AP
Business Highlights
Monday November 10, 6:25 pm ET

Wall Street falls, unable to shake economic woes

NEW YORK (AP) -- Wall Street caved in to its economic anxieties and closed lower Monday, giving up an early rally over a stimulus package in China and refocusing on the acute pullback in spending that is pummeling U.S. companies.

Market participants realized that while China's $586 billion stimulus is a positive sign that governments around the world are working to fix the global economy, the stimulus itself will likely have only a limited effect in the United States.

The Dow fell 73.27, or 0.82 percent, to 8,870.54, after rising by 215 points in early trading and tumbling by as many as 183.

Government provides record aid package to AIG

WASHINGTON (AP) -- In a record bailout of a private company, the government on Monday provided a new $150 billion financial-rescue package to troubled insurance giant American International Group, including $40 billion for partial ownership.

The action, announced by the Federal Reserve and the Treasury Department, was taken as it became increasingly clear that an original financial lifeline thrown to AIG in September would be insufficient to stabilize the teetering company. All told, the moves boost aid to the company to more than $150 billion. Fed officials, however, expressed confidence that the money would be repaid to taxpayers.

Circuit City files for bankruptcy protection

RICHMOND, Va. (AP) -- Facing pressure from vendors and consumers who aren't spending, Circuit City Stores Inc. filed for bankruptcy protection Monday as it heads into the busy holiday season with hopes that move will help it survive.

Under Chapter 11 protection, the nation's second-biggest electronics retailer can keep operating while it develops a reorganization plan. Its Canadian operations also filed for similar protection.

The company also said it cut 700 more jobs at its Richmond, Va., headquarters, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.

Deutsche Post to cut 9,500 jobs in US

ATLANTA (AP) -- Delivery company DHL, hit by heavy losses and fierce competition, is significantly reducing its air and ground operations in the U.S. and cutting 9,500 American jobs, leaving rivals like FedEx, UPS and the U.S. Postal Service to fight over the customers it will stop serving.

The decision announced Monday could lead to higher shipping prices and greatly scale back a possible venture between UPS and DHL, the fourth-largest shipper of packages in the U.S.

Deutsche Post AG, the German parent of DHL, said it will no longer offer U.S. domestic-only air and ground services as of Jan. 30, though it said international shipping to and from the U.S. would continue.

Fannie Mae posts $29B loss, may tap gov't funding

WASHINGTON (AP) -- Fannie Mae on Monday posted a $29 billion loss in the third quarter as it took a massive tax-related charge, and said it may have to tap the government's $100 billion lifeline in the coming months.

The mortgage finance company, seized by federal regulators more than two months ago, posted a loss of $13 per share for the July-September quarter, mainly due to a $21.4 billion non-cash charge to reduce the value of tax assets. That compares with a loss of $1.4 billion, or $1.56 a share, in the year-ago period.

Oil prices swing wildly as Dow rally fails

SIOUX FALLS, S.D. (AP) -- Oil prices fluctuated throughout the day Monday, tracking closely with the path on Wall Street where an early rally failed to hold.

Light, sweet crude for December delivery rose $1.37 to settle at $62.41 a barrel on the New York Mercantile Exchange Monday, but swung as low as $59.10 at one point.

The weakening in the U.S. dollar, partially driven by the Chinese stimulus package, may be pushing investors to buy crude. Crude is bought and sold in dollars, and when the dollar falls against foreign currencies, investors often sell the U.S. currency and buy oil.

Starbucks 4Q profit drops 97 pct on closure costs

NEW YORK (AP) -- Fewer U.S. customers and venti-sized costs for closing poorly performing stores led to lower sales and profit in the fourth quarter at Starbucks Corp., the company said Monday.

Seattle-based Starbucks said profit fell 97 percent to $5.4 million, or a penny a share, from $158.5 million, or 21 cents per share, a year earlier. The coffee retailer earned 10 cents per share when the costs from closing about 600 stores in the U.S. and 61 locations in Australia are excluded.

McDonald's same-store sales rise 8.2 percent

NEW YORK (AP) -- Consumers worldwide who are watching their spending bought more burgers and chicken breakfast biscuits at McDonald's in October, leading to a big rise in sales at established locations for the fast-food leader.

McDonald's Corp. said Monday its global same-store sales jumped 8.2 percent during the month. That beat the company's own prediction for a rise similar to the one it recorded in its last quarter, when same-store sales, or sales at locations open at least a year, jumped 7.1 percent worldwide.

GM says GMAC mortgage unit may not survive

DETROIT (AP) -- Bad news kept piling up for General Motors Corp. on Monday as its shares plunged to their lowest point in 60 years and the company said in a government filing that the mortgage unit of its finance arm may not survive.

GM also said that Delphi Corp., its former parts operation that was spun off as a separate company in 1999, may not be able to emerge from Chapter 11 bankruptcy protection.

GM shares dropped $1, or 23 percent, to close at $3.36.

USDA projects lower corn, soybean harvests

WASHINGTON (AP) -- The Agriculture Department on Monday lowered its forecasts for this year's U.S. corn and soybean harvests, pushing up the prices of both commodities while knocking down the shares of meat producers.

Chicken, pork and beef companies such as Smithfield Foods Inc., Tyson Foods Inc. and Hormel Foods Corp. use corn and soybeans for livestock feed. Tyson said Monday its chicken unit lost $91 million in its most recent quarter due to a $230 million increase in grain costs.

While changes to the USDA's estimates were small, they defied analysts' expectations.

By The Associated Press

The Dow fell 73.27, or 0.82 percent, to 8,870.54.

Broader indexes also ended lower. The Standard & Poor's 500 index fell 11.78, or 1.27 percent, to 919.21, and the Nasdaq composite index fell 30.66, or 1.86 percent, to 1,616.74.

Light, sweet crude for December delivery rose $1.37 to settle at $62.41 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil futures rose 2.7 cents to settle at $2 a gallon, while gasoline prices gained 1.73 cents to settle at $1.367 a gallon. Natural gas for December delivery jumped 39 cents to settle at $7.24 per 1,000 cubic feet.

In London, December Brent crude rose $1.73 to settle at $59.08 a barrel on the ICE Futures exchange.