AP
Business Highlights
Monday September 15, 6:29 pm ET

Stocks tumble amid new Wall Street landscape

NEW YORK (AP) -- A stunning makeover of the Wall Street landscape sent stocks falling precipitously Monday, with the Dow Jones industrials sliding 500 points in their largest point drop since the September 2001 terrorist attacks.

Investors reacted badly to a shakeup of the financial industry that took out two storied names: Lehman Brothers Holdings Inc. and Merrill Lynch & Co.

Stocks also posted big losses in markets across much of the globe as investors absorbed Lehman's bankruptcy filing and what was essentially a forced sale of Merrill Lynch to Bank of America for $50 billion in stock.

While those companies' situations had reached some resolution, the market remained anxious about American International Group Inc., which is seeking emergency funding to shore up its balance sheet.

HP to cut 24,600 jobs as part of EDS integration

SAN FRANCISCO (AP) -- Hewlett-Packard Co. said Monday it plans to slash 24,600 jobs over the next three years, nearly 8 percent of its work force, as it combines operations with Electronic Data Systems Corp., the technology-services company it recently acquired.

Most of the cuts will come from within EDS's ranks, and nearly half will hit jobs in the U.S., HP said Monday after the markets closed.

HP had not previously detailed how many employees of the combined company would lose their jobs. Before the acquisition, HP had 178,000 people and EDS had 142,000, a total of 320,000.

NY allows AIG to borrow from subsidiaries

CHARLOTTE, N.C. (AP) -- American International Group Inc. will be allowed to use $20 billion of assets held by its subsidiaries to provide cash needed for the troubled insurer to stay in business, New York Gov. David Paterson said Monday.

The move comes as AIG reviews its operations and discusses alternatives with outside parties to shore up its business amid concern the world's largest insurer could need billions of dollars to strengthen its balance sheet.

Oil closes below $100 for first time in 6 months

NEW YORK (AP) -- Oil prices closed below $100 a barrel for the first time in six months Monday, tumbling in another dramatic sell-off as the demise of Lehman Brothers and the sale of Merrill Lynch deepened worries about the U.S. economy.

Crude prices shed more than $5 a barrel and have now given up virtually all their gains for the year, extending a steep, two-month slide from record levels above $147 a barrel.

Oil's pullback also came as early signs suggested that Hurricane Ike delivered less damage than feared to the Gulf Coast energy oil and gas infrastructure. But pump prices jumped above $4 a gallon in parts of the country as a precautionary shutdown of Gulf refineries caused gasoline shortages.

Bank of America agrees to buy Merrill for $50 bln

NEW YORK (AP) -- Bank of America Corp. said early Monday it would acquire Merrill Lynch in a $50 billion all-stock transaction that should lift the uncertainty shrouding the investment bank since the start of the credit crisis over a year ago.

Charlotte, N.C.-based Bank of America has the most deposits of any U.S. bank, while Merrill Lynch & Co. Inc. is the world's largest and most widely recognized brokerage.

Bank of America will rival Citigroup Inc., the biggest U.S. bank in terms of assets.

Lehman Brothers files for Chapter 11 protection

NEW YORK (AP) -- Lehman Brothers, a 158-year-old investment bank choked by the credit crisis and falling real estate values, filed for Chapter 11 protection in the biggest bankruptcy filing ever on Monday and said it was trying to sell off key business units.

The filing was made in the U.S. Bankruptcy Court in the Southern District of New York by Lehman Brothers Holdings Inc., the bank's holding company.

Output drops worse-than-expected 1.1 percent

WASHINGTON (AP) -- Government data show the nation's industrial output plunged in August by nearly four times the amount that had been expected. It's the worst performance since Hurricane Katrina devastated the Gulf Coast in 2005.

The Federal Reserve reported Monday that industrial output dropped 1.1 percent last month, far worse than the 0.3 percent decline that economists had been expecting.

SEC plans measures against short-selling

WASHINGTON (AP) -- With Wall Street engulfed in crisis, the Securities and Exchange Commission is planning measures to rein in aggressive forms of short-selling that were blamed in part for the demise of Lehman Brothers and which some fear could be turned against other vulnerable companies.

During emergency meetings between federal officials and investment bank executives over the weekend, SEC Chairman Christopher Cox indicated to the bankers that the agency plans in a few days to impose new permanent protections against abusive "naked" short-selling, a person familiar with the matter said Monday.

Unlike the SEC's temporary emergency ban this summer covering naked short-selling in 19 stocks, the new measures would apply to trading in the broader market.

Best Buy to acquire music-sharer Napster

CHICAGO (AP) -- Napster Inc., the online music community that rose from a dorm room project to became the scourge of the global recording industry, is being purchased by Best Buy Inc. for nearly $127 million as the electronics retailer tries to boost its digital music business.

The $2.65 per share all-cash deal announced Monday is nearly double the music network's Friday closing price but a small sum to pay for Best Buy, which gets access to Napster's 700,000 subscribers who pay a monthly fee to access digital music catalogs.

By The Associated Press

The Dow fell 504.48, or 4.42 percent, to 10,917.51, moving below the 11,000 mark for the first time since mid-July. It was the worst point drop for the Dow since it lost 684.81 on Sept. 17, 2001, the first day of trading after the terror attacks. It was also the sixth-largest point drop in the Dow, just behind the 508.00 it suffered in the October 1987 crash.

Broader stock indicators also fell. The Standard & Poor's 500 index declined 58.74, or 4.69 percent, to 1,192.96 -- also its biggest drop since 9/11 and the first time it closed below 1,200 in three years.

The Nasdaq composite index fell 81.36, or 3.60 percent, to 2,179.91; it was its worst percentage and point loss since Jan. 4.

Light, sweet crude for October delivery fell $5.47 to settle at $95.71 a barrel on the New York Mercantile Exchange -- oil's first settlement under $100 since March 4. Earlier, prices dipped to $94.13, the lowest trading level in seven months. The sell-off gained momentum in aftermarket trading as prices fell more than $6.50.

In other Nymex trading, heating oil futures fell 14.79 cents to settle at $2.7912 a gallon, while gasoline prices dropped 20.82 cents to settle at $2.5614 a gallon. Natural gas for October delivery rose about a penny to settle at $7.374 per 1,000 cubic feet.

In London, October Brent crude fell $5.20 to settle at $92.38 a barrel on the ICE Futures exchange.