The Wall Street Journal-20080206-Business and Finance
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Business and Finance
Full Text (427 words)Service-sector activity in January fell to its lowest level since 2001, suggesting businesses from hotels and retailers to banks are now contracting. In Europe, a similar indicator fell to a four-year low. The data reinforced expectations that the Fed will again cut interest rates amid concerns about a recession.
The Dow industrials tumbled 370.03 points, or 2.9%, to 12265.13 as recession fears left all sectors lower. It was the worst one-day percentage loss since Feb. 27, 2007.
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Many corporate loans are reeling in secondary market trading, making it hard for banks to unload other commitments they have made.
High-yield, or "junk," bonds will default at a rate of 4.64% this year, the highest rate since 2003, a report says.
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France's Credit Agricole unit is leading an effort by several banks to bail out bond insurer Financial Guaranty.
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Yahoo is holding out hope it can avoid Microsoft's bid by way of a possible rival suitor or a tie-up with Google that might allow it to stay independent.
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Google is nearing a joint venture with a Chinese online music company that would permit it to provide free, licensed music downloads.
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GMAC posted a $724 million loss but said it expects a profit in 2008. Moody's downgraded GMAC and its ResCap mortgage business.
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BHP sweetened its unsolicited bid for rival mining giant Rio Tinto. The new offer is valued at $147.4 billion.
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Disney's net fell 27% on year-earlier gains. The company reported strength in ad sales and at theme parks.
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BP's profit jumped 53% to $4.4 billion. The company said it will cut 5,000 jobs and raise its dividend by 25%.
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Toyota's net rose 7.5% on strong sales in emerging markets. The sales forecast for North America was cut.
Chrysler and supplier Plastech reached an interim pact that allows the auto maker to resume production at plants it idled after a dispute.
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NYSE Euronext said it will take nine months longer than forecast to achieve $250 million in technology-related savings. Shares dropped 14%.
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The Justice Department called for a shake-up of financial-futures exchanges, saying current policies may have inhibited competition.
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Japan Tobacco canceled plans to integrate its frozen-food operations with another Japanese company after a food-poisoning outbreak.
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Lenders are finding that many more people bought homes as investments than previously believed. Loans backing the purchases also turned out to be riskier.
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The SEC settled with a former Dow Jones director and two others, who agreed to pay a total of $24 million to resolve insider-trading charges.
