AP
Business Highlights
Friday October 24, 6:27 pm ET

Stocks fall on concerns of global recession

NEW YORK (AP) -- Wall Street joined stock markets around the world in a huge selloff Friday, sending major market indexes to their lowest levels in more than five years on the belief that a punishing economic recession is at hand.

A grim outlook from electronics maker Sony helped trigger the selling, and another bleak forecast from the automaker Daimler added momentum to the drop.

U.S. trading was dramatic and fractious, with the Dow Jones industrials falling more than 500 points soon after the opening bell. The blue chips followed the pattern of recent sessions, recovering ground only to fall sharply again, before ending the day with a loss of 312. All the major indexes fell more than 3 percent.

OPEC slashes production; crude still tumbles

VIENNA, Austria (AP) -- OPEC's attempt to stem a free-fall in oil prices fizzled Friday as global economic fears pushed crude down to lows last seen 15 months ago.

Prices slumped even as the Organization of Petroleum Exporting Countries, gathered for an emergency meeting in Vienna, announced it would slash production by a daily 1.5 million barrels. And if OPEC members under quota stop overproduction, reduction will be even higher -- around 1.8 million barrels a day.

But oil's imperviousness to production cutbacks -- the most potent weapon in the OPEC arsenal -- reflected the cartel's diminishing control over prices, now driven by the lack of demand rather than supply.

Chrysler to cut 25 percent of salaried work force

DETROIT (AP) -- Chrysler LLC, whose owner has been in talks to sell the automaker to General Motors Corp., said Friday it will cut 25 percent of its salaried work force starting next month and warned that it will make more restructuring announcements soon.

Chrysler, which has about 18,500 white-collar workers, said Friday it also will cut a quarter of its contract employees -- those who work for other companies under contract with the automaker.

About 5,000 people are likely to lose their jobs, although the company would not say how many contract workers it has.

PNC Financial buying National City for $5.58B

NEW YORK (AP) -- PNC Financial Services Group Inc. said Friday it is acquiring National City Corp. for $5.58 billion, the first bank to use fresh investments from a federal bailout program to make an acquisition.

The deal comes within hours of PNC Financial receiving approval for $7.7 billion in cash from the government under the $700 billion government program aimed at relieving the ongoing credit crisis.

The agreement is the latest deal in the rapidly consolidating banking industry. It combines Pittsburgh-based PNC, which has weathered the ongoing credit crisis better than most regional banks, with National City, a large, Cleveland-based regional bank weighed down by high-risk mortgage loans.

Europe feels thunderclap, recession looms

FRANKFURT, Germany (AP) -- Stocks sank, the pound and euro plunged, and company after company delivered bad profit news Friday as Europe got another severe jolt from the global financial crisis.

The pain was acute on stock exchanges. Germany's DAX index slid as much as 10 percent at one point Friday, its lowest level since October 1989, although it recovered somewhat to close down 5 percent. In London, the FTSE 100 index of leading British stocks was as low as 8 percent before finishing down 5 percent, while France's CAC 40 was off 3.5 percent.

And that won't be the end of it. The European Union said its monthly purchasing manager's index slid to 44.6 in October, its lowest since the benchmark was created in 1998, and indicating recession. It was down from 46.9 in September.

No curbs on Wall Street pay despite meltdown

NEW YORK (AP) -- Despite the Wall Street meltdown, the nation's biggest banks are preparing to pay their workers as much as last year or more, including bonuses tied to personal and company performance.

So far this year, nine of the largest U.S. banks, including some that have cut thousands of jobs, have seen total costs for salaries, benefits and bonuses grow by an average of 3 percent from a year ago, according to an Associated Press review.

Banks will decide what to pay out in bonuses in the coming months. Just because they've been accruing money for incentive pay doesn't mean they will pay it out in full.

UK economy officially on the brink of recession

LONDON (AP) -- Britain's economy shrank in the third quarter as the global credit squeeze took its toll, according to figures out Friday, confirming that the country is on the brink of its first recession since 1991. The pound plunged.

