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.