AP
Business Highlights
Wednesday December 10, 6:33 pm ET

Auto rescue bill in peril, opposed by GOP senators

WASHINGTON (AP) -- Emergency aid for the nation's imperiled auto industry was thrown into jeopardy Wednesday, opposed by Republicans who were revolting against a hard-fought deal between Democrats and the Bush White House to speed $14 billion to ailing carmakers.

The House was on track to vote on the bailout Wednesday night, and Democrats held out hope that it could be enacted by week's end. But a growing number of GOP senators declared they would not go along.

Stocks resume climb after 1-day sell-off

NEW YORK (AP) -- Wall Street climbed back on an upward track Wednesday, rising in late trading as a surge in gold and other commodities prices gave investors a reason to snap up energy and materials stocks.

But the market's closing levels masked the fact that it was a confusing day on the Street. Investors had sent stocks higher until mid-afternoon on expectations of a bailout for the Detroit automakers, but the market forfeited that advance on signs that the plan was running into opposition from Republican lawmakers. Investors then set aside their uncertainty, and plowed back into stocks as they saw the rebound in commodities.

The Dow Jones industrial average rose 70.09, or 0.81 percent, to 8,761.42.

AIG working to settle $10B of investment losses

CHARLOTTE, N.C. (AP) -- American International Group Inc. said Wednesday it is working on resolving nearly $10 billion in soured investments -- without asking taxpayers for more money.

The exposure stems from investments in mortgage and corporate debt assets, and may make it more difficult for the battered insurer to repay the federal government for its bailout package.

Federal deficit on pace to reach record $1T

WASHINGTON (AP) -- The federal government ran a record budget deficit in November, putting Uncle Sam on track to post an all-time high annual shortfall of $1 trillion or more.

In just the first two months of the budget year that started Oct. 1, the deficit totaled $401.6 billion, nearly matching the record gap of $455 billion posted for all of last year, according to Treasury Department data released Wednesday. If the deficit does top $1 trillion for the current budget year, it also would be a post-World War II high when measured as a percentage of the economy.

Wholesale inventories, sales plunge in October

WASHINGTON (AP) -- Wholesalers cut back on their inventories in October by the largest amount since the period following the 2001 terrorist attacks while they watched their sales plunge by a record amount.

Analysts predict more grim news in the months ahead as the current recession deepens.

The Commerce Department reported Wednesday that wholesalers, the companies in the supply chain between manufacturers and retailers, reduced their inventories by 1.1 percent in October, the biggest cutback since a similar drop in inventories in November 2001.

GMAC extends deadline for tender offers

NEW YORK (AP) -- GMAC Financial Services, the financing arm of General Motors, said Wednesday that its bid to become a bank holding company and qualify for aid under the government's $700 billion bank rescue plan may be in danger because it hasn't raised the capital needed to meet federal requirements.

One analyst said that if GMAC doesn't get the help it needs, it may need to shutter its home mortgage division in order to prevent the entire company from filing for bankruptcy protection.

Oil prices jump on rumor of Saudi cuts

COLUMBUS, Ohio (AP) -- Oil prices rose in volatile trading Wednesday after rumors spread that Saudi Arabia told major customers of significant production cuts.

Investors tend to exit the market as the year closes out, creating very volatile trading. That appeared to be the case on Wednesday as well, with huge price swings.

Light, sweet crude for January delivery rose 3.4 percent, or $1.45, to settle at $43.52 on the New York Mercantile Exchange.

Office Depot cutting 112 stores, 2,200 jobs

CHICAGO (AP) -- Office Depot Inc. will close about 9 percent of its North American stores and cut 2,200 jobs over the next three months while planning to open fewer locations next year in an effort to cut costs.

Shares of the office supply chain rose more than 12 percent after Wednesday's announcement.

The plan to shutter 112 stores will reduce the chain's base to 1,163. It plans to close 45 stores in the Central U.S., 40 in the Northeast and Canada, 19 in the West and eight in the South.

Another Yahoo investor seeks Microsoft search deal

SAN FRANCISCO (AP) -- A large Yahoo Inc. shareholder has joined a growing chorus urging the beleaguered Internet company to set aside its past differences with Microsoft Corp. and renew negotiations to sell its search operations to the spurned suitor.

In a letter sent Wednesday to Yahoo's board, Ivory Investment Management called upon the directors to make amends for "acting unreasonably" in their earlier talks with Microsoft by quickly closing a deal with the software maker

Eastman Kodak withdraws full-year 2008 forecast

ROCHESTER, N.Y. (AP) -- Eastman Kodak Co. said Wednesday it has withdrawn its full-year 2008 operating profit and sales forecast because of a weak economy and stronger dollar, and says executives will not receive a salary increase next year.

The Rochester, N.Y.-based photographic products company said consumer spending has slowed dramatically, and tight credit markets are making it hard for shoppers to secure financing for new equipment purchases.

By The Associated Press

The Dow Jones industrial average rose 70.09, or 0.81 percent, to 8,761.42.

The S&P 500 index rose 10.57, or 1.19 percent, to 899.24, and the Nasdaq composite index rose 18.14, or 1.17 percent, to 1,565.48. The Russell 2000 index of smaller companies rose 10.69, or 2.30 percent, to 476.40.

Light, sweet crude for January delivery rose 3.4 percent, or $1.45, to settle at $43.52 on the New York Mercantile Exchange.

In other Nymex trading, gasoline futures rose 3.2 cents to settle at 96.87 cents a gallon. Heating oil fell 3.42 cents to settle at $1.40 a gallon while natural gas for January delivery rose 10.7 cents to settle at $5.686 per 1,000 cubic feet.

In London, January Brent crude rose 77 cents to settle at $42.20 on the ICE Futures exchange.