AP
Business Highlights
Thursday January 15, 6:39 pm ET

Congress OKs release of final $350B of bailout

WASHINGTON (AP) -- Congress laid the foundation for President-elect Barack Obama's economic recovery plan on Thursday with remarkable speed, clearing the way for a new infusion of bailout cash for the financial industry while majority Democrats proposed spending increases and tax cuts totaling a whopping $825 billion.

Two days after Obama personally lobbied for release of $350 billion in bailout funds, the Senate narrowly turned aside a bid to block the money. Despite bipartisan anger over the Bush administration's handling of the program to date, Democratic allies of the incoming president prevailed on a 52-42 roll call.

Stocks regain ground as hopes grow for bailout

NEW YORK (AP) -- Wall Street pulled off a big turnaround Thursday, rebounding from a steep early drop to finish modestly higher. Investors who began the day worrying about a revival of the banking crisis grew optimistic during the session that the government will again help the financial industry.

The selloff, which followed news that Bank of America Corp. needs another government cash infusion, had the Dow Jones industrials heading for a seventh straight loss. But investors awaiting a Senate vote authorizing the second $350 billion from the government's financial bailout fund became more upbeat as the day wore on. The Dow rose 12.35, or 0.15 percent, to 8,212.49 after falling the past six days.

JPMorgan posts profit, but 'disappointing' one

NEW YORK (AP) -- JPMorgan Chase eked out a fourth-quarter profit, but its results were anything but calming to investors worried about the mountain of upcoming losses in the troubled banking sector.

Defaults surged in a wide variety of loans, ranging from home loans to credit cards to commercial real estate loans. JPMorgan's investment bank was forced to mark down its portfolio by $2.9 billion. And had it not been for JPMorgan's buy of Washington Mutual Inc. late last year, the bank would have reported a net loss for the fourth quarter.

New York-based JPMorgan Chase & Co. on Thursday reported a profit of $702 million, or 7 cents per share, down 76 percent from $2.97 billion, or 86 cents per share, a year ago.

New jobless claims rise, economy keeps shrinking

WASHINGTON (AP) -- The number of newly laid off workers seeking unemployment benefits rose more than expected last week, the latest sign the economy is shrinking and unlikely to rebound anytime soon.

The figures came a day after the government said retail sales dropped sharply in December and the Federal Reserve issued a gloomy economic assessment.

Economists said the reports illustrate that the economy remains stuck in a downward cycle: Consumers initially cut back spending in response to the housing and credit crises, slowing the economy and leading companies to lay off workers, which spurs even more caution among consumers.

European Central Bank cuts rates to 2 percent

FRANKFURT, Germany (AP) -- The European Central Bank slashed its main interest rate by a half percentage point to 2 percent on Thursday -- but signaled it would slow the pace of future cuts -- as it sought to protect the 330 million people in the 16 countries that use the euro against a deepening recession.

The unanimous decision by the bank's governing council was in line with market expectations and left the rate at its lowest level since December 2005. It followed a three-quarter point cut last month.

GM basing plans on lower US sales outlook of 10.5M

NEW YORK (AP) -- General Motors Corp. said Thursday that it's basing its turnaround plan on the assumption that the auto industry will sell 10.5 million cars and trucks in the U.S. this year, a 1.5 million drop from the expectation it shared with Congress last month.

While asking lawmakers for $18 billion in loans, the Detroit automaker said it expected industrywide sales of about 12 million for 2009, with 10.5 million seen as a worst-case scenario.

The Treasury Department allocated $13.4 billion in loans to GM last month, and the company must submit a plan to show the Treasury Department that it is cutting enough costs to become viable, or the government can call back the loans March 31.

Bear market intensifies for crude; prices tumble

NEW YORK (AP) -- Oil prices flirted with five-year lows Thursday as unemployment benefit claims rose and OPEC cut demand expectations for 2009.

Any belief that energy prices had bottomed out were wiped away early in the day as crude plumbed new depths for the year and more government data suggested the economy may be worsening.

Light, sweet crude for February delivery fell 5 percent, or $1.88, to settle at $35.40 a barrel Thursday on the New York Mercantile Exchange. Prices fell as low as $33.20 Thursday and only gave up steep losses when the Dow Jones industrial average rebounded.

Intel 4Q profit plunges 90 pct, meets forecasts

SAN JOSE, Calif. (AP) -- Intel Corp.'s fourth-quarter profit plunged 90 percent but still met Wall Street's subdued expectations Thursday, as the chip maker was hurt by wheezing PC sales that have crimped demand for microprocessors. Sales slumped 23 percent, in line with Intel's previous guidance.

That was good enough to send Intel's shares up 2.1 percent in after-hours trading.

Net income was $234 million, or 4 cents per share, compared with $2.3 billion, or 38 cents per share, in the year-ago period.

Genentech 4Q profit rises, but just short of views

SOUTH SAN FRANCISCO, Calif. (AP) --Genentech Inc.'s fourth-quarter profit rose 47 percent on sales of its blockbuster cancer drug Avastin, but the biotechnology company set a weaker-than-expected outlook for 2009.

The results, reported late Thursday, come as the shadow of a potential buyout by part-owner Roche hangs over the company. That anticipation prompted Wall Street to view both positive and negative developments for the company through the prism of their ability to drive any new deal value.

By The Associated Press

The Dow rose 12.35, or 0.15 percent, to 8,212.49.

Broader stock indicators advanced Thursday. The Standard & Poor's 500 index rose 1.12, or 0.13 percent, to 843.74 and the technology-heavy Nasdaq composite index rose 22.20, or 1.49 percent, to 1,511.84.

The Russell 2000 index of smaller companies rose 9.45, or 2.09 percent, to 462.62.

Light, sweet crude for February delivery fell 5 percent, or $1.88, to settle at $35.40 a barrel Thursday on the New York Mercantile Exchange.

In London, the February Brent crude contract fell 39 cents to settle at $44.69 a barrel on the ICE Futures exchange.

In other Nymex trading, gasoline futures rose less than a penny to settle at $1.1742 a gallon. Heating oil rose 2.4 cents to settle at $1.4871 a gallon while natural gas for February delivery fell 12.7 cents to settle at $4.843 per 1,000 cubic feet.