Friday January 23, 2009, 6:28 pm EST
GE profit drops 46 pct as
finance unit struggles
WASHINGTON (AP) -- General
Electric Co. posted a 46 percent drop in fourth-quarter earnings on Friday and
warned of a tough environment this year as it struggles with its ailing finance
business. The results cap a difficult 2008 for one of the world's largest
industrial companies and point to risks ahead.
GE's businesses touch on
most sectors of an economy mired in a recession, from medical equipment and
real estate to TV stations. And its longtime profit engine, GE Capital, has
seen profits sapped as businesses and consumers limit borrowing or default.
Wall Street ends mixed as
tech, financials rally
NEW YORK (AP) -- Investors'
ambivalence about earnings reports gave Wall Street a mixed performance Friday.
Traders pounced on companies
showing signs of life and dumped companies whose quarterly results fell short
of expectations. Better-than-forecast results from Google Inc. helped
technology shares while lackluster numbers from General Electric Co. reinforced
investors' concerns about the depths of the recession.
Insurer Aflac Inc. helped
ease some of Wall Street's concerns about the financial industry after
reassuring investors it had more than enough cash to maintain its credit
ratings.
But the results from GE
weighed on industrial names and held the Dow Jones industrial average to a loss
as broader indexes climbed.
Obama tells GOP he'll listen
-- but no guarantees
WASHINGTON (AP) -- President
Barack Obama sought to dampen Republicans' complaints about the Democrats'
massive economic revival package Friday with an offer to listen carefully to
their ideas, too. But he gave no guarantees he'd accept any -- and made a point
of reminding them who won the November election.
Obama promised to meet with
congressional Republicans on their turf early next week after they and
Democratic leaders thrashed out emergency tax-and-spending plans to revive the
failing economy in a get-together at the White House on Friday. The House could
vote on the $825 billion proposal the Democrats have worked out with Obama soon
after the meeting at the Capitol.
With Democrats controlling
the House, Senate and White House -- and some economists calling for even more
spending to stimulate the economy -- it was far from certain the Republicans
would be able to achieve any of their goals, which center on less spending and
more tax cuts.
Reported talks to buy Wyeth
could transform Pfizer
TRENTON, N.J. (AP) -- Under
pressure from big investors and analysts to make a bold move, beleaguered
drugmaker Pfizer Inc. appears to have one in the works with reported talks to
buy smaller rival Wyeth for $60 billion.
The Wall Street Journal
reported Friday that the companies have been in talks for months, but said any
deal is far from completion and the state of the global markets could undo any
plans. Neither company was talking Friday.
If a deal goes through, the
world's biggest drugmaker would see its revenue jump 50 percent and its profit
climb, would vault into a premier position in two areas it's been coveting --
biotech drugs and vaccines -- and could slash costs with another round of job
cuts in areas with significant overlap, from administration to research.
Britain in recession as Q4
output slides 1.5 pct
LONDON (AP) -- The British
economy has officially sunk into recession, government statistics showed
Friday, with output falling 1.5 percent in the fourth quarter of last year as
the financial crisis ravaged banks, retail and manufacturing.
It was the biggest decline
since the early days of Margaret Thatcher's government nearly 30 years ago and
prompted a further bout of selling of the pound, which slumped to a new 23- 1/2
year low against the dollar.
Following the 0.6 percent
decline recorded in the third quarter, Britain is now officially in recession
-- the standard definition of a recession is two quarters of negative growth.
The quarter-to-quarter drop
in the fourth quarter came with both services and manufacturing output sharply
down in the wake of the banking crisis, the seizing up of lending and
already-confirmed recessions around the world, from the U.S. to Germany and
Japan.
Schlumberger 4Q tumbles;
sees rough year ahead
HOUSTON (AP) -- Oilfield
services giant Schlumberger Ltd. painted a bleak picture of the oil patch
Friday, reporting a 17 percent drop in fourth-quarter earnings and saying it
will cut 5,000 jobs worldwide during the first half of the year, more than
previously disclosed.
