AP
Business Highlights
Monday January 5, 6:25 pm ET

Obama plunges into econ talks, predicts approval

WASHINGTON (AP) -- President-elect Barack Obama plunged into rare pre-inaugural crisis talks with congressional leaders Monday, declaring the national economy was "bad and getting worse" and embracing tax cuts now expected to reach $300 billion. He predicted lawmakers would approve a mammoth revitalization package within two weeks of his taking office.

If the two-year plan is enacted, workers would see larger paychecks almost immediately because taxes withheld by the government would drop.

Chrysler sales drop 53 pct; others not much better

DETROIT (AP) -- Chrysler LLC's December U.S. sales plunged by more than half and it sold 30 percent fewer vehicles in 2008, dwarfing the steep declines at the other major automakers as consumers remained uncertain about the economy and their jobs.

Chrysler said Monday its December sales dropped 53 percent because of the recession and fewer fleet sales, while Toyota Motor Corp. reported a 37 percent slide and Honda Motor Co. said its sales tumbled 35 percent.

Ford Motor Co.'s U.S. sales fell 32 percent in December. General Motors Corp. and Nissan Motor Co. both posted 31 percent declines.

Apple's Jobs has hormone imbalance, will stay CEO

NEW YORK (AP) -- Apple Inc. founder Steve Jobs, a survivor of pancreatic cancer whose gaunt appearance in the past year has alarmed the Mac and iPod lovers who look to him as an oracle, said Monday he has an easily treated hormone imbalance and will remain in charge of the company.

The news sent Apple stock up more than 4 percent on a down day for much of the market. But Jobs did not say whether the problem was related to the cancer.

At Apple, Jobs has presided over a decade of huge success. His mix of secrecy and high-design principles, seen in the rollouts of new Mac computers, the iPod music player and the iPhone, has become a trademark.

Investors collect profits after last week's rally

NEW YORK (AP) -- Caution returned to Wall Street Monday as investors gave back some gains from last week's rally even as they found encouragement from President-elect Barack Obama's calls for an economic stimulus package.

Some retreat was to be expected after investors sent the Dow Jones industrial average to a two-month high on Friday; investors are wary about pouring more money into the battered market with economic data still generally weak.

Congressmen sound off against SEC in Madoff affair

WASHINGTON (AP) -- Republican and Democratic House members said Monday that the alleged $50 billion fraud involving Wall Street figure Bernard Madoff reflects deep, systemic problems at the Securities and Exchange Commission.

Inspector General H. David Kotz said he is so concerned about the SEC's failure to uncover Madoff's alleged Ponzi scheme that the IG is expanding the inquiry called for last month by SEC Chairman Christopher Cox. Cox had pushed the blame squarely onto the SEC's career staff for the failure to detect what Madoff was doing.

At the first congressional hearing on the scandal, Rep. Spencer Bachus, R-Ala., called for Congress to create a modern regulatory structure.

The House Financial Services Committee is trying to determine how, despite warnings back to at least 1999 to SEC staff members, Madoff continued to operate his alleged scheme.

AP source: Ex-eBay CEO to run for Calif. governor

SACRAMENTO, Calif. (AP) -- A person with knowledge of the discussions says former eBay Inc. chief executive Meg Whitman plans to run for governor of California.

The person was not authorized to talk publicly and spoke Monday on condition of anonymity. He says the 52-year-old Republican hopes to succeed Gov. Arnold Schwarzenegger in 2011 but is not ready to make a formal announcement.

US govt to NY judge: Jail Madoff without bail

NEW YORK (AP) -- A prosecutor on Monday asked that Bernard Madoff be jailed pending trial, saying the disgraced financier broke a promise not to touch his assets by mailing watches, jewelry, cufflinks and mittens estimated to be worth $1 million to relatives and two friends.

The judge ordered both sides to submit written arguments this week and said he would rule later.

Madoff's lawyer, Ira Sorkin, said his client did not violate a court-imposed asset freeze by mailing heirlooms including $25 cufflinks and a $200 pair of mittens to his brother, a son and daughter-in-law and a New York couple vacationing in Florida.

Construction spending shows gains but outlook grim

WASHINGTON (AP) -- Construction spending fell less than expected in November as record activity on nonresidential projects helped offset another steep decline in housing. But the outlook remains bleak as credit is tight for builders trying to stay afloat amid a recession entering its second year.

Construction spending fell 0.6 percent in November, the Commerce Department reported Monday, less than half of the 1.3 percent decline economists had expected.

While housing took another sharp tumble, dropping 4.2 percent, this was partially offset by a surprisingly strong 0.7 percent rise in nonresidential activity.

But the pickup in nonresidential construction -- which includes office buildings, shopping centers and hotels -- was seen as a temporary blip.

Oil settles above $48 on uneasy Mideast

SIOUX FALLS, S.D. (AP) -- Israel's ground offensive in Gaza and a dispute between Ukraine and Russia over gas imports pushed oil prices above $48 a barrel Monday, but some analysts say there's more than just unrest in the Middle East behind the rally.

Israel seized control of high-rise buildings and attacked houses, mosques and smuggling tunnels as it pressed its offensive against the Gaza Strip's Hamas rulers, while the U.S. joined a number of countries calling for a cease-fire.

Borders Group names new CEO, posts lower sales

NEW YORK (AP) -- Borders Group Inc., which has struggled along with other booksellers as people buy more books online and from discounters, announced a new CEO and other top managers Monday as it also reported weak holiday sales.

The Ann Arbor, Mich.-based company also warned that its stock is in danger of being delisted from the New York Stock Exchange. The shares have lost nearly all of their value in recent months amid larger-than-expected losses and financing trouble.

Borders named Ron Marshall, 54, the founder of private equity firm Wildridge Capital Management, to replace George Jones as CEO and also serve as president and a director. The company noted that Marshall had been involved in other turnaround projects as CEO of food distributor and retailer Nash Finch Co. during its financial difficulties and as chief financial officer of Pathmark Stores Inc., now a unit of the Great Atlantic & Pacific Tea Co.

Tyson Foods CEO resigns effective immediately

MILWAUKEE (AP) -- Tyson Foods Inc. said Monday that its president and chief executive, Dick Bond, will step down immediately and be replaced by a former CEO as the world's largest meat processor continues to weather a downturn in the industry.

Bond, who had been CEO since 2006, will be replaced on an interim basis by former chairman and Chief Executive Leland Tollett, the Springdale, Ark.-based company said in a news release. Tollett was CEO from 1995 until he retired in 1998 after nearly 40 years with the company.

By The Associated Press

The Dow Jones industrials closed down 81.80, or 0.91 percent, to 8,952.89 after falling as much as 142.

Broader stock indicators showed more modest declines. The Standard & Poor's 500 index fell 4.35, or 0.47 percent, to 927.45, and the Nasdaq composite index fell 4.18, or 0.26 percent, to 1,628.03.

Light, sweet crude for February delivery rose $2.47 cents to settle at $48.81 a barrel on the New York Mercantile Exchange.

In London, February Brent crude rose $2.71 cents to settle at $49.62 a barrel on the ICE Futures exchange.

In other Nymex trading, gasoline futures added 7.19 cents to settle at $1.1824 a gallon. Heating oil gained 9.6 cents to settle at $1.5763 a gallon while natural gas for February delivery rose 10.1 cents to settle at $6.072 per 1,000 cubic feet.