AP
Business Highlights
Monday October 6, 6:46 pm ET

Dow finishes below 10,000 for first time since '04

NEW YORK (AP) -- Wall Street joined in a worldwide cascade of despair Monday over the financial crisis, driving the Dow Jones industrials to their biggest loss ever during a trading day. Even a big afternoon rally failed to keep the Dow from its first close below 10,000 since 2004.

The sell-off came despite the $700 billion U.S. government bailout package, which was signed into law Friday after two weeks in which traders had appeared to count on the rescue as their only hope to avoid a market meltdown.

At its worst point, the Dow was down more than 800 points, an intraday record. The stock market rallied during the final 90 minutes of the trading day, and the Dow finished down about 370 points at 9,955.50.

Officials pledge to move quickly on rescue

WASHINGTON (AP) -- The Treasury Department moved swiftly Monday to implement the financial rescue package, naming a former Goldman Sachs executive to oversee spending the $700 billion earmarked for the plan and pledging to work with other countries to calm global financial markets.

The administration announced it had tapped Neel Kashkari, 35 -- an assistant Treasury secretary for international affairs -- to head the Treasury's new Office of Financial Stability on an interim basis.

President Bush's top economic advisers also vowed to work with their counterparts around the world to restore confidence and stability to financial markets roiled by tight credit and worries about a global economic slowdown.

Officials made a number of rapid-fire moves Monday in an effort to demonstrate that the government would not tarry in implementing the new program.

Europe governments go their own way on crisis

LONDON (AP) -- Individual European governments issued a wave of deposit guarantees to shore up their banks but fell short of any coordinated action Monday to deal with the crisis sweeping financial markets, even as stock markets crashed and the euro sank to its lowest level for over a year.

Though Europe's officials appeared to be paying lip service to the need for working together, they continued to make key announcements on deposits on a go-it-alone basis.

France, which holds the rotating leadership of the European Union, said its 27 governments have each pledged to take "all necessary measures to ensure the stability of the financial system" but no joint action was forthcoming, fuelling the belief that the crisis would be handled differently by each country.

Germany's Finance Minister Peer Steinbrueck made clear his government's opposition to the idea that the euro zone's single largest economy should put up money to prop up institutions outside his country.

Wachovia, Citigroup, Wells agree to standstill

NEW YORK (AP) -- Wachovia, Citigroup and Wells Fargo on Monday agreed to a standstill of all formal litigation activity -- a sign that the banks and the Federal Reserve are working feverishly to reach an agreement over the fate of Wachovia.

The standstill agreement will end at noon on Wednesday, unless extended.

Federal Reserve officials have been in talks with Wells Fargo and Citigroup in the hope of getting the parties to come to some sort of agreement.

Bank of America slashes dividend, plans capital raise

NEW YORK (AP) -- Bank of America Corp. on Monday reported its third-quarter results earlier than planned, revealing a 68 percent profit drop and plans to boost capital by selling stock and halving its dividend.

Like most other major financial institutions, Bank of America has been hit by significant losses in mortgages, credit cards and other souring debt.

Profit fell to $1.18 billion, or 15 cents per share, for the July-to-September period from $3.7 billion, or 82 cents per share, in the same period last year. That was much lower than analysts' estimates of 62 cents per share, according to Thomson Financial.

Eli Lilly to buy ImClone for more than $6B

INDIANAPOLIS (AP) -- Eli Lilly & Co. has agreed to spend more than $6 billion to fortify its cancer treatment portfolio by acquiring the biotechnology firm ImClone Systems Inc. in a deal that tops earlier offers from competitor Bristol-Myers Squibb Co.

Indianapols-based Lilly announced Monday that it will pay $70 per share for ImClone. New York-based Bristol-Myers then said it would not increase its latest offer of $62 per share, but would pocket about $1 billion for its 14 million ImClone shares.

Lilly executives said the ImClone deal would expand Lilly's cancer treatment pipeline a few years before several significant patent expirations hit the drug maker, creating a "true oncology powerhouse."

Congress opens hearings on financial meltdown

WASHINGTON (AP) -- The now-bankrupt investment bank Lehman Brothers arranged millions in bonuses for fired executives as it pleaded for a federal lifeline, lawmakers learned Monday, as Congress began investigating what went so wrong on Wall Street to prompt a $700 billion government bailout.

The first in a series of congressional hearings on the roots of the financial meltdown yielded few major revelations about Lehman's collapse, and none about why government officials, as they scrambled to avert economic catastrophe, declined to rescue the flagging company while injecting tens of billions of dollars into others.

EBay cutting 1,600 jobs, 10 percent of work force

NEW YORK (AP) -- EBay Inc. said Monday it will cut about 1,600 jobs, 10 percent of its work force, in its largest round of dismissals ever.

About 1,000 full-time employees will be gone, while eBay will achieve the rest of the cuts by letting temporary and part-time workers go and by leaving open positions unfilled. The auction site operator would not describe which positions would be cut, other than to say they will come across the company and around the world.

Fed to provide as much as $900B in loans to banks

WASHINGTON (AP) -- The Federal Reserve will provide as much as $900 billion in cash loans to squeezed banks in an urgent effort Monday to break through a dangerous credit clog that threatens the economy and has unhinged financial markets around the globe.

The Fed's action is aimed at spurring spooked financial institutions, which are hoarding cash, to lend not only to each other but also to individuals and businesses.

Oil prices fall as financial turmoil goes global

NEW YORK (AP) -- Oil prices plunged below $90 a barrel Monday, coming within reach of year-ago levels as a widening financial maelstrom spreads overseas and crimps global demand for energy.

A barrel of oil has not been this cheap in eight months, suggesting that the climate in which oil soared to unheard of levels is coming to an abrupt end.

Crude's stunning fall comes just three months after prices surged close to $150 a barrel.

Credit markets still tight as stocks plunge

NEW YORK (AP) -- The jammed credit markets barely budged Monday as governments around the world scrambled to prop up their failing banks and investors waited for details on how, exactly, the Treasury will go about buying $700 billion of U.S. banks' mortgage assets.

If lending remains tight, it could cause more cash flow problems for the companies and municipalities that rely on the credit markets and banks for short-term loans.

By The Associated Press

The Dow Jones industrials fell as much as 800.06, then recovered in erratic trading to a loss of 369.88, or 3.58 percent, to close at 9,955.50, closing below 10,000 for the first time since Oct. 26, 2004. The Dow surpassed its previous record for a one-day point decline -- 778, which the blue chips suffered a week ago when investors feared the bailout package might not pass Congress.

Broader indexes also plunged. The Standard & Poor's 500 index shed 42.34, or 3.85 percent, to 1,056.89; and the Nasdaq composite index fell 84.43, or 4.34 percent, to 1,862.96. The Russell 2000 index of smaller companies dropped 23.49, or 3.79 percent, to 595.91.

Light, sweet crude for November delivery fell $6.07, or 6.4 percent, to settle at $87.81 a barrel on the New York Mercantile Exchange. It was crude's fourth straight negative session and its lowest settlement since Feb. 6.

In other Nymex trading, heating oil futures fell 18.8 cents to settle at $2.474 a gallon, while gasoline futures lost 16.92 cents to settle at $2.0591 a gallon. Natural gas futures fell 52.3 cents to settle at $6.835 per 1,000 cubic feet.

In London, November Brent crude fell $6.57 to settle at $83.68 a barrel on the ICE Futures exchange.