AP
Business Highlights
Tuesday September 23, 6:51 pm ET

Berkshire buying $5 billion stake in Goldman Sachs

OMAHA, Neb. (AP) -- Warren Buffett's Berkshire Hathaway Inc. said Tuesday it is investing at least $5 billion in Goldman Sachs Group Inc. in a deal that will likely boost confidence in the venerable investment bank.

Goldman is also raising at least $2.5 billion in a public offering.

Buffett, the chief executive and chairman of Omaha-based Berkshire, said in a news release that Goldman Sachs "has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance."

Goldman's shares closed at $125.05 Tuesday, up $4.27, or 3.5 percent. They rose another $8.43, or 6.7 percent, to $133.48 in after-hours trading.

Dire warnings fail to sway senators on big bailout

WASHINGTON (AP) -- Senators dug in their heels Tuesday, pushing back against dire warnings from the government's top economic officials of recession, layoffs and lost homes if Congress doesn't quickly approve the Bush administration's emergency $700 billion financial bailout plan.

Congressional leaders still predicted passage -- with significant changes -- but Wall Street's nerves were hardly soothed.

The Dow Jones industrials sank 161 points and now are off more than 500 this week after initially surging on the bailout announcement last week.

Stocks extend fall as Street weighs bailout plan

NEW YORK (AP) -- Financial markets extended their declines Tuesday as investors worried that lawmakers were beginning to doubt the necessity of a broad government bailout for financial institutions as a way to revive ailing credit markets.

Top economic officials updating Congress about efforts to work out a $700 billion financial rescue plan faced a greater degree of second-guessing from lawmakers than some investors had expected. The Dow Jones industrials, which had been higher for the first half of the session ended at the lows of the day, tacking a 161-point loss onto a steep drop from Monday.

Still, trading appeared more orderly than Monday, when investors rushed into hard assets like oil and gold.

Home prices fell 5.3 pct in July, gov't says

WASHINGTON (AP) -- Nationwide home prices in July fell a record 5.3 percent compared with a year ago, a government agency said Tuesday, and have now receded to October 2005 levels.

Prices were down 0.6 percent from June on a seasonally adjusted basis, according to the Federal Housing Finance Agency.

The national decline in home values coupled with reckless lending standards during the real estate boom are the driving forces behind rising mortgage defaults and foreclosures. They have spurred a credit crisis that has shaken Wall Street to its core and caused the Bush administration to propose a $700 billion financial industry bailout.

Lennar 3rd-quarter loss narrows, revenue drops

Lennar Corp., one of the nation's largest homebuilders, said Tuesday that its sales in the third quarter plunged more than 50 percent and it does not expect the housing market to improve "for some time to come."

By slashing costs, Lennar narrowed its loss to $89 million, or 56 cents a share, during the three months ended Aug. 31, markedly better than a $513.9 million loss ($3.25 a share) in the year-ago quarter.

Revenue fell to $1.11 billion from $2.34 billion.

While the results were in line with Wall Street forecasts, the company's outlook disappointed investors, who sent Lennar's shares down almost 8 percent, or $1.03 to $12.71.

Oil prices trade lower a day after huge rally

NEW YORK (AP) -- Oil prices pulled back Tuesday after the previous session's wild, record-setting rally, dropping below $107 a barrel as uncertainty over the U.S. financial bailout plan and a stronger dollar led investors to shed commodities.

It was crude's first down session in five days. Some decline was to be expected after crude soared 16 percent on Monday -- the biggest one-day gain ever -- partly because of a technical fluke.

Still, oil market watchers say crude is showing early signs that it may be poised for another big climb.

Tomato processing, egg products industries probed

WASHINGTON (AP) -- A federal investigation into possible food price-fixing has been expanded to include two major industries, tomato processing and egg products.

The Justice Department confirmed Tuesday that prosecutors are conducting separate inquiries into whether the tomato and egg industries engaged in anticompetitive practices.

Federal prosecutors also have been looking at possible price-fixing in the citrus industry for at least a year.

Google phone to cost $179, debut Oct. 22

NEW YORK (AP) -- The first phone that harnesses Google Inc.'s ambition to make the Internet easy to use on the go was revealed Tuesday, and it looks a lot like an iPhone.

T-Mobile USA showed off the G1, a phone that, like Apple Inc.'s iPhone, has a large touch screen. But it also packs a trackball, a slide-out keyboard and easy access to Google's e-mail and mapping programs.

T-Mobile said it will begin selling the G1 for $179 with a two-year contract. The device hits U.S. stores Oct. 22 and heads to Britain in November and other European countries early next year.

DuPont names Kullman as chief executive officer

DOVER, Del. (AP) -- Having shifted under chief executive Charles Holliday Jr. from a traditional chemicals business to a science and biotechnology company, DuPont Co. will keep branching out under incoming CEO Ellen Kullman.

DuPont announced Tuesday that Holliday is stepping down after 10 years as CEO and will be replaced by Kullman, an executive vice president who has spent 20 years with the company and formerly led the unit that makes the material for body armor.

Kullman, 52, who once described DuPont's focus on internal research as being too insular and arrogant, said she will work to make the company's commitment to science-based innovation pay off.

Japan's Nomura buys Lehman's Europe, Mideast units

TOKYO (AP) -- Nomura, Japan's largest brokerage, said Tuesday it would buy the European and Middle Eastern operations of Lehman Brothers -- just a day after disclosing it had acquired the Asian units of the failed U.S. investment bank.

The deal is a major step in the liquidation of what was once the fourth-largest investment bank in the U.S.

Nomura Holdings Inc. said it would take over Lehman Brothers' equities and investment banking operations in Europe and the Middle East.

Chrysler plans to sell electric car in 2010

AUBURN HILLS, Mich. (AP) -- Chrysler LLC charged up the electric car race Tuesday, muscling in on General Motors Corp.'s Chevrolet Volt by unveiling three electric-powered models and promising to put one of them on sale in the U.S. sometime in 2010.

The company showed reporters three electric prototypes: a Dodge sports car, a Jeep Wrangler and a Chrysler minivan.

The Dodge sports car is completely electric and based on Lotus Europa underpinnings, but the Jeep Wrangler and Chrysler minivan models will be extended-range vehicles similar to the Volt, which GM has said will go on sale in November 2010.

Like the Volt, all three Chrysler vehicles are recharged by plugging them into a standard wall outlet.

By The Associated Press

The Dow Jones industrial average fell 161.52, or 1.47 percent, to 10,854.17 after having risen more than 125 points in the early going and then falling by more than 180. With Monday's 370-point decline, the blue chips are down 534 points, or 4.69 percent, for the week.

Broader stock indicators also fell Tuesday. The Standard & Poor's 500 index fell 18.87, or 1.56 percent, to 1,188.22, and the Nasdaq composite index fell 25.65, or 1.18 percent, to 2,153.33.

Light, sweet crude for November delivery fell $2.76 to settle at $106.61 on the New York Mercantile Exchange, after earlier dipping as low as $104.05. The contract jumped $6.62 to settle at $109.37 on Monday.

In other Nymex trading, heating oil futures fell 5.02 cents to settle at $3.0132 a gallon, while gasoline futures lost 10.88 cents to settle $2.595 a gallon. Natural gas futures jumped 20.1 cents to settle at $8.144 per 1,000 cubic feet.

In London, November Brent crude fell $2.96 to settle at $103.08 a barrel on the ICE Futures exchange.