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Business update: Health care reform suit clears hurdle

Virginia’s lawsuit challenging the Obama administration’s health care reform law cleared its first legal hurdle today as a federal judge ruled the law raises a host of complex constitutional issues. Virginia Attorney General Ken Cuccinelli claims in the lawsuit that Congress doesn’t have the authority to require citizens to buy health insurance or pay a penalty. U.S. District Judge Henry Hudson’s ruling denied the Justice Department’s attempt to have the lawsuit dismissed, saying further hearings were needed to weigh the merits of the case. An Oct. 18 hearing had previously been set.

Economic reports give stocks big start for August: The stock market began August with a huge rally after economic and earnings reports from around the world revived investors’ faith in the global recovery. The Dow Jones industrial average jumped nearly 190 points in afternoon trading. Major stock indexes all rose more than 1.5 percent.

Bad Russian wheat harvest boosts U.S. farmers: A severe drought destroyed one-fifth of the wheat crop in Russia, the world’s third-largest exporter, and now wildfires are sweeping in to finish off some of the fields that remained. Expectations that Russia will slash exports by at least 30 percent have sent wheat prices soaring, and this is good news for farmers in the world’s largest wheat exporter — the United States. The higher wheat prices may mean that Americans and Europeans pay slightly more for bread, but the bigger burden will fall on people in the Middle East, Africa and parts of Asia, analysts say.

Manufacturing grows for 12th straight month: U.S. manufacturing grew for a 12th straight month in July, providing a boost to the slowing economic recovery. And many manufacturers said they are willing to hire, a sign that the industry could help ease the nation’s high unemployment rate in the months ahead. The latest report from the Institute for Supply Management did note today that manufacturing growth has cooled in the past three months. But much of that was expected.

Fed chief sees long road back to economic health: The nation faces a long road to get back to good economic health, Federal Reserve Chairman Ben Bernanke said today. Bernanke said progress is being made after the deepest recession since the 1930s. The worst of the financial crisis is behind the nation and the economy is growing again, he pointed out.

Government trims borrowing estimate for this year: The Treasury Department has further trimmed its estimates of the amount of borrowing it will need to do this year as an improving economy has boosted tax revenues and cut spending needs more than previously expected. Treasury says that it now expects to borrow $1.438 trillion this year, still the second-highest amount in history. But that is down by 19.5 percent from last year’s all-time record in borrowing of $1.786 trillion.