AP
Business Highlights
Thursday October 9, 7:27 pm ET

Dow plunges 679 to fall to lowest level in 5 years

NEW YORK (AP) -- Stocks plunged in the final hour of trading Thursday, sending the Dow Jones industrial average down 679 points -- more than 7 percent -- to its lowest level in five years after a major credit ratings agency said it might cut its rating on General Motors Corp. The Standard & Poor's 500 index also fell more than 7 percent.

The declines came on the one-year anniversary of the closing highs of the Dow and the S&P. The Dow has lost 5,585 points, or 39.4 percent, since closing at 14,198 on Oct. 9, 2007. The S&P 500, meanwhile, is off 655 points, or 41.9 percent, since recording its high of 1,565.15.

Citi ends negotiations with Wells over Wachovia

NEW YORK (AP) -- Citigroup has ended negotiations with Wells Fargo in their fight to acquire Wachovia, saying it believes it has strong legal claims against Wachovia and Wells Fargo for breach of contract and plans to pursue its claims vigorously.

Citigroup agreed last week to buy Wachovia's banking operations for $2.1 billion in a deal orchestrated by the government. Four days later, Wells Fargo stunned Citigroup by announcing that Wachovia's board had agreed to an $11.7 billion all-stock offer.

GM shares tumble 31 percent to 58-year low

NEW YORK (AP) -- Shares of General Motors Corp. lost nearly one-third of their value Thursday, plunging to their lowest level since July 1950 after Standard & Poor's said the automaker's credit could fall further into junk status due to the "rapidly weakening state" of the global automotive market.

GM shares plummeted $2.15, or 31.1 percent, to close at $4.76 after falling as low as $4.65. That low marked the automaker's lowest trade since March 15, 1950, according to the Center for Research in Security Prices at the University of Chicago. The automaker's shares are down 50 percent from their close of $9.45 at the end of last month.

Jobless claims drop from 7-year high

WASHINGTON (AP) -- New applications for unemployment benefits dropped last week from a seven-year high, the Labor Department said Thursday, though they remain at elevated levels that indicate recession.

Initial claims for jobless benefits dropped 20,000 to a seasonally adjusted 478,000, the department said, the same level that Wall Street economists expected.

The department said Hurricanes Ike and Gustav were responsible for adding about 20,000 claims on a seasonally adjusted basis. That's down from approximately 45,000 the previous week.

Demand destruction: Oil prices drop to 1-year low

NEW YORK (AP) -- Oil prices closed at their lowest level in a year Thursday, falling below $85 a barrel even after OPEC signaled it may try to slow crude's downward spiral by cutting production.

At the pump, retail gas prices kept falling, with a gallon of regular shedding 4.4 cents overnight to a new national average of $3.403, according to auto club AAA, the Oil Price Information Service and Wright Express. Light, sweet crude for November Delivery fell $1.81 to settle at $86.62 a barrel on the New York Mercantile Exchange, the lowest closing price since Oct. 15, 2007.

New AIG loan renews concerns over insurer's health

NEW YORK (AP) -- Concerns about the health of American International Group Inc. were renewed Thursday, a day after the insurance giant said it would receive an additional $37.8 billion loan from the Federal Reserve.

AIG is apparently facing a liquidity crunch greater than was anticipated a month ago when the U.S. government first bailed out the company.

The new loan is on top of a two-year, $85 billion loan AIG received last month from the Fed in an effort to stay in business. The new loan will help AIG cover requests from clients to redeem borrowed securities.

Rate cut loosens credit only at the margins

NEW YORK (AP) -- In two signs of continued strain on credit markets despite the Federal Reserve's interest rate cut this week, a key bank-to-bank lending rate rose Thursday and the amount of commercial paper in the market fell for the fourth straight week.

The London Interbank Offered Rate, or LIBOR, for three-month dollar loans rose to 4.75 percent from 4.52 percent on Wednesday. Just a month ago, three-month LIBOR was at 2.81 percent. Meanwhile, the Fed said commercial paper outstanding fell by $56.4 billion to a seasonally-adjusted $1.55 trillion in the week ended Oct. 8 -- that's down from $1.82 billion on Sept. 10, and down 30 percent from the peak of $2.2 trillion in the summer of 2007.

OPEC to hold emergency meeting on oil prices

NEW YORK (AP) -- OPEC said Thursday it will hold an extraordinary meeting Nov. 18 to discuss how the widening global financial crisis is affecting oil prices, a move that could lead to a coordinated production cut in a bid to halt crude's steep losses.

In a statement published on its Web site, the Organization of Petroleum Exporting Countries said it's concerned about how the crisis is hampering global economies and world oil markets. The meeting will be held in Vienna, Austria.

Apparel chains report dismal September sales

NEW YORK (AP) -- Dismal September sales results from mall-based apparel chains, released Thursday, offered more fresh evidence that American consumers, spooked by the financial meltdown, shut their wallets tight last month.

The reports fueled more worries about the holiday shopping season, which was already expected to be bleak. TJX Cos. saw a drop in sales, while Gap Inc., Abercrombie & Fitch Co. and Chico's FAS Inc. reported double-digit same-store sales declines.

By The Associated Press

The Dow ended the day at its lows, finishing down 678.91, or 7.3 percent, at 8,579.19.

Broader stock indicators also tumbled. The S&P 500 fell 75.02, or 7.6 percent, to 909.92, while the Nasdaq composite index fell 95.21, or 5.5 percent, to 1,645.12.

The Russell 2000 index of smaller companies fell 47.37, or 8.7 percent, to 499.20.

Light, sweet crude for November Delivery fell $1.81 to settle at $86.62 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil futures fell 7.59 cents to settle at $2.4186 a gallon, while gasoline futures fell less than half a penny to $2.0273 a gallon.

Natural gas for November delivery rose 8.3 cents to settle at $6.825 per 1,000 cubic feet.