AP
Business Highlights
Monday October 20, 6:35 pm ET

Momentum building for new economy-boosting package

WASHINGTON (AP) -- Momentum is building for a fresh dose of economic stimulants to boost the country out of the doldrums -- perhaps by putting more money in Americans' pockets.

The White House said Monday that President Bush was open to some sort of action after Federal Reserve Chairman Ben Bernanke warned the slump could drag on without the extra bracing tonic.

If congressional leaders and President Bush -- who has been cool to more federal stimulus spending given already exploding budget deficits -- were to hash out an acceptable package, it would require a special session after the Nov. 4 elections.

Wall Street higher on hopes of credit recovery

NEW YORK (AP) -- A rising wave of optimism lifted Wall Street Monday, propelling the Dow Jones industrials up more than 400 points on more signs of a reviving credit market and comments from Federal Reserve Chairman Ben Bernanke.

All the major indexes finished with gains of 3 percent or more.

Investors who had sold furiously in recent weeks in response to immobile credit markets became more optimistic as bank-to-bank lending rates eased further. There's also less demand for ultra-safe Treasury bills, another sign that the credit markets are gradually returning to a healthier state.

Leading indicators rise in September

NEW YORK (AP) --The economy's health improved for the first time in five months in September as supplier deliveries and new orders strengthened, a private research group said Monday.

The New York-based Conference Board said its monthly forecast of future economic activity rose 0.3 percent, a better reading than the 0.2 percent drop expected by Wall Street economists surveyed by Thomson/IFR.

The index had fallen a revised 0.9 percent in August and 0.7 percent in July.

Utilities consolidation goes on: Exelon for NRG

COLUMBUS, Ohio (AP) -- Nuclear power giant and utility operator Exelon made an unsolicited $6.2 billion all-stock bid for wholesale power generator NRG Energy in a deal that would create the nation's largest power company.

The combined Exelon and Princeton, N.J.-based NRG would be big enough to power nearly 45 million homes with 47,000 megawatts, Chicago-based Exelon said. It would have a diverse power mix and a market capitalization of $40 billion.

The bid comes two years after NRG rebuffed a nearly $8 billion offer from energy supplier Mirant Corp.

AmEx profit falls as cardholders struggle

NEW YORK (AP) -- American Express Co. said Monday its profit fell 24 percent in the third quarter as cardholders restrained their spending and had more trouble paying down debt.

The results were better than anticipated, and propelled Amex's shares higher. Still, the company's report echoed other recent results showing that the credit-card environment is worsening -- even for companies like American Express that pride themselves in catering to more well-heeled borrowers.

The credit-card issuer said net income was $815 million, or 70 cents a share, in the July to September period, down from $1.07 billion, or 90 cents a share, in the same timeframe last year.

TI profit down in 3Q, warns of slowing business

NEW YORK (AP) -- Texas Instruments Inc., which makes chips for cell phones and other gadgets, warned Monday that orders are slowing down rapidly, and said it will cut jobs to save money.

TI said it will reduce its work force by 650 people in six countries from a unit that makes chips for cell phones. And it is in talks to sell part of the unit, which has struggled due to a sales decline at one of its main clients, Motorola Inc.

The company essentially met analyst expectations for third-quarter earnings on Monday, but Chief Executive Rich Templeton said order trends have been weak over the past few months.

Toy makers brace for tough holiday season

NEW YORK (AP) -- Both Barbie maker Mattel Inc., the world's largest toy retailer, and rival Hasbro Inc. said as they announced third-quarter results Monday that price increases are helping to offset rising costs, but noted that they could be hurt by the severity of the economic downturn.

On Monday, Mattel posted a slightly higher third-quarter profit that still fell short of analyst expectations. Hasbro said its net profit declined, but said sales of its Star Wars, Playskool and Nerf toys helped boost third-quarter profit and sales above Wall Street expectations.

US, NY probing credit-default swap market

NEW YORK (AP) -- Federal prosecutors and New York's attorney general said Monday they had taken the unusual step of joining forces to probe the multitrillion-dollar credit-default swap market, an unregulated area of finance blamed for helping to fuel the credit crisis.

The offices of U.S. Attorney Michael Garcia and New York Attorney General Andrew Cuomo acknowledged the unique arrangement in separate statements.

Halliburton posts $21M 3Q loss on debt settlement

HOUSTON (AP) -- Halliburton on Monday posted a $21 million third-quarter loss due largely to a big debt repayment, but the oilfield services company did booming business and its top executive maintained a positive outlook in the face of the global economic slowdown.

The company's shares, hammered like others in recent weeks, rebounded in trading Monday.

Halliburton's loss amounted to 2 cents per share in the July-September period, in contrast to a profit of $727 million, or 79 cents a share, a year ago.

AP source: Credit trouble slowing GM-Chrysler deal

DETROIT (AP) -- A potential deal for General Motors Corp. to acquire Chrysler LLC is slowly moving forward, but the transaction is being hampered by an inability to borrow the money needed to make it happen.

GM has been talking with Chrysler owner Cerberus Capital Management LP for at least a month about acquiring the struggling automaker, as Cerberus tries to exit the auto business and GM seeks Chrysler's cash stockpile of about $11 billion.

If the deal is consummated, GM likely would close factories, lay off thousands of workers and perhaps even close Chrysler's giant Auburn Hills, Mich., headquarters.

Gasoline prices tumble despite likely OPEC cuts

NEW YORK (AP) -- Consumers got another break at the gas pump Monday, as prices dropped further below $3 a gallon and approached year-ago levels even as the near-certainty of an OPEC production cut pushed oil prices marginally higher.

Gasoline has fallen more than a dime a gallon since Friday, hitting a national average of $2.92 on Monday, according to auto club AAA, the Oil Price Information Service and Wright Express.

Pump prices have fallen 29 percent from their July record high of $4.114 a gallon and are only 10 cents higher than a year ago. That difference could be bridged this week if gasoline keeps falling at the current rate.

By The Associated Press

The Dow rose 413.21, or 4.67 percent, to 9,265.43. The blue chips' gain were in line with a 4.68 percent gain registered Thursday, when the Dow jumped 401 points.

Broader indexes also rose sharply Monday. The Standard & Poor's 500 index jumped 44.85, or 4.77 percent, to 985.40. The Nasdaq composite index rose 58.74, or 3.43 percent, to 1,770.03.

Light, sweet crude for November delivery rose $2.40 to settle at $74.25 a barrel on the New York Mercantile Exchange. The contract Friday gained $1.53 to settle at $71.38; crude has fallen about 50 percent from its July 11 high of $147.27.

In other Nymex trading, heating oil futures rose 7.3 cents to settle at $2.2299 a gallon, while gasoline futures rose 5.4 cents to settle at $1.7201 a gallon. Natural gas futures for December delivery fell 9.5 cents to settle at $7.211 per 1,000 cubic feet.

In London, December Brent crude rose $2.43 to settle at $72.03 a barrel on the ICE Futures exchange.