Online digital video disc rental leader Netflix Inc. resumed normal shipments Friday after its distribution centers were crippled by three days of severe technical problems, a spokesman said.

The Los Gatos, Calif.-based company also offered a 15 percent credit to customers whose discs were delayed by the outage, the longest disruption in service since Netflix launched its subscription service nine years ago.

The outage held up shipments for about a third of the company's 8.4 million subscribers, meaning the total value of the credits could run into the millions of dollars. The credits will automatically appear on customers' next billing statements, Netflix spokesman Steve Swasey said.

NEW YORK

Oil prices decline as dollar extends rally

Oil fell to its lowest price in three months Friday, briefly touching the $111 level after the dollar muscled higher and OPEC predicted the world's thirst for fuel next year will fall to its lowest point since 2002.

Light, sweet crude for September delivery fell $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange after falling to $111.34, its lowest price since May 2 and more than $35 -- or 24 percent -- below its July 11 trading record above $147.

At the pump, retail gasoline prices also continued falling, with a gallon of regular shedding about half a penny overnight to a new national average of $3.771, according to auto club AAA, the Oil Price Information Service and Wright Express. Gasoline peaked at $4.114 on July 17.

Crude fell after the dollar gained strength against the euro on U.S. data showing that industrial output rose more than expected in July.

In Las Vegas, a gallon of regular, unleaded self-serve gasoline was $3.824 on Friday, AAA said in its Daily Fuel Gauge report.

The price is down 9.3 percent from $4.215 a month ago, but up 37.6 percent from $2.779 a year ago, AAA said.

HERSHEY, Pa.

Hershey kisses stay sweet but get pricier

Hershey Co. said Friday it plans to raise prices on its products by an average of 11 percent as it tries to stem the effect of soaring commodities costs.

The candy company known for its chocolate bars and bite-sized Kisses said the immediate increase was necessary to offset "significant increases" in the cost of raw materials such as sugar, cocoa and peanuts -- up as much as 45 percent since the start of the year -- as well as the growing cost of fuel, utilities and transportation.

The Hershey-based chocolatier said its commodities costs will grow by more than $110 million this year -- a figure that could double in 2009.

NEW YORK

J.C. Penney profits slip 36 percent in quarter

J.C. Penney Co. reported a 36 percent drop in second-quarter profits Friday and issued a downbeat outlook for the current quarter as shoppers curbed clothing spending.

The Plano, Texas-based department store chain said it earned $117 million, or 52 cents per share, in the three-month period ended Aug. 2, down from $182 million, or 81 cents per share, a year earlier.

Total net sales fell 2.5 percent to $4.28 billion from $4.39 billion. Same-store sales, or sales at stores opened at least a year, fell 4.3 percent.

Analysts polled by Thomson Reuters expected earnings of 50 cents per share on revenue of $4.28 billion.

Official boosts pressure on Merrill

New York State Attorney General Andrew Cuomo stepped up pressure on Merrill Lynch & Co. and Goldman Sachs Group Inc. to settle claims they misled investors in auction-rate securities after Wachovia Corp. agreed to buy back $9 billion of the bonds.

Merrill faces an "imminent" lawsuit from New York because the firm's offer last week to buy back $10 billion of the debt wasn't adequate, Cuomo said at a news conference Friday. New York has subpoenaed about 25 firms involved in sales of auction-rate securities, including five that have already settled.

Merrill has five days to explain why the attorney shouldn't act, according to a letter from Cuomo's office.

Meanwhile, Wachovia, the fourth-largest U.S. bank, will pay a $50 million fine to settle claims by the Securities and Exchange Commission and states led by Missouri that it misled investors. It also will take a $275 million pretax charge because of higher legal costs in the third quarter.

The move follows a similar $500 million write-down in the second quarter that was disclosed Monday.

SAN JOSE, Calif.

Cadence Design pulls buyout offer for rival

Electronic design software maker Cadence Design Systems Inc. on Friday withdrew its offer to buy smaller rival Mentor Graphics Corp.

Cadence, which is based in San Jose, Calif., in June offered to buy Mentor Graphics for $16 per share, or about $1.45 billion.

Cadence said Mentor Graphics' board and management "were unwilling to engage in substantive discussions" on the acquisition, which prevented them from confirming to its lenders the benefits that could be achieved from a deal.

Wilsonville, Ore.-based Mentor Graphics dismissed the criticism.

NEW YORK

Treasury prices climb as oil prices head down

Treasury prices extended their gains Friday as oil prices dipped and economic data suggested that the U.S. economy remains sluggish.

In late trading, the 10-year Treasury note extended Thursday's rise, rising 0.44 points to 101.31. Its yield fell to 3.84 percent from 3.90 late Thursday, according to BGCantor Market Data. Yields move in the opposite direction from prices.

The 30-year long bond rose 1 point to 100.5. Its yield fell to 4.47 percent from 4.53 percent late Thursday.