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thursday nov.20.2008

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INBRIEF Lakeland resident named to board >> LAKELAND — Jason W. Brown of Lakeland was appointed to Cornerstone Hospice Foundation’s board of directors. The nonprofit group’s Polk County operational center is on Havendale Boulevard in Winter Haven. Brown graduated from Florida Southern College with a bachelor’s degree in communications. He is the weekly seminar host and speaker for One Source Financial Inc. on topics centered around Financial Planning. Brown, who is married and has two daughters, is a former candidate for Polk County Commissioner District 1.

Oil falls while U.S. cuts driving >> SIOUX FALLS, S.D. — Oil slipped below $54 a barrel Wednesday as stock markets across the globe fell and yet another U.S. government report illustrated the disarray in the housing market. U.S. motorists, stung by record gasoline prices, job losses and falling home prices, left the roadways in droves, logging almost 11 billion fewer miles in September, according to the Transportation Department. Governments, businesses and consumers have slashed energy expenditures, which has halved the price of crude since record highs in July. Light, sweet crude for December delivery fell 77 cents to settle at $53.62 a barrel on the New York Mercantile Exchange, about where prices were in January of 2007.

Dow falls below 8,000; S&P at 5-year low Economic worries caused across-the-board selling By JOE BEL BRUNO and SARA LEPRO The Associated Press

NEW YORK — Wall Street hit levels not seen since 2003 on Wednesday, with the Dow Jones industrial average plunging below the 8,000 mark as the fate of Detroit’s Big Three automakers amid a slumping economy disheartened investors. A cascade of selling occurred in the final minutes of the session as investors yanked money out of the market. For many, the real fear is that the

recession might be even more protracted if Capitol Hill is unable to bail out the troubled auto industry. Investors also scoured economic data that included minutes from the last meeting of the Federal Reserve in which policymakers lowered projections for economic activity this year and next. Economic worries caused across-the-board selling, with financial stocks particularly hard hit. The S&P 500, widely considered the broadest snapshot of

corporate America, slipped 6.12 percent to 806.58; and the Dow gave up 5.07 percent to 7,997.28. Both closed at their lowest levels since March 2003. The financial crisis has already wiped out $6.69 trillion of value from the S&P 500 since its October 2007 high, and many fear more is to come. Stocks have traded with high volatility in the past few months, with the major indexes soaring only to plunge an hour later as the market looks for a bottom.

The Associated Press

A man checks stock prices online Wednesday at a TD Ameritrade brokerage in New York. Wall Street struggled to find a direction Wednesday, as investors, already nervous about the fate of the nation’s top automakers, scoured more economic data in search of some relief.

Los a ngeles au to show

Consolidation Likely

BASF temporarily closing 80 plants >> FRANKFURT, Germany — Chemical company BASF SE said Wednesday it is temporarily closing 80 plants worldwide due to slumping demand and cutting production at 100 more, including facilities in Texas and Louisiana. Some 20,000 workers are affected. It also abandoned its goal to match last year’s profit, citing slowing demand for its products, particularly from automotive customers. BASF shares plunged 13.7 percent to end at 21.96 euros ($27.67) in Frankfurt. BASF spokesman Gareth Rees said the shutdowns and slowdown have already begun and will extend into January. Workers were being encouraged to take vacation time and reduce their overtime.

Construction sinks to new record low >> WASHINGTON — Construction of new homes plunged last month to the lowest level on records going back nearly 50 years as U.S. builders slashed production while Wall Street nosedived. Embattled homebuilders, who enjoyed a five-year boom, are now building new homes and apartments at a record-low pace, according to government data released Wednesday. New building permits, a barometer of future activity, also plummeted to the lowest pace on record. With construction dropping, the number of unsold homes should fall quickly in the coming months, wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Report: Economy hitting hospitals >> TRENTON, N.J. — The dismal economy has American hospitals ailing, with new data showing declines in overall admissions and elective procedures, plus a significant jump in patients who can’t pay for care, the American Hospital Association said Wednesday. Hospitals also have been hurt by losses on their investments due to the turmoil on Wall Street, and many are finding it more expensive to borrow money — if they can at all, according to a report from the association, which represents about 5,000 U.S. hospitals. From News Chief wire reports

The Associated Press

The Ford Fusion Hybrid is seen Monday at the Ford Product Design Center in Dearborn, Mich. Ford unveiled the hybrid version Wednesday at the Los Angeles auto show.

