AP
Business Highlights
Friday December 5, 6:21 pm ET
Half-million jobs vanish as economy deteriorates
WASHINGTON
(AP) -- Skittish employers slashed 533,000 jobs in November, the most in 34
years, catapulting the unemployment rate to 6.7 percent.
The
new figures, released by the Labor Department Friday, showed the crucial
employment market deteriorating at an alarmingly rapid clip. The net loss of
more than a half-million jobs was far worse than analysts expected.
As
companies throttled back hiring, the unemployment rate bolted from 6.5 percent
in October to 6.7 percent last month, a 15-year high.
The
unemployment rate would have moved even higher if not for the exodus of 422,000
people from the work force. Economists said many of those people probably
abandoned their job searches out of sheer frustration. In November 2007, the
jobless rate was at 4.7 percent.
Congress
and White House seek auto compromise
WASHINGTON
(AP) -- Congressional Democrats and the White House are quietly exploring a
possible compromise to allow a bailout of the beleaguered auto industry.
Officials
in both parties say House Speaker Nancy Pelosi spoke with White House Chief of
Staff Josh Bolten during the day, although they declined to elaborate on the
details of their discussion.
The
talks came as auto industry executives pleaded with lawmakers for federal help
for a second straight day and the government reported the worst single-month
loss of jobs in 34 years.
Stocks
shake off jobs report to end with big gains
NEW
YORK (AP) -- Wall Street put an upbeat spin Friday on the government's report
that the nation lost more than half a million jobs last month. Stocks reversed
early losses and closed sharply higher as the data raised hopes that Washington
will again step in to help the economy.
The
Dow Jones industrial average closed up nearly 260 points as investors' shock
dissipated over the Labor Department's report that employers slashed 533,000
jobs in November compared with the 320,00 that economists forecast.
Ultimately,
even a terrible reading on employment wasn't surprising to a market that has
been drubbed by a stream of bad economic news.
Chrysler
CEO says bankruptcy possible without loan
DETROIT
(AP) -- Chrysler LLC Chief Executive Robert Nardelli told lawmakers considering
financial support for the auto industry Friday that Chrysler would be pushed
toward bankruptcy or even liquidation if it doesn't get federal loans.
Nardelli
told the House Financial Services Committee that a million people who depend on
the automaker for their livelihoods would be unemployed if the company failed.
Chrysler
on Friday said it hired the prominent bankruptcy law firm of Jones Day to help
study whether bankruptcy would be a better option than government loans. The
firm was hired after lawmakers asked for a study during congressional hearings
in November, spokeswoman Lori McTavish said in a statement.
Home
loan troubles break records again
WASHINGTON
(AP) -- A record one in 10 American homeowners with a mortgage were either at
least a month behind on their payments or in foreclosure at the end of
September as the source of housing market pressure shifted from risky loans to
the crumbling U.S. economy.
The
percentage of loans at least a month overdue or in foreclosure was up from 9.2
percent in the April-June quarter, and up from 7.3 percent a year earlier, the
Mortgage Bankers Association said Friday.
The
foreclosure crisis continued to be concentrated in states like Florida, where a
stunning 7.3 percent of all loans were in foreclosure at the end of September,
by far the highest in the country.
Return
to $1 gas? Energy prices evaporate
COLUMBUS,
Ohio (AP) -- Oil prices hit four-year lows Friday as employers cut the highest
number of jobs in 34 years. The continuing decline in prices is so dramatic and
so sudden that it is raising the prospect that gas prices could soon fall below
$1 a gallon.
The
worst jobs data in 34 years on Friday just added more fuel to the deepening
global recession as U.S. employers slashed a far worse-than-expected 533,000
jobs in November and the unemployment rate rose to a 15-year high of 6.7
percent.
A
gallon of gasoline can be had for 50 cents less than it cost just last month,
and people are starting to talk about $1 gas.
Kashkari:
Taxpayers will see return from bailout
WASHINGTON
(AP) -- Taxpayers will get money back from the government program providing up
to $250 billion in capital to banks around the country, a Treasury Department
official said Friday.
