NEW ORLEANS — Hurricane Katrina victims whose homes and businesses were destroyed when floodwaters breached levees in the 2005 storm cannot recover money from their insurance companies for the damages, a federal appeals court ruled Thursday.

The case could affect tens of thousands of rebuilding residents and business owners in Louisiana, Daniel E. Becnel, who represented 21 plaintiffs in the case, said. Insurers could have taken a “multibillion dollar hit” if the ruling had gone against the industry, said David Rossmiller, an insurance attorney and analyst.

“This event was excluded from coverage under the plaintiffs’ insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written,” Judge Carolyn King wrote for a three-judge panel of the 5th U.S. Circuit Court of Appeals.

As a result, the panel found those who filed the suit “are not entitled to recover under their policies,” she said.

Insurance companies typically restrict property coverage to damage caused by wind, fire and other hazards. Congress launched the National Flood Insurance Program in 1968 to help homeowners living in flood-prone areas get flood insurance to complement private policies. Private agents sell the federal policies, which are often subsidized by taxpayers because premiums don’t factor in the real risks of damage./AP

COPYRIGHT ISSUES

Japanese companies slam YouTube

TOKYO — A coalition of Japanese television, music and film companies slammed YouTube Thursday, saying the online video sharing service was not doing enough to rid the site of cartoons and other clips that infringe on copyrights.

The group also expressed skepticism over an automatic video recognition and purging system being developed by YouTube parent Google Inc., questioning the reliability of the technology and saying it was taking too long.

“YouTube has to stop how it runs its site and get rid of the illegal clips. We want them to reset the service,” composer Hideki Matsutake told a joint press conference. The coalition met with YouTube and Google executives earlier in the week, the second such meeting this year.

“There is no middle ground,” Matsutake said. “We demand that all copyrighted material be removed immediately.”

Clips from Japanese TV and the music industry are rampant on YouTube. A spoof of an English language lesson taken from a popular comedy show aired by Nippon Television Network has been viewed more than a million times.

YouTube has said it cooperates with holders of copyrights and immediately complies with requests to have unauthorized material removed from the site. In October, the site deleted nearly 30,000 files after the Japanese group complained of copyright infringement./AP

STOCKS CLIMB

Dow posts second-straight triple-digit gain

NEW YORK — Wall Street had its second-straight late-day rally Thursday, again propelling the Dow Jones industrials up more than 100 points after solid readings on corporate earnings and the job market calmed some of investors’ anxiety about a tight credit market.

Trading was volatile again, but not to the extreme seen over the past week. The Dow and the Nasdaq composite mostly stayed in positive territory for much of the session.

Analysts said the jobless report in particular helped stocks, as it indicated that the labor market is holding up. The figures were released a day before the government’s highly anticipated July employment report, to be issued before the start of trading on Friday.

With the market jumpy about rising mortgage defaults leading to losses and tougher lending standards, it was impossible to tell whether the market’s two-day advance, which has lifted the Dow 250 points, will stick. In the latest indication that the lending climate is still deteriorating, Accredited Home Lenders Holding Co., a nonbank mortgage lender, said in a filing Thursday its business is in jeopardy, and its stock plummeted 41 percent.

The blue chip index, now about 4 percent below the record close it reached in early July, has seen triple-digit swings become the norm in recent weeks as investors received a series of unpleasant reports about the mortgage and corporate lending markets. Stocks have been up-ended by concerns that credit will be less available to fund the merger deals that helped power Wall Street higher this year./AP

MARKETING TO KIDS

State supreme court lets dismissal of tobacco lawsuit stand

SAN FRANCISCO — A unanimous California Supreme Court ruled Thursday that federal law trumps state provisions when it comes to cigarette marketing allegedly targeting children.

The court let stand two lower court rulings tossing out a long-running class-action lawsuit brought by smokers who said they took up the habit as minors because of the companies’ marketing.

Because the plaintiffs failed to present evidence the advertisements were misleading and targeted exclusively to children, federal cigarette labeling laws and the companies’ First Amendment rights to commercial speech allow the marketing campaigns, Justice Joyce Kennard wrote for the court.

The Supreme Court also noted the state shared in a $206 billion nationwide settlement in 1998 that included banning ads on billboards and public transportation and banning cartoon characters such as the iconic Joe Camel character, which the California lawsuit used as an example of the kind advertising that alleged to be illegal.

