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NEW YORK — Stocks rose sharply Thursday, led by strong gains among the blue chips and mortgage lender Countrywide Financial Corp., which said it had lined up added financing. The Dow Jones industrial average rose by more than 130 points on strong advances by General Motors Corp. and McDonald's Corp., which hit an all-time high. Financial stocks such as Countrywide also jumped, while bond prices fell. Investors, who have been nervous about the impact of sinking housing and credit markets on the economy, were relieved to hear Countrywide secured $12 billion in credit. The additional financing alleviated concerns the nation's largest mortgage lender might collapse because of spiking defaults. ___ DETROIT (AP) _ The United Auto Workers union has picked General Motors Corp. as the lead company and potential strike target in contract negotiations with the Detroit Three, a local union official said Thursday. The official, who requested anonymity because the talks are private, said his local received notice Thursday afternoon that GM would be the lead. Contracts between the UAW and GM, Chrysler LLC and Ford Motor Co. expire at midnight Friday. Normally, the union negotiates an agreement with the lead company, which becomes the pattern for the other two. Contracts usually are extended beyond the deadline for companies other than the lead. Ford spokeswoman Marcey Evans confirmed that Ford had agreed to a contract extension, but a Chrysler spokesman would not comment. ___ NEW YORK (AP) _ Oil prices finished above $80 a barrel for the first time Thursday and gasoline prices rose as refiners reported production problems after Hurricane Humberto hit Texas. Oil first traded over $80 a barrel on Wednesday after the Energy Department reported declines in crude and gasoline inventories and a drop in refinery activity, but ended the day below that psychologically important mark. On Thursday, Humberto added to the supply concerns by cutting power to several refineries in the Port Arthur, Texas, area. Another tropical system gaining strength in the Atlantic also supported prices. Light, sweet crude for October delivery finished at a record $80.09, up 18 cents on the New York Mercantile Exchange and above the previous record close of $79.91 set a day earlier. ___ WASHINGTON (AP) _ Former Federal Reserve Chairman Alan Greenspan acknowledges he failed to see early on that an explosion of mortgages to people with questionable credit histories could pose a danger to the economy. In an upcoming interview, Greenspan said he was aware of "subprime" lending practices where homebuyers got very low initial rates only to see them later jacked up, causing severe payment shock. But he said he didn't initially realize the harm they could do. An excerpt of the interview was released Thursday. ___ WASHINGTON (AP) _ The number of laid off workers filing claims for unemployment benefits rose last week in another worrisome sign that the labor market is weakening. The Labor Department reported Thursday that new claims for unemployment benefits rose by 4,000 last week to 319,000. It marked the sixth increase in the past seven weeks and was a further sign that the economy is feeling the impact of a steep slump in housing and a spreading credit crisis. The government reported last week that employers cut 4,000 jobs from payrolls in August, the first monthly job decline in four years. ___ CALABASAS, Calif. (AP) _ Countrywide Financial Corp. boosted its borrowing capacity by $12 billion as the mortgage lender struggles to weather the slowdown in the housing market, the company said Thursday. The move came after the largest U.S. home lender borrowed $11.5 billion and sold a $2 billion stake to Bank of America in recent weeks so it could keep operating its retail banking and mortgage businesses. Countrywide said it arranged the $12 billion in additional borrowing capacity through new or existing credit agreements. ___ NEW YORK (AP) _ The dollar hovered near a record low against the euro Thursday on speculation that the Federal Reserve will cut interest rates to boost the U.S. economy. The U.S. currency also sank to a 30-year low against the Canadian dollar as oil prices surged to an all-time high above $80 a barrel. The euro rose to $1.3927, topping the record $1.3914 reached the previous day, before settling back to $1.3886 in late New York trading. It bought $1.3908 late Wednesday. ___ PARIS (AP) _ Alcatel-Lucent SA fell nearly 9 percent Thursday after the telecommunications equipment maker slashed its full-year revenue growth forecast and said it expects third-quarter operating profit to be "around break-even." In a statement, Alcatel-Lucent said it expects revenue growth in 2007 to be flat to slightly up at a constant exchange rate. The company had previously estimated its full-year revenue would grow in the mid-single digit percentage range at a constant exchange rate. Alcatel-Lucent said the revision reflects recent discussions with wireless customers in North America. ___ NEW YORK (AP) _ American consumers will be bearing the cost of safer toys, but not until after this year's Christmas season. Shoppers can expect price increases up to 10 percent next year to pay for increased vigilance by toy makers and stores after more than 3 million lead-tainted toys from China were recalled worldwide since June. That means a $6.99 Barbie doll could go up to about $7.70, or a $70 child friendly digital camera could retail next year for almost $80 A 10 percent average increase would be the biggest one-time price hike in toys in several years, analysts say. And it's more than twice the government's measure of consumer inflation of 4.7 percent during the first seven months of this year. Consumers could also see higher prices on other Chinese imports like fish and children's apparel, but the big price gains in toys could be more jolting. ___ OAK BROOK, Ill. (AP) _ McDonald's Corp. stock surged to an all-time high Thursday after the fast-food chain announced the largest dividend increase in its history and pledged to return more money to shareholders than Wall Street expected. The dollar's record low against the euro also boosted McDonald's, which has more than 6,000 restaurants in Europe. Shares in the company rose $3.10, or 6 percent, to $54.30 Thursday after reaching a new high-water mark of $54.68. The increase came a day after McDonald's raised its annual dividend by 50 cents per share to $1.50 on Wednesday afternoon and said it expects to return between $15 billion and $17 billion in cash to shareholders through dividends and share buybacks between 2007 and 2009. Several brokerages upgraded their outlook for McDonald's shares. ___ WASHINGTON (AP) _ Rates on 30-year mortgages dropped this week to the lowest point in four months, providing some relief for people hoping to refinance their existing mortgages. Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.31 percent this week, the lowest level since May 17, when 30-year mortgages averaged 6.21 percent. The rate had been 6.46 percent last week. All mortgage products surveyed by Freddie Mac showed declines this week. Frank Nothaft, the company's chief economist, said this should provide help to homeowners who are hoping to refinance existing adjustable rate loans that are resetting from low introductory "teaser" rates. ___ By The Associated Press According to preliminary calculations, the Dow rose 133.23, or 1.00 percent, to 13,424.88. The Standard & Poor's 500 index rose 12.39, or 0.84 percent, to 1,483.95, and the technology-heavy Nasdaq composite index rose 8.99, or 0.35 percent, to 2,601.06. Light, sweet crude for October delivery finished at a record $80.09, up 18 cents on the New York Mercantile Exchange and above the previous record close of $79.91 set a day earlier. In London, October Brent crude fell 28 cents to settle at $77.40 a barrel on the ICE futures exchange. In other Nymex trading, heating oil futures lost 0.01 cent to settle at $2.219 a gallon. Natural gas lost 40.9 cents to settle at $6.029 per 1,000 cubic feet. October gasoline rose 3.04 cents to settle at $2.0464 a gallon. |
