AP
Business Highlights
Wednesday October 8, 7:18 pm ET

Fed slashes interest rates, but stocks lose again

WASHINGTON (AP) -- The Federal Reserve, desperately trying to jump-start the lending that keeps the U.S. economy moving, dropped its closely watched federal funds rate to 1.5 percent. The cut from 2 percent took the rate to its lowest level in more than four years.

Central banks in England, China, Canada, Sweden and Switzerland and the European Central Bank also cut rates after a series of high-stakes phone calls over several days between Fed Chairman Ben Bernanke and his counterparts.

Stocks zigzag, end lower after emergency rate cut

NEW YORK (AP) -- A stock market, empowered by an emergency rate cut, tried to find some stability Wednesday, rallying several times before another late-day drop left Wall Street down for the sixth straight day. Still, the pullback, while fed by comments from Treasury Secretary Henry Paulson, was milder than the massive declines of earlier in the week.

The Dow Jones industrial average ended down 189.01, or 2.00 percent, at 9,258.10 after changing direction 36 times. Investors had been hankering for a rate cut, and they were clearly happy with the central banks' actions. However, they were also aware that in the near term, the credit markets remain tied up because banks are reluctant to lend.

World markets slide again despite shock rate cuts

LONDON (AP) -- World stock markets swooned once more Wednesday as concerns about the state of the global economy outweighed a coordinated rate cut by top central banks aimed restoring confidence in the world's crisis-stricken financial system.

The FTSE 100 index of leading UK shares initially rose, then slid back into the red, closing down 238.53, or 5.2 percent, at 4,366.69. France's CAC-40 lost 235.33 points, or 6.3 percent, to 3,496.89, while Germany's DAX finished 313.01 points, or 5.9 percent, weaker at 5,013.62.

Retailers report weak September sales

NEW YORK (AP) -- American consumers went into hiding in September, leaving retailers with dismal sales and an uncertain future well beyond the holiday season as the fallout from the financial meltdown pushes spending even lower.

Thomson Reuters estimates that its sales tally for September will be up only 1 percent, well below the 1.9 percent average pace from January through August. The final tally, which will be released Thursday, will reflect results from other merchants such TJX Cos., which are slated to release results Thursday. The tally is based on same-store sales, or sales at stores open at least a year.

Pending home sales up 7.4 percent in August

WASHINGTON (AP) -- Pending home sales rose 7.4 percent from July to August, an unexpected piece of positive news for the battered U.S. housing market.

The National Association of Realtors said Wednesday its seasonally adjusted index of pending sales for existing homes rose to 93.4 from an upwardly revised July reading of 87. The reading was the highest since June 2007.

Home sales are considered pending when the seller has accepted an offer, but the deal has not yet closed. Typically there is a one- to two-month lag before a sale is completed.

Oil prices skid to 2008 low on falling demand

NEW YORK (AP) -- Oil prices closed down Wednesday after touching their lowest level this year, pressured by a huge jump in U.S. crude inventories and more signs of dwindling demand.

Light, sweet crude for November delivery fell $1.11 to settle at $88.95 on the New York Mercantile Exchange. Oil at point fell to $86.05 -- the lowest price since Dec. 6, 2007.

In London, November Brent crude sank to a one-year low of $81 a barrel on the ICE Futures exchange, before ending the day down 30 cents at $84.36 a barrel. Crude has now fallen about 40 percent since surging to an all-time record $147.27 a barrel on July 11.

Fed grants AIG $37.8 billion loan

CHARLOTTE, N.C. (AP) -- The Federal Reserve on Wednesday agreed to provide insurance giant American International Group Inc. with a loan of up to $37.8 billion, on top of one made to the troubled company last month.

Under the new program, the Federal Reserve Bank of New York will borrow up to $37.8 billion in investment-grade, fixed income securities from AIG in return for cash collateral. These securities were previously lent by AIG's insurance company subsidiaries to third parties.

The arrangement will help AIG secure funds on an as-needed basis, the New York-based insurer said in a statement.

Wachovia, Citigroup, Wells Fargo extend standstill

NEW YORK (AP) -- Citigroup and Wells Fargo agreed Wednesday to extend their legal standstill in the fight for Wachovia until Friday morning, giving the banks more time to work toward a mutual agreement.

After the battle for the Charlotte, N.C.-based bank moved to both state and federal court over the weekend, the parties agreed Monday to a cease-fire at the urging of Federal Reserve officials. But that agreement expired at noon Wednesday without a resolution on the fate of Wachovia. The extension of the standstill suggests that the parties believe an agreement is reachable.

Walgreen withdraws $2.8B offer to buy Longs Drug

NEW YORK (AP) -- Drugstore chain Walgreen Co. has withdrawn its $2.8 billion bid to acquire Longs Drug Stores, apparently helping to ease the path for Longs' $2.7 billion acquisition by CVS Caremark Corp.

Longs had already accepted CVS Caremark Corp.'s lower bid of $71.50 per share, a deal already approved by antitrust regulators. Some Longs shareholders have criticized the CVS deal, saying it may undervalue Longs' real estate.

Bank of America, RBC settle securities cases

WASHINGTON (AP) -- Bank of America Corp. has agreed to buy back up to $4.7 billion in auction-rate securities to settle charges it misled thousands of customers about the risky investments, federal and state regulators said Wednesday.

The regulators also announced similar settlements with RBC Capital Markets Corp., which agreed to buy back about $850 million worth of auction-rate securities from roughly 2,200 investors.

By The Associated Press

The Dow Jones industrial average ended down 189.01, or 2.00 percent, at 9,258.10.

Broader stock indicators also fell. The S&P 500 index slid 11.29, or 1.13 percent, to 984.94, and the Nasdaq fell 14.55, or 0.83 percent, to 1,740.33.

Light, sweet crude for November delivery fell $1.11 to settle at $88.95 on the New York Mercantile Exchange.

In London, November Brent crude sank to a one-year low of $81 a barrel on the ICE Futures exchange, before ending the day down 30 cents at $84.36 a barrel.

In other Nymex trading, heating oil futures fell 1.12 cents to settle at $2.4945 a gallon, while natural gas futures fell 2.6 cents to settle at $6.742, after earlier falling to a 13-month low.

Gasoline futures fell 3.3 cents to settle at $2.0298 a gallon after earlier falling to a one-year low.