Neel
Kashkari, the director of Treasury's Office of Financial Stability, which
oversees the $700 billion financial rescue fund, said the government is
investing in "very high quality institutions of all sizes."
The
Treasury Department has received preferred stock and warrants to buy additional
shares in return for the $150 billion it has invested so far in 52 banks,
including Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co.
Inc.
Kashkari
also defended the capital injection program and Treasury's operation of the
$700 billion Troubled Asset Relief Program, or TARP.
Hartford
Financial doubles share price on outlook
CHARLOTTE,
N.C. (AP) -- Shares of Hartford Financial Services Group Inc. more than doubled
Friday as investors cheered the insurer's better-than-expected 2008 forecast
and assertion that its balance sheet is sound enough to handle continued market
declines.
Hartford
shares soared $7.38 to close at $14.59, trading as high as $16.08 during the
session. That's more than double Thursday's closing price of $7.21 but still
well below the 52-week high of $98.07 that the stock reached a year ago. The
stock traded around $70 a share as recently as mid-September, but had fallen to
around $7 in recent days.
The
news, which came out ahead of Hartford's investor meeting in New York, was a
quick turn for the battered insurer, which in recent months was seen to be in
dire need of capital.
DETROIT
(AP) -- The worsening U.S. auto sales slump claimed another 2,000 workers
Friday as General Motors Corp. announced layoffs at three more car factories.
The
company said it will cut shifts at car factories in Lordstown, Ohio; Orion
Township, Mich.; and Oshawa, Ontario, starting in February due to slowing demand
for their products.
The
layoffs amount to 2.4 percent of GM's North American blue-collar work force of
84,000. So far this year, GM has announced 11,000 factory worker layoffs in the
U.S.
The
latest cuts were announced as a Congressional committee heard a second day of
testimony from GM, Ford Motor Co. and Chrysler LLC executives seeking a
government bailout of up to $34 billion to keep the U.S.-based automakers from
collapsing.
Merrill,
BofA shareholders approve combination
CHARLOTTE,
N.C. (AP) -- Shareholders of Merrill Lynch & Co. and Bank of America Corp.
on Friday approved the investment bank's sale to Bank of America, a move that
will create the nation's largest financial-services firm.
During
a special shareholders meeting at company headquarters in New York, Merrill
shareholders approved the sale of the company, bringing to an end the
independence of an investment bank founded in 1914.
Bank
of America shareholders approved the deal later in the day.
Consumers
unexpectedly trimmed borrowing in Oct.
WASHINGTON
(AP) -- U.S. consumers unexpectedly cut back on their borrowing in October as
the economy sunk deeper into recession.
The
Federal Reserve reported Friday that consumer credit fell at an annual rate of
1.6 percent in October. That compared with a 3.1 percent growth rate logged in
September, and marked the deepest cutback since August.
Economists
expected consumers to boost their borrowing by around $2 billion in October
from the previous month. Instead, consumer debt dropped by $3.5 billion to
$2.58 trillion.
The
Fed's measure of consumer borrowing does not include any debt secured by real
estate, such as mortgage or home equity loans.
By
The Associated Press
The
Dow Jones industrials jumped 259.18, or 3.09 percent, to 8,635.42 after falling
by 258 and rising as much as 310 in the volatile trading late in the session.
Broader
stock indicators also advanced. The Standard & Poor's 500 index rose 30.85,
or 3.65 percent, to 876.07, and the Nasdaq composite index rose 63.75, or 4.41
percent, to 1,509.31.
The
Russell 2000 index of smaller companies rose 21.56, or 4.91 percent, to 461.09.
On
Friday, light, sweet crude for January delivery settled at $40.81 a barrel on
the New York Mercantile Exchange, down by nearly $3 per barrel. Prices fell as
low at $40.50, levels last seen in December 2004.
In
other Nymex trading, gasoline futures for January delivery tumbled 6.83 cents
to settle at 90 cents. Heating oil slid 8.26 cents to $1.4265 a gallon while
natural gas for January delivery shed 24.7 cents to sell at $5.77 per 1,000
cubic feet.
In
London, January Brent crude slipped by $2.42 cents to $39.86 on the ICE Futures
exchange.