BUSINESS BRIEFS
Wholesale prices plunge in August
Associated Press
WASHINGTON — The Labor Department reported yesterday that wholesale prices declined 0.9 percent in August, nearly double the 0.5 percent drop that economists had expected, as the price of all types of energy from gasoline to natural gas fell sharply. It was the largest drop in wholesale prices in nearly two years.
Economists had expected that lower prices for gas might entice shoppers to spend more.
But the Commerce Department reported that retail sales dipped 0.3 percent in August. The August slump followed an even bigger 0.5 percent decline in July, the weakest performance in five months and much worse than the 0.1 percent decline originally reported.
IKE DRIVES UP GAS PRICES; CRUDE DIPS
NEW YORK — Gasoline prices jumped at the wholesale level yesterday as Hurricane Ike swept through Gulf of Mexico, prompting companies along the Texas coast to shut down refining and drilling operations.
Crude oil on the futures market, however, briefly sank below the psychologically important $100-a-barrel mark for the first time since April 2 — showing that investors believe a worsening global economy will continue to drive down demand for some time.
The fact that U.S. fuel demand is so weak right now might mean the recent surge in the wholesale price of gasoline — which rose to about $4.85 a gallon in the Gulf Coast market yesterday — might not be passed along to consumers unless Ike's impact is severe and long-lasting.
FIDELITY TO BUY BACK SECURITIES
ALBANY, N.Y. — Fidelity Investments said yesterday it will buy back $300 million worth of auction-rate securities from its customers, becoming the first major retail brokerage to make restitution in a wide-ranging investigation.
Fidelity is the first so-called "downstream" distributor — rather than an underwriter — to settle an auction-rate securities probe, even though Fidelity didn't conduct auctions, New York Attorney General Andrew Cuomo said.
CHRYSLER TO OFFER MORE BUYOUTS
WARREN, Mich. — Chrysler LLC said yesterday it will make another round of early retirement and buyout offers to factory workers in the Detroit area to reduce the number who are on indefinite layoff due to slumping sales.
Employees will learn about the offers this month, company officials said during an event at a Warren factory where the automaker celebrated the launch of the new Dodge Ram pickup.
It wasn't immediately known how many workers will be eligible. Chrysler has about 45,000 hourly workers worldwide.
ALASKA AIR TO SLASH 1,000 JOBS
NEW YORK — Alaska Airlines said yesterday it will cut capacity by 8 percent this winter and slash up to 1,000 jobs, as high fuel costs and a weak economy provide a "one-two punch" to the carrier's bottom line.
The job cuts represent about 9 percent to 10 percent of the airline's 10,000 employees. The 850 to 1,000 positions on the chopping block include pilots, flight attendants, aircraft technicians, and reservations, customer service and ramp agents.
The carrier, a unit of Seattle-based Alaska Air Group Inc., says the capacity reductions will start on Nov. 9 and continue throughout next year.
DELPHI, GM REACH NEW DEAL
NEW YORK — Delphi Corp. and General Motors Corp. said yesterday they have reached a new deal on the automaker's role in Delphi's bankruptcy exit, including the transfer of employee pensions.
Under the new deal, GM's financial support of Delphi's emergence from court protection has grown to $10.6 billion, up from $6 billion in an earlier plan. The automaker will now take on $3.4 billion in pension obligations for hourly workers, instead of the $1.5 billion that was predicted earlier.
