BUSINESS BRIEFS
Credit crunch wallops home sales and prices
Associated Press
WASHINGTON — Hit by a severe credit crunch, existing home sales fell for the eighth straight month with median home prices dropping by a record amount.
The National Association of Realtors reported yesterday that sales of existing homes dropped by 1.2 percent last month to a seasonally adjusted annual rate of 4.97 million units. That represented the slowest sales pace on record going back to 1999 and was 20.7 percent below activity a year ago.
FORD EXPLORER LAWSUITS SETTLED
SACRAMENTO, Calif. — Ford Motor Co. yesterday agreed to settle class-action lawsuits covering plaintiffs in four states who claimed its Explorer sport utility vehicles were prone to rollovers, the company and an attorney for the plaintiffs said.
The settlement applies to about 1 million people in California, Connecticut, Illinois and Texas, said Kevin P. Roddy, a New Jersey attorney and co-counsel for the SUV owners who brought the lawsuit.
The settlement will allow vehicle owners to apply for $500 vouchers to buy new Explorers or $300 vouchers to buy other Ford or Lincoln Mercury products, Roddy told the Associated Press.
SPENDING SLOWS, AS DOES ECONOMY
WASHINGTON — The economy grew at a slower pace in the late fall as shoppers watched their pennies heading into the busy holiday season.
The Federal Reserve's new snapshot, released yesterday, suggested the strains from a severe housing slump and a painful credit crunch are affecting the behavior of individuals and businesses alike — making them somewhat more cautious.
Yet, the hope that the Federal Reserve will cut a key interest rate for a third time this year to energize the economy sent stocks soaring on Wall Street.
BEAR STEARNS CUTS STAFF FOR 3RD TIME
NEW YORK — Battered by the subprime mortgage crisis, Bear Stearns Cos. yesterday cut 4 percent of its staff in a move that could herald a push by investment banks to cull their ranks before bonuses are paid.
The nation's fifth-biggest investment bank will cut 650 jobs from its staff of about 15,500. This marks the third wave of layoffs to sweep through Bear Stearns, which as of last month eliminated about 900 positions.
Bear Stearns has been among the hardest hit as investment banks reel from deterioration in the subprime mortgage and leveraged loan markets.
PLAN WOULD OK TRIBUNE CO. SALE
WASHINGTON — The proposed $8.2 billion buyout of the Tribune Co. could be approved as soon as tomorrow under a plan put forth by the head of the Federal Communications Commission.
FCC Chairman Kevin Martin said he has circulated a plan to the other four members of the commission that would grant Tribune Co. waivers that would allow the firm to own a newspaper and a broadcast station in the same market until the commission votes on a permanent rule on such combinations.
Tribune Co., owner of the Los Angeles Times, the Chicago Tribune, nine other dailies and 23 TV stations, is the subject of a buyout led by real estate investor Sam Zell that would take the company private.
AMERICAN AIR SELLING SUBSIDIARY
DALLAS — The parent of American Airlines said it plans to sell or spin off its American Eagle regional carrier next year. Its shares rose 6.9 percent.
Investors have been pressing AMR Corp. to sell the regional airline and other assets, moves they say could raise money and lift AMR's stock price. American is the nation's biggest airline. The industry has been under pressure from record fuel prices. But AMR has posted six straight profitable quarters as planes were more full and passengers paid higher fares.
