BUSINESS BRIEFS
American Express gets Fed OK to be bank holding firm
Associated Press
WASHINGTON — The Federal Reserve yesterday granted a request by American Express Co. to become a bank holding company, opening the door for the credit card giant to accept deposits and permanently access financing from the Fed.
The Fed said it had approved the application for American Express and a related company, American Express Travel Related Services Co. Inc., to become bank holding companies.
The approval represented the latest reshaping of the financial services industry, which is undergoing its worst credit crisis in decades.
In announcing the action, the Fed cited "emergency conditions."
The Fed's approval for American Express was similar to the decision it made in September to transform the country's two biggest investment banks, Goldman Sachs Group Inc. and Morgan Stanley, into bank holding companies.
FANNIE MAE POSTS $29 BILLION LOSS
WASHINGTON — Fannie Mae yesterday posted a $29 billion loss in the third quarter as it took a massive tax-related charge, and said it may have to tap the government's $100 billion lifeline in the coming months.
The mortgage finance company, seized by federal regulators more than two months ago, posted a loss of $13 per share for the July-September quarter, mainly due to a $21.4 billion non-cash charge to reduce the value of tax assets.
That compares with a loss of $1.4 billion, or $1.56 a share, in the year-ago period.
STARBUCKS REPORTS LOWER SALES, PROFIT
NEW YORK — Fewer U.S. customers and high costs for closing poorly performing stores led to lower sales and profit in the fourth quarter at Starbucks Corp., the company said yesterday.
Seattle-based Starbucks said profit fell 97 percent to $5.4 million, or a penny a share, from $158.5 million, or 21 cents per share, a year earlier. The coffee retailer earned 10 cents per share when the costs from closing about 600 stores in the U.S. and 61 locations in Australia are excluded.
BURGERS, BISCUITS LIFT MCDONALD'S
NEW YORK — Consumers worldwide who are watching their spending bought more burgers and chicken breakfast biscuits at McDonald's in October, leading to a big rise in sales at established locations for the fast-food leader.
McDonald's Corp. said yesterday its global same-store sales jumped 8.2 percent during the month.
That beat the company's own prediction for a rise similar to the one it recorded in its last quarter, when same-store sales, or sales at locations open at least a year, jumped 7.1 percent worldwide.
GM SHARES PLUNGE TO 60-YEAR LOW
DETROIT — Bad news kept piling up for General Motors Corp. yesterday as its shares plunged to their lowest point in 60 years and the company said in a government filing that the mortgage unit of its finance arm may not survive.
GM also said that Delphi Corp., its former parts operation that was spun off as a separate company in 1999, may not be able to emerge from Chapter 11 bankruptcy protection.
GM shares dropped $1, or 23 percent, to close at $3.36.
CORN, SOYBEAN FORECASTS REDUCED
WASHINGTON — The Agriculture Department yesterday lowered its forecasts for this year's U.S. corn and soybean harvests, pushing up the prices of both commodities while knocking down the shares of meat producers.
Chicken, pork and beef companies such as Smithfield Foods Inc., Tyson Foods Inc. and Hormel Foods Corp. use corn and soybeans for livestock feed. Tyson said yesterday its chicken unit lost $91 million in its most recent quarter due to a $230 million increase in grain costs.
