AP
Business Highlights
Friday January 16, 6:45 pm ET

Citigroup posts loss, splits up the bank

NEW YORK (AP) -- Citigroup Inc. on Friday announced its latest attempt to become profitable again: Splitting the bank into two pieces.

Citigroup -- after suffering a loss of $8.29 billion, its fifth straight quarterly deficit -- is reorganizing into Citicorp and Citi Holdings. The first will focus on traditional banking around the world, while the second will hold the company's riskier assets and tougher-to-manage ventures.

Bank of America slides to 4Q loss; gets more aid

CHARLOTTE, N.C. (AP) -- Escalating credit costs forced Bank of America Corp. to report a $2.39 billion fourth-quarter loss, hours after it convinced the federal government it needed a new multibillion-dollar lifeline to survive the absorption of Merrill Lynch's hefty losses.

Bank of America also attributed the loss to write-downs and trading losses in the company's capital markets business, but said most of its core business units remained in the black. Both retail and wealth management segments posted profit and the bank saw narrower losses in its investment bank during the quarter. The results don't reflect the $15.31 billion loss Merrill Lynch suffered.

Circuit City to close 567 remaining US stores

Bankrupt Circuit City Stores Inc., unable to work out a sale of the company, said Friday it will go out of business -- closing its 567 U.S. stores and cutting 30,000 jobs.

The nation's second-biggest consumer electronics retailer is the latest casualty of an unprecedented pullback in consumer spending that has driven other brands such as KB Toys, Mervyns LLC and Linens 'N Things into bankruptcy. Experts believe there will be more to come.

The company had been seeking a buyer or a deal to refinance its debt, but the hobbled credit market and consumer worries proved insurmountable.

Wall Street rebounds after banks report big losses

NEW YORK (AP) -- Wall Street has managed its second straight comeback, but the rebound was more a sign of the market's turmoil than strength.

Stocks closed moderately higher Friday after an erratic session that had investors tussling with concerns about the ongoing problems in the banking industry. Yet investors were also heartened by plans for both Citigroup Inc. and Bank of America Corp. to restore themselves to profitability, and they were also willing to place bets on a range of consumer and industrial stocks.

The Dow Jones industrial average rose 68.73, or 0.84 percent, to 8,281.22.

Deflation concerns grow as consumer prices shrink

WASHINGTON (AP) -- Consumer prices tumbled yet again in December, and inflation last year logged its smallest advance since the early 1950s, fanning new fears that the country may face a dangerous bout of deflation.

The Labor Department's latest inflation report, released Friday, showed consumer prices dropped 0.7 percent in December, marking the third straight month prices fell.

For all of 2008, prices inched up 0.1 percent, the smallest increase since 1954. Although prices spiked during some summer months -- as oil hit record highs and food prices marched upward-- the inflation threat of 2008 ended up fizzling.

Nearly 40K job cuts announced as weakness persists

NEW YORK (AP) -- Employers announced a total of nearly 40,000 job cuts Friday, almost all of them related to problems in other parts of the economy.

Circuit City Stores Inc. is cutting 30,000 jobs. Rental car company Hertz Global Holdings Inc. is eliminating 4,000 jobs worldwide as families and business travelers forgo trips. Insurer WellPoint Inc. is cutting about 1,500 jobs, with rising unemployment leading to fewer people with health insurance.

Advanced Micro Devices Inc. announced its third round of layoffs in a year, cutting 1,100 jobs, or 9 percent, of its global staff. Meanwhile, petroleum company ConocoPhillips said Friday it will cut about 1,300 jobs, or 4 percent of its work force.

Chrysler Financial gets $1.5B loan from bailout

WASHINGTON (AP) -- The Treasury Department said Friday it will provide a $1.5 billion loan to Chrysler LLC's financing arm to be used for new vehicle loans in hopes of boosting sales and ultimately returning the domestic auto industry to profitability.

Chrysler immediately announced it will offer zero-percent financing on 11 Chrysler, Jeep and Dodge models and be able to provide financing to a wider range of applicants -- including those will less than ideal credit.

The Treasury said the new aid will be in addition to the $17.4 billion in loans earmarked for both Chrysler and General Motors Corp. last month in an effort to buy time for the two companies to reorganize.

Crude prices fall as storage space nears limit

NEW YORK (AP) -- Burgeoning crude inventories pushed oil prices lower Friday with yet another major energy group predicting demand will fall again this year in a widening recession.

In its closely watched monthly survey, the Paris-based International Energy Agency cited "the relentless worsening of global economic conditions" as it reduced its global demand expectations by 1 million barrels, to 85.3 million barrels a day.

Light, sweet crude for March delivery fell 97 cents Friday to settle at $42.57 on the New York Mercantile Exchange. The February contract, which expires Tuesday, rose $1.11 to settle at $36.51 a barrel in very light trading.

Johnson Controls posts 1Q loss

NEW YORK (AP) -- Johnson Controls Inc., which makes building and automotive systems, said Friday it lost $608 million in its fiscal first quarter and warned that it expects a loss for this quarter, blaming the continued downturn in automotive and construction markets that spread from the U.S. to other key markets around the world.

The Milwaukee-based company said its loss amounted to $1.02 per share. That contrasts with a profit of $235 million, or 39 cents per share, in the prior-year quarter.

Senate Republicans block delay in TV transition

WASHINGTON (AP) -- Senate Republicans on Friday blocked a bill that would have delayed next month's nationwide shutdown of analog TV signals until June 12, but Democrats vowed to bring the measure back for a vote next week.

The bill was defeated even after President-elect Barack Obama on Friday urged lawmakers to postpone the Feb. 17 transition amid mounting concerns that too many Americans who rely on analog TV sets to pick up broadcast channels won't be ready. Obama called for a delay largely because the federal program that subsidizes converter boxes for those viewers hit a $1.34 billion funding limit this month.

By The Associated Press

The Dow Jones industrial average rose 68.73, or 0.84 percent, to 8,281.22.

The Standard & Poor's 500 index rose 6.38, or 0.76 percent, to 850.12, while the Nasdaq composite index rose 17.49, or 1.16 percent, to 1,529.33.

Light, sweet crude for March delivery fell 97 cents Friday to settle at $42.57 on the New York Mercantile Exchange.

In other Nymex futures trading, gasoline slipped by less than a penny to settle at $1.1672 and heating oil fell 1.3 cents to settle at $1.4734 a gallon. Natural gas for February delivery fell 4.2 cents to settle $4.80 per 1,000 cubic feet.

Brent crude for March delivery rose $1.88 to settle at $46.57.