AP
Business Highlights
Wednesday October 15, 6:18 pm ET

Stocks plunge anew as data points to recession

NEW YORK (AP) -- Investors agonizing over a faltering economy sent the stock market plunging all over again Wednesday after a stream of disheartening data convinced Wall Street that a recession, if not already here, is inevitable.

The market's despair propelled the Dow Jones industrials down 733 points to their second-largest point loss ever, and the major indexes all lost at least 7 percent.

The slide meant that the Dow, which fell 76 points on Tuesday, has given back all but 127 points of its record 936-point gain of Monday.

Retail sales plunge 1.2 percent in September

WASHINGTON (AP) -- Retail sales plunged by the largest amount in three years in September as worried consumers shunned the malls and auto showrooms in the midst of the country's financial meltdown.

The Commerce Department reported Wednesday retail sales decreased 1.2 percent last month, nearly double the 0.7 percent drop that had been expected. It was the biggest decline since retail sales fell by 1.4 percent in August 2005.

The bigger-than-expected decline significantly increased the risks of a recession because consumer spending is two-thirds of total economic activity.

Bernanke: Quick economic rebound not in cards

WASHINGTON (AP) -- The country's economic health won't snap back quickly even if badly needed confidence in the U.S. financial system returns and roiled markets finally calm, Federal Reserve Chairman Ben Bernanke cautioned Wednesday. He left the door open to additional interest rate reductions.

The government's new powers under the $700 billion financial bailout package signed into law two weeks ago should help reduce risks to the economy, Bernanke said.

Fed: Economy sinks deeper into rut

WASHINGTON (AP) -- The country has sunk deeper into an economic rut, the Federal Reserve reported Wednesday, reflecting mounting damage from the financial and credit crises.

The Fed's new snapshot of business conditions around the nation showed economic activity weakened across all of the Fed's 12 regional districts.

Consumer spending slumped in most Fed regions. Manufacturing also slowed in most areas.

JPMorgan, Wells Fargo 3Q profits dip

NEW YORK (AP) -- In the midst of one of the nation's worst credit crises, JPMorgan Chase & Co. and Wells Fargo & Co. managed to report better-than-expected third-quarter results on Wednesday. But even two of the country's strongest banks proved they are not immune to the widespread credit problems plaguing their peers.

Both banks reported sharp declines in profit as they took hits on investments and increased their credit reserves to prepare for troubles ahead. But given the waning economy and the current shake-up in the markets, the credit problems did not come as a surprise to most analysts. While many remain cautious of the worsening economy, analysts generally viewed the results as positive.

EBay posts 3Q profit, but outlook below forecasts

NEW YORK (AP) -- EBay Inc. posted a third-quarter profit that beat analyst forecasts Wednesday, but its lower-than-expected fourth-quarter forecast indicated the online auction site operator is not immune from the slowing economy.

The San Jose, Calif.-based company's shares fell 54 cents, or 3.8 percent, in after-hours trading, after finishing regular trading down $2.41, or 13.6 percent, at $15.33.

EBay earned $492 million, or 38 cents per share, in the quarter that ended Sept. 30. In the year-ago period, eBay reported a loss of $936 million, or 69 cents per share, stemming from charges to its Skype telecommunications unit.

Excluding one-time items, eBay earned 46 cents per share -- five cents higher than analysts polled by Thomson Reuters expected.

Delta swings to 3Q loss, AMR posts small profit

ATLANTA (AP) -- Executives said Wednesday as Delta Air Lines reported a third-quarter loss and American Airlines' parent posted a small profit that travelers have not seen the last of capacity cuts and fees for services that were once free.

Atlanta-based Delta will scale back international growth plans in the coming months and is prepared to cut more domestic capacity if needed to weather the global financial crisis that has intensified in recent weeks, executives said. American, a unit of Fort Worth, Texas-based AMR Corp., will cut capacity again next year by 6 percent. The move could help push fares higher if other airlines go along.

Despite the economic downturn, fees and higher fares for the most part have not abated.

G-8 announces global summit on financial crisis

BRUSSELS, Belgium (AP) -- The Group of Eight major industrial nations announced Wednesday they will hold a global summit -- perhaps as early as November in New York -- to forge common action to prevent another economic meltdown.

Britain called for radical restructuring of international institutions like the International Monetary Fund and World Bank. British Prime Minister Gordon Brown said the summit meeting would require vision similar to the creation of the U.N. and the Bretton Woods conference that laid out an international financial and monetary system in the 1940s. Emerging economies such as China and India and European economies outside the G-8 should also participate, he said.

The G-8 leaders said in a joint statement released by the White House that they were united in their commitment to change the regulation of the world's financial sector to "remedy deficiencies exposed by the current crisis."

Oil dips below $75 as OPEC cuts demand forecast

NEW YORK (AP) -- Oil prices closed below $75 a barrel for the first time in nearly 14 months Wednesday after OPEC, fearing that a severe global economic slowdown is unavoidable, slashed its 2009 petroleum demand forecast.

Another bad day on Wall Street also pressured oil prices, which have tumbled a staggering 49 percent since soaring to an all-time high $147.27 on July 11. The Dow Jones industrial average plunged 733 points.

Light, sweet crude for November delivery fell $4.09, or 5.2 percent, to settle at $74.54 a barrel on the New York Mercantile Exchange. It was crude's lowest settlement prices since Aug. 31, 2007.

GM campaign tells buyers they can still get loans

DETROIT (AP) -- With October auto sales expected to fall short of September's 15-year low, General Motors Corp. is launching a campaign this week to reach people who have stopped looking for cars out of fear that they can't get a loan.

Many banks and finance companies, including GM's own GMAC Financial Services, have tightened credit standards because they can't borrow money to lend, or they're reluctant to lend and risk defaults.

GM will promote its financing options with radio, newspaper and digital advertising from Friday through Nov. 3.

By The Associated Press

The Dow ended down 733.08, or 7.87 percent, at 8,577.91. On Monday, Sept. 29, the Dow had its largest point drop of 777.68. Wednesday's percentage drop was the biggest since the 8.04 percent of Oct. 26, 1987, which followed Black Monday, the Oct. 19 crash that sent the blue chips down 22.6 percent in a single session.

The Dow's massive decline Wednesday marks its 20th triple-digit move in 23 sessions.

Broader stock indicators also skidded. The Standard & Poor's 500 index fell 90.17, or 9.03 percent, to 907.84, and the Nasdaq composite index fell 150.68, or 8.47 percent, to 1,628.33.

It was the lowest close for the Nasdaq since June 30, 2003, when the index finished at 1,622.80. The Dow and the S&P 500 are also at mid-2003 levels.

Light, sweet crude for November delivery fell $4.09, or 5.2 percent, to settle at $74.54 a barrel on the New York Mercantile Exchange. It was crude's lowest settlement prices since Aug. 31, 2007.

In other Nymex trading, heating oil futures fell 7.12 cents to settle at $2.217 a gallon, while gasoline futures fell 10.26 cents to settle at $1.7822 a gallon. Natural gas futures for November delivery fell 18.8 cents to settle at $7.136 per 1,000 cubic feet.

In London, November Brent crude fell $3.73 to settle at $70.80 a barrel on the ICE Futures exchange.