AP
Business Highlights
Thursday December 11, 8:24 pm ET

Auto bailout stalled; negotiations into the night

WASHINGTON (AP) -- Labor, lawmakers and the auto industry bargained in unprecedented private talks at the Capitol Thursday night, claiming progress in a common struggle to salvage a $14 billion government bailout of the nation's Big Three carmakers.

Officials said the talks centered on possible wage and benefit concessions from the United Auto Workers union as well as large-scale debt restructuring by General Motors Corp., Ford Motor Co. and Chrysler LLC.

BofA plans up to 35,000 job cuts in next 3 years

NEW YORK (AP) -- Bank of America Corp. said Thursday it expects to cut 30,000 to 35,000 jobs over the next three years, as it faces a deteriorating economic environment and tries to absorb Merrill Lynch & Co.

The final number could be even higher, analysts say. Charlotte, N.C.-based Bank of America said it hasn't yet completed its analysis for eliminating positions, and won't until early next year. The company and Merrill have about 308,000 employees in total, and the cuts will affect workers from both companies and all types of businesses.

Wall Street tumbles on auto bailout worries

NEW YORK (AP) -- Wall Street's anxiety about Detroit automakers welled up Thursday, sending stocks sharply lower in an afternoon sell-off as investors grew fearful that a bill to rescue the companies wouldn't make it through the Senate.

The pullback follows mostly moderate moves in stocks since mid-November and is a fresh reminder of investors' fears about the economy.

The Dow Jones industrial average fell 196.33, or 2.24 percent, to 8,565.09. The decline left the blue chips with a 0.81 percent loss for the week going into Friday's session.

Retailer KB Toys files for bankruptcy protection

NEW YORK (AP) -- In another sign of the grim holiday season, KB Toys filed for bankruptcy protection for the second time in four years on Thursday and plans to begin going-out-of business sales at its stores immediately.

That a toy retailer filed for bankruptcy just before Christmas shows how bleak things have become, since such stores make up to half of their sales during the holidays. But analysts expect toy sales this holiday season to be flat or down slightly from last year's total of $10.4 billion, according to market research firm NPD Group, because consumers are cutting back amid the recession.

More jobs carnage: 573,000 file for unemployment

WASHINGTON (AP) -- New claims for jobless benefits surged last week and came in worse than expectations that were already gloomy -- and economists say the figures would get even worse without an auto industry bailout.

Initial applications for unemployment benefits rose to a seasonally adjusted 573,000, the Labor Department said Thursday. That was nearly 50,000 more than economists were expecting and up from a revised 515,000 the week before.

The last time so many Americans filed new jobless claims in a single week was in 1982, although the labor force has grown by about half since then.

Procter & Gamble trims fiscal 2Q sales outlook

NEW YORK (AP) -- Procter & Gamble Co. said Thursday it will miss a second-quarter sales target as the consumer products company acknowledged it isn't immune to the recession.

The maker of such products as Tide detergent, Pampers diapers and Gillette shavers, P&G said organic sales -- that is, sales not linked to acquisitions -- won't meet the 4 percent to 6 percent growth goal in the quarter ending in December. But the Cincinnati-based company still expects organic sales to grow between 4 percent and 6 percent over its fiscal 2009, which ends in June.

Oil prices near $48 a barrel as dollar falls

HOUSTON (AP) -- Oil prices rose 10 percent Thursday as the value of the dollar sank further and investors dumped money into crude markets.

The falling dollar, which makes commodities like oil more attractive, outweighed a new report from the International Energy Agency, which said energy demand is sliding sharply.

Light, sweet crude for January delivery rose $4.46 to settle at $47.98 a barrel in trading on the New York Mercantile Exchange, after rising to near $49 earlier in the session.

Source: DOJ tells PNC to sell 61 NatCity branches

NEW YORK (AP) -- PNC Financial Services Group Inc. is being told by the federal government to sell 61 branches of National City Corp. in western Pennsylvania as a condition for acquiring the bank, according to a person familiar with the matter.

National City's nearly 30,000 employees, from top managers to bank tellers, were being informed during the afternoon that the Department of Justice would announce the order later in the day, the person said on condition of anonymity because he was not authorized to speak publicly about the planned sale.

Ex-Nasdaq chair arrested on fraud charge

NEW YORK (AP) -- A former Nasdaq stock market chairman was arrested on a securities fraud charge Thursday, accused of running a phony investment business that amounted to what prosecutors called a "giant Ponzi scheme."

Bernard L. Madoff was released on $10 million bail. He declined to comment as he walked out of court.

Madoff, 70, the founder of Bernard L. Madoff Investment Securities LLC, maintained a separate and secretive investment-advising business that served between 11 and 25 clients and had a total of about $17.1 billion in assets under management, prosecutors said.

Boeing again delays 787 test flight, delivery

Boeing Co. has further delayed the initial test flight and delivery of its highly anticipated 787 jetliner, citing the impact of a recent strike and lingering production problems.

The Chicago-based aerospace company said Thursday it was pushing back the inaugural flight of the next-generation passenger jet to the second quarter of 2009 and the first delivery to between January and March of 2010.

By The Associated Press

The Dow Jones industrial average fell 196.33, or 2.24 percent, to 8,565.09.

The broader Standard & Poor's 500 index fell 25.65, or 2.85 percent, to 873.59, and the Nasdaq composite index fell 57.60, or 3.68 percent, to 1,507.88.

The Russell 2000 index of smaller companies tumbled 25.19, or 5.3 percent, to 451.21 as investors looked for the safety of larger companies expected to fare better in a weak economy.

Light, sweet crude for January delivery rose $4.46 to settle at $47.98 a barrel in trading on the New York Mercantile Exchange, after rising to near $49 earlier in the session.

In other Nymex trading, gasoline futures jumped nearly 11 cents to settle at $1.0786 a gallon. Heating oil gained 10 cents to settle at $1.5066 a gallon and natural gas for January delivery fell 11.8 cents to $5.568 per 1,000 cubic feet.

In London, January Brent crude soared $4.99 to settle at $47.35 on the ICE Futures exchange.