AP
Business Highlights
Wednesday October 22, 6:31 pm ET

Stocks tumble on worries about earnings forecasts

NEW YORK (AP) -- Wall Street tumbled again Wednesday as investors worried that the global economy is poised to weaken even as parts of the credit market slowly show signs of recovery. The major indexes fell more than 4 percent, including the Dow Jones industrial average, which finished off its lows with a loss of 514 points.

The Standard & Poor's 500 index was the worst performer among the major indexes with a 6.1 percent slide that left it at its lowest level since April 2003.

Corporate profit forecasts, a jump in the dollar and falling oil prices signaled investors are fearful that an economic slowdown will sweep the globe even if lending begins to approach more normal levels.

Wachovia 3Q loss paves way for Wells deal

NEW YORK (AP) -- Wachovia Corp. on Wednesday reported a staggering $24 billion loss as it took a goodwill impairment charge of nearly $19 billion ahead of its acquisition by Wells Fargo & Co.

The Charlotte, N.C.-based bank reported a loss after paying preferred dividends of $23.89 billion, or $11.18 per share, in the period ended Sept. 30, compared with earnings of $1.62 billion, or 85 cents per share, a year earlier.

Excluding goodwill impairment of $18.7 billion and merger-related and restructuring expense of $414 million, the bank lost $4.76 billion, or $2.23 per share.

Amazon.com profit soars but outlook and stock down

NEW YORK (AP) -- Amazon.com Inc. said Wednesday that its profit climbed 48 percent in the third quarter, but the company reduced its full-year sales outlook, showing that the online retailer cannot escape the weak economy. Its shares dived.

The company now anticipates 2008 revenue of $18.46 billion to $19.46 billion. That means the high end of its forecast is below the $19.52 billion that analysts polled by Thomson Reuters were expecting.

In July, Amazon had predicted sales of $19.35 billion to $20.10 billion.

Drugmakers post lower third-quarter net income

TRENTON, N.J. (AP) -- Drugmakers Merck & Co., Wyeth and GlaxoSmithKline PLC all posted lower profits for the third quarter on Wednesday, partly due to the intensifying generic competition weighing on the entire pharmaceutical industry.

And in what it characterized as an advance strike to counteract that and other problems, Merck said it will slash about 7,200 jobs, or nearly 13 percent of its workforce, in its second major restructuring in less than three years.

The companies managed to meet or slightly beat analysts' expectations, in part because of benefits from currency exchange rates. But on a day in which world markets fell, their shares all did as well.

Oil falls below $67 on US recession fears

NEW YORK (AP) -- Oil prices tumbled below $67 a barrel to 16-month lows Wednesday after the government reported big increases in U.S. fuel supplies -- more evidence that the economic downturn is drying up energy demand.

The Energy Information Administration said crude inventories jumped by 3.2 million barrels last week, above the 2.9 million barrel increase expected by analysts surveyed by energy research firm Platts. Gasoline inventories rose by 2.7 million barrels last week, and inventories of distillates, which include heating oil and diesel, rose by 2.2 million barrels.

Boeing's 3Q profit dives 38 percent amid strike

Boeing Co.'s third-quarter profit dropped 38 percent as a strike and supplier production problems hurt results at the world's No. 2 commercial airplane maker. Its shares fell 7.5 percent Wednesday.

Boeing has endured several setbacks, including a 46-day worker strike that analysts estimate has cost roughly $100 million a day in deferred revenue and production delays on its highly anticipated next-generation passenger jet.

The aircraft maker reported net income of $695 million, or 96 cents per share, for the three months ended Sept. 30, down from $1.11 billion, or $1.44 per share. The latest results include a 60-cents-per-share erosion in earnings as the strike and a shortage of key parts lowered Boeing's airplane deliveries.

Amgen profits surge on reduced expenses

THOUSAND OAKS, Calif. (AP) -- Biotech drugmaker Amgen Inc. said Wednesday its profit leapt in the third quarter thanks to favorable comparison with a prior-year quarter weighed down by acquisition and restructuring charges.

Thanks to favorable exchange rates, the company raised its full-year earnings outlook even as it reported declining U.S. sales for its best-selling medication.

Amgen earned $1.16 billion, or $1.09 per share, compared with $201 million, or 18 cents per share, in the same period last year.

McDonald's 3Q profit jumps 11 percent

NEW YORK (AP) -- A jump in global sales boosted McDonald's Corp.'s third-quarter profit by 11 percent, the company said Wednesday, a bright spot among restaurant companies as strapped consumers balk at spending their cash on dining out.

The nation's No. 1 hamburger chain cited the popularity of its sandwiches and drinks, but reiterated that it was discussing changes to its Dollar Menu because of the high cost of ingredients and expected to reach a decision soon.

Same-store sales, or sales at stores open at least a year, were notably strong in the third quarter, rising 7.1 percent globally and 4.7 percent in the U.S.

British prime minister: Recession likely in UK

LONDON (AP) -- Prime Minister Gordon Brown dared to utter the dreaded "R" word Wednesday, confirming what consumers have known for months -- that no country can escape the global recession.

Wary of making a bad economic situation worse and hemmed in by a mind-numbing formula, world leaders have steered clear of the word even as they forecast tough times. But Brown and his central bank governor, Mervyn King, broke ranks.

Amid the bad news, the White House announced Wednesday that a summit of world leaders would meet Nov. 15 in Washington to address the global financial crisis.

By The Associated Press

The Dow fell 514.45, or 5.69 percent, to 8,519.21, after being down as much as 698 points in the final half hour of trading. Still, the Dow finished above its Oct. 10 closing low of 8,451. The Dow fell 231 points Tuesday after jumping 413 points Monday.

Broader stock indicators also fell Wednesday. The Standard & Poor's 500 index lost 58.27, or 6.10 percent, to 896.78, its lowest close since it finished at 892 on April 21, 2003.

The technology-heavy Nasdaq composite index fell 80.93, or 4.77 percent, to 1,615.75.

Light, sweet crude for December delivery fell $5.43 to settle at $66.75 on the New York Mercantile Exchange, after falling as low as $66.20. It was the lowest close for a front-month contract since June 13, 2007, when crude settled at $66.26.

In other Nymex trading, heating oil futures fell 14.13 cents to end at $2.0562 a gallon, while gasoline prices dropped 12.1 cents to finish at $1.5709 a gallon. Natural gas futures fell 10.2 cents to settle at $7.21 per 1,000 cubic feet.

On London's ICE futures exchange, Brent crude fell $5.20 to $64.52 a barrel.