AP
Business Highlights
Thursday November 20, 7:11 pm ET

Stocks tumble for second day; Treasurys surge

NEW YORK (AP) -- Stocks plunged for a second straight day Thursday, falling to a range not seen in more than five years as financial and energy stocks tumbled while demand for the safety of government debt spiked to historic levels.

Stocks saw the most intense selling late in the session after hopes faded that lawmakers would quickly put together an aid package for U.S. automakers and as the Standard & Poor's 500 index broke through lows established in 2002. That breach of a key technical threshold sent a shudder through the market and touched off further selling.

The Dow Jones industrial average fell about 445 points, or 5.6 percent, to 7,552.29, its lowest close since March 2003.

Dems are postponing crucial vote on auto bailout

WASHINGTON (AP) -- Democratic leaders in Congress sidetracked legislation to bail out the auto industry Thursday and demanded the Big Three develop a plan assuring the money would make them economically viable.

The decision averted a likely defeat of legislation providing $25 billion loans for the industry, and did not necessarily translate into passage of a different one. As a result, the fate of hundreds of thousands of auto workers and even of an iconic American industry hang in the balance.

Fannie Mae, Freddie Mac halting foreclosures

WASHINGTON (AP) -- Mortgage finance companies Fannie Mae and Freddie Mac are suspending foreclosures for about 16,000 households during the holiday season.

The two companies said Thursday that they will halt foreclosure sales between Nov. 26 and Jan. 9, while they evaluate whether borrowers qualify for a new loan modification program announced last week.

Fannie Mae said about 10,000 households would be affected, while Freddie Mac said the changes would affect about 6,000 borrowers who are facing foreclosure. The change does not apply to vacant homes.

Congress extends jobless benefits

WASHINGTON (AP) -- Jarred by new jobless alarms, Congress raced to approve legislation Thursday to keep unemployment checks flowing through the December holidays and into the new year for a million or more laid-off Americans whose benefits are running out.

The Senate's vote followed Thursday's government report that laid-off workers' new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had surged past 10 million.

Citi shares sink despite Saudi prince's investment

NEW YORK (AP) -- Citigroup Inc. shares tumbled below $5 a share Thursday to their lowest level in more than 15 years, a sign that a Saudi prince's decision to boost his stake in the bank has failed to galvanize confidence among increasingly anxious investors.

Prince Alwaleed bin Talal, a longtime investor in Citigroup, said he plans to increase his stake in the bank to 5 percent from less than 4 percent.

It wasn't clear whether his roughly $350 million investment -- calculated based on Citigroup's current market capitalization -- would be used to buy new shares issued directly by Citigroup, or to buy stock from other shareholders in open market transactions.

Oil at 3-year lows; gas below $2 in 23 states

COLUMBUS, Ohio (AP) -- Oil prices on Thursday hit levels not seen in more than three years and retail gasoline prices are now below $2 across nearly half of the country on dour economic reports suggesting a painful economic pullback.

Benchmark crude fell as low as $48.50 a barrel on the New York Mercantile Exchange, levels last seen on May 18, 2005, when oil hit $46.80 a barrel. It fell 7 percent, or $4, to settle at $49.62 in Nymex trading.

Meanwhile, prices at the pump fell again overnight nationally close to $2 a gallon, with the average price in 23 states even less than that

Credit market recovery slips on carmaker fears

NEW YORK (AP) -- Investors flooded into government debt again on Thursday, sending Treasury yields to multiyear lows as ongoing worries about an auto industry collapse impede the credit markets' attempts at a recovery.

Meanwhile, rates on junk bonds keep soaring -- a bad sign for speculative-grade companies that need to tap the markets for funding.

The yield on the benchmark 10-year Treasury note sank to 3.22 percent -- the lowest level since June 2003. The 30-year bond's yield fell to 3.79 percent -- the lowest since the government started issuing the bond in 1977. And the 2-year note's yield sank to 1.01 percent -- the lowest since 1946, according to Global Financial Data in Los Angeles.

New York Times Co. slashes dividend by 74 percent

NEW YORK (AP) -- The New York Times Co. is slashing its quarterly dividend by 74 percent to preserve cash as the advertising slump worsens.

The cuts could foment unhappiness among members of the Sulzberger family, who are the controlling shareholders of the storied newspaper publisher.

The company declared a quarterly dividend of 6 cents per share for Class A and B common shares, down from 23 cents per share in the third quarter. The dividend is payable on Dec. 15 for shareholders on record as of Dec. 1.

Gap's 3Q profits edge up 3.4 percent on cost cuts

NEW YORK (AP) -- Apparel chain Gap Inc. reported Thursday that its third-quarter profit rose 3.4 percent as cost-cutting efforts like inventory control offset a sales slump. The company also affirming its profit guidance for the full year.

The San Francisco-based company said after the markets closed Thursday that it earned $246 million, or 35 cents per share, in the three months ended Nov. 1. That compares with $238 million, or 30 cents per share, in the same period a year earlier.

Fuld replacement named at Lehman Brothers

NEW YORK (AP) -- A restructuring expert overseeing the liquidation of Lehman Brothers will replace Richard Fuld as chief executive on Dec. 31, Lehman lawyer Harvey Miller said Thursday.

Chief Restructuring Officer Bryan Marsal of Alvarez & Marsal has been overseeing the wind-down of what was once the nation's fourth-largest investment bank. Lehman will also hire David Goldfarb, a former Lehman chief strategy officer, to help with the wind-down. It will pay him $500,000 for six months of work with the possibility of a $500,000 bonus.

By The Associated Press

The Dow fell 444.99, or 5.56 percent, to 7,552.29.

Broader stock indicators also showed huge declines. The Standard & Poor's 500 index fell 54.14, or 6.71 percent, to 752.44, below the closing low of 776.76 logged on Oct. 9, 2002 to its lowest close since April 14, 1997.

The Nasdaq composite index fell 70.30, or 5.07 percent, to 1,316.12.

The Russell 2000 index of smaller companies fell 27.07, or 6.56 percent, to 385.31.

Light, sweet crude for December delivery fell 7 percent, or $4, to settle at $49.62 in Nymex trading.

In other Nymex trading, gasoline futures tumbled 10 cents to settle at $1.0070 a gallon. Heating oil lost 8.38 cents to settle at $1.6759 a gallon while natural gas for December delivery slid 42.7 cents to settle at $6.316 per 1,000 cubic feet.

In London, Brent crude fell $3.64 to settle at $48.08 on the ICE Futures exchange.