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.