The Labor Department reported Thursday that new applications filed for unemployment insurance dipped by 2,000 to 322,000 for the week ending Aug. 18. It marked the first drop in new claims in roughly a month.

The showing was a bit higher than the 320,000 analysts were forecasting. Still, the level of claims suggested that the employment climate remains in fairly good shape despite problems in housing, tighter credit, and turmoil on Wall Street in recent weeks.

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LOS ANGELES (AP) — The infusion of $2 billion from Bank of America Corp. should help shore up sagging Countrywide Financial Corp. as it tries to outlast the credit crunch squeezing Wall Street and the mortgage industry, analysts said Thursday.

The deal, disclosed late Wednesday, gives the nation's largest mortgage lender breathing room as it tries to navigate the U.S. housing downturn.

Despite the boost in capital, Countrywide is likely to have a tough time staying profitable given the overall bleak housing forecast, as home values fall and adjustable mortgages reset and raise the specter of more defaults, concluded Chris Brendler, an analyst with Stifel Nicolaus & Co.

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WASHINGTON (AP) — Banks have stepped up their borrowing from the Federal Reserve, a development encouraged by central bank policymakers to help stem a credit crunch that has roiled Wall Street.

The Federal Reserve, in a report released Thursday, said daily borrowing averaged $1.2 billion for the seven days ending Wednesday. That was the third-highest weekly average since at least the Sept. 11, 2001, terror attacks, the Fed said.

On just Wednesday alone, $2 billion was borrowed. That was the most in a single day since April 12, 2006, the Fed said.

There was heightened interest in Thursday's report because it offered the best picture thus far on the extent to which banks were using the "discount window" after the Fed's announcement last week that it was cutting rates to banks for these loans.

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ATLANTA (AP) — Talks over restructuring a $10.3 billion deal to sell The Home Depot Inc.'s wholesale distribution business went down to the wire Thursday, the expected closing date for the agreement.

The Atlanta-based retailer has hinted the deal could fall through. Or Home Depot may have to lower the price.

A spokeswoman declined to comment on whether the deal will be completed. Investors were edgy, sending Home Depot shares down 75 cents, or 2.2 percent, to $34.02.

During a speech before the Rotary Club of Atlanta on Monday, Chief Executive Frank Blake said the deal to sell HD Supply is "hopefully" going to close "sometime very soon." He didn't address the issue further.

Last week, the world's largest home improvement store chain said the expected closing date of the sale of HD Supply had been extended by a week, from Aug. 16 to Thursday.

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WASHINGTON (AP) — Two major airlines were fined $300 million apiece Thursday after admitting they conspired to fix prices on international flights and agreeing to help prosecutors investigate other airlines.

British Airways PLC, Britain's largest airline, and Korean Air Co., South Korea's national carrier, pleaded guilty to antitrust conspiracy charges. They acknowledged colluding with rivals over cargo rates and fuel surcharges, which were added to fares in response to rising oil prices. That meant higher costs for international shippers and passengers.

U.S. District Judge John D. Bates said the case "involved considerable commerce and reflected long-term and widespread conduct involving major airlines and players."

Both saw their potential fines reduced because they cooperated with Justice Department investigators.

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BEIJING (AP) — A global recall of millions of Chinese-made toys was the result of new industry standards, not poor quality, an official said Thursday, as a high-level panel announced the launch of a nationwide safety campaign.

Earlier this month, Mattel Inc. recalled almost 19 million Chinese-made items, including dolls, cars and action figures. Some were contaminated with lead paint, while others had small, powerful magnets that children might swallow and damage their organs.

Vice Commerce Minister Gao Hucheng said 18.2 million of the recalled products — including popular Polly Pocket dolls and Barbie play sets — were pulled off shelves because of a revision of international standards in May involving magnets.

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By The Associated Press

Wal-Mart Stores Inc. is stepping up testing and safety reviews of the toys it sells to reassure consumers ahead of the critical holiday season after a series of recalls of Chinese-made toys over hazards to children.

Wal-Mart's top toy executive said Thursday the retailer will ask manufacturers to resubmit testing documentation for toys already on the shelves or in shipment, so that Wal-Mart can double-check the results.

The world's largest retailer is also increasing the number of toys tested at independent labs by about 25 to 50 percent, or an average of 200 additional items daily.

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PROVIDENCE, R.I. (AP) — A U.S. aircraft and finance company will pay nearly $5 million to settle charges that its subsidiaries paid kickbacks to Saddam Hussein's government during the United Nations' oil-for-food program, prosecutors said Thursday.

Prosecutors aren't filing criminal charges against Providence-based Textron Inc., the maker of Cessna aircraft and Bell helicopters, but are requiring that it pay a $1.15 million fine and $3.5 million in related civil penalties. Textron has agreed to cooperate with investigators.

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NEW YORK (AP) — Barnes & Noble Inc., the largest U.S. bookseller, said Thursday its second-quarter earnings rose 9 percent, boosted by sales of J.K. Rowling's "Harry Potter and the Deathly Hallows."

The company also said it expects a loss in the third quarter but increased its yearly guidance to reflect tax benefits and lower-than-expected costs for closing a distribution center.

The company's shares rose 90 cents, or 2.6 percent, to $35.82 Thursday. The stock has traded between $30.01 and $43.80 over the past 52 weeks.