CNN Financial News Producer
The CEOs of General Motors, Ford and Chrysler are back on Capitol Hill this morning, explaining why they believe their companies should get federal assistance. Each of the companies unveiled plans Tuesday that detailed how they would plan to return to profitability if they get federal loans. They also upped the amount they are seeking from $25 billion to as much as $34 billion
If you opened the New York Times this morning you might have noticed a full-page ad taken out by the United Auto Workers Union with the message: "We are not bankers." The ad goes on to say "We don't work on Wall Street or for big insurance companies. We build quality cars and trucks. But we've been hit with the same financial crisis." It goes on to talk about how many thousands of other businesses would collapse and millions of other workers that would lose their jobs if the Big Three go under. Check out CNNMoney.com's report: "Who Can Save Detroit?"
Lots of job cuts announced this morning – more than 22,000 of them. AT&T is cutting 12,000 – or 4% of its total workforce. Entertainment giant Viacom is cutting 850 jobs. Swiss Bank Credit Suisse is cutting 5,300 jobs. Money manager State Street is cutting up to 1,800 jobs. Chemicals giant DuPont is cutting 2,500 jobs.
All that is overshadowing the fact that new claims for jobless benefits fell unexpectedly last week, although the number of people continuing to claim benefits reached a 26-year high. Initial claims for unemployment insurance dropped to a seasonally adjusted 509,000 last week, from an upwardly revised figure of 530,000 for the previous week. But the number of people continuing to claim unemployment benefits last week reached 4.09 million, the highest level since December 1982, when the economy was in a steep recession. And Friday morning, of course, we'll get the government's employment report for November. We're expecting job losses there of 325,000 – bringing total losses for the year above 1.5 million.
The Treasury Dept. is mulling a plan to lower mortgage rates to 4.5%. A source tells CNN that lobbyists are pushing Treasury to consider a plan to purchase mortgage-backed securities in the hopes of driving mortgage rates to that level. Similar to an effort unveiled last week by the Federal Reserve, the proposal calls for Treasury to buy securities backed by 30-year fixed-rate mortgages from Fannie Mae and Freddie Mac. Details on the plan remain sketchy, but an announcement could come as early as next week, the source said. We'll be examining what it means for homeowners. How much will it help? And will it improve the distressed housing market?
Stocks on Wall Street opened lower this morning as investors reacted to all those job cuts, and have since bounced into positive territory, for now.
Fears of a global economic meltdown prompted two European central banks to slash their key interest rates today in attempts to stem the recession. The Bank of England cut its rate to 2% from 3%, and that followed a reduction of 1.5 percentage points to 3.0% on Nov. 6. The Bank of England has never set its rate below 2%. It was last at 2% in 1951. The European Central Bank, which governs monetary policy in 15 countries, cut its key lending rate by 0.75% to 2.50%.
Wal-Mart reported November sales numbers that trounced expectations this morning as the discounter continues to gain market share from its rivals in a worsening economy. Wal-Mart, the world's largest retailer, said its same-store sales, or sales at its stores open at least a year, rose 3.4%, beating its own forecast for a 1% to 3% increase in the measure for the month. Analysts had expected the retailer to log a 2% sales increase for the month, which also included sales on Black Friday.
Gas prices fell 1.4 cents to $1.789 a gallon. That's the 78th consecutive decrease. According to AAA, the last time the national average price for a gallon of regular unleaded gasoline was near the current price was January 12, 2005, when the national average was $1.789.
Oil prices are hovering around $46 a barrel, a 3-1/2 year low.
And, The Great White Way goes green! This is the latest installment of Mayor Michael Bloomberg's pledge to reduce New York City's carbon footprint 30% by 2030. Ten Broadway theaters have already replaced some 10,000 bulbs with more energy-efficient ones. The rest of Broadway's theaters are vowing to make the switch within 12 months. But not everything is going according to Bloomberg's plan. A federal judge recently blocked his effort to replace every taxicab with a hybrid model by 2012. Now the city will try a different tactic: offering financial incentives aimed at getting more fuel-efficient cars on the road.
See you on Broadway!
Editor's note: Ali Velshi interviews Chrysler CEO Robert Nardelli today. See his full report on the interview and the economy tonight on AC360 at 10pm ET.
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