The company said the job
reductions amount to about 5 percent of its global staffing, including
contractors. Two weeks ago, Schlumberger announced 1,000 cuts in North America
and said it was looking at reductions elsewhere. The North American cuts are
part of the total reduction.
Tumbling crude prices,
frozen credit markets and forecasts for meager energy consumption have forced
oil and gas producers worldwide to scale back spending. That means less work
for companies like Schlumberger, which assists producers with drilling,
reservoir management and other services.
Freddie Mac to ask for
billions more in funds
McLEAN, Va. (AP) -- Mortgage
finance company Freddie Mac said Friday it will need an additional $30 billion
to $35 billion in government aid as it copes with losses on loans the company
backed during the U.S. housing bubble.
The company disclosed in a
Securities and Exchange Commission filing late Friday that it expects its
government regulator, the Federal Housing Finance Agency, to make the request
from the Treasury Department.
It comes on top of the $13.8
billion the company received last year after it was seized by the government.
Sibling company Fannie Mae has yet to request any such aid but has warned it
may need to do so.
Harley to cut 1,100 jobs as
4Q profit falls
NEW YORK (AP) --
Harley-Davidson Inc. said Friday it will cut 1,100 jobs over two years, close
some facilities and consolidate others as it grapples with a slowdown in
motorcycle sales.
The Milwaukee-based company
also reported its fourth-quarter profit fell nearly 60 percent, and said it is
slashing motorcycle shipments in 2009 to cope with reduced demand.
The iconic motorcycle maker
said it will consolidate two engine and transmission plants in Milwaukee into
its facility in Menomonee Falls, Wis. It will shrink its paint and frame
operations in its York, Pa., plant and close its distribution facility in
Franklin, Wis., whose duties will be handled by a third party.
Oil prices baffle traders;
soar 6 pct to end week
NEW YORK (AP) -- The
government reported by midweek that oil inventories had soared, suggesting a
serious dent in demand; there were horrible housing and jobless numbers
Thursday and to end the week there was talk that OPEC couldn't cut production
fast enough. Over the same three days, oil prices jumped 11 percent.
Traders searched for logic
in a market that seemed to defy it, and by Friday had largely given up.
Light, sweet crude for March
delivery soared more than 6 percent Friday, or $2.80, to settle at $46.47 a
barrel on the New York Mercantile Exchange. In the volatile hours between
market open and close, prices swung as low as $41.40 and as high as $47.
Xerox 4Q profit plunges,
misses Wall Street view
NEW YORK (AP) -- Xerox
Corp.'s fourth-quarter earnings plunged as the printer and copier maker booked
hefty charges for layoffs and other restructuring costs, and the company on
Friday also forecast first-quarter profit below Wall Street expectations.
Shares of the Norwalk,
Conn.-based company dropped 56 cents, or 7.4 percent, to close at $7.03.
Xerox also blamed
fast-moving exchange rates for denting its profit margins even as the global
downturn hurt sales of new printing equipment and customers slashed their
supply inventories. Xerox's most profitable business, "post-sale"
revenue from ink and other supply sales, fell 8 percent after growing in the
third quarter.
By The Associated Press
The Dow Jones industrials
fell 45.24, or 0.56 percent, to 8,077.56. The Dow had been down more than 200
points early in the day and briefly moved into positive territory.
Broader stock indicators
rose. The Standard & Poor's 500 index rose 4.45, or 0.54 percent, to
831.95, while the Nasdaq composite index rose 11.80, or 0.81 percent, to
1,477.29.
Light, sweet crude for March
delivery soared more than 6 percent Friday, or $2.80, to settle at $46.47 a
barrel on the New York Mercantile Exchange. In the volatile hours between
market open and close, prices swung as low as $41.40 and as high as $47.
In other Nymex trading,
gasoline futures rose 6.1 cents to settle at $1.1544 per gallon. Heating oil
rose 10.19 cents to settle at $1.4505 per gallon. Natural gas for February
delivery fell 16.3 cents to settle at $4.681 per 1,000 cubic feet.
In London, the March Brent
contract rose $2.98 to settle at $48.37 on the ICE Futures exchange.