AP
Business Highlights
Monday December 29, 6:25 pm ET

Stocks pull back amid Middle East tensions

NEW YORK (AP) -- Wall Street retreated Monday as continuing violence in the Middle East and a resulting jump in oil prices reminded investors that the market could face problems beyond the recession. The collapse of a Dow Chemical Co. joint venture, meanwhile, intensified Wall Street's economic worries.

Investors remained cautious in a holiday-shortened week, unwilling to make many big bets in the final three days of trading for 2008. Israel's escalating attacks against Gaza's Hamas rulers made traders more hesitant to buy. The Dow Jones industrial average fell 31.62, or 0.37 percent, to 8,483.93.

Oil ends above $40 as Middle East fighting rages

HOUSTON (AP) -- Crude prices rose above $40 a barrel Monday as Israel and Palestinian militants exchanged rocket fire and the death toll mounted in the oil-rich region.

Light trading contributed to market volatility in the final days of 2008, with price swings of close to $5 a barrel.

Light, sweet crude for February delivery rose $2.31 cents to settle at $40.02 a barrel on the New York Mercantile Exchange, the first time crude has ended the day above $40 in a week. Nymex will be closed Thursday for the New Year's Day holiday.

Dow Chemical may seek lower price for Rohm & Haas

NEW YORK (AP) -- The collapse of a joint venture with a state-owned Kuwaiti company may make Dow Chemical less willing to pay the $15.3 billion pricetag for Rohm & Haas it initially agreed to last summer as energy prices peaked.

Kuwait's government backed out of the deal with Dow late Sunday, calling the K-Dow Petrochemicals joint venture, "very risky" due to the global financial crisis and crude prices that have tumbled more than 70 percent since July.

GMAC stays mum on debt swap

NEW YORK (AP) -- The financing arm of General Motors Corp. remained silent Monday on whether it had raised enough capital to become a bank-holding company and eligible for access to billions in federal bailout money.

Analysts have speculated that if GMAC Financial Services LLC doesn't obtain financial help it would have to file for bankruptcy protection or shut down, which would be a serious blow to parent GM's own chances for survival.

Kerkorian sells remaining Ford shares

DETROIT (AP) -- Billionaire investor Kirk Kerkorian has sold his remaining shares in Ford Motor Co., according to a spokeswoman for his investment company Tracinda Corp.

Kerkorian's jettisoning of Ford comes just six months after Tracinda boosted its stake in the Dearborn, Michigan-based automaker to 6.49 percent. The move was announced shortly after Kerkorian met with Ford Chief Executive Alan Mulally and Executive Chairman Bill Ford to discuss the company's turnaround plan.

3 private investors seek to purchase IndyMac

WASHINGTON -- A trio of private investors -- J.C. Flowers & Co., Dune Capital Management and Paulson & Co. -- have teamed up in an effort to buy failed thrift IndyMac, a person familiar with the deal said Monday.

The two private-equity firms and hedge-fund Paulson have applied for a federal holding company charter, according to the person, who asked not to be named because the deal has not been completed.

Rate on 6-month Treasury bills hits record low

WASHINGTON (AP) -- The interest rate on six-month U.S. Treasury bills dropped to its lowest level on record at the weekly Treasury auction, the government said Monday.

The Treasury Department said it auctioned $27 billion in six-month bills at a yield of 0.25 percent, an all-time low. That's down from a rate of 0.285 percent last week. Treasury rates have fallen to historic lows as the worst financial crisis in 70 years has triggered a rush by investors to the safety of government securities. Higher demand for such securities pushes their yield, or interest rate, down.

GM supplier Delphi suspends work at China factory

SHANGHAI, China (AP) -- U.S. car parts maker Delphi Corp. has suspended work at a factory in Suzhou due to shrinking demand amid the global economic slump, a media report and a staff member said Monday.

The factory west of Shanghai in the city of Suzhou makes compressors for General Motors Corp. Calls to the plant rang unanswered Monday.

Northwest seeks to delay some U.S.-China service

ATLANTA (AP) -- Northwest Airlines, due to poor market conditions in light of the weakened global economy, is the latest carrier seeking to delay or cut back long-coveted U.S.-China service.

The subsidiary of Atlanta-based Delta Air Lines Inc. said in a filing earlier this month with the Department of Transportation that it was seeking to delay proposed daily Seattle-Beijing service by a year from March 2009 to March 2010 and delay startup of Detroit-Shanghai nonstop service by more than two months from March 25, 2009, to June 3, 2009.

Russia lets rouble fall again

MOSCOW (AP) -- Russia's Central Bank on Monday allowed its plummeting currency to drop further on the last day of trading before the long New Year's holiday, ending a rollercoaster year for the ruble on a historic low.

The ruble slid 1.5 percent on the MICEX foreign currency exchange, to close at 34.9 rubles against the Central Bank's euro-dollar basket.

By The Associated Press

The Dow Jones industrial average fell 31.62, or 0.37 percent, to 8,483.93.

Broader indexes also declined. The Standard & Poor's 500 index fell 3.38, or 0.39 percent, to 869.42; the Nasdaq composite index fell 19.92, or 1.30 percent, to 1,510.32.

Light, sweet crude for February delivery rose $2.31 cents to settle at $40.02 a barrel on the New York Mercantile Exchange.

In other Nymex trading, gasoline futures rose 3 cents to settle at 87.45 cents a gallon. Heating oil rose 4 cents to settle at $1.2853 a gallon, while natural gas for January delivery jumped 31 cents to settled at $6.136 per 1,000 cubic feet, well above the technically important $6 level.

In London, February Brent crude rose $2.18 to settle at $40.55 a barrel on the ICE Futures exchange.