The contraction in growth in the July to September quarter had been widely expected but the 0.5 percent dip was greater than anticipated, sending share prices and the British pound spiraling downward.

The growth figures for the third quarter mark the first half of the definition of a technical recession used by government: two or more consecutive quarters of negative economic growth. Economists say that the current quarter, October to December, is certain to continue the trend.

September existing home sales up 5.5 percent

WASHINGTON (AP) -- Sales of existing homes rose by the largest amount in more than five years in September. But analysts cautioned against reading too much into the gain, noting that it reflected conditions before the latest upheaval in financial markets increased the likelihood of a recession in the overall economy.

The National Association of Realtors reported that sales of existing homes rose by 5.5 percent from August to September to a seasonally adjusted annual rate of 5.18 million units -- far better than the flat results analysts had expected. On an unadjusted basis, sales were up 7.8 percent from September last year.

But even with the gain in sales, prices kept falling. The median sales price has dropped to $191,600, down by 9 percent from a year ago.

Oil prices plunge, gas prices follow

COLUMBUS, Ohio (AP) -- Crude prices tumbled Friday and a gallon of gasoline fell below year-ago levels for the first time in 2008, even as OPEC announced a huge production cut in an attempt to halt the declines.

Crude prices have now fallen 56 percent from the highs reached in July, and more than $41 per barrel in just the last month.

Gathered in Vienna, Austria, on Friday to stanch plunging oil prices, OPEC announced it would slash oil production by 1.5 million barrels a day.

Oil prices plunged more than 5 percent.

Credit markets see signs of squeeze again

NEW YORK (AP) -- The credit markets showed renewed signs of stress Friday as investors, worried about plunging stocks and the possibility of companies defaulting on their debt, fled once again to the safety of government debt.

The three-month Treasury bill's yield fell further below 1 percent, while the 30-year Treasury bond's yield dropped briefly to multi-decade lows before rebounding.

Fears are growing that the world could suffer a serious, widespread recession, and large investors -- particularly hedge funds -- are responding to the turmoil by deleveraging, or trying to pay off their debts. Deleveraging involves selling stocks and other assets, and in turn, causing them to plunge in value.

Gannett 3Q profits down 32 pct, signals job cuts

NEW YORK (AP) -- Gannett Co., the nation's largest newspaper publisher, said Friday that its third-quarter profits fell 32 percent as advertising revenue declined, and new job cuts are likely as a result.

With ad prospects continuing to look grim into next year, Gannett said it is exploring new job reductions by year's end in its publishing, corporate and other divisions.

The third-quarter earnings are largely in line with Wall Street expectations after adjusting for severance costs from major job reductions.

The company's net income was $158 million, or 69 cents a share, on revenue of $1.64 billion. A year ago, net income was $234 million, or $1.01 per share.

By The Associated Press

By the close, the Dow Jones industrials fell 312.30, or 3.59 percent, to 8,378.95 after falling 504 in the early going.

Broader stock indicators also fell Friday. The S&P 500 index declined 31.34, or 3.45 percent, to 876.77, and the Nasdaq composite index fell 51.88, or 3.23 percent, to 1,552.03.

Friday's finish was the lowest for the Dow since April 25, 2003, when it ended at 8,306.35. For the S&P 500, it was the lowest ending since April 11, 2003, when the index finished at 868.30. It was the Nasdaq's lowest close since a May 23, 2003, finish of 1,510.09.

Light, sweet crude for December delivery fell $3.69 to settle at $64.15 a barrel on the New York Mercantile Exchange. Prices had fallen as low as $62.85 earlier in the day.

In other Nymex trading, heating oil futures fell 8.32 cents to $1.95 a gallon, while gasoline futures fell 10 cents to $1.47 a gallon. Natural gas for November delivery fell 18 cents to $6.23 per 1,000 cubic feet.

In London, November Brent crude fell $3.87 to $62.05 a barrel on the ICE Futures exchange.