AP
Business Highlights
Friday September 19, 6:21 pm ET

Radical rescue: Hundreds of billions for bailout

WASHINGTON (AP) -- Struggling to stave off financial catastrophe, the Bush administration on Friday laid out a radical bailout plan with a jawdropping price tag -- a takeover of a half-trillion dollars or more in worthless mortgages and other bad debt held by tottering institutions.

Relieved investors sent stocks soaring on Wall Street and around the globe.

A grim-faced President Bush acknowledged risks to taxpayers in what would be the most sweeping government intervention to rescue failing financial institutions since the Great Depression.

Stocks soar as investors bet on gov't rescue plan

NEW YORK (AP) -- Wall Street extended a huge rally Friday as investors stormed back into the market, relieved that the government plans to restore calm to the financial system by rescuing banks from billions of dollars in bad debt.

The Dow Jones industrials rose about 370 points, giving them a massive gain of about 780 over two days, and Treasurys fell as money flowed into equities.

The government's proposal, while still a work in progress, has placated investors who worried that a continuum of bad bets on mortgages would hobble more financial companies and cause further damage to the strained banking system and the overall economy.

Government steps to head off run on money funds

WASHINGTON (AP) -- The federal government on Friday stepped in to bolster the teetering $3 trillion money-market mutual fund industry and stem a wave of withdrawals that resembled a Depression-era run on the banks -- sparked largely by panicked institutional clients rather than individual investors in what are normally considered to be the safest of investments.

The Treasury Department said it will tap into a $50 billion fund created during the Depression and temporarily provide guarantees for the popular investment products, held in some 38 million accounts that enable investors to see modest returns while keeping cash readily available if needed.

Providing additional support, the Federal Reserve took steps to back typically safe commercial short-term lending that underlies fund assets.

Govt trading ban could have unintended results

WASHINGTON (AP) -- The government's unprecedented move Friday to ban people from betting against financial stocks might be a salve for the market's turmoil but could also carry serious unintended consequences.

In a bid to shore up investor confidence in the face of the spiraling market crisis, the Securities and Exchange Commission temporarily banned all short-selling in the shares of 799 financial companies. Short selling is a time-honored method for profiting when a stock drops.

The ban took effect immediately Friday and extends through Oct. 2. The SEC said it might extend the ban -- so that it would last for as many as 30 calendar days in total -- if it deems that necessary.

Oil jumps above $104 a barrel on US bailout plan

NEW YORK (AP) -- Oil prices shot up more than $6 a barrel Friday, breaking back into $100 territory as a sweeping government plan to rescue the imperiled U.S. financial system emboldened investors to re-enter the markets.

Light, sweet crude for October delivery rose $6.67 to settle at $104.55 a barrel on the New York Mercantile Exchange, after earlier rising as high as $105.25. It was oil's first close above $100 in a week.

No rise in monthly Medicare premiums for 2009

WASHINGTON (AP) -- The monthly premium for the vast majority of the elderly and disabled participating in Medicare will hold steady at $96.40 next year.

It's the first time since 2000 that the charge for health coverage is not increasing.

Premiums usually go up to reflect higher costs and demand for care projected for the coming year.

Health care costs have been rising much more quickly than overall inflation over the years. That trend indicates this year's break for beneficiaries is likely a blip.

Russian stocks resume trading

MOSCOW (AP) -- Russia's financial markets closed up by more than 20 percent Friday after a volatile session that saw trading suspended twice as stocks shot higher.

The RTS and MICEX stock exchanges were rebounding off the government's efforts to rush through emergency measures that included more money for banks and purchases of shares to stem plunging prices.

Trading was halted twice after shares gained sharply, breaching technical limits. It resumed shortly before the markets closed.

Government: Gas mileage rise in 2008 vehicles

WASHINGTON (AP) -- The average fuel efficiency of the fleet of new cars and trucks rose only slightly in 2008, but the government said Friday an increase in the sales of smaller vehicles due to high gas prices could push the numbers higher.

The Environmental Protection Agency reported that the average performance of new, 2008 model cars and trucks was 20.8 miles per gallon in 2008, up 0.2 mpg compared to 2007 model year vehicles a year ago, and a 1.5 mpg increase since 2004.

Schering-Plough cuts 1,000 US sales jobs

NEW YORK (AP) -- Schering-Plough Corp. said Friday it will cut 1,000 sales jobs as part of broader cuts in a move to reduce costs and reposition itself in an ever-changing industry.

The Kenilworth, N.J.-based pharmaceutical company said it will cut 20 percent of its U.S. sales force, leaving 4,000 positions. The layoffs are part of a 10 percent reduction in staff announced in April.

In all, the company hopes cost cuts and layoffs since the buyout of biotechnology company Organon Biosciences in November will save it $1.5 billion annually by 2012.

MillerCoors to put Sparks Red on hold

MILWAUKEE (AP) -- MillerCoors says it's going to put plans for a new caffeine-infused alcoholic energy drink on hold pending talks with the 25 states that asked the company not to release the beverage.

In a statement Friday, MillerCoors said the company won't go ahead with its scheduled Oct. 1 launch of Sparks Red.

On Wednesday, attorneys general from 25 states asked the company to abandon its plans for the drink.

By The Associated Press

The Dow rose 368.75, or 3.35 percent, to 11,388.44 after having been up as much as 463.36.

Broader stock indicators also surged. The S&P 500 index rose 48.57, or 4.03 percent, to 1,255.08, and the Nasdaq composite index rose 74.80, or 3.40 percent, to 2,273.90.

Even with Friday's big gains, stocks didn't end the week with much change after the whipsaw sessions. The Dow slipped 0.29 percent, the S&P 500 rose 0.27 percent and the Nasdaq added 0.56 percent.

Light, sweet crude for October delivery rose $6.67 to settle at $104.55 a barrel on the New York Mercantile Exchange, after earlier rising as high as $105.25. It was oil's first close above $100 in a week.

In other Nymex trading, heating oil futures rose 11.54 cents to settle at $2.8978 a gallon, while gasoline prices gained 11.73 cents to settle at $2.5997 a gallon. Natural gas for October delivery fell 7.8 cents to settle at $7.848 per 1,000 cubic feet.

In London, November Brent crude rose $4.42 to settle at $99.61 a barrel on the ICE Futures exchange.