Business news in brief

Merck & Co. lost the second trial to reach a verdict over allegations its osteoporosis drug Fosamax causes so-called jaw death. The jury set damages at $8 million. Merck has major operations in the Philadelphia area. A jury in New York ruled against Merck on Friday in the case of Shirley Boles, of Fort Walton Beach, Fla., who said she developed osteonecrosis of the jaw by taking Fosamax. The first Fosamax case resulted in a Merck victory in May. Paul F. Strain, a lawyer for Merck, said Merck will ask U.S. District Judge John Keenan to throw out the verdict and, if necessary, will appeal. - Bloomberg News

New Jersey's Gov. Christie has conditionally vetoed a bill to limit the effect of an unemployment tax increase on businesses. Christie says the dollar figure is fine but the bill doesn't go far enough toward reforming the financially troubled unemployment insurance fund. Christie said Thursday that he wanted changes to make it harder for people fired for misconduct to collect benefits. The bill is basically designed to avert an automatic $400-per-employee tax increase on businesses that would have been triggered July 1 because of the unemployment fund's insolvency. It calls for an increase of about $130 per worker instead. Senate President Stephen Sweeney said he expects the Senate to accept Christie's conditions. - AP

Armstrong World Industries said it named Matthew J. Espe as the Lancaster flooring maker's chief executive officer and president. Espe, 51, replaces Michael D. Lockhart, who stepped down in February and had led the company for 10 years. Espe has been head of Ricoh Americas Corp., and was chairman and CEO of Ikon Office Solutions Inc. before that business was acquired by Ricoh Co. Ltd. of Japan in 2008. Ricoh Americas Corp., West Caldwell, N.J., said Kevin Togashi will take over from Espe as chairman and CEO. Togashi will also retain his role as chairman and CEO of Ricoh Americas Holdings Inc. - Reid Kanaley

US Airways and Spanish carrier Spanair announced an agreement that will give US Airways passengers access to additional destinations in Spain, the Canary Islands, continental Europe and Africa. The deal, which substantially expands an agreement between the two airlines, is effective Saturday. It gives passengers so-called single-source booking, ticketing, and baggage connections for flights on either airline. US Airways is the dominant carrier serving Philadelphia International Airport, with about 60 percent of the traffic. - Paul Schweizer

A confirmation hearing to end Philadelphia Newspapers L.L.C.'s bankruptcy will resume Monday. Lawyers in the case spent Friday trying to resolve issues surrounding a provision that would release company employees from liability in most ongoing legal actions. Philadelphia Newspapers owns The Inquirer, Daily News and the website Philly.com. As part of its reorganization plan, the company was sold at auction to its senior lenders in April for $139 million. - Christopher K. Hepp

The government lowered its estimate of how much the U.S. economy grew in the first quarter of the year, noting that consumers spent less than it previously thought. The gross domestic product rose by an annual rate of 2.7 percent in the January-to-March period, the Commerce Department said. That was less than the 3.0 percent estimate for the quarter that the government released last month. It also was much slower than the 5.6 percent pace in the previous quarter. The economy has now grown for three consecutive quarters after shrinking for four straight during the recession - the longest contraction since World War II. - AP

Toyota Motor Corp. halted sales of a hybrid Lexus model because too much fuel spilled in crash tests conducted by the government safety agency, the company said. Toyota said in a letter to the National Highway Traffic Safety Administration that about 17,000 of the HS250h sedans for the 2010 model year are being recalled. Toyota has not received any reports of accidents or injuries related to the defect, a company spokesman said. - Bloomberg News

Delta Air Lines Inc., FedEx Corp. and other carriers lost a court bid to block a new federal rule that makes it easier for unions to organize employees into collective-bargaining units. U.S. District Judge Paul Friedman in Washington upheld a change in union voting procedures that lets airline and railroad workers form bargaining units with approval from the majority casting ballots, rather than a majority of potential members. The Air Transport Association, an industry trade group, contended the shift was arbitrary and illegal. The rule is effective July 1. - Bloomberg News

Regulators have shut down banks in Florida, Georgia, and New Mexico, lifting to 86 the number of U.S. bank failures this year. The Federal Deposit Insurance Corp. took over Peninsula Bank, Englewood, Fla., with $644.3 million in assets and $580.1 million in deposits. The agency also seized First National Bank in Savannah, Ga., with $252.5 million in assets and $231.9 million in deposits. Miami-based Premier American Bank agreed to assume the assets and deposits of Peninsula Bank. The Savannah Bank is assuming all the deposits and some of the assets of First National Bank. The FDIC also seized High Desert State Bank, Albuquerque, N.M., with $80.3 million in assets and $81 million in deposits. First American Bank, Artesia, N.M., will assume all of the deposits of High Desert State Bank. - AP

The Greek government has submitted to parliament proposals for sweeping pension and labor market changes that will raise retirement ages and make layoffs cheaper. Labor Minister Andreas Loverdos says the draft law will make the debt-ridden country's pension system more rational and ensure its long-term viability. The proposed changes made public Friday will raise the retirement age to 65 years for all - up from 60 for women - and sets the necessary contribution years for a full pension at 40, up from 35. - AP

The government said it obtained a court order to halt an alleged $34 million Ponzi scheme targeting federal employees and law enforcement agents nationwide with promises of safe investments in a nonexistent bond fund. The Securities and Exchange Commission said the order issued Thursday by a federal judge in Miami also froze the assets of the estate of the late Kenneth Wayne McLeod, his consulting firm Federal Employee Benefits Group of Jacksonville, Fla., and an affiliated investment firm. - AP