AP
Business Highlights
Friday February 13, 6:11 pm ET

Dems muscle stimulus through House; Senate next

WASHINGTON (AP) -- Democrats pushed a huge, $787 billion stimulus bill through the House and toward final approval on Friday, launching a costly attack on the worst economic crisis since the Great Depression and handing President Barack Obama a major victory early in his term.

The House vote was 246-183, with Republicans unanimous in opposition to the bill, which includes tax cuts and an estimated $500 billion in federal spending. Senate leaders set a confirming vote for several hours later, and in a show of urgency, the White House dispatched a government plane to Ohio to fly back a senator who was home for his mother's Saturday morning funeral.

Supporters said the bill would save or create 3.5 million jobs.

Obama to outline plan to stem home foreclosures

WASHINGTON (AP) -- The biggest players in the mortgage industry are halting home foreclosures while the Obama administration develops its plan to help struggling homeowners.

The White House said President Barack Obama on Wednesday will outline his much-anticipated plan to spend at least $50 billion to prevent foreclosures in a speech in Arizona, one of the states hardest hit by the foreclosure crisis.

Though lenders have beefed up their efforts to aid borrowers over the past year, their action hasn't kept up with the worst housing recession in decades.

Government-controlled mortgage finance companies Fannie Mae and Freddie Mac, and major banks JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. said Friday they are halting foreclosures through March 6.

New York-based Citigroup Inc. said its halt will extend until the administration has completed the details of the loan modification program or March 12, whichever is earlier.

Stocks fall as investors can't shake economic woes

NEW YORK (AP) -- Investors sent Washington a message this week: They won't commit to stocks until the government commits to a plan.

Stocks ended lower Friday, pushing the Dow Jones industrial average to its lowest close since last November and leaving it with a weekly decline of 5.2 percent.

The gears are moving in Washington. On Friday, the White House said President Obama will outline steps to stem home foreclosures next Wednesday, and the House passed a $787 billion economic stimulus bill.

Wall Street is focused, though, on lingering uncertainties. The stimulus package -- too big for some, too small for others -- is far from proving itself effective in reviving the economy. Investors also hesitated to get too excited about the upcoming announcement on preventing home foreclosures, after their hopes got dashed earlier in the week.

Fourth down: A brutal end to '08 for S&P companies

NEW YORK (AP) -- The companies that make up the Standard & Poor's 500 are on track to post a collective quarterly loss for the first time -- a sign corporate America was battered even harder than expected by the economy.

The dismal earnings reports already handed in by three-quarters of the S&P companies are compelling Wall Street analysts to tone down expectations for this year and push back predictions for when the economy will recover.

The deepest wounds are showing up on banks, weighed down by the bad debt on their books. But the pain hardly stops there. Among major industries, only consumer staples, utilities and health care have been able to maintain or add to profits.

Peanut Corp. of America files for bankruptcy

ATLANTA (AP) -- The peanut processing company at the heart of a national salmonella outbreak is going out of business.

The Lynchburg, Va.-based Peanut Corp. of America filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Virginia Friday, the latest bad news for the company that has been accused of producing tainted peanut products that may have been sent to everyone from poor school children to disaster victims.

The outbreak was traced to the company's plant in Blakely, Ga., where inspectors found roaches, mold and a leaking roof. A second plant in Plainview, Texas was shuttered this week after preliminary tests came back positive for possible salmonella contamination. So far, the outbreak has been suspected of sickening more than 630 people and may have caused nine deaths. It also has led to more than 2,000 product recalls, one of the largest in U.S. history.

Auto suppliers seeking federal aid

WASHINGTON (AP) -- Auto suppliers asked the Obama administration Friday for up to $25.5 billion in loans and government guarantees to stabilize the battered U.S. auto industry.

Two trade groups, the Original Equipment Suppliers Association and the Motor & Equipment Manufacturers Association, made the request to the Treasury Department. The aid would prevent a shortage of parts for key vehicle models and follow massive loans to U.S. automakers.

