(Reuters) - Consumer sentiment rose to its highest level in five years in October as Americans were more upbeat about prospects for the economy and their own finances, a survey released on Friday showed. The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 82.6 from 78.3 in September. It was at its highest level since September 2007 on a final reading basis.

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(Reuters) - At least three brokerages cut their price targets on Apple Inc by up to $50 a share after the iPhone maker surprised analysts by forecasting lower gross margins for the current quarter. Apple shares edged lower 0.1 percent to $608.85 in premarket trading. For the December quarter, Apple forecast revenue of $52 billion, below estimates of $55 billion, according to Thomson Reuters I/B/E/S. It expects margins of 36 percent, far lower than analysts' expectations of 43 percent.

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(Reuters) - Amazon.com Inc (AMZN.O) reported its first quarterly net loss in more than five years on Thursday as the world's largest Internet retailer spent heavily and suffered from an economic slowdown in Europe. Amazon shares slipped slightly to $220.75 in after-hours trading after the results.

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(Reuters) - Merck & Co Inc posted a higher-than-expected quarterly profit as one-time tax gains helped offset plunging sales of its former flagship product, Singulair, an asthma drug that began facing cheaper generics in August. But overall third-quarter sales came in slightly below Wall Street expectations on Friday, as Singulair's decline outpaced already-grim predictions for it.

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(Reuters) - Stocks erased early morning gains and turned negative, weighed down by declines in the materials and telecom sectors. The Dow Jones industrial average dropped 21.92 points, or 0.17 percent, to 13,055.42. The Standard & Poor's 500 Index lost 1.81 points, or 0.13 percent, to 1,406.94. The Nasdaq Composite Index shed 2.31 points, or 0.08 percent, to 2,979.38.

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(Reuters) - Business investment showed signs of stalling in September, an indication that worries over a possible sharp tightening in the federal budget are already weighing on the economy. Other data on Thursday showed the number of Americans filing new claims for unemployment benefits fell last week, a fresh sign the labor market is slowly healing.

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(Reuters) - Contracts to buy previously owned homes rose far less than expected in September, an industry group said on Thursday, but the data continued to point to an improving tone in the housing market. The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in September, gained 0.3 percent to 99.5. Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 2.1 percent after declining 2.6 percent in August.

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(Reuters) - International oil company BP (BP.L), weakened and distracted by its troubles in the United States and Russia, is in danger of losing touch with the leaders in an industry where strength and focus yield the richest pickings. "I can't help thinking they've sort of lost their way. "Everywhere you look, they're falling behind," said a senior executive of one rival this week.

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(Reuters) - Microsoft Corp launched its new Windows 8 operating system and Surface tablet on Thursday in a bid to revive interest in its flagship product and regain ground lost to Apple Inc and Google Inc in mobile computing. "We've reimagined Windows and we've reimagined the whole PC industry," Microsoft Chief Executive Steve Ballmer told Reuters Television early Thursday ahead of the launch.

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(Reuters) - British lawmakers have criticized a deal the tax man made with Starbucks (SBUX.O) that allowed the coffee chain to almost eliminate its UK tax bill by deducting royalties the group paid itself for the use of its own brand. Starbucks Chief Financial Officer Troy Alstead told Reuters the UK tax authority had questioned its practice of paying 6 percent of turnover as royalties to a Dutch subsidiary and that the two parties had agreed to lower it to 4.7 percent.

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