AP
Business Highlights
Thursday September 11, 6:16 pm ET

Bankers say Lehman approaching rivals for lifeline

NEW YORK (AP) -- Lehman Brothers has approached other major financial institutions about a potential acquisition or investment in the battered securities firm, people close to the situation said Thursday.

The nation's No. 4 investment bank has been casting a wide net to find a potential buyer for all or part of the 158-year-old firm, bankers and executives at other financial companies said Thursday.

The bankers and executives asked not be named because they are not authorized to comment publicly.

Trade deficit surges, jobless claims remain high

WASHINGTON (AP) -- The U.S. trade deficit soared in July to a 16-month high, the Commerce Department said, as oil imports hit an all-time high. While exports increased, economists expect slowing economies in Europe and Asia will reduce export growth later this year.

The Labor Department also reported that new applications for unemployment benefits fell less than expected last week as the struggling economy continues to take a toll on workers.

AP source: Ford says it wants 4,200 fewer workers

DETROIT (AP) -- Ford Motor Co. has said that it wants to cut its blue-collar work force by another 4,200 employees, according to a person briefed on a presentation to union officials.

The struggling automaker is offering buyout and early retirement packages at manufacturing operations in Ohio, Michigan, Kentucky and Indiana as it continues efforts to trim its factory ranks to match lower demand for its products.

Ford has declined to publicly state a target number, but Joe Hinrichs, group vice president of global manufacturing, told union officials the company has 4,200 more blue collar workers than it needs, according to the person briefed on the presentation.

Stocks rebound, but Lehman remains a worry

NEW YORK (AP) -- Stocks made a stunning comeback Thursday, as investors snapped up some of the financial sector's stronger players and pumped money into the materials and transportation sectors. The Dow Jones industrial average rose more than 160 points.

A drop in crude below $101 a barrel also helped reverse Wall Street's early losses, particularly among automaker and transportation stocks like railroad CSX Corp., Ford Motor Co. and General Motors Corp.

Gasoline prices spike as Ike heads toward Texas

NEW YORK (AP) -- Gasoline prices jumped to unprecedented levels in the wholesale markets Thursday as Hurricane Ike tore across the Gulf of Mexico, threatening to strike Texas and its refineries.

Crude oil on the futures market, however, sank below $101 a barrel to its lowest settlement price since late March -- a sign that investors are still worried about waning global demand.

FDA: Infant formula from China tainted by chemical

WASHINGTON (AP) -- Tainted infant formula from China may be on sale at ethnic groceries in this country, even though it is not approved for importation, federal officials warned on Thursday.

However, the Food and Drug Administration stressed that the domestic supply of infant formula is safe.

FDA officials are urging U.S. consumers to avoid all infant formula from China, after several brands sold in that country came under suspicion of being contaminated with melamine, a chemical used in plastics.

Settlement reached in AIG shareholder lawsuit

WILMINGTON, Del. (AP) -- Attorneys for a Louisiana pension fund reached a $115 million settlement Thursday in a shareholder lawsuit against former executives of insurance giant American International Group Inc.

The settlement was reached just days before trial was to begin in a lawsuit challenging hundreds of millions of dollars in commissions paid by AIG to C.V. Starr & Co., a privately held affiliate controlled by former AIG Chairman Maurice "Hank" Greenberg and other AIG directors.

Attorneys for the plaintiffs said the settlement includes a $29.5 million payment from Greenberg and three other individual defendants, with the remaining $85.5 million covered by liability insurance.

WaMu shares reverse course, end higher

WASHINGTON (AP) -- Shares of Washington Mutual Inc. staged a late rally Thursday, recouping some of this week's steep losses as investors pumped money back into the banking sector despite ongoing concerns.

The stock jumped 51 cents, or 22 percent, to end the day at $2.83, after earlier falling as much as 25 percent to $1.75. Shares were down in after-hours trading, dropping 11 cents, or 3.9 percent, to $2.72.

The Seattle-based company's stock was down nearly 46 percent for the week, before staging its turnaround Thursday.

30-year mortgages dip to lowest level since April

WASHINGTON (AP) -- Rates on 30-year mortgages dropped sharply this week, falling to the lowest level in five months, as the government's dramatic takeover of mortgage giants Fannie Mae and Freddie Mac had the hoped-for impact of lowering mortgage rates.

Freddie Mac reported Thursday that its nationwide survey found that 30-year, fixed-rate mortgages dipped to 5.93 percent this week, down from 6.35 percent last week.

The sharp decline pushed the 30-year rate below 6 percent for the first time since late May and marked the lowest level for this rate since they averaged 5.88 percent the week of April 17.

Banks borrow more from Fed; Wall Street takes pass

WASHINGTON (AP) -- Banks borrowed more over the past week from the Federal Reserve's emergency lending program, while Wall Street firms took a pass for the sixth week in a row.

A Fed report released Thursday said commercial banks averaged $19.8 billion in daily borrowing over the past week. That compared with a daily average of $18.98 billion in the previous week.

For the week ending Sept. 10, Wall Street firms didn't take out any loans. Their borrowing, however, averaged as high as $38.1 billion a day over the course of a week in early April.

Ahead of Ike, gasoline spikes

HOUSTON (AP) -- The threat of Hurricane Ike pushed gasoline prices higher Thursday, something Gustav failed to do, as the latest storm pushed toward the mass of petroleum refineries along the Gulf Coast.

Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Marathon Oil Co. were among the companies halting operations at refineries on the Texas coast, primarily in the Houston area.

Refineries along the upper Texas Gulf Coast account for about one-fifth of the nation's refining capacity. Exxon Mobil's refinery in Baytown, outside Houston, is the nation's largest.

By The Associated Press

The Dow rose 164.79, or 1.46 percent, to 11,433.71, after falling by as many as 170 points in the early going.

Broader stock indicators rose. The Standard & Poor's 500 index rose 17.01, or 1.38 percent, to 1,249.05, while the Nasdaq composite index rose 29.52, or 1.32 percent, to 2,258.22.

October gasoline futures rose 8.72 cents to settle at $2.7488 a gallon on the New York Mercantile Exchange.

Light, sweet crude for October delivery on the Nymex fell $1.71 to settle at $100.87 a barrel -- the lowest close since March 24. During trading, the contract dropped as low as $100.10 a barrel.

In Nymex trading, heating oil futures rose 1.31 cent to settle at $2.9155 a gallon.

Natural gas fell 14.5 cents to settle at $7.248 per 1,000 cubic feet. The EIA said Thursday that natural gas in U.S. storage rose last week.

In London, Brent crude on the ICE Futures exchange fell $1.33 to $97.64 a barrel.