AP
Business Highlights
Friday July 11, 7:01 pm ET

Office of Thrift Supervision shuts down IndyMac

LOS ANGELES (AP) -- IndyMac Bank succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures on Friday when banking regulators seized the mortgage lender's assets.

The Office of Thrift Supervision said it transferred IndyMac's operations to the Federal Deposit Insurance Corporation because it did not think it could meet its depositors' demands.

Pasadena, Calif.-based IndyMac Bancorp Inc., the holding company for IndyMac Bank, has been struggling to raise capital as the housing slump deepens.

A spokesman for the lender did not immediately return an e-mail request for comment

Washington, Wall St. weigh Fannie, Freddie help

WASHINGTON (AP) -- Wall Street and Washington wrestled Friday with how to shore up mortgage giants Fannie Mae and Freddie Mac, two troubled pillars of the economy whose failure would deal a devastating blow to the already crippled housing market.

As investors grew more convinced that only some type of government bailout could rescue the firms, Treasury Secretary Henry Paulson said the focus was to support the pair "in their current form" without a takeover.

The government was considering giving Fannie and Freddie access to the Fed's emergency lending program as one option to prop up the firms, said Sen. Christopher Dodd, D-Conn., citing conversations with Fed Chairman Ben Bernanke and Paulson.

A Fed spokeswoman said the central bank had not talked with Fannie and Freddie about the emergency lending program. The spokeswoman declined to discuss any other options being considered.

Stocks end lower amid worries on Fannie, Freddie

NEW YORK (AP) -- Wall Street's angst over the ongoing fallout from the credit crisis made for a turbulent end to a volatile week Friday -- stocks tumbled, soared and then turned south again as investors tried to assess the dangers faced by the country's biggest mortgage financiers, Fannie Mae and Freddie Mac.

The Dow Jones industrial average, which traded down more than 250 points in the session, briefly moved into positive territory Friday before ending down more than 125 points. The blue chips also traded below 11,000 for the first time in two years. And all the major indexes ended with another losing week.

A new high for oil prices above $147 a barrel also weighed on stocks.

The fate of the government-chartered companies was a focus of trading Friday as it had been earlier in the week. Shares of Fannie Mae and Freddie Mac fell sharply over several sessions on concerns about their stability. Wall Street is worried that a collapse of the two financiers would cause further shock to the financial system, and trigger more losses to banks and brokerages with significant holdings of mortgage-backed securities.

Oil sets new trading record above $147 a barrel

NEW YORK (AP) -- It's only July, but it might be time to start loading up on blankets and sweaters. Oil spiked to a new trading record as hostilities rise between the West and Iran -- raising the likelihood that this winter's heating bills will be the priciest yet.

Crude oil's brief jump past $147 a barrel Friday arrived not only as the United States and Israel view Iran as a growing threat, but also as the U.S. dollar fell and worries erupted over possible supply disruptions in two other major oil-producing nations: Nigeria and Brazil.

Those factors contributed to new all-time trading highs in crude, gasoline and heating oil. It looks like $4-a-gallon gasoline might be here to stay, and that heating oil costs might cause further problems for consumers as the weather gets colder. Futures prices for natural gas turned lower Friday, but are still about twice as high as a year ago.

Software problems bug Apple's launch of new iPhone

NEW YORK (AP) -- The launch of Apple Inc.'s much-anticipated new iPhone turned into an information-technology meltdown on Friday, as customers were unable to get their phones working.

In stores, people waited at counters to get the phones activated, as lines built behind them. Many of the customers had already camped out for several hours in line to become among the first with the new phone, which updates the one launched a year ago by speeding up Internet access and adding a navigation chip.

A spokesman for AT&T, the exclusive carrier for the iPhone in the U.S., said there was a global problem with Apple's iTunes servers that prevented the phones from being fully activated in-store, as had been planned.

Instead, employees are telling buyers to go home and perform the last step by connecting their phones to their own computers, spokesman Michael Coe said.

Reports: InBev, Anheuser-Busch talking

ST. LOUIS (AP) -- After weeks of public bickering, Anheuser-Busch Cos. Inc.'s board is likely to accept a sweetened buyout offer from the Belgian-based brewer InBev SA as early as this weekend, a published report said.

