Analysts and economists were surprised by the move, with some seeing it as evidence that the problems in subprime lending are spilling into the general economy and others as a case of the European Central Bank stepping in where the U.S. Federal Reserve Bank has not.

The European Central Bank, which controls monetary policy for Germany, France and 11 other nations in the euro zone, said it allocated 94.8 billion euros in the one-day quick tender to ensure orderly market conditions. Forty-nine bidders took part in the tender.

———

NEW YORK — The back-to-school shopping season had a disappointing start in July as consumers rattled by a weakening housing market and other financial pressures stayed away from stores and malls.

As merchants reported sluggish monthly sales results Thursday, the weakest performers were mall-based apparel chains, particularly teen merchants like Pacific Sunwear of California Inc. and Wet Seal Inc. Wal-Mart Stores Inc. posted a slim gain but warned that its increased discounting are hurting profit margins.

Among the few standouts were J.C. Penney Co. and Costco Wholesale Corp., both of which beat expectations.

———

NEW YORK — American International Group on Thursday told investors the housing market would have to spiral to Depression-era levels before the insurer would be harmed by its exposure to the residential mortgage market.

The world's largest insurer has exposure to subprime loans — those made to people with tainted credit — as a lender, investor in mortgage-backed securities and supplier of mortgage insurance. But AIG characterized its exposure as minimal and said it would take declines of 30 percent to 40 percent in home values to dent the market for mortgages with stronger ratings, where most of its holdings lie.

———

WASHINGTON — The number of newly laid off people signing up for jobless benefits rose last week, suggesting that employment conditions, while softening a tad, still remain good.

The Labor Department reported Thursday that new applications filed for unemployment insurance increased by a seasonally adjusted 7,000 to 316,000 for the week ending Aug. 4. The increase left claims at their highest point since late June.

Economists were predicting claims would be lower, around 310,000 for last week.

Still, claims are lower now than they were a year ago, when they stood at 319,000.

In other economic news, the back-to-school shopping season had a disappointing start in July as people turned cautious amid turmoil on Wall Street, harder-to-get credit and the worsening housing slump.

———

PARIS — A major French bank, BNP Paribas, announced Thursday that it was suspending three of its asset-backed securities funds, saying it could no longer value them accurately because of problems in the U.S. subprime mortgage market.

The announcement by the bank's BNP Paribas Investment Partners unit sent shock waves through an already sensitive money market.

The bank, France's largest bank by market value, said it was suspending three funds worth a total of 2 billion euros ($2.75 billion): Parvest Dynamic ABS, BNP Paribas ABS Euribor and BNP Paribas ABS Eonia. All funds combined at BNP Paribas Investment Partners are worth more than 350 billion euros ($482.79 billion).

———

NEW YORK — Internet telephone company Vonage Holdings Corp. on Thursday reported a much reduced loss for the second quarter as it scaled back marketing, but it also saw a drastic drop in new subscribers.

The drop in recruitment means that Vonage is no longer the country's largest provider of Internet-based telephone service, a field it pioneered. Cable company Comcast Corp. reported 3 million digital phone subscribers at the end of the second quarter, surpassing Vonage's 2.45 million, an increase of just 57,000 lines from the first quarter.

The Holmdel, N.J., company is struggling in court with another old-line telecommunications company, Verizon Communications Inc. In March, a jury found that Vonage infringed on three Verizon patents. The judge barred Vonage from signing up new customers, but that decision has been stayed while an appeals court considers it.

———

ATLANTA — The Home Depot Inc. sent its already battered shares into a tailspin Thursday when it issued a double dose of bad news that it may get less than expected for its wholesale distribution unit and it is lowering how much it will pay to buy back a portion of its stock.

While the world's largest home improvement store chain said it is committed to getting the most value from the sale of its HD Supply unit and completing its plan to repurchase up to $22.5 billion in company stock, analysts warned there could be more bumps along the way.

Home Depot has said it would fund the share repurchase plan in part with the proceeds from the sale of Home Depot Supply.

———

LOS ANGELES — Satellite broadcaster DirecTV Group Inc. said on Thursday that second-quarter earnings fell 2 percent on a sharp rise in operating costs, although demand for its high definition services increased.

Net income for the El Segundo-based company slipped to $448 million, or 37 cents per share, from $459 million, or 36 cents per share, a year ago. There was an increase in the per-share profit because of a reduction in the number of shares outstanding during the latest period.

Analysts expected 36 cents per share, according to a Thomson Financial survey.

———

DETROIT — Buick tied with Lexus as the highest-ranking brand in a closely watched study of vehicle dependability, marking the first time in 12 years that Lexus has shared the top award, J.D. Power and Associates said Thursday.

Cadillac, Mercury and Honda rounded out the top five brands in the annual survey, which measures problems experienced by the original owners of three-year-old vehicles. Both Buick and Lexus had 145 problems per 100 vehicles. The worst-performing brand, Land Rover, had 398 problems. The industry average was 216 problems, down from 227 problems in last year's survey.