A real estate group said home prices fell in 80 percent of U.S. cities in the third quarter of this year as heavily discounted distressed sales made up 30 percent of all deals. But overall sales continued to climb, the National Association of Realtors said. The median sales prices of existing homes declined in 123 of 153 metropolitan areas compared with the same period a year ago. Prices rose in the Pittsburgh area, where the median price in the third quarter was $124,600, vs. $122,700 in the same quarter last year.

The average price of a gallon of regular unleaded gasoline at Pittsburgh-area pumps was $2.734 yesterday, a drop of more than 2 cents per gallon from a week ago, but still 25 cents more than average prices a month ago, according to the AAA Fuel Gauge report. A year ago, the average price locally was $2.434 per gallon. Nationally, the average price per gallon yesterday was $2.930.

Law firm Reed Smith said it would slash salaries by nearly 20 percent for first-year associates who are joining its U.S. offices in January. Starting salaries for the eight attorneys scheduled to join the Pittsburgh office will be $110,000, down from $135,000 in 2008. In larger markets such as New York, Chicago and Washington, D.C., the first-year associates will earn $130,000, down from $160,000 last year. Those affected would normally have started working for the firm in September, but their start date was deferred because of the economic downturn. Reed Smith is hiring 51 new associates next year in its 15 offices in the United States.

The Internal Revenue Service has dropped its audits into whether employment taxes should have been paid for drivers of FedEx Ground for the years 2004 through 2006. FedEx Ground is a Moon-based subsidiary of FedEx that the company runs using drivers it classifies as independent contractors. The IRS had dropped a similar audit of the company for 2002 but is still looking into the years 2007 and 2008.

Yahoo Inc. CEO Carol Bartz promised yesterday to turn around the struggling Internet company after this year's "terrible" performance. Ms. Bartz reiterated her goal to boost the operating profit margin to between 15 percent and 20 percent in two to three years by spurring revenue and cutting costs. That would be a sharp improvement over this year's margins of 6 percent.

Mylan Inc. said its Matrix Laboratories subsidiary received regulatory approval to sell a generic version of Tap Pharmaceuticals' heartburn medication Prevacid. ... The Cheesecake Factory Inc. restaurant chain agreed to pay $345,000 to settle a lawsuit alleging it let some male employees sexually harass other male workers in suburban Phoenix. ... Britain's two biggest banks, HSBC Holdings PLC and Barclays PLC, reported strong investment banking profits yesterday and signaled that bad debts may be nearing their peak, raising hopes the worst of the financial crisis is over for them. ... Two Bear Stearns executives who ran hedge funds that collapsed were acquitted yesterday of lying to investors.

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