BUSINESS BRIEFS
Big banks' profits nearly wiped out in market turmoil
Associated Press
CHARLOTTE, N.C. — The credit crisis all but wiped out fourth-quarter earnings at Bank of America Corp. and Wachovia Corp., but the banks did make some money — something that can't be said for Citigroup and some other Wall Street financial firms.
Profits fell 95 percent at Bank of America and 98 percent at Wachovia. The numbers, worse than analysts expected, show that the global credit squeeze is still causing more customers to fall behind on their bills and banks to lose money on securities they own.
"The continued turmoil in the capital markets and the dramatic change in the credit environment diminished our fourth-quarter results substantially," Wachovia Chief Executive Ken Thompson said on a call with analysts.
UNITED IN GOOD POSITION FOR DEAL
CHICAGO — United Airlines parent UAL Corp. is in "very good position" to pair up with another carrier despite a money-losing fourth quarter, CEO Glenn Tilton said yesterday.
Tilton wouldn't tip his hand about the status of talks widely reported to be under way with Delta Air Lines Inc., which is looking at potential combinations with either United or Northwest Airlines Corp.
But he did nothing to dampen speculation that the nation's second-biggest airline is pushing hard to team up with Delta or, if those talks fail, another carrier such as Continental Airlines Inc.
AMBAC FINANCIAL LOSES $3.26 BILLION
NEW YORK — Ambac Financial Group Inc. booked a massive loss yesterday as mortgage-related troubles spread, but the bond insurer assured investors it remains a viable company even as its business slows.
"We just got too complex," Michael Callen, interim chief executive, said of his company's foray into bonds backed by risky mortgages. The fallout from that bet led to a $3.26 billion fourth-quarter loss.
The executive said Ambac is "evaluating strategic alternatives with a number of potential partners," as it seeks to maintain its "AAA" credit rating with two agencies and regain it after being downgraded by a third.
"We're talking to very credible parties and pools of capital," Callen said, but declined to be more specific.
Investors responded positively, sending Ambac shares surging $1.77, or 28.6 percent, to $7.97 yesterday. The stock is still down 92 percent from its 12-month high of $96.10 set last May, after losing more than 70 percent last week.
RECESSION FEARS DRIVE DOWN OIL
NEW YORK — Oil futures fell yesterday on mounting concerns that the U.S. economy may be heading toward a recession that would dampen demand for crude.
While the Federal Reserve's interest rate cut helped crude futures recover from much steeper earlier losses, many investors doubt the move will stave off a serious slowdown.
Light, sweet crude for February delivery fell 72 cents to settle at $89.85 a barrel on the New York Mercantile Exchange; earlier, prices had fallen as low as $86.11. Oil last traded that low on Dec. 6.
EXPORT CONTROL CHANGES OK'D
WASHINGTON — President Bush yesterday approved changes aimed at modernizing the country's controls on the export of sensitive products to foreign nations. U.S. manufacturers said the changes should boost their overseas sales.
The White House said the package of directives would promote a "more efficient and transparent export licensing process."
Manufacturers estimated the proposals would greatly reduce the number of products for which businesses must obtain export control licenses.
Companies expected to benefit the most include those making high-tech products such as computers, semiconductors, machine tools and aerospace products.