The Wall Street Journal reported Friday that InBev has boosted its takeover offer for the St. Louis-based maker of Budweiser, Bud Light and other beers by $5 a share to $70. It said one person it did not identify by name said the Anheuser-Busch board is likely to accept the offer this weekend.

An earlier New York Times report, also citing unnamed sources, said talks have become friendly. The Times also said Friday that a person close to the talks said Inbev had raised its offer to $70 a share. It said an announcement of a deal could come as early as Monday.

A deal would be a stunning turnaround from the often heated rhetoric between the two companies over the past several days.

GE profit falls, meets estimates, sells loan unit

HARTFORD, Conn. (AP) -- General Electric Co. reverted to form with no big surprises in its latest earnings report, and investors shocked by an unexpected profit shortfall three months ago showed their appreciation.

Even though earnings fell in the latest quarter, investors helped GE shares hold their ground Friday.

The conglomerate whose interests range from making loans, TV shows and light bulbs to building industrial machinery reported a 6 percent decline in its second-quarter earnings but still matched analyst's expectations.

GE's share price edged up 2 cents to close at $27.66 even as the Dow Jones industrials lost more than 100 points and briefly slid below 11,000 for the first time in two years.

Ashland stock tumbles on Hercules deal

WILMINGTON, Del. (AP) -- Ashland's stock plummeted Friday after it said it would buy specialty chemicals maker Hercules Inc. in a $2.6 billion cash-and-stock deal that also includes a hefty debt load.

Ashland Inc.'s stock fell 13 percent after it announced the deal, which also includes the assumption of $700 million of Hercules Inc. debt, sparking worries that the payments would stymie growth.

Standard & Poor's Ratings Services warned of a possible downgrade of Ashland's corporate credit rating, noting that the deal would be mostly debt-financed.

The offer represented a 38 percent premium over Hercules' Thursday closing price.

The deal was announced the day after Dow Chemical Co. agreed to Rohm and Haas Co. at a 74 percent premium for more than $15 billion in cash.

Administration rejects regulating greenhouse gases

WASHINGTON (AP) -- The Bush administration on Friday rejected regulating greenhouse gases blamed for global warming, saying it would cause too many job losses.

In a 588-page federal notice, the Environmental Protection made no finding on whether global warming poses a threat to people's health, reversing an earlier conclusion at the insistence of the White House and officially kicking any decision on a solution to the next president and Congress.

The White House on Thursday rejected EPA's conclusion three weeks earlier that the 1970 Clean Air Act "can be both workable and effective for addressing global climate change." Instead, EPA said Friday that law is "ill-suited" for dealing with climate change.

Trade deficit ebbs as exports rise to record high

WASHINGTON (AP) -- The U.S. trade deficit narrowed in May as exports -- including industrial supplies and consumer goods -- climbed to all-time highs.

The latest snapshot of trade activity, reported by the Commerce Department on Friday, showed that the nation's trade gap, thanks largely to the declining dollar, decreased to $59.8 billion. That was down 1.2 percent from April's trade deficit and was the best showing since March.

The improvement came even as imports -- including crude oil -- hit new record highs.

The trade deficit narrowed in May because exports grew faster than imports.

By The Associated Press

The Dow fell 128.48, or 1.14 percent, to end at 11,100.54 after having fallen to 10,977.68. It last traded below 11,000 on July 25, 2006.

Broader stock indicators also logged declines. The Standard & Poor's 500 index fell 13.90, or 1.11 percent, to 1,239.49, and the Nasdaq composite index fell 18.77, or 0.83 percent, to 2,239.08.

Light, sweet crude for August delivery soared to an all-time high of $147.27 a barrel before settling at $145.08, up $3.43. That's slightly below last Thursday's settlement record of $145.29 a barrel.

In Nymex trading, heating oil futures rose to a trading record of $4.1586 before settling at $4.0766 a gallon, up 3.92 cents.

Gasoline futures also rose to a new trading record of $3.631 a gallon before finishing at $3.5632, up 5.23 cents.

Natural gas futures fell 39.6 cents to $11.904 per 1,000 cubic feet, but only after rising as high as $13.694.

On London's ICE futures exchange, Brent crude settled at $144.49, up $2.46.