Thursday January 22, 2009, 6:40 pm EST
Thain
resigns from Bank of America
NEW YORK (AP) -- Wall Street bonuses, a sore point as the
government gives billions of dollars in bailout money to the financial
industry, have apparently cost former Merrill Lynch & Co. CEO John Thain his new job at Bank of America Corp.
Thain
resigned from Bank of America Thursday following news that Merrill Lynch had
rushed out its year-end bonuses, paying them just before Bank of
The company gave no reason for Thain's
departure, but its timing, coming hours after news reports about the bonuses,
made it likely that there was a connection with the payouts.
Microsoft resorts to first layoffs, cutting 5,000
SEATTLE (AP) -- Microsoft Corp. will make the first mass layoffs
in its 34-year history, cutting 5,000 jobs as demand for personal computers
falls and even one of the world's richest companies gets burned by the recession.
The company announced the cuts Thursday as it reported an 11
percent drop in second-quarter profit, which fell short of Wall Street's
expectations. Microsoft shares fell more than 11 percent.
Layoffs spike, housing tumbles; outlook worsens
WASHINGTON (AP) -- The number of newly laid-off Americans filing
jobless claims and the pace of home construction both posted
worse-than-expected results in government data released Thursday, lending
urgency to the economic recovery plan President Barack Obama and Congress are
scrambling to advance.
The latest batch of economic news
cemented fears that the recession, already in its second year, will drag on
through much of 2009.
And the furious pace of layoffs continued Thursday, with
Microsoft Corp. saying it will slash up to 5,000 jobs over the next 18 months.
Chemical maker Huntsman Corp. will ax 1,175 jobs this year and will get rid of
an additional 490 contractors. Those -- as well as other employers -- have seen
customer demand wane and are cutting costs to survive the fallout.
Stocks pare losses from Microsoft, bank woes
The major indexes, which plunged and then soared the first two
trading days of the week, ratcheted up and down during the course of the
session before ending sharply lower. The Dow Jones industrial average fell as
much 271 points before ending down 105.
Bad news from Microsoft Corp. set the tone for the day and made
clear more pain was to come before an elusive economic recovery would emerge.
The company surprised investors Thursday morning by reporting its fiscal
second-quarter earnings early -- and the news was not good. The software giant
posted an 11 percent drop in profit and said it will slash 5,000 jobs over the
next 18 months.
Google exceeds 4Q forecasts, though earnings drop
SAN FRANCISCO (AP) -- Google Inc.'s profit slipped for the first
time in the fourth quarter, but the Internet search leader is still weathering
the economic storm better than analysts anticipated.
The results released Thursday indicated the Mountain View-based
company was able to rein in its free-spending ways enough to offset a slowdown
in the online ad market that generates most of Google's revenue. That
contrasted with a missed forecast and 5,000 layoffs announced earlier in the
day by rival Microsoft Corp.
Even so, there were signs the recession is starting to bear down
on Google.
Senate panel approves Geithner for
treasury post
WASHINGTON (AP) -- The Senate Finance Committee on Thursday
cleared the nomination of Timothy Geithner as
treasury secretary despite unhappiness over his mistakes in paying his taxes.
The committee approved the nomination on an 18-5 vote, sending it
to the full Senate for a vote either Friday or next week. President Barack
Obama is hoping for quick approval so that the point man for the
administration's economic rescue effort can begin work.
The committee vote came a day after Geithner
appeared before the panel to apologize for what he called "careless
mistakes" in failing to pay $34,000 in taxes earlier in the decade, when
he worked at the International Monetary Fund.
Sony forecasts first annual net loss in 14 years
Sony Corp. said it will offer early retirement to employees at
its prized TV division, seeking to trim personnel costs there by 30 percent. It
is also slashing jobs at its movies, music and game businesses. Sony did not
give a head count target for the reductions. It said it is cutting 1,000
temporary workers when it closes one of two TV plants in
Stringer said he and two other top executives, including
President Ryoji Chubachi,
will give up their entire bonus, which would halve their annual pay, according
to Sony. Other executives and managers will see lower pay.
Southwest Airlines reports 4Q loss
DALLAS (AP) -- Southwest Airlines Co. said Thursday that it lost
money in the fourth quarter of last year as its fuel-hedging strategy,
brilliant when oil prices were rising, lost punch with tumbling energy prices.
It was Southwest's second straight losing quarter after a string
of profitable quarters that reached back to early 1991.
The discount carrier is responding by cutting capacity 4 percent
this year -- the first time in Southwest's 38-year history that it hasn't
planned for growth -- and reining in fleet expansion.
Southwest lost $56 million, or 8 cents per share, in the fourth
quarter, compared with a gain of $111 million, or 15 cents per share, a year
earlier.
Judge keeps NY lawyer accused of fraud in custody
NEW YORK (AP) -- A judge who let Bernard Madoff
stay out of prison on charges in a $50 billion fraud told a prominent lawyer
charged in a much smaller case Thursday that his friends must post $10 million
in cash or property before he can go home on bail.
Magistrate Judge Douglas F. Eaton said he would require the
lawyer, Marc Dreier, to provide the collateral on $20 million bail, to pay for
armed guards, and to find at least four financially responsible people to sign
a bond because Dreier was a bigger risk to flee than Madoff.
Eaton found himself defending his early December decision to free
Madoff on $10 million bail secured only by the
signatures of Madoff and his wife after Dreier's
lawyer complained Madoff was getting a better deal
than Dreier, who is accused of stealing $400 million from hedge funds.
Crude markets grow volatile with inventory buildup
COLUMBUS, Ohio (AP) -- Oil prices rose in volatile trading
Thursday after the government reported an enormous buildup of oil and gasoline
at U.S. storage facilities, another manifestation of how badly the
deteriorating economy has cut into energy demand.
With the latest report from the Department of Energy, crude
inventory levels have risen by 14 million barrels since the week ended Jan. 2,
pushing operational capacity at key storage sites to the limit.
Prices tumbled 7 percent before a late day rally, with light,
sweet crude for March delivery settling up 12 cents at $43.67 on the
By The Associated Press
The Dow Jones industrials fell 105.30, or 1.28 percent, to
8,122.80.
Broader market indexes recovered some of their losses but still
showed big drops. The Standard & Poor's 500 index
fell 12.74, or 1.52 percent, to 827.50. The technology-heavy Nasdaq composite index dropped
41.58, or 2.76 percent, to 1,465.49 after the Microsoft news.
Prices tumbled 7 percent before a late day rally, with light,
sweet crude for March delivery settling up 12 cents at $43.67 on the
In other Nymex trading, gasoline
futures fell 8 cents a gallon to settle at $1.1738. Heating oil fell 3.74 cents
to settle at $1.386 per gallon while natural gas for February delivery fell 9.9
cents to settle at $4.78 per 1,000 cubic feet.
In