Concerns about the health of American International Group Inc. were renewed Thursday, a day after the insurance giant said it would receive an additional $37.8 billion loan from the Federal Reserve. “The bottom line is, they need more liquidity than they thought,” said Mark Lane of William Blair &Co. The new loan is on top of a two-year, $85 billion loan AIG received last month from the Fed. AIG shares fell 73 cents, or 23 percent, to $2.46 in late afternoon trading. AIG is apparently facing a liquidity crunch greater than was anticipated a month ago.
Technology sector slumps sharply
Even after IBM Corp. surprised Wall Street with a healthy profit in the third quarter and a reaffirmation of its earnings outlook for the rest of the year, the broader technology sector dived again Thursday. There’s just not enough of what lifted IBM to go around. Tech stocks were pummeled Thursday, and IBM ended the day down as well. Analysts expressed fears that Armonk, N.Y.-based IBM could see trouble in the fourth quarter and into 2009 if the lending and spending climate worsens as expected.
Apple raises buzz about notebooks
Apple Inc. has invited the media and industry analysts to an event at its Cupertino, Calif., headquarters next Tuesday to talk about notebook computers. Apple’s MacBook line of laptops is long overdue to be refreshed, analysts have said. The question is price. The timing would be right for a new line of notebooks starting at $800, says VentureBeat.
Citigroup may sue over Wachovia bid
Citigroup has ended negotiations with Wells Fargo in their fight to acquire Wachovia, saying it believes it has strong legal claims against Wachovia and Wells Fargo for breach of contract and plans to pursue its claims vigorously. Citigroup agreed last week to buy Wachovia’s banking operations for $2.1 billion in a deal orchestrated by the government. Four days later, Wells Fargo stunned Citigroup by announcing that Wachovia’s board had agreed to an $11.7 billion offer.
Jobless numbers drop last week
New applications for unemployment benefits dropped last week from a seven-year high, the Labor Department said Thursday, though they remain at elevated levels that indicate recession. Initial claims for jobless benefits dropped 20,000 to a seasonally adjusted 478,000, the department said, the same level Wall Street economists expected. The department said hurricanes were responsible for 20,000 more claims.
Crude oil prices fall below $85
Oil prices closed at their lowest level in a year Thursday, falling below $85 a barrel even after OPEC signaled it may try to slow crude’s downward spiral by cutting production. At the pump, retail gas prices kept falling, with a gallon of regular shedding 4.4 cents overnight to a new national average of $3.403, according to auto club AAA, the Oil Price Information Service and Wright Express. Light, sweet crude for November delivery fell $1.81 to settle at $86.62 a barrel.
From Herald news services