The original 1998 lawsuit against the country’s six largest tobacco companies sought to have them forfeit between $700 million and $2 billion allegedly earned from sales to an estimated 1.5 million teen smokers in California between 1994-99./AP

Free Works

Microsoft to offer free version of Works

SEATTLE — Microsoft Corp. will test a free, advertising-supported version of Works, an already inexpensive package of word processing, spreadsheet and other programs, but would not say whether it is exploring a similar Web-based suite.

The company said Wednesday that a limited number of computer makers will pre-install Microsoft Works 9 SE on new PCs in certain markets, and that the test of the business model will last about a year.

Microsoft’s announcement comes a week after its top executives sketched out a strategy for supplementing traditional packaged software revenue with subscriptions and Web-based services, during a day of meetings with financial analysts at its Redmond, Wash., headquarters.

Industry watchers have been parsing those speeches for signs the company will develop an online version of the more expensive Office suite to compete with free offerings from Google Inc., but the company has so far been silent on the issue.

In an interview Thursday, Melissa Stern, a senior product manager at Microsoft, said the ad-supported programs address requests by customers for free productivity software and concerns from PC makers about rising costs.

The display ads will appear in the lower corners of the screen while users work on spreadsheets, calendar appointments and other documents. The suite will come pre-loaded with ads, and new ones will download when users’ computers connect to the Internet.

Advertisers can buy space inside of Works the same way they plan online advertising campaigns on Microsoft’s Web sites.

The ads, which Stern says are “not intrusive,” will be targeted based on what Microsoft knows about Works users’ demographics, and will relate to common tasks like household budgeting and vacation planning.

Users of the free Works suite will be able to click from inside the program to upgrade to the $40, ad-free version of Works 9, or download a free trial version of Office 2007, which costs from $149 to $679./AP

On the rise

Hybrid sales on pace for record-setting year

DETROIT — Hybrid vehicles are on track to achieve record U.S. sales this year despite signs consumer interest in hybrids is waning, an auto information company said Thursday.

An estimated 187,000 hybrids were sold in the first six months of 2007, accounting for 2.3 percent of all new vehicle sales, according to J.D. Power and Associates. Although a slowdown is expected in the second half of the year, J.D. Power is forecasting total sales of 345,000 hybrids for 2007, a 35 percent increase from 2006 when the current record of 256,000 hybrids were sold.

The Toyota Prius continues to be the best-selling hybrid model, accounting for just more than half of all hybrids sold. J.D. Power said Prius sales got a boost this year from incentives of up to $2,000 per vehicle, which helped offset a decrease in federal tax breaks for Toyota and Lexus hybrids. Toyota Motor Corp. said Wednesday that Prius sales were up 85 percent in the first seven months of this year compared with the same period a year ago.

Mike Omotoso, senior manager of global powertrain forecasting for J.D. Power, said the percentage of people who say they’re considering hybrids is dropping as buyers realize the vehicles may not save enough fuel to justify premiums of up to $3,000.

“Toyota is realizing that. That’s why they’re offering incentives,” he said.

Hybrids also face growing competition from other fuel-saving technologies such as diesel and ethanol. Omotoso predicts an influx of diesel vehicles from European automakers in the next few years. Honda Motor Co., which is discontinuing the hybrid version of the Accord sedan because of weak sales, plans to introduce new diesel-engine technology by 2010. Omotoso expects U.S. diesel sales to top 500,000 in 2007./AP

Competition within the hybrid segment also will intensify in the coming years, giving buyers a lot more options. There will be as many as 65 hybrid models, more than half of them trucks, in the market by 2010, with projected sales of nearly 775,000, J.D. Power said.

Later this year, a two-mode hybrid system developed jointly by General Motors Corp., BMW AG and DaimlerChrysler AG will begin appearing in some trucks and sport utility vehicles. The system uses a computer to choose from thousands of combinations of running on one electric motor, two electric motors, a combination of electric motors and the gasoline engine, or shutting down some of the gas engine’s cylinders.

Omotoso estimated that the system costs between $6,000 and $10,000, so the manufacturers could have a difficult time making money on it unless consumers will pay a premium.

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On the Net:

J.D. Power and Associates: http://www.jdpower.com