NEW YORK — Rupert Murdoch appeared to be on the verge of clinching a deal to buy Dow Jones & Co., reportedly lining up sufficient support Tuesday to take over stewardship of The Wall Street Journal publisher from the family that has controlled it for more than a century.

The Journal reported on its Web site Tuesday that a key Bancroft family trust had reversed itself and decided to support the deal, likely meaning that votes representing about 38 percent of Dow Jones' shareholder vote were now in favor of selling to Murdoch.

Combined with the 29 percent of Dow Jones shares that are publicly held and very likely to support Murdoch, the $5 billion deal appeared to have critical mass.

———

AMERICAN HOME MORTGAGE SEES SHARES PLUNGE

NEW YORK — Shares of American Home Mortgage Investment Corp. plunged 90 percent Tuesday after the company raised fears it may become insolvent, renewing concern about worsening credit quality in the mortgage market and killing a Wall Street rally.

The struggling mortgage lender said its financial backers have essentially pulled the plug. The Wall Street banks that lend American Home Mortgage money for home loans — which include firms like UBS AG, Bear Stearns Cos., and JPMorgan Chase & Co. — will not extend the company any more money, and some have demanded back the money they have lent.

The Dow Jones industrial average, which had been up more than 120 points earlier in the day, closed down about 147 points after the news from American Home reminded investors of the tenuous state of the credit markets of late.

Keefe, Bruyette & Woods analyst Bose George said American Home Mortgage will probably go bankrupt, or at least be restructured into something leaving very little value for shareholders.

———

EARNINGS ABROAD BOOST GM PROFIT

DETROIT — General Motors Corp. ran its string of profitable quarters to three on Tuesday when it announced second-quarter net income of $891 million that came largely from overseas operations.

The earnings growth in Europe, Latin America, Asia and other areas eclipsed lingering problems in North America. Although GM showed vast improvement in its backyard, it still posted a net loss of $39 million there.

Nonetheless, quarterly profits announced by GM and Ford raised hopes that at least two of the Detroit Three were headed in the right direction after billion-dollar losses and talk of possible bankruptcies.

Ford Motor Co. last week posted its first quarterly profit in two years at $750 million, although the company warned it had not turned the corner to consistent profitability. Chrysler Group's second-quarter earnings results have been delayed until August by the pending sale of 80.1 percent of the company to Cerberus Capital Management LP.

———

JOHNSON & JOHNSON TO CUT 4,820 JOBS

TRENTON, N.J. — Johnson & Johnson said Tuesday it would reduce its global workforce by up to 4 percent, or up to 4,820 jobs, to cut costs due to a slump in sales of its heart stents and its No. 2 drug, plus coming patent expirations for key drugs.

The healthcare giant, which employs about 120,500 people in 57 countries, said the restructuring — its largest ever — would bring pretax charges of $550 million to $750 million later this year, as well as other, unspecified steps besides job cuts.

Excluding the charges, the New Brunswick, N.J.-based maker of contraceptives, contact lenses, prescription drugs and baby products still expects to meet its 2007 profit targets. The company said the moves should generate pretax, annual cost savings of $1.3 billion to $1.6 billion next year and similar amounts after that.

Johnson & Johnson shares rose 43 cents to $60.50 in regular trading, then rose 53 cents in after-hours trading.

———

NORTHWEST RELEASES 2ND-QUARTER NUMBERS

MINNEAPOLIS — Northwest Airlines Corp., which emerged from bankruptcy protection on May 31, said on Tuesday that it earned $273 million during its second quarter before accounting boosts related to its reorganization.

Northwest shares fell 52 cents, or nearly 3 percent, to $17.43 Tuesday. They have generally been drifting lower since peaking at $26.50 in June after Northwest emerged from bankruptcy.

Including reorganization items Northwest earned $2.15 billion, or $8.20 per share, during the quarter that ended June 30. Northwest's finances benefited from $1.94 billion in reorganization items during the quarter, which included two months operating under bankruptcy protection and one month after it emerged.

Revenue for the quarter declined 3 percent, to $3.18 billion, from $3.29 billion a year ago.

———

OIL FUTURES END ABOVE $78 A BARREL

NEW YORK — Oil futures settled at a record high above $78 Tuesday on expectations that crude inventories fell last week and reports of new violence in Nigeria, a large oil producer and key supplier to the U.S.

Investors believe Wednesday's inventory report by the Energy Department's Energy Information Administration will show that refiners drew down oil inventories as they continued to increase gasoline production last week, analysts said.

News that a Nigerian construction worker was kidnapped Tuesday added to the bullish tone of a market that seemed determined to test last year's record highs, analysts said.

Light, sweet crude for September delivery gained $1.38 to settle at $78.21 a barrel on the New York Mercantile Exchange. That puts futures within striking distance of the intraday record, and beat the settlement price record of $77.03 set the same day.

———

CONSUMER SPENDING UP 0.1% IN JUNE

WASHINGTON — Shoppers took a break in June, boosting their spending at the slowest pace in nine months as high gasoline prices and fallout from the housing slump made people think twice about buying.

The Commerce Department reported Tuesday that consumer spending edged up by just 0.1 percent. That marked a pullback from May's brisk 0.6 percent rise and was the smallest increase since last September. Incomes, the fuel for future spending, rose 0.4 percent for a second month in a row.

However, a more forward-looking report suggested that consumers were in a much better frame of mind in July. Their confidence shot up to a six-year high.

The Conference Board said that its Consumer Confidence Index, jumped to 112.6 in July from a reading of 105.3 in June. The fresh survey of consumer attitudes, though, was taken before last week's stock market meltdown.

———

MARATHON OIL TO BUY WESTERN OIL SANDS

HOUSTON — Marathon Oil Corp. is poised to break into Canada's growing oil-sands market, announcing Tuesday it has agreed to buy Western Oil Sands Inc. for $5.5 billion in cash and stock.

Marathon also said its second-quarter earnings fell 11 percent from a year ago, when it benefited from a one-time gain. Its share price fell.

Shareholders of Western Oil, based in Calgary, Alberta, will get $3.6 billion in cash and $1.9 billion in Marathon stock. Marathon also will assume $650 million in Western Oil debt, valuing the total deal at roughly $6.2 billion.