AP
Business Highlights
Thursday October 23, 6:36 pm ET

US working on plan to help homeowners refinance

WASHINGTON (AP) -- Federal regulators told Congress Thursday they're working on a plan that could help many distressed homeowners escape foreclosure in a global financial crisis that Federal Reserve Chairman Alan Greenspan warned will get worse before it gets better.

Greenspan called the banking and housing chaos a "once-in-a-century credit tsunami" that led to a breakdown in how the free market system functions.

Neel Kashkari, who is overseeing the government's $700 billion financial rescue effort, told the Senate Banking Committee that the new plan could include setting standards for changing mortgages to make them more affordable and giving loan guarantees to banks that meet them.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., told the same Senate panel that the government needs to do more to help tens of thousands of home borrowers avert foreclosure

Job losses accelerating, and the worst is ahead

WASHINGTON (AP) -- Unemployment claims, already well into recession territory, are rising even faster than expected, leading economists to warn Thursday that the worst is yet to come.

The Labor Department said new applications for unemployment insurance rose 15,000 last week to a seasonally adjusted 478,000, above analysts' estimates of 470,000. Jobless claims above 400,000 are considered a sign of recession.

The White House, in unusually stark language, acknowledged the economy is going through what spokeswoman Dana Perino called a "rough ride."

Stocks end mixed as investors search for bargains

NEW YORK (AP) -- Wall Street spent another session buffeted by volatility Thursday, this time closing mixed after investors wrestled with their fears about the economy but also looked for bargains after two days of selling.

While the Dow Jones industrials and Standard & Poor's 500 index rose sharply, a downdraft in tech stocks left the Nasdaq composite index with a loss.

Buying came in spurts and then tended to quickly evaporate as investors fretted that the economy is either in a recession or headed for one. They showed little confidence, gravitating toward big-name stocks seen as safer bets after a two-day selloff sliced nearly 750 points from the Dow.

Auto job losses continue as Chrysler, GM make cuts

DETROIT (AP) -- The employment carnage in the ever-shrinking U.S. auto industry continued Thursday as Chrysler LLC announced it would get rid of 1,825 factory jobs and General Motors Corp. trimmed some benefits and said it would make further white-collar cuts.

As the shaky U.S. economy speeds the industry's out-of-control slide, and tight credit cuts into sales, Auburn Hills-based Chrysler said the jobs will be eliminated at the end of the year when it closes a Newark, Del., sport utility vehicle plant ahead of schedule and eliminates a shift at a Toledo, Ohio, Jeep plant.

At GM, senior managers sent a memo to executives Wednesday saying early retirement and buyout offers to white-collar workers had been well-received but that the company still would have to make involuntary layoffs.

Xerox to cut 5 pct of staff; 3Q profit beats views

SAN FRANCISCO (AP) -- Xerox Corp. plans to cut 3,000 jobs, or 5 percent of its work force, because a slowdown in orders from large U.S. companies has dragged down the printer and copier maker's profit margins.

The restructuring the Norwalk, Conn.-based company announced Thursday will affect all departments except sales and is an example of how the economic turmoil is hurting companies outside the financial services industry.

Xerox shares slid 27 cents, or 3.4 percent, to end at $7.71.

Xerox had already been steadily cutting costs and jobs before the financial crisis dramatically worsened in the past month.

Microsoft profit up 2 percent, but outlook soft

SEATTLE (AP) -- Microsoft Corp. said Thursday its fiscal first-quarter profit edged up 2 percent, buoyed through economic uncertainty by corporate customers that renewed licenses for servers and other business programs.

Microsoft's guidance for the current quarter was weaker than Wall Street was expecting, but shares rose in extended trading following the report, a sign that investors had been worried it would be worse.

In the three months that ended Sept. 30, Microsoft's earnings rose to $4.37 billion, or 48 cents per share, from $4.29 billion, or 45 cents per share in the same period last year.

Goldman Sachs said to cut 10 percent of work force

NEW YORK (AP) -- Goldman Sachs Group Inc. is cutting about 10 percent of its work force amid the ongoing downturn in the credit and lending markets, a person briefed on the plan said Thursday.

Goldman Sachs will cut about 3,260 jobs. No additional cuts are planned, the person said. This person requested anonymity because the company hadn't publicly disclosed details of the plan.

The job cuts are a direct result of the current economic environment and significantly lower levels of business activity, the person told the Associated Press.

Oil rises above $67 as OPEC prepares to cut output

NEW YORK (AP) -- Oil prices swung back above $67 a barrel Thursday, rebounding from a 16-month low as OPEC members met to decide whether to slash production to halt crude's slide.

But gasoline prices kept falling, dropping to levels not seen since exactly a year ago. A gallon of regular gas fell 3.6 cents overnight to a new national average of $2.82, according to auto club AAA, the Oil Price Information Service and Wright Express.

Members of the Organization of the Petroleum Exporting Countries were gathering in the Austrian capital of Vienna ahead of official talks Friday. Iranian oil minister Gholam Hossein Nozari called on the cartel to cut by 2 million barrels a day to stop a steep slide that has left prices more than 50 percent lower than their peak of $147.27 hit July 11. Venezuela also called for quick action to shore up falling prices.

US foreclosure filings up 71 percent in 3Q

WASHINGTON (AP) -- The number of homeowners ensnared in the foreclosure crisis grew by more than 70 percent in the third quarter of this year compared with the same period in 2007, according to data released Thursday.

Nationwide, nearly 766,000 homes received at least one foreclosure-related notice from July through September, up 71 percent from a year earlier, said foreclosure listing service RealtyTrac Inc.

By the end of the year, RealtyTrac expects more than a million bank-owned properties to have piled up on the market, representing around a third of all properties for sale in the U.S.

UPS reports drop in 3Q profit

ATLANTA (AP) -- UPS Inc.'s third-quarter profit fell nearly 10 percent despite a rise in sales, the world's largest shipping carrier said Thursday as it warned that it faces more challenges ahead, job cuts may be on the horizon and the "scope and the size" of a deal it is working out to carry some packages for rival DHL could change.

While its results for the most recent quarter beat Wall Street expectations, the Atlanta-based company projected its full-year earnings per share will come in toward the lower end of the range it previously gave.

The fourth quarter includes the traditionally busy holiday shipping period.

By The Associated Press

The Dow Jones industrials rose 172.04, or 2.02 percent, to 8,691.25, after rising 277 points and falling by 276 points during the session. On Wednesday, the Dow lost 514 points as investors worried that the global economy is poised to weaken. That was on top of a 231-point loss Tuesday.

Broader stock indicators were mixed Thursday. The Standard & Poor's 500 index rose 11.33, or 1.26 percent, to 908.11, and the Nasdaq fell 11.84, or 0.73 percent, to 1,603.91.

Light, sweet crude for December delivery rose $1.09 to settle at $67.84 a barrel on the New York Mercantile Exchange. Earlier, oil dropped as low as $65.90, the lowest trading level since June 13, 2007.

In other Nymex trading, gasoline futures rose 0.69 cent to settle at $1.5778 a gallon, while heating oil fell 0.005 cent to settle at $2.0557 a gallon. Natural gas for January delivery fell 32.4 cents to settle at $6.886 per 1,000 cubic feet.

In London, December Brent crude rose $1.40 to settle at $65.92 a barrel on the ICE Futures exchange.