BUSINESS BRIEFS
Investment bank shares plunge as doubts grow
Associated Press
NEW YORK — Shares of Goldman Sachs and Morgan Stanley plunged yesterday, a sign that investors fear they can't survive in their present form as the last two major independent investment banks.
Executives of both companies insisted a day earlier, when they were reporting profits for the most recent quarter, that they do have the financial wherewithal to go it alone.
But analysts said the question increasingly is whether continued market turmoil could force them to acquire or be acquired by commercial banks, whose deposit-taking operation would provide a stable funding source.
Morgan Stanley and Wachovia Corp. are in talks about a possible combination as the investment bank tries to come up with ways to survive the ongoing credit crisis, according to media reports
WAMU APPEARS HEADED FOR SALE
Ailing bank Washington Mutual Inc. appeared headed toward a sale yesterday after a major investor removed a potential stumbling block and nervous banking regulators began approaching the most logical buyers.
The New York Times, citing unidentified people familiar with the matter, said an auction of the bank was already under way, and The Wall Street Journal reported Wells Fargo & Co. and Citigroup Inc. expressed interest in a takeover.
A concession by investment firm TPG, which injected $7 billion into WaMu five months ago, may have opened the way to a sale — or, failing that, made it easier for the bank to raise another round of capital.
BARCLAYS MAY BUY MORE OF LEHMAN
LONDON — Barclays PLC said it may pick up some of Lehman Brothers assets and employees in Europe and Asia, on top of the British bank's deal to acquire key U.S. operations from the failed investment bank.
Barclays PLC, the third-largest British bank, took advantage of Lehman Brothers' bankruptcy reorganization to reach a deal on Tuesday for Lehman's North American investment banking and trading operations for $1.75 billion.
Barclays agreed to pay $250 million for the Lehman's tra ding operations and $1.5 billion for the company's New York headquarters and two data centers in New Jersey. The deal is subject to court and regulatory approval.
BIGGEST ONE-DAY JUMP FOR GOLD
NEW YORK — Gold prices skyrocketed yesterday — posting the biggest one-day gain ever in dollar terms — as fears of more credit market turmoil unnerved investors and triggered a flood of safe-haven buying.
Gold for December delivery rose as much as $90.40, or 11.6 percent, to $870.90 an ounce in after-hours trading on the New York Mercantile Exchange after jumping $70 to settle at $850.50 in the regular session. That was the biggest one-day price jump ever; gold's previous single-day record was a $64 gain on Jan. 29, 1980. In percentage terms, it was gold's largest one-day advance since 1999.
HOME BUILDING HITS 17-YEAR LOW
WASHINGTON — Construction of new homes and apartments fell to the weakest pace in 17 years in August, but lower mortgage rates and tax credits have given builders some glimmer of hope of a possible rebound.
Housing construction dropped a surprising 6.2 percent last month, the Commerce Department reported yesterday, far larger than the 1.6 percent decline analysts had been expecting.
IT WAS THE SLOWEST BUILDING PACE SINCE JANUARY 1991,
Building activity is on track to slide below the 1 million-mark for the whole year, the first time that has happened in more than six decades.
Supporting the view that construction will fall further, building permits, considered a good indicator of future activity, dropped 8.9 percent in August.
