biggest computer market.

While Chinese know their Internet is monitored and censored, that rarely creates a stir. The reaction against Microsoft’s black screen tactics shows Chinese consumers’ persistent belief that there’s little wrong with buying cut-rate pirated goods.

Knockoff software and electronics are rampant in China. Brand-name computers are sold by retailers with pirated software bundled in, helping to keep prices low. More than 80 percent of personal computer software in China last year was pirated, according to the Business Software Alliance, a trade group that counts Microsoft as a member. The worldwide piracy rate last year was 38 percent, and the rate in the U.S. was 20 percent, according to the software group.

In an upstairs corner of a Cybermart electronics emporium in downtown Shanghai, where the shop’s counters were cluttered with computer parts, mobile phone trinkets and imitation iPods, saleswoman Jin Li stood in a pink smock under a large Microsoft sign. The shop isn’t a licensed Microsoft seller.

“We just wanted to put a brand name up there,” Jin said, nodding at the sign.

Customers, she said, have a main complaint about Windows XP. “The real thing is definitely too expensive. They can download it or buy it pirated for 10 yuan,” or less than $2, she said. “The real thing is hundreds of yuan. What do you think?”

It’s not certain that all users of pirated Windows would otherwise buy the real thing. And it’s possible that the presence of cheap pirated versions benefits Microsoft in some cases, by helping to introduce people to the company’s products. However, Microsoft says software piracy has kept the company short of its revenue growth targets for China.

The company is finding little sympathy.

“I’ll still use pirated software,” said 24-year-old Shanghai advertising salesman Tai Chenggong, whose screen turned black this week after he downloaded a fake copy of Windows for free. “It still works, no problem.”

AP Technology Writer Jessica Mintz in Seattle contributed to this report.