AP
Business
Highlights
Monday
January 26, 6:10 pm ET
Pfizer to buy Wyeth for $68B; cut 8,000
jobs
TRENTON, N.J. (AP) -- No. 1 drugmaker
Pfizer Inc. said Monday it is buying No. 12 Wyeth for $68 billion in a deal
that will quickly boost Pfizer's revenue and profit and transform it overnight
into a more diversified company less reliant on its dwindling drug pipeline.
New York-based Pfizer managed with one stroke to overshadow a
full house of issues: a 90 percent drop in income, a hefty charge to end an
investigation, a severe cut in its dividend, a shockingly low profit forecast
for 2009 and 8,000 job cuts starting immediately.
That's all on top of the colossal problem triggering this deal:
the expected loss of $13 billion a year in revenue for cholesterol fighter Lipitor starting in November 2011, when it gets generic
competition.
Pfizer also plans to cut about 8,000 jobs, 10 percent of its
workforce, as part of what it expects will be a staff reduction totaling 15
percent of the combined companies' workers -- implying a total job loss of
almost 20,000.
Obama targets greenhouse gases, fuel efficiency
WASHINGTON (AP) -- President Barack Obama took aim Monday at the
lofty but long elusive goal of making the nation more energy independent,
ordering reviews that could lead to tougher auto emission standards in states
and higher pressure on automakers to produce more fuel-efficient cars.
Attacking a Bush administration policy, Obama directed the
Environmental Protection Agency to re-examine whether
Obama also directed his administration to get moving on new
fuel-efficiency guidelines for the auto industry in time to cover 2011
model-year cars.
Job-killing recession racks up more layoff victims
WASHINGTON (AP) -- The recession is killing jobs at an alarming
pace, with tens of thousands of new layoffs announced Monday by some of the
biggest names in American business -- Pfizer, Caterpillar and Home Depot.
More pink slips, pay freezes and other hits are expected to slam
workers in the months ahead as companies desperately look for ways to survive.
Looking ahead, economists predicted a net loss of at least 2
million jobs -- possibly more -- this year even if President Barack Obama's
$825 billion package of increased government spending and tax
cuts is enacted. Last year, the economy lost a net 2.6 million jobs, the
most since 1945, though the labor force has grown significantly since then.
December existing home sales rise unexpectedly
WASHINGTON (AP) -- Sales of existing homes posted an unexpected
increase last month, as consumers snapped up bargain-basement foreclosures in
Analysts, however, cautioned that prices are likely to keep
falling through 2009, and said the outlook for home sales is highly uncertain.
If President Barack Obama's administration enacts a plan to keep
borrowers in their homes, analysts said, the number of foreclosures on the
market could decline.
Sales of existing homes rose 6.5 percent to an annual rate of
4.74 million in December, from a downwardly revised pace of 4.45 million in
November, the National Association of Realtors said Monday. Without adjusting
for seasonal factors, sales nationwide were up 1.1 percent from a year earlier,
reflecting a surge of more than 36 percent in the Western states.
Stocks fluctuate on anxiety over earnings reports
The major indexes changed course several times in Monday's
session, rising in response to Pfizer Inc.'s $68 billion planned acquisition of
Wyeth, a deal that reassured investors that mergers could still take place in a
recession. And the National Association of Realtors said existing homes rose
rather than fell in December, stirring hopes that lower prices and falling
interest rates are starting to erase at a glut of homes with "for
sale" signs.
But news from big companies weighed on the market. Downbeat
comments from Caterpillar Inc. about the health of its business curbed the
advance in the Dow Jones industrials.
Caterpillar fourth-qtr profit falls 32 pct
Caterpillar Inc.'s fourth-quarter profit dropped 32 percent as
the global economic slowdown sapped demand for heavy equipment, forcing the
company to lower its 2009 profit expectations and make further job cuts that
will ultimately wipe out 20,000 positions.
Earnings for the world's largest maker of mining and construction
machinery fell far short of expectations as customers pulled back on purchases
of equipment used to mine quarries and help build homes, highways and offices.
Demand hit a wall in the last month of the year, weighed down by the forces of
recession: slumping commodity prices, tight credit markets and weak home
building.
Caterpillar, an economic bellwether and component of the Dow Jones
industrial average, reported fourth-quarter earnings of $661 million, or $1.08
per share, on Monday, down from $975 million, or $1.50 per share, a year
earlier. Overall sales rose 6 percent to $12.92 billion.
Struggling Sprint Nextel to eliminate 8,000 jobs
KANSAS CITY, Mo. (AP) -- Faced with persistent subscriber losses
and questions about its long-term prospects, Sprint Nextel Corp. is slashing
its already shrinking work force by 8,000 people as it seeks to cut annual
costs by $1.2 billion.
The layoffs, announced Monday, are just the latest attempt by the
nation's third-largest cell phone carrier to right its financial ship in the
face of tough competition and a brutal economy. They come slightly more than a
year after the company cut 4,000 jobs and closed 125 retail centers as Chief
Executive Dan Hesse, then new on the job, aimed to
show he was serious about streamlining operations.
Sprint said it expects the latest round of layoffs, which
represent a 14 percent reduction of its 56,000 employees, will be largely
completed by March 31. The company said it will take a first-quarter charge of
more than $300 million for severance and other costs.
Dow will not buy Rohm & Haas by Tuesday deadline
The news sent shares of Rohm & Haas Co. tumbling 13.2
percent, or $8.72, to end at $57.10. Shares of Dow Chemical Co. fell 7.6
percent, or $1.09, to $13.24.
The Federal Trade Commission signed off on the acquisition last
Friday, creating a Tuesday deadline for Dow to close the deal under its
agreement with Rohm & Haas.
Dow cited the global financial crisis and the
"stunning" decision by a Kuwaiti state-owned petrochemical company to
pull out of a $17.4 billion joint venture with Dow just days before the deal
was to close at 2008's end.
Dow had planned to use billions from that deal to help fund the
Rohm & Haas acquisition.
Philadelphia-based Rohm & Haas filed suit in
Fannie Mae could need $16B from government
WASHINGTON (AP) -- Mortgage finance company Fannie Mae said
Monday that it likely needs up to $16 billion from the government as conditions
in the U.S. housing market continue to deteriorate.
Fannie Mae's disclosure that it expects an injection of $11
billion to $16 billion in taxpayer aid comes after sibling
company Freddie Mac disclosed last week that it's likely to require as
much as $35 billion in federal support on top of the $13.8 billion it received
last year.
Fannie, which has yet to receive any government aid, said in a
Securities and Exchange Commission filing that the actual amount needed
"may differ materially from this estimate" because its fourth-quarter
financial statements are still being prepared.
By The Associated Press
The Dow Jones industrials rose 38.47,or
0.48 percent, to 8,116.03, after briefly moving into negative territory.
The Standard & Poor's 500 index rose 4.62, or 0.56 percent,
to 836.57, and the Nasdaq
composite index rose 12.17, or 0.82 percent, to 1,489.46.
Light, sweet crude for March delivery fell 74 cents to settle at
$45.73 on the
In other Nymex trading, gasoline
futures rose less than a penny to settle at $1.1531 a
gallon. Heating oil fell 2.35 cents to settle at $1.4270 a gallon while natural
gas for February delivery rose 2.8 cents to settle at $4.490 per 1,000 cubic
feet.
In