AP
Business Highlights
Wednesday December 3, 8:00 pm ET

UAW grants concessions, exec warns of depression

DETROIT (AP) -- Worried about their jobs and warned that the cost of failure could be a depression, hundreds of leaders of the United Auto Workers voted overwhelmingly Wednesday to make concessions to Detroit's three struggling automakers, including all but ending a much-derided program that let laid-off workers collect up to 95 percent of their salaries.

Union leaders also agreed to let the cash-starved automakers delay billions of dollars in payments to a union-administered trust set to take over health care for blue-collar retirees starting in 2010. In addition, they decided to let the Detroit leadership begin renegotiating elements of landmark contracts signed with the automakers last year, a move that could lead to wage concessions.

Stocks finish higher despite dismal economic data

NEW YORK (AP) -- Wall Street withstood another stream of bad economic readings Wednesday, closing sharply higher after investors shuttled between pessimism about the recession and hopes that the nation might start seeing relief soon. The major indexes saw big swings throughout the day, but all closed up more than 2 percent, giving the market its second straight advance.

The Dow rose 172.60, or 2.05 percent, to 8,591.69. The blue chip index has gained more than 442 points in the past two session, wiping out more than half of Monday's slide.

Productivity growth better than expected in 3Q

WASHINGTON (AP) -- Worker productivity slowed in the summer while wage pressures increased, but both developments were better than expected and are unlikely to raise inflation alarms at the Federal Reserve.

Meanwhile, the U.S. service sector, which includes hotels, retailers and other industries, shrank more than expected in November, even after a report earlier this week showed the U.S. has been in a recession for a year. The Institute for Supply Management, a trade group of purchasing executives, said Wednesday that readings for new orders, employment and prices all hit the lowest levels on records dating back to 1997.

Fed: Economy darkens heading into holidays

WASHINGTON (AP) -- The country's economic picture has darkened further as Americans hunkered down heading into the holidays, forcing retailers to ring up fewer sales and factories to cut back on production.

The Federal Reserve's new snapshot of business conditions nationwide, released Wednesday, suggested the economy was sinking deeper into recession.

The Fed didn't use the word "recession," but just two days earlier the National Bureau of Economic Research declared what many Americans already knew in their bones: that the country had been suffering through one since last December.

Oil prices waver on skimpy crude inventory report

SIOUX FALLS, S.D. (AP) -- Oil prices wavered near three-year lows as investors weighed falling global demand and a government report showing an unexpected decline in U.S. crude inventories.

Light, sweet crude for January delivery fell 17 cents to settle at $46.79 a barrel on the New York Mercantile Exchange. Crude dipped to $46.26, the lowest level since May 20, 2005, when it traded at $46.20.

There are growing signs that crude, which has fallen $100 per barrel since mid-July, is rattling oil producing nations.

French power company in hunt for Constellation

UNDATED (AP) -- A $4.5 billion bid Wednesday by France's state-controlled power company for reactors in Maryland and New York could lead to the only foreign ownership stake in U.S. nuclear plants.

The late bid for half of Constellation Energy's nuclear business also puts Electricite de France SA in direct competition with an American icon, Warren Buffet.

Buffet's MidAmerican Energy Holdings Co. swept in to acquire Constellation Energy three months ago as the company, with significant nuclear power holdings, struggled to find cash.

Management group wins auction to buy Neuberger

NEW YORK (AP) -- A group of managers and employees has won an auction to buy Lehman Brothers Holdings' prized investment management unit, which includes the Neuberger Berman money management business.

The bid by the Neuberger Berman group beat out two other competing bidders, one of which included private equity firms Bain Capital Partners and Hellman & Friedman.

Lehman filed for bankruptcy protection on Sept. 15.

Obama names Richardson to head Commerce

CHICAGO (AP) -- President-elect Barack Obama selected a prominent Hispanic for his new Cabinet on Wednesday, naming New Mexico Gov. Bill Richardson as his commerce secretary and calling him a leading "economic diplomat for America" in troubled times.

Richardson's nomination brings to three the number of former campaign rivals Obama has welcomed to his team. Joe Biden is the vice president-elect, and Hillary Rodham Clinton will be the next secretary of state, pending confirmation by the Senate.

SEC adopts new rules for credit-rating agencies

WASHINGTON (AP) -- Federal regulators on Wednesday adopted new rules designed to stem conflicts of interest and provide more transparency for Wall Street's credit-rating industry, widely faulted for its role in the subprime mortgage debacle and ensuing credit crisis.

The action by the five-member Securities and Exchange Commission was another government response touching on the global financial crisis set off by mortgage securities. The commissioners voted unanimously at a public meeting to adopt the new rules, most of which will take effect in about 60 days.

Pratt & Whitney lays off 350 employees

Jet engine maker Pratt & Whitney laid off about 350 employees across the country on Wednesday amid concerns that airlines may delay or cancel orders as the global economy slows.

The cuts will affect less than 1 percent of the company's work force of more than 38,000 employees, and will take effect immediately, Jennifer Whitlow, a spokeswoman said.

Pratt & Whitney, a subsidiary of United Technologies Corp., supplies both military and commercial jet engines for products such as Boeing Co.'s 747 and 777, as well as the Airbus A300, among many others. It also builds engines for Lockheed Martin Corp.'s F-22 fighter jet and the F-35 Joint Strike Fighter.

By The Associated Press

The Dow rose 172.60, or 2.05 percent, to 8,591.69.

Broader indexes also closed higher. The Standard & Poor's 500 index rose 21.93, or 2.58 percent, to 870.74, while the Nasdaq composite index rose 42.58, or 2.94 percent, to 1,492.38.

The Russell 2000 index of smaller companies rose 11.94, or 2.70 percent, to 453.76.

Light, sweet crude for January delivery fell 17 cents to settle at $46.79 a barrel on the New York Mercantile Exchange.

In other Nymex trading, gasoline futures fell 1.86 cents to $1.0397 a gallon. Heating oil rose less than a penny to settle at $1.58.40 a gallon while natural gas for January delivery fell 7.7 cents to settle at $6.347 per 1,000 cubic feet.