AP
Business Highlights
Thursday December 4, 6:14 pm ET

Automakers face skeptical senators on aid plan

WASHINGTON (AP) -- U.S. automakers drew fresh skepticism from lawmakers Thursday in a rocky confrontation over their pleas for an expanded $34 billion rescue package they say they need to survive. Congressional analysts said one bailout plan under consideration would fall short of what the carmakers want.

With time on the current Congress running out, opposition to the bailout appeared to be as strong as last week -- before Detroit's Big Three auto chiefs returned to Capitol Hill with more detailed plans on how they would spend the money.

Bernanke wants more action to curb foreclosures

WASHINGTON (AP) -- Federal Reserve Chairman Ben Bernanke called on the government Thursday to ramp up efforts to stem soaring home foreclosures, which are feeding into the country's deep economic troubles.

Although a flurry of actions have been taken to ease the housing crisis, foreclosures still remain "too high" with adverse consequences for struggling homeowners, squeezed lenders and the broader economy, Bernanke said in remarks to a Fed conference on housing finance.

Lenders appear to be on track to initiate 2.25 million foreclosures this year, up from an average annual pace of less than 1 million during the pre-crisis period, he said.

Street turns cautious ahead of employment report

NEW YORK (AP) -- A period of relative calm on Wall Street ended Thursday as stocks tumbled in the final hour of trading on growing investor anxiety ahead of the government's November employment report.

The major indexes each slid more than 2.5 percent, including the Dow Jones industrial average, which dropped 216 points to 8,376.24 after rising in seven of the last eight sessions.

The pullback followed a decent run on Wall Street. Broad indexes like the Standard & Poor's 500 index have finished with gains in seven of the last nine sessions. Monday was the biggest exception, when the major indexes plunged more than 7 percent at the prospects of a punishing recession.

New jobless claims drop unexpectedly

WASHINGTON (AP) -- New claims for jobless benefits fell unexpectedly last week but the number of people continuing to receive government aid reached a 26-year high and large companies announced more job cuts Thursday.

The Labor Department reported that initial claims for unemployment insurance dropped to a seasonally adjusted 509,000, from an upwardly revised figure of 530,000 for the previous week. That was significantly below analysts' estimates of 537,000, according to a survey by Thomson Reuters.

Retailers see sales drop in dreary November

NEW YORK (AP) -- Retailers who suffered through a miserable November -- despite a surge in sales the day after Thanksgiving -- are worried that the usual lull between the holiday weekend and the final days before Christmas could be dangerously quiet this year.

With financially squeezed shoppers holding out for even better deals or are simply already done, retailers who are already offering deep discounts will likely be forced to be even more aggressive as they lurch through a season looking to be the weakest in at least 30 years.

Worries about the holiday season increased Thursday after many retailers -- with Wal-Mart the notable exception -- reported November sales so dismal it was the industry's worst month since at least 1969. The malaise cut across all sectors as shoppers worried about layoffs and shrinking retirement funds and focused on necessities.

AT&T to cut 12,000 jobs, 4 percent of staff

NEW YORK (AP) -- Pressured by the economic turmoil and the mounting loss of traditional phone customers, AT&T Inc. is cutting 12,000 jobs, about 4 percent of its work force.

The Dallas-based telecommunications company, the nation's largest, said the job cuts will begin this month and run throughout 2009. The company also plans to lower its capital spending next year, and one analyst estimates that reduction could be as much as $2 billion.

The 300,000-person company has announced layoffs several times over the past few years, including in April, when it said it would eliminate 4,600 jobs, but it has been hiring at the same time. This is the first time since the company bought BellSouth Corp. in 2006 that it said overall staffing would decline.

DuPont to cut 2,500 jobs, trim 4,000 contractors

DOVER, Del. (AP) -- Chemical manufacturer DuPont said Thursday that it will cut 2,500 jobs and will not turn a profit in the fourth quarter as a severe slowdown in the automotive and construction markets eats away at chemical sales.

DuPont also said it will release 4,000 contractors by the end of this year, with additional contractor reductions expected in 2009, and will implement work schedule reductions and redeploy more than 400 employees on projects to reduce working capital and operating costs.

Oil tumbles below $44 a barrel, gas hits new low

COLUMBUS, Ohio (AP) -- Oil tumbled nearly 7 percent to settle below $44 a barrel Thursday and average gasoline prices slipped under $1.80 a gallon, both four year lows, as unemployment benefit claims hit a 26-year high and major companies announced more job cuts.

The unprecedented decline in energy prices has provided some relief to consumers and businesses, it has occurred as the nation dips into recession.

Fewer people have jobs to drive to. Gasoline futures for January delivery closed below a dollar, with optimism about the nation's economic health in serious decline.

ECB cuts rates, following BoE, Swedish Riksbank

BRUSSELS, Belgium (AP) -- Europe's central banks slashed borrowing costs aggressively Thursday to try and ward off a long recession triggered by the financial crisis.

Their rate cuts tried to counter a slowdown that looks longer and deeper than initially feared -- but they are getting close to the limit on how low they can go.

The European Central Bank cut its interest rate by the biggest amount in ten years, the Bank of England dropped to the lowest level since 1951 and Sweden's Riksbank made a new record with a surprise 1.75 percent cut. Britain and Sweden cut their rates sharply to 2 percent.

Merck 2009 profit outlook misses estimates

TRENTON, N.J. (AP) -- Drugmaker Merck & Co. on Thursday forecast lower profits and flat revenue in 2009 -- far below Wall Street expectations -- with management blaming the weak global economy, generic competition, slower sales of key products and restructuring charges.

Merck shares slumped on the news.

Merck, which six weeks ago announced its second restructuring in three years, has been struggling all year with safety concerns hurting sales of its key cholesterol drugs and a couple of other products.

By The Associated Press

The Dow industrials ended down 215.45, or 2.51 percent, at 8,376.24.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 25.52, or 2.93 percent, to 845.22, and the Nasdaq composite index fell 46.82, or 3.14 percent, to 1,445.56.

The Russell 2000 index of smaller companies fell 14.23, or 3.14 percent, to 439.53.

Light sweet crude dipped nearly 7 percent, or $3.12, to settle at $43.67 on the New York Mercantile Exchange

In other Nymex trading, gasoline futures fell 7.2 cents to 96.95 cents a gallon. Heating oil dropped 7.49 cents to $1.5091 a gallon while natural gas for January delivery fell 33 cents to $6.017 per 1,000 cubic feet.

In London, January Brent crude tumbled $3.16, to $42.28 on the ICE Futures exchange.