General Motors Corp. has received $9.4 billion in federal loans and is expected to receive another $4 billion, while Chrysler LLC has received $4 billion in loans and is hoping to access another $3 billion.

The two companies must submit plans to Treasury next week showing how they will restructure their companies to become viable in the future.

Geithner joins G-7 meeting as Europe economy tanks

ROME (AP) -- The job of the Group of Seven finance ministers meeting on solutions to the financial crisis looked even more difficult on Friday as new economic data showed Europe's recession deepening.

The meeting, which began with dinner Friday and was continuing with a daylong session on Saturday, marks Geithner's international debut.

Officials from the leading industrial nations will discuss new financial markets rules, concerns about protectionist measures in stimulus plans, and the effect of the crisis on poorer countries. But a major breakthrough would be a surprise, with the meeting coming ahead of a broader, 20-country summit in April.

Euro zone economy shrank by 1.5 pct in Q4

LONDON (AP) -- The economy in the countries using the euro contracted by a record 1.5 percent in the last three months of 2008, dropping even more sharply than in the U.S as collapsing world trade hit the region's export-rich economies, figures showed Friday.

The drop in output for the fourth quarter compared to the third was the biggest since the euro was created in 1999 and the third quarterly fall in a row.

The drop in 15 of the 16 euro countries -- Slovakia only joined Jan. 1 and wasn't counted in euro zone figures -- means the euro zone's economy contracted even more than the U.S.'s equivalent 1.0 percent, according to Eurostat, even though Europe's banking system is not considered to be as exposed to toxic subprime loans.

Oil breaks out of weeklong price slide

COLUMBUS, Ohio (AP) -- Oil broke out of a weeklong slump Friday, soaring 10 percent, as traders prepared for a long Presidents Day weekend.

Light, sweet crude for March delivery rose $3.53 to settle at $37.51 a barrel on the New York Mercantile Exchange. Prices rose as high as $38.25 in afternoon trading.

Traders had been selling the March contract all week and buying the April, May, June and July contracts, but that changed Friday.

After opening above $42 a barrel Monday, crude prices have tumbled every day as traders showed little optimism that a $790 billion stimulus package and the Treasury Department's plan to spend more than $1 trillion to help remove banks' soured assets from their books would perk up the economy -- and oil consumption -- anytime soon.

Sirius could file bankruptcy as early as Tuesday

Financially strapped Sirius XM Radio Inc. said Friday that it could file for bankruptcy as early as Tuesday if it cannot successfully negotiate with the holders of its debt.

The satellite radio company said it has exchanged $172.5 million of debt maturing in December for new debt due in 2011. But the company still has about $175 million coming due this Sunday.

Sirius is fighting against attempts for control by Charlie Ergen, the chief executive of Dish Network Corp. and sister company EchoStar Corp. Ergen bought much of a $300 million batch of discounted Sirius bonds that come due next week. Sirius had rejected a previous offer by Ergen for control of the company.

By The Associated Press

The Dow Jones industrials fell 82.35, or 1.04 percent, to 7,850.41. It was the lowest close since Nov. 20, when the blue-chip index settled at a five-and-a-half month low of 7,552.29.

Broader stock indicators also fell. The Standard & Poor's 500 index lost 8.35, or 1.00 percent, to 826.84, and the Nasdaq composite index decreased 7.35, or 0.48 percent, to 1,534.36. The S&P 500 ended the week down 4.8 percent, and the Nasdaq finished the week down 3.6 percent.

Light, sweet crude for March delivery rose $3.53 to settle at $37.51 a barrel on the New York Mercantile Exchange. Prices rose as high as $38.25 in afternoon trading.

In other Nymex trading, gasoline futures fell 5.2 cents to settle at $1.2063 a gallon. Heating oil fell 2.18 cents to settle at $1.30 a gallon, while natural gas for March delivery fell 3.3 cents to settle at $4.452 per 1,000 cubic feet.

In London, the March Brent contract rose 16 cents to settle at $44.81 on the ICE Futures exchange.