BUSINESS BRIEFS
Circuit City sales fell 11.4% in Dec.
Associated Press
RICHMOND, Va. — Electronics retailer Circuit City Stores Inc. yesterday said same-store sales fell 11.4 percent in December, as strength in the last two weeks of the month was not enough to offset declining sales of tube televisions, camcorders and other devices earlier in December.
Based on its sales results, the company continued to back its forecast of a "modest loss" before taxes for the fourth quarter, despite America's traditional holiday hunger for televisions and other high-tech gadgets.
"Our sales performance, while disappointing, was in line with our expectations," Chief Executive Philip J. Schoonover said in a news release.
Last month, Circuit City reported a bigger-than-expected loss for the third quarter, driven by lower extended warranty sales and restructuring costs.
PAULSON: NO EASY ANSWER TO CRISIS
WASHINGTON — The Bush administration is working to combat the country's housing crisis but there is no simple solution, Treasury Secretary Henry Paulson said yesterday, adding that a correction in the housing market is "inevitable and necessary."
Paulson said the country was facing an unprecedented wave of 1.8 million subprime mortgages that are scheduled to reset to sharply higher rates over the next two years.
He said this raised the threat of a market failure and was the reason the administration brokered a deal with the mortgage industry to freeze certain subprime mortgage rates for five years to allow the housing market to recover.
OIL FUTURES FALL ON ECONOMIC WORRIES
NEW YORK — Oil futures fell sharply yesterday, extending their retreat from $100 as investors sold on concerns that a cooling economy will curb demand for oil and gasoline.
Comments by Treasury Secretary Henry Paulson suggesting there is no simple fix for the nation's housing crisis added to worries about the economy raised by last Friday's Labor Department jobs report; the government's data showed that employers added far fewer jobs last month than expected.
Light, sweet crude for February delivery dropped $2.82 to settle at $95.09 a barrel on the New York Mercantile Exchange. It was the third day in a row oil prices have declined.
SALLIE MAE NAMES NEW CHAIRMAN
WASHINGTON — Battered in recent months because of a failed buyout and higher borrowing costs, shares of Sallie Mae jumped yesterday after the company named a banking industry turnaround specialist as its new chairman. Analysts are not convinced, however, that new blood on its board is enough to resuscitate the nation's largest student lender.
Sallie Mae's new chairman is Anthony P. Terracciano, who has been known as "Tony the Tiger" for his experience advising troubled banks and working on sales of some of them. The 68-year-old has held executive positions at First Union Corp., First Fidelity Bank Corp., Mellon Bank, Chase Manhattan Bank, The Dime Bank and Riggs National Corp.
INSURANCE FRAUD TRIAL UNDER WAY
HARTFORD, Conn. — The former chairman and CEO of the world's largest insurer initiated a deal that led to five ex-executives being charged with participating in a scheme to manipulate the company's financial statements, a federal prosecutor said yesterday during opening arguments at their trial.
Four former executives of Berkshire Hathaway's General Re Corp. and a former executive of American International Group Inc. are charged in the scheme involving AIG's financial statements.
Prosecutor Raymond Patricco said former AIG CEO Maurice "Hank" Greenberg, who has not been charged in the case, started the deal in 2000, after AIG's stock price dropped 6 percent, representing a loss of $12 billion to shareholders. The price dropped because loss reserves had declined.
