AP
Business Highlights
Monday July 28, 7:33 pm ET

Stocks slide as financials again pull back

NEW YORK (AP) -- Wall Street again surrendered to investors' anxiety about the financial sector Monday, sending the Dow Jones industrials down 240 points and back into bear market territory.

The flight from equities sent investors into safe-haven bets like Treasury bonds.

Financials that had rallied in recent weeks after logging huge declines, suffered from the same worries about souring debt that caused an abrupt end to their run-up late last week.

US deficit zooming to half-trillion as Bush leaves

WASHINGTON (AP) -- The government's budget deficit will surge past a half-trillion dollars next year, a record flood of red ink that promises to force the winner of the presidential race to dramatically alter his economic agenda.

The deficit will hit $482 billion in the 2009 budget year, the White House estimated Monday.

That figure is sure to rise after adding the tens of billions of dollars in additional Iraq war funding it doesn't include, and the total could be higher yet if the economy fails to recover as the administration predicts.

Administration OKs new way to help mortgage market

WASHINGTON (AP) -- The Bush administration and federal banking regulators joined with the nation's four largest banks Monday to endorse a new way to pump money into the battered U.S. mortgage market.

Treasury Secretary Henry Paulson unveiled a set of best practices designed to encourage banks to issue a debt instrument known as a covered bond.

The administration hopes these bonds will replace some of the mortgage financing that has disappeared as investors have incurred billions of dollars of losses on mortgage-backed securities.

Merrill to sell troubled assets, raise capital

NEW YORK (AP) -- Merrill Lynch & Co., in a broad move to clean up its troubled balance sheet, said Monday it will sell a big slice of its asset-backed securities and issue new stock to raise $8.5 billion of fresh capital.

The world's largest brokerage, struggling to right itself as the credit crisis continues, said it will issue more than 200 million new common shares as part of the deal.

Singapore sovereign wealth fund Temasek Holdings agreed to boost its stake by acquiring another $3.4 billion stake, while Merrill's management plans to buy 750,000 shares.

Amgen 2Q profit falls on restructuring, charges

THOUSAND OAKS, Calif. (AP)-- Amgen Inc.'s second-quarter profit slipped 7.6 percent as a series of restructuring and other charges further stunted a second quarter already hit by a continued decline in anemia drug sales.

But the results topped Wall Street forecasts after excluding the charges.

The stock reached its highest point in more than a year Monday, buoyed by positive study results on the company's next possible blockbuster, the osteoporosis drug denosumab.

GM cuts shifts to curtail SUV, truck production

NEW YORK (AP) -- General Motors Corp. said Monday it will cut shifts at plants in Ohio and Louisiana, eliminating 1,760 jobs, as part of the automaker's previously announced plan to reduce vehicle production due to weak demand for trucks and sport utility vehicles.

The cuts bring GM's truck and SUV production cuts to just under the 300,000 units company officials had hoped for this year, Sapienza said.

Oil rises on Nigerian attack, Iran nuclear worries

NEW YORK (AP) -- Oil prices rose Monday, approaching $125 a barrel after militants sabotaged two oil pipelines in Nigeria and Iran claimed that it had doubled the size of its nuclear program but signaled a willingness to work with the U.S.

Light, sweet crude for September delivery rose $1.47 to settle at $124.73 a barrel on the New York Mercantile Exchange, after earlier rising as high as $125.22 a barrel.

The gains, however, were tempered by more evidence that high gas prices are causing Americans to keep their cars off the roads.

KKR to go public on NYSE via fund takeover NEW YORK (AP) -- Private equity powerhouse Kohlberg Kravis Roberts & Co. said Monday a plan to go public through a takeover of its Amsterdam-listed investment fund gives it access to new markets to make acquisitions and provides the European shareholders better value.

The transaction is a departure from plans announced a year ago by Henry R. Kravis and George R. Roberts to tap equity markets for up to $1.25 billion through an initial public offering. Those plans were hurt by the collapse of credit markets that significantly slowed mergers and acquisitions over the past year.

The new structure of the deal won't give KKR a boost of cash like a regular IPO, but will provide it with access to new markets to raise capital. A public listing would allow KKR to either issue new shares in a takeover bid of another company or to sell shares and raise cash.

Report says BP plant in danger of another accident

HOUSTON (AP) -- Life-threatening safety violations continue to plague a Texas City BP refinery, leaving it susceptible to another major accident like the one in 2005 that killed 15 people, according to a report released Monday.

The report was prepared on behalf of blast victims who object to a federal criminal plea deal with London-based BP PLC related to the accident.

Engineer Mike Sawyer's report criticized BP for not conducting a detailed audit of the refinery, not making widespread improvements at the facility and for the plant's safety record since the blast, which includes three more worker deaths and several fires and chemical releases.

Verizon 2Q profit up 12 pct, beats expectations

NEW YORK (AP) -- Verizon Communications Inc.'s second-quarter earnings rose 12 percent, the company said Monday, while revenue was slightly shy of expectations and customers disconnected their landlines faster than before.

The nation's second-largest telecommunications company earned $1.88 billion, or 66 cents per share, in the quarter ended June 30, up from $1.68 billion, or 58 cents per share, a year ago.

Verizon said that excluding a merger-related item, it earned 67 cents a share, beating the average estimate of analysts polled by Thomson Financial by 2 cents.

Kraft Foods 2nd-quarter profit rises 4 percent

MILWAUKEE (AP) -- Kraft Foods Inc. reported growth in the second quarter Monday, as consumers, undeterred by price increases, abandon restaurants for less costly meals at home and the company benefits from its restructuring plan.

The nation's largest food and beverage maker is also benefiting from price increases, saying it has raised its prices, on average, 7 percent in the most recent quarter.

Kraft reported a second-quarter profit increase of almost 4 percent in the April-June period on Monday, saying higher prices helped offset rising costs.

Profit rose to $732 million, or 48 cents per share in the quarter, up from $707 million, or 44 cents per share, a year earlier.

Toyota lowers global auto sales target

TOKYO (AP) -- Toyota lowered its global vehicle sales plan for this year to 9.5 million vehicles -- down from 9.85 million -- as the sluggish North American market slows the Japanese automaker's momentum.

Even with the lower number announced Monday, Toyota Motor Corp. plans to sell more vehicles than it did last year.

The pace of Toyota's growth has been slowing. Under the new target it would inch up 1 percent this year, in contrast to a 6 percent climb in 2007, when it sold 9.37 million vehicles.

By The Associated Press

The Dow Jones industrial average fell 239.61, or 2.11 percent, to 11,131.08.

Broader stock indicators also declined. The Nasdaq composite index also fell into bear market territory, shedding 46.31, or 2.00 percent, to 2,264.22. The Standard & Poor's 500 index declined 23.39, or 1.86 percent, to 1,234.37; it has been in bear territory for the past few weeks.

Light, sweet crude for September delivery rose $1.47 to settle at $124.73 a barrel on the New York Mercantile Exchange, after earlier rising as high as $125.22 a barrel.

In other Nymex trading Monday, heating oil futures rose 3.91 cents to settle at $3.562 a gallon while gasoline prices added 3.77 cents to settle at $3.07 a gallon. Natural gas futures added 7.9 cents to settle at $9.163 per 1,000 cubic feet.

In London, Brent crude for September delivery rose $1.32 cents to settle at $125.84 a barrel on the ICE Futures exchange.