Nissan CEO says auto crisis will probably lead to companies combining By DAN STRUMPF

The Associated Press

LOS ANGELES — Nissan Motor Co. and Renault SA Chief Executive Carlos Ghosn said Wednesday that he expects the current crisis in the auto industry will soon lead some carmakers to consolidate. Ghosn made his remarks at the Los Angeles Auto Show while the chief executives of General Motors Corp., Ford Motor Co. and Chrysler LLC were in Washington making their case to the House Financial Services Committee for $25 billion in loans to stay in business. Ghosn said the weakening

global auto market that the auto industry is facing will knock out some competitors. He pointed to the U.S. financial industry, which has seen key players recently disappear. “We’re still stuck in a situation where credit is not flowing normally, and the recession that began in the United States is not only deepening but spreading across the globe,” Ghosn said. “It’s fair to say that no one, no one had predicted how the global economy would be so volatile in 2008.” Both GM and Nissan were reportedly in talks with Chrysler about an acquisi-

tion or other combination as U.S. automakers burned up cash because of a sales meltdown due to the U.S. economic downturn. GM said this month it was setting aside considerations for a “strategic acquisition” to focus on its immediate cash-flow problems, and some analysts said that could give new life to a deal between Chrysler and Nissan-Renault, which would most likely be interested in acquiring certain parts of Chrysler’s business rather than the entire company. Nissan already has an agreement with Chrysler to build a subcompact car for the U.S. company.

L.A. AUTO SHOW The Los Angeles Auto Show opens to the public Friday after two days of media previews, but GM and Chrysler aren’t unveiling any new models. GM had planned to unveil its new Buick LaCrosse sedan but scaled back its presence to focus on the company’s financial problems. Ghosn acknowledged that Nissan-Renault had been in talks with Chrysler about an alliance two years ago, but said the talks were inconclu-

sive and suggested a lack of enthusiasm from Chrysler’s side was to blame. “We are not convinced that any alliance can take place if there is no mutual appetite,” Ghosn said. “If you’re in a situation where someone is excited about something and the other is skeptical, it’s not going to work. Alliance is like marriage.” While the auto industry’s situation is most distressful in the U.S., where October sales fell 32 percent to their lowest rate in 25 years, foreign companies also are starting to see sharp sales decreases because of the global economic slowdown.

Survey shows Floridians plan to reduce holiday spending The Associated Press GAINESVILLE — ’Twas the month before Christmas and all through the mall, not many Floridians were shopping, their wallets were small. Tough economic times are forcing Florida consumers to drastically cut back on plans for holiday spending, according to surveys conducted in September and October by the University of Florida Bureau of Economic and Business Research. More than 500 consumers participated each month in the telephone survey. The polls have a margin of error of 3 percent. “The 2008 holiday season will be one of the worst for retailers in decades. In sharp contrast to previous years, decreased spending intentions were reported across all income brackets,” said Barton Weitz, executive director of

“The 2008 holiday season will be one of the worst for retailers in decades. In sharp contrast to previous years, decreased spending intentions were reported across all income brackets.” barton Weitz  executive director of the David F. Miller Center for Retailing Education and Research at the University of Florida the David F. Miller Center for Retailing Education and Research at UF. Consumer plans for spending fell as the holiday shopping season grew closer. The September survey showed a 38 percent decrease from last year, from $1,328 per resident to $824. The average

dropped again in October to $802. The bad news extended to shopping malls, which can expect a 15 percent drop in the number of consumers planning to shop there, compared with 2007. Online shopping is expected to drop by 1 percent.

Gift cards, however, continue to appeal to consumers, with more than 60 percent indicating they will spend the same or more for them than in 2007, the surveys showed. Consumers, however, are staying away from buying gift cards from retailers having financial difficulties, Weitz said. Department and specialty stores will be vulnerable to downturns in sales, but discounters such as Wal-Mart and Target may have opportunities to lure middle and high-income shoppers into their stores, Weitz said. Stores selling luxury items will suffer, Weitz said, adding that for the first time since 2003, high-income households, defined as those making more than $100,000 a year, expect to decrease spending. He said data only exists for the last five years.