AP
Business Highlights
Friday October 3, 6:27 pm ET

Historic bailout bill passes Congress; Bush signs

WASHINGTON (AP) -- With the economy on the brink of meltdown and elections looming, a reluctant Congress abruptly reversed course and approved a historic $700 billion government bailout of the battered financial industry on Friday. President Bush swiftly signed it.

The 263-171 vote capped two weeks of tumult in Congress and on Wall Street, punctuated by urgent warnings from Bush that the country confronted the gravest economic disaster since the Great Depression if lawmakers failed to act.

Wells Fargo agrees to buy Wachovia, Citi objects

NEW YORK (AP) -- A battle broke out Friday for control of Wachovia, as Wells Fargo agreed to pay $14.8 billion for the struggling bank, while Citigroup and federal regulators insisted that Citi's earlier and lower-priced takeover offer go forward.

The surprise announcement that Wachovia Corp. agreed to be acquired by San Francisco-based Wells Fargo & Co. in the all-stock deal -- without government assistance -- upended what had appeared to be a carefully examined arrangement and caught regulators off guard.

Wells' original offer totaled about $15.1 billion, but since the value of its shares closed down 60 cents Friday, the deal is now valued at about $14.8 billion.

Only four days earlier, Citigroup Inc. agreed to pay $2.1 billion for Wachovia's banking operations in a deal that would have the help of the Federal Deposit Insurance Corp.

The head of the FDIC said the agency is standing behind the Citigroup agreement, but that it is reviewing all proposals and will work with the banks' regulators.

Economy sheds most jobs since 2003, more cuts seen

WASHINGTON (AP) -- In September, employers chopped payrolls by 159,000 -- more than double the cuts made just one month before. It was the ninth straight month of job losses. A staggering 760,000 jobs have disappeared so far this year.

It was the fastest pace in more than five years.

The Labor Department's report, released Friday, also showed that the nation's unemployment rate was 6.1 percent, up sharply from 4.7 percent a year ago. Over the last year, the number of unemployed people has risen by 2.2 million to 9.5 million.

Stocks end lower amid worries after House OKs plan

NEW YORK (AP) -- Wall Street ended an intensely volatile week with another sell-off Friday while credit markets remained strained after enthusiasm over the government's $700 billion financial rescue plan gave way to worries about obstacles still facing the economy.

The Dow Jones industrials fell 157 points, and all the major indexes finished the week with big losses.

Investors dumped stocks late in the session after a big intraday rally, repeating a defensive move seen throughout the yearlong market pullback.

Credit markets still tight after bailout approval

NEW YORK (AP) -- The stranglehold on the credit markets remained tight Friday after the House approved a revised financial bailout package, with investors nervous that the plan is at most a first step in repairing the faltering U.S. economy.

Anxiety among investors kept Treasury bill demand high; the yield on the 3-month bill slipped below half a percent.

Most market participants have been regarding the rescue plan approved by the Senate earlier this week as a medicine for what's ailing the financial system, but not a cure-all.

AIG plans sale of business units to repay debt

CHARLOTTE, N.C. (AP) -- The insurer American International Group Inc. said Friday it plans to sell off a number of business units to pay off its massive government loan.

The announcement was expected by Wall Street. But it now leaves investors wondering how much AIG will be able to raise from the sales.

AIG, one of the world's biggest insurers, Friday didn't specifically disclose all the assets it would sell or the expected prices from the sales. However, the New York-based insurer said it plans to retain its U.S. property and casualty and foreign general insurance businesses, and also plans to retain an ownership interest in its foreign life insurance operations.

Exports fueled slight services expansion in Sept.

NEW YORK (AP) -- Educational services, farms, utilities, stores and hospitals all saw their businesses expand slightly in September, thanks to strong exports and deliveries, a private research group's survey showed Friday.

The reading of 50.2 from the Institute for Supply Management was down from 50.6 in August. A reading above 50 signals growth. The index has hovered near the 50 "boom-bust" line for most of the year.

Oil slips after job report, bailout passage

HOUSTON (AP) -- Oil prices slipped in volatile trading Friday after Congress approved a historic bailout of the nation's teetering financial industry as the longterm health of the global economy remained questionable.

Investors bet down the price for crude early in the day when the U.S. Department of Labor reported that employers slashed payrolls in September by the greatest amount in more than five years, but got back into the market when Wells Fargo Co. stepped in to buy Wachovia Corp. for $15.1 billion.

And few believed that the unprecedented bailout package, passed early in the afternoon, would rekindle the global appetite for energy any time soon.

Sept. dividend payouts lowest for 3Q in 50 years

NEW YORK (AP) -- Dividend cuts in the third quarter took $22.5 billion out of the pockets of investors during what one Standard & Poor's analyst called the worst September for dividends in more than 50 years.

Of the 7,000 or so publicly traded companies that report dividend information to S&P, 138 decreased their dividend during the third quarter of 2008 compared to 21 during the third quarter of 2007.

That marks the worst September for dividends since S&P started keeping such records in 1956.

Toyota's 0 percent offer shows credit is available

NEW YORK (AP) -- Toyota Motor Corp. is offering an unprecedented zero-percent financing on nearly a dozen models.

But after the top Japanese automaker posted a 32 percent drop in September sales that only domestic competitors had experienced until now, the question is: Is it enough to get people to buy?

Toyota's U.S. division said Thursday night it will offer the free financing on 11 models with terms ranging from 36 to 60 months. The incentive expires Nov. 3.

By The Associated Press

The Dow fell 157.47, or 1.50 percent, to 10,325.38 after rising more than 310 points.

Broader stock indicators also ended lower. The Standard & Poor's 500 index fell 15.05, or 1.35 percent, to 1,099.23, and the Nasdaq composite index fell 29.33, or 1.48 percent, to 1,947.39.

Light, sweet crude for November delivery fell 9 cents to settle at $93.88 a barrel on the New York Mercantile Exchange.

November Brent crude fell 31 cents to settle at $90.25 a barrel on the ICE Futures exchange.

In other Nymex trading, heating oil futures rose 4.75 cents to $2.6620 a gallon, while gasoline prices fell 2.67 cents to $2.2283 a gallon. Natural gas for November delivery fell 12.3 cents to $7.358 per 1,000 cubic feet.