Bankruptcy speculation grows at US Airways

US Airways shares fell 22 percent Friday as the company’s chief executive warned of “nonexistent” progress in labor talks with the machinists’ union, and the pilots’ union warned of possible bankruptcy as soon as next month.

In a weekly message to employees, chief executive Bruce Lakefield said he was astounded at the slow pace of labor talks given the airline’s dire situation.

Analysts now are predicting the company will seek bankruptcy protection no later than mid-September. Company officials have said they thought the airline had until the end of September to solve its labor issues.

Above, US Airway jets prepare for takeoff in April from Reagan International Airport in Arlington, Va.

Economy

Trade deficit soars

The U.S. trade deficit hit a record $55.82 billion in June as the country’s foreign oil bill surged to an all-time high, the government reported Friday.

The Commerce Department’s monthly trade report showed the June imbalance was up a sharp 19.1 percent from a revised May imbalance of $46.88 billion. Exports of goods and services fell by 4.3 percent to $92.82 billion while imports climbed 3.3 percent to a record $148.64 billion.

The far bigger-than-expected jump in the deficit caught analysts by surprise. They said it would act to further slow an economy already struggling with what Federal Reserve Chairman Alan Greenspan described as a “soft patch” in the early summer.

Massachusetts

Light cigarettes focus of class-action lawsuit

Smokers of so-called light cigarettes can pursue a class-action lawsuit against Philip Morris USA based on the claim that the tobacco giant advertised Marlboro Lights as less harmful than other brands, Massachusetts’ highest court ruled Friday.

The Supreme Judicial Court’s 4-3 decision marks the first time any state’s high court has allowed smokers to proceed with a class action against the industry over the marketing of light cigarettes. Class-action status means anyone with a similar complaint against Philip Morris can join the suit and could be included in any monetary judgment against the company.

Wall Street

Markets end week mixed

Wall Street closed out a difficult week with a small gain Friday, even as many investors, concerned over yet another spike in oil prices and a drop in consumer confidence, stayed on the sidelines. The major indexes ended the week mixed, with tech stocks pummeled by disappointing earnings outlooks.

Oil prices closed at $46.58, up $1.08, on the New York Mercantile Exchange, reaching another record high and giving greater credence to investor fears that oil may have to reach $50 or beyond before falling back.

The major indexes were mixed for the week. The Dow and the S&P 500 both edged 0.1 percent higher, while the Nasdaq fell 1.1 percent.