Business

Oil prices top $126 a barrel, gas hits $3.67 a gallon


Associated Press
Published: May 10, 2008

NEW YORK (AP) — Oil rose above $126 a barrel for the first time yesterday, bringing its advance this week to nearly $10, as investors questioned whether a possible confrontation between the U.S. and Venezuela could cut exports from the OPEC member.

Gas prices, meanwhile, rose above an average $3.67 a gallon at the pump, following oil's recent path higher.

On yesterday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government, which heighten the chances that the U.S. could impose sanctions on one of its biggest oil suppliers.

Citigroup to shed nearly $500B in assets

NEW YORK (AP) — Citigroup Inc.'s new chief executive, Vikram Pandit, plans to stick with a global banking model after months of intense review — but only after shrinking the company by about one-fifth first.

The three-year game plan, revealed yesterday, includes getting rid of more businesses, mortgages, real-estate operations and jobs.

The bank aims to shed between $400 billion and $500 billion of its $2.2 trillion in assets and grow revenue by 9 percent over the next few years as it tries to rebound from massive losses tied to deterioration in the credit markets.

Circuit City could be sold

RICHMOND, Va. (AP) — Circuit City Stores Inc. yesterday gave in to pressure from activist shareholders, essentially putting itself up for sale and agreeing to nominate dissident directors to its board.

The electronics retailer announced it would open its books to Blockbuster Inc. and Blockbuster's largest shareholder, Carl Icahn. It did so after Icahn defused concerns over whether Blockbuster could finance the deal by saying he was prepared to buy the company if all else fails.

Circuit City said Icahn's letter answered some questions related to the potential transaction, and that it would allow the video-rental chain to conduct due diligence in its takeover bid of just over $1 billion with plans for creating a huge chain that would sell electronic gadgets and rent movies and games.

Fedex cuts profit forecast

MEMPHIS, Tenn. (AP) — FedEx is cutting its fourth-quarter guidance, blaming a steep increase in fuel costs.

The Memphis, Tenn.-based shipping company says it now expects to post a fourth-quarter profit of $1.45 to $1.50 per share, down from its previous prediction of $1.60 to $1.80 per share.

Fedex says its fuel costs have risen by more than 7 percent since it issued its previous guidance in March.

U.S. trade deficit dips

WASHINGTON (AP) — The U.S. trade deficit narrowed sharply in March as demand for imports fell by the largest amount since the last recession was ending. Analysts forecast that trade would continue to be one of the economy's few bright spots this year.

The March deficit totaled $58.2 billion, down 5.7 percent from February, the Commerce Department reported yesterday. It was a much larger improvement than had been expected.

The smaller deficit was driven by a 2.9 percent drop in imports.

Gates: Microsoft to go its own way

JAKARTA, Indonesia (AP) —Microsoft Corp. will focus on growing its own advertising and Internet search business after it withdrew its takeover offer for Yahoo Inc., Chairman Bill Gates said yesterday.

Microsoft has not presented an alternative strategy to compete with its dominant rival in the Internet business, Google Inc., since withdrawing a $47.5 billion bid for Yahoo Inc. last weekend.

Analysts have been left wondering how the world's largest software maker will increase its share of that multibillion dollar market without a major tie-up.

Gates says Microsoft remained open to making acquisitions, but declined to comment on possible candidates, such as networking sites like Facebook in which Microsoft already holds a 1.6 percent stake.

USDA: Wet weather slowing corn planting

DES MOINES, Iowa (AP) — Corn production this year could be down as much as 7 percent from the record-breaking heights of 2007, according to a U.S. Department of Agriculture report released yesterday.

The prediction is a foreboding sign for those hoping for a drop in prices.

The USDA report projects farmers will harvest about 12 billion bushels of corn this year. About one-third of the harvest will be directed toward ethanol production, the USDA estimates.