AP
Business Highlights
Friday September 12, 6:22 pm ET

Stocks mixed as energy sector rises, Lehman falls

NEW YORK (AP) -- Stocks finished another volatile session narrowly mixed Friday, as gains in the energy, utilities and materials sectors offset some of Wall Street's angst over the fate of Lehman Brothers Holdings Inc.

The three major indexes all managed to end the week higher.

The troubles of the financial sector dominated trading, as investors tried to glean insights into Lehman's race to sell itself or otherwise regain Wall Street's confidence.

Gasoline rises on Ike, but crude dips below $100

NEW YORK (AP) -- Gasoline prices jumped at the wholesale level Friday as Hurricane Ike swept through Gulf of Mexico, prompting companies along the Texas coast to shut down refining and drilling operations.

Crude oil on the futures market, however, briefly sank below the psychologically important $100-a-barrel mark for the first time since April 2 -- showing that investors believe a worsening global economy will continue to drive down demand for some time in the United States and elsewhere.

The fact that U.S. fuel demand is so weak right now might mean the recent surge in the wholesale price of gasoline -- which rose to about $4.85 a gallon in the Gulf Coast market Friday -- might not be passed along to consumers unless Ike's impact is severe and long-lasting.

Lehman shares fall amid race to find buyer

NEW YORK (AP) -- Lehman Brothers' shares sank further on Friday as top executives raced to put a sale of the beleaguered investment bank in place and Washington indicated that taxpayers would not foot the bill.

Confidence has waned that Lehman Brothers Holdings Inc. will emerge from the financial crisis as an independent franchise, and the No. 4 U.S. investment bank is scouring Wall Street for a financial lifeline.

Executives worked feverishly in the past two days to find someone willing to buy all or part of the company, bankers and industry executives close to the situation said.

Lehman shares fell 57 cents, or 13.5 percent, to cloe at $3.65. The stock is down nearly 95 percent from its 52-week high of $67.73.

Cuomo: Fidelity to settle auction-rate probe

ALBANY, N.Y. (AP) -- Fidelity Investments said Friday it will buy back $300 million worth of auction-rate securities from its customers, becoming the first major retail brokerage to make restitution in a wide-ranging investigation.

Fidelity is the first so-called "downstream" distributor -- rather than an underwriter -- to settle an auction-rate securities probe, even though Fidelity didn't conduct auctions, New York Attorney General Andrew Cuomo said.

Sales slide in August while price pressures abate

WASHINGTON (AP) -- The Labor Department reported Friday that wholesale prices declined 0.9 percent in August, nearly double the 0.5 percent drop that economists had expected, as the price of all types of energy from gasoline to natural gas fell sharply. It was the largest drop in wholesale prices in nearly two years.

Economists had expected that lower prices for gas might entice shoppers to spend more.

But the Commerce Department reported that retail sales dipped 0.3 percent in August. The August slump followed an even bigger 0.5 percent decline in July, the weakest performance in five months and much worse than the 0.1 percent decline originally reported.

Chrysler to offer more workers buyouts, retirement

WARREN, Mich. (AP) -- Chrysler LLC said Friday it will make another round of early retirement and buyout offers to factory workers in the Detroit area to reduce the number who are on indefinite layoff due to slumping sales.

Employees will learn about the offers this month, company officials said during an event at a Warren factory where the automaker celebrated the launch of the new Dodge Ram pickup.

It wasn't immediately known how many workers will be eligible. Chrysler has about 45,000 hourly workers worldwide.

Alaska Airlines to cut capacity, slash jobs

NEW YORK (AP) -- Alaska Airlines said Friday it will cut capacity by 8 percent this winter and slash up to 1,000 jobs, as high fuel costs and a weak economy provide a "one-two punch" to the carrier's bottom line.

The job cuts represent about 9 percent to 10 percent of the airline's 10,000 employees. The 850 to 1,000 positions on the chopping block include pilots, flight attendants and aircraft technicians, as well as reservations, customer service and ramp agents.

The carrier, a unit of Seattle-based Alaska Air Group Inc., says the capacity reductions will start on Nov. 9 and continue throughout next year.

Foreclosure filings increase, but at slower rate

Foreclosure filings in August increased 27 percent compared to the same month a year ago, a significantly slower pace than in previous months, according to data released Thursday.

Nationwide, 303,800 homes received at least one foreclosure-related notice in August, up 12 percent from July, RealtyTrac Inc. said. That means one in every 416 U.S. households received a foreclosure filing last month.

August's increase, however, was smaller than the two prior months.

Delphi, GM reach new deal on transfer of pensions

NEW YORK (AP) -- Delphi Corp. and General Motors Corp. said Friday they have reached a new deal on the automaker's role in Delphi's bankruptcy exit, including the transfer of employee pensions.

Under the new deal, GM's financial support of Delphi's emergence from court protection has grown to $10.6 billion, up from $6 billion in an earlier plan. The automaker will now take on $3.4 billion in pension obligations for hourly workers, instead of the $1.5 billion that was predicted earlier.

Delphi will seek court approval for the proposal Sept. 23. It said adopting the new agreements with GM was necessary to help it emerge from court protection as soon as possible.

China blames dairy farms for tainted baby formula

BEIJING (AP) -- Investigators believe dairy farmers added a dangerous chemical to milk that has been linked to kidney stones in dozens of babies and one death in China's latest product safety scandal.

The government vowed "serious punishment" on Friday after China's biggest milk powder producer recalled 700 tons of baby formula. The official Xinhua News Agency said the powder was tainted with melamine, a toxic chemical used in plastics that contaminated pet food last year.

U.S. authorities warned American consumers to avoid all Chinese infant formula. Although Chinese formula is not approved for import into the United States, it might be sold at ethnic grocery stores, the Food and Drug Administration said.

Investors walk out of rescue plan talks for Alitalia

ROME (AP) -- On Friday, a group of Italian investors who had been prepared to inject 1 billion euros ($1.4 billion) into Alitalia walked away from what were billed as do-or-die talks seeking union approval for a plan to relaunch the company, which was declared bankrupt on Aug. 29 to seek protection from creditors.

The future of the airline and thousands of jobs are on the line.

The investors said the offer was still on the table despite the deadlock, according to Renata Polverini, a union representative who had taken part in the talks.

No one was yet giving up hope that a deal could yet be reached and unions were working late Friday to try to reach a common position after the talks stalled.

By The Associated Press

The Dow Jones industrial average fell 11.72, or 0.10 percent, to 11,421.99, after falling more than 150 points in the early going.

Broader stock indicators also came well off their lows. The Standard & Poor's 500 index rose 2.65, or 0.21 percent, to 1,251.70, and the Nasdaq composite index rose 3.05, or 0.14 percent, 2,261.27.

On the New York Mercantile Exchange, light, sweet crude for October delivery rose 31 cents to settle at $101.18 a barrel, after briefly sinking to $99.99.

October gasoline futures climbed 2.08 cents to settle at $2.7696 a gallon on Nymex.

In other Nymex trading, October heating oil futures rose 2.36 cents to settle at $2.9391 a gallon. Natural gas for October delivery rose 11.8 cents to settle at $7.366 per 1,000 cubic feet.

In London, October Brent crude fell 6 cents to settle at $97.58 a barrel on the ICE Futures exchange, after closing at a six-month low in the previous trading session.