BUSINESS BRIEFS
Financial rescue plan expected next week
Advertiser News Services
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WASHINGTON — Treasury Secretary Timothy Geithner will announce new plans for rescuing the financial sector in a speech next week, a Treasury official said yesterday.
The plans will include new programs aimed at helping homeowners stave off foreclosure, and efforts to stabilize the banking sector.
Top Treasury officials met over the weekend with representatives of the financial industry and other policymakers to discuss a number of possible rescue plans. One is a government-run "bad bank" that would buy problem assets that are clogging bank balance sheets. Another would provide insurance against losses on assets that banks will continue to hold on their books, much like was done in expanded support programs for Citigroup Inc. and Bank of America Corp.
The plans have not been finalized, but will be presented to President Obama soon, the official said.
MACY'S TO CUT 4% OF WORKFORCE
CHICAGO — Macy's Inc. plans to eliminate 7,000 jobs, or about 4 percent of its workforce, as the retailer consolidates merchandise planning and other functions.
The retailer also forecast sales at stores open at least one year, a measure of a retailer's health, this year will fall between 6 percent and 8 percent. That outlook is more dismal than the National Retail Federation's projection of a 0.5 percent decline and Standard & Poor's 5.3 percent decrease.
Macy's, with headquarters in Cincinnati and New York, also announced several cash-saving moves, including cutting its dividend to 5 cents a share from 13.25 cents and slashing capital spending to about $450 million from about $1 billion. The company also plans to buy back up to $950 million in bonds due this year.
MATTEL PROFITS FALL, WILL RAISE PRICES
NEW YORK — As toymaker Mattel Inc. reported that its profit fell almost by half for the key fourth quarter and more than one-third for the year, it said it will raise its prices and cut its 2009 spending, including on advertising.
Mattel's profit and sales fell further than most predicted, and its shares fell more than 16 percent in trading yesterday.
Toys tend to resist economic strain better than many products because parents tend to keep spending on their children even when they spend less on themselves and on household goods.
COMPANIES HOLD BACK ON FORECASTS
NEW YORK — With earnings season half over, it's not just the huge write-offs and plunging profits that have investors on edge. More and more companies are so uncertain about the future, they're not giving earnings forecasts at all.
That reluctance is making the market increasingly skittish, and in January the Dow Jones industrial average turned in the worst performance in its 113-year history.
Results from the first 227 companies in the Standard & Poor's 500 index to report results are worrisome. Sales fell 10.2 percent in the October-December period, according to S&P. The companies lost an average of $8.89 a share mainly because of huge write-offs.
