BUSINESS BRIEFS
Fears of reduced demand force down price of oil
Associated Press
NEW YORK — Oil prices plunged yesterday, picking up downward momentum amid concerns that a slowing economy might reduce demand for crude just as OPEC members are considering an increase in production. Prices were also pressured by apparent progress at the Middle East peace summit in Annapolis, Md.
Light, sweet crude for January delivery dropped $3.28 to settle at $94.42 a barrel on the New York Mercantile Exchange. The contract is nearly $5 below the record of $99.29 set last week.
LOAN LOSSES COST WELLS FARGO $1.4B
NEW YORK — Wells Fargo & Co. will take a $1.4 billion provision in the fourth quarter for loan losses, the bank said.
In a filing with the Securities and Exchange Commission, the San Francisco-based bank said it will create an $11.9 billion portfolio of the company's riskiest mortgages, which it plans to liquidate. The portfolio consists of three types of home-equity loans, or additional money lent to homeowners who already have mortgages.
The portfolio represents about 3 percent of Wells Fargo's loan balance, and the bank said the debt poses the biggest risk to its balance sheet.
FREDDIE MAC CUTS DIVIDEND BY 50%
WASHINGTON — Freddie Mac halved its dividend and unveiled plans to sell $6 billion of preferred stock to bolster the mortgage investor's finances in anticipation of more losses, the company said yesterday.
Freddie Mac, chartered by Congress to buy home loans from mortgage lenders, is the nation's No. 2 buyer and guarantor of home loans.
It will sell $6 billion of a special class of stock. The money raised through this sale will be used to buttress the company's balance sheet "in light of actual and anticipated losses," Freddie said in a statement.
LENDERS OFFERING FORECLOSURE HELP
DETROIT — A mortgage industry group agreed yesterday to help the nation's mayors raise public awareness about ways to avoid falling into foreclosure as part of an effort to address the nation's housing crisis.
The deal was announced following a meeting in Detroit organized by the U.S. Conference of Mayors and attended by mayors from across the country.
The Mortgage Bankers Association also plans to help cities get access to information on homes in foreclosure to ensure those properties don't blight neighborhoods.
STAPLES STOCK RISES AFTER REPORT
BOSTON — Staples Inc.'s third-quarter profit dipped 5 percent as consumers spent less on office supplies, but sales of highly profitable items such as ink cartridges grew, and Staples' performance beat Wall Street expectations.
Investors sent shares of the world's largest office products supplier up nearly 11 percent, a week after rival Office Depot Inc. saw its shares drop 6 percent when its third-quarter numbers fell. Office Depot's recent problems helped trigger a 16 percent decline in Staples' shares, and Staples' stronger results yesterday topped investors' low expectations, analysts said.
ARBITRON SHARES TAKE A TUMBLE
NEW YORK — Shares of Arbitron Inc. tumbled yesterday after the radio ratings company said it would delay the rollout of a new electronic audience measurement system. Arbitron said its earnings this year and next would be lower than previously expected because of the delays.
