Financial News from the Eyewitness News Newsroom

WALL STREET Stocks fall sharply

NEW YORK
Investors unsettled about the holiday shopping season are giving back some of Wall Street's recent gains, sending the Dow Jones industrial average down more than 400 points.

While initial reports about the start of holiday shopping over the weekend suggested sales were better than some retailers and analysts expected, Americans appear to be extremely cautious.

According to preliminary figures released by RCT ShopperTrak, sales rose 3 percent on Black Friday. The day after Thanksgiving is traditionally one of the biggest shopping days of the year. But some analysts are concerned that Black Friday's results aren't indicative of the rest of the weekend.

RECESSION Private group declares beginning of recession in December '07

WASHINGTON
A panel of the National Bureau of Economic Research says the U.S. economy fell into a recession last year.

The NBER says its group of academic economists who determine business cycles met and decided that the U.S. recession began in December 2007.

Many economists believe the current downturn will last until the middle of 2009 and will be the most severe slump since the 1981-82 recession.

President George W. Bush is expressing remorse that the global financial crisis has cost jobs and damaged retirement accounts.

The president told ABC's "World News" in an interview that he will support additional federal intervention, if necessary, to ease the recession. The interview will air tonight.

Bush told the network: "I'm sorry it's happening, of course."

ECONOMY Weakness reported in manufacturing, construction spending

WASHINGTON
Two new readings on the economy have come in weaker than expected.

The Commerce Department says construction spending fell 1.2 percent in October, as builders contend with the economic downturn and a severe credit crisis. The weakness was led by a sizable drop in homebuilding. Weakness in nonresidential building was also seen.

The Institute for Supply Management says its November index of manufacturing activity fell to 36.2, marking a 26-year low. Any reading below 50 indicates contraction.

STIMULUS Pelosi hopes for stimulus bill by Inauguration Day

WASHINGTON
House Speaker Nancy Pelosi says Congress will try to have a huge economic recovery bill ready for President-elect Barack Obama as soon as he takes office.

The California Democrat says lawmakers will press ahead in hopes the bill will be ready for Obama's signature when he's sworn in on Jan. 20. The measure could total $500 billion for infrastructure, helping states with Medicaid costs, and renewable energy development.

Congress convenes Jan. 6, which would give lawmakers just two weeks to complete the bill if it is to be signed right away.

FORD-VOLVO Ford weighing the sale of Volvo

DEARBORN, Mich.
Ford says it is considering the sale of Volvo Car Corp.

It expects the strategic review of the Swedish luxury automaker will take several months. The move is one of several actions Ford is taking to strengthen its balance sheet amid what it called "severe economic instability worldwide."

Ford officials would not speculate on how a potential sale would affect the companies. Spinning off Volvo into a separate entity may be a possibility, as both companies have already taken steps to allow Volvo to operate on a more independent basis. That effort began in 2007, after a previous strategic review of Volvo.

FED-GEITHNER New York Fed launches search for new president

WASHINGTON
Timothy Geithner, President-elect Barack Obama's pick to be Treasury secretary, will soon step down from his current post as president of the Federal Reserve Bank of New York.

The New York Fed says it has created a search committee to select Geithner's successor. The New York Fed says Geithner will continue to serve as president "for the next several weeks."

Geithner won't participate in decisions on interest rates and other economic and financial matters made by the Federal Open Market Committee, the Federal Reserve's chief policy-making group that includes Fed chairman Ben Bernanke.

The FOMC's next meeting is Dec. 15-16, and many economists predict the Fed will lower rates again to limit damage to the already crippled economy.

Names mentioned as possible successors to Geithner include New York Fed executive William Dudley, who oversees the Fed's market operations, and Kevin Warsh, a governor at the Federal Reserve Board in Washington, D.C.

JOHNSON & JOHNSON-MENTOR Johnson & Johnson buying Mentor

NEW BRUNSWICK, N.J.
Health-care products company Johnson & Johnson says it will buy cosmetic-product and breast-implant maker Mentor Corp. for more than $1 billion. It is a move to boost J&J's presence in cosmetic and reconstructive medicine.

Under the deal, J&J will start a cash tender offer for $31 per share. It will add breast implants and other products to its Ethicon surgical products unit. The offer is nearly double Mentor's closing price of $16.15 on Friday.

Both companies' boards of directors have approved the deal, which is expected to close during the first quarter.

PILGRIM'S PRIDE-BANKRUPTCY Pilgrim's Pride files for bankruptcy protection

PITTSBURG, Texas
Chicken producer Pilgrim's Pride is filing for Chapter 11 bankruptcy protection.

A company spokesman says Pilgrim's Pride is reorganizing and not liquidating its assets. He says the company will keep operating.

The Pittsburg, Texas-based company sought bankruptcy protection in a filing with the U.S. Bankruptcy Court for the Northern District of Texas today.

The company has been saddled by debt due to the acquisition of its rival Gold Kist Inc. and has had to extend its temporary credit line three times since September.

It's also hurting due to volatile feed prices and an oversupply of meat on the market, which keeps prices down.