AP
Business Highlights
Wednesday November 19, 7:02 pm ET

Dow falls below 8,000, S&P at 5-year low

NEW YORK (AP) -- Wall Street hit levels not seen since 2003 on Wednesday, with the Dow Jones industrial average plunging below the 8,000 mark amid a dour economic outlook from the Federal Reserve and worries over the fate of Detroit's three automakers.

A cascade of selling occurred in the final minutes of the session as investors yanked money out of the market. For many, the real fear is that the recession might be even more protracted if Capitol Hill is unable to bail out the troubled auto industry.

The Dow gave up 427.47 points, or 5.07 percent, to 7,997.28.

Fed sharply lowers forecasts, hints of rate cut

WASHINGTON (AP) -- The Federal Reserve on Wednesday sharply lowered its projections for economic activity this year and next, and signaled that additional interest rate reductions may be needed to help combat the worst financial crisis to jolt the country in more than a half-century.

With the economy forecast to lose traction, or even jolt into reverse, unemployment will move higher, the Fed predicted.

Consumer prices drop record 1 percent in October

WASHINGTON (AP) -- Consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount.

The Labor Department said Wednesday that consumer prices fell by 1 percent last month, the biggest one-month decline on records that go back to February 1947. The drop was twice as large as the 0.5 percent decrease that analysts had been expecting and marked the third straight month that prices had either fallen or been unchanged.

The worry is that the recession, which many analysts believe will worsen in coming months, will further depress prices, hurting such industries as housing, autos and retailing, and contribute to a downward spiral that will feed on itself.

Democrats seek to lower expectations for bailout

WASHINGTON (AP) -- Top Senate Democrats suggested Wednesday that a bill to rescue Detroit's Big Three automakers was stalled and challenged the Bush administration to take steps to save the industry if congressional efforts falter. The White House quickly rebuffed the suggestion.

The difficulties of striking a deal on the package before a new president and a new Congress with expanded Democratic majorities take office appeared to be too great to overcome. The deadlock persisted even as the heads of General Motors, Ford and Chrysler returned for a second day to plead for relief and as their congressional backers urged colleagues not to punish them for past mistakes.

Ballmer dismisses Yahoo buyout but open on search

BELLEVUE, Wash. (AP) -- Microsoft Corp. is no longer interested in buying all of Yahoo Inc., CEO Steve Ballmer said Wednesday, though he told shareholders that the company would still be "very open" to a collaboration on Internet search. His comments sent Yahoo shares diving by 19 percent.

Yahoo spurned a $47.5 billion takeover offer from Microsoft in May, and later rejected Microsoft's bid to buy only its search engine. Ballmer has said repeatedly of late that the buyout remains off the table, though a search-related deal is possible.

But Wednesday marked the first time he had renewed that stance since the resignation announced this week by Yahoo CEO Jerry Yang, who had resisted Microsoft's overtures.

Oil falls; Americans cut driving by 90B miles

SIOUX FALLS, S.D. (AP) -- Oil slipped below $54 a barrel Wednesday as stock markets across the globe fell and yet another U.S. government report illustrated the disarray in the housing market.

U.S. motorists, stung by record gasoline prices, job losses and falling home prices, left the roadways in droves, logging almost 11 billion fewer miles in September, according to the Transportation Department. The department reported that Americans drove 90 billion fewer miles over the most recent 11 months of the fiscal year.

Light, sweet crude for December delivery fell 77 cents to settle at $53.62 a barrel on the New York Mercantile Exchange, about where prices were in January of 2007.

US home construction sinks to new record low

WASHINGTON (AP) -- Construction of new homes plunged last month to the lowest level on records going back nearly 50 years as U.S. builders slashed production while Wall Street nosedived.

Embattled homebuilders, who enjoyed a five-year boom, are now building new homes and apartments at a record-low pace, according to government data released Wednesday. New building permits, a barometer of future activity, also plummeted to the lowest pace on record.

The Commerce Department reported that construction of new homes and apartments fell 4.5 percent in October, the fourth straight monthly decline. Construction sank to an annual rate of 791,000 units from an upwardly revised September rate of 828,000 units.

Ghosn says auto industry consolidation likely

LOS ANGELES (AP) -- Nissan Motor Co. and Renault SA Chief Executive Carlos Ghosn said Wednesday that he expects the current crisis in the auto industry will soon lead some carmakers to consolidate.

Ghosn made his remarks at the Los Angeles Auto Show, pointing out that the weakening global auto market that the auto industry is facing will knock out some competitors. He pointed to the U.S. financial industry, which has seen key players recently disappear.

BASF temporarily closing 80 plants

FRANKFURT, Germany (AP) -- Chemical company BASF SE said Wednesday it is temporarily closing 80 plants worldwide due to slumping demand and cutting production at 100 more, including facilities in Texas and Louisiana. Some 20,000 workers are affected.

It also abandoned its goal to match last year's profit, citing slowing demand for its products, particularly from automotive customers.

Harrah's CEO: Economy is changing casinos

LAS VEGAS (AP) -- Executives at top casino companies said Wednesday that the gambling business won't be the same for years to come, with operators and manufacturers shifting to focus on properties that already exist, not ones that they want to build.

Loveman told other casino operators at an industry conference that Harrah's, its competitors and other businesses may have to change how they work -- particularly how they finance development -- for the rest of his professional life.

By The Associated Press

The Dow gave up 427.47 points, or 5.07 percent, to 7,997.28.

The S&P 500 slipped 52.54 points, or 6.12 percent, to 806.58. The technology-heavy Nasdaq composite index fell 96.85 points, or 6.53 percent, to 1,386.42, while the Russell 2000 index of smaller companies gave up 35.13, or 7.85 percent, to 412.38.

Light, sweet crude for December delivery fell 77 cents to settle at $53.62 a barrel on the New York Mercantile Exchange.

In other Nymex trading, gasoline futures slipped about 3 cents to settle at $1.107 a gallon. Heating oil rose less than a penny to settle at $1.7597 a gallon while natural gas for December delivery jumped 22.7 cents to settle at $6.743 per 1,000 cubic feet.

In London, January Brent crude fell 12 cents to settle at $51.72 on the ICE Futures exchange.