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Saying it is focusing on making and marketing beer, Anheuser-Busch is shutting down a broadcast production unit that helped get Blues hockey games and Cardinals baseball contests on the air.

Ancillary operations at the St. Louis brewer are starting to drop off as A-B is integrated into InBev of Belgium, which took over the company three weeks ago. Bud Productions, the in-house division that produced hundreds of play-by-play broadcasts of pro baseball, hockey and football, will shut down Jan. 1.

"After careful review, we have decided to discontinue the production services available through our Bud Productions unit," Anheuser-Busch said in a statement Tuesday. "This was a difficult decision, but is supportive of our goals to remain focused on brewing and marketing beer."

The announcement came one day after Anheuser-Busch InBev said it is cutting 1,400 full-time salaried jobs in the U.S., including about 1,000 in St. Louis. It was unclear Tuesday how many jobs will be lost from the closure of Bud Productions or whether they were included in the previously announced layoffs.

Jack Donovan, general manager of Fox Sports Midwest, said Bud Productions, also known as Bud Sports, helped Fox broadcast Cardinals games on TV, as well as produce the Blues games on the radio.

"Bud Sports has been a great partner of ours for several years," Donovan said classic car insurance. … Bud Sports was very professional and had some very capable individuals working in the department. We really had a great partnership."

Donovan said Fox does not expect fans to see any difference in the quality of the telecasts. Scheduled broadcasts will go on as planned. Fox is in hiring discussions with several people from Bud Productions.

jmcwilliams@post-dispatch.com

314-340-8372

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CHICAGO — Not only are Americans flying less as the economy tanks, they’re spending less time scouting the Internet for travel deals, creating an unprecedented drop in traffic for online travel agencies such as Chicago-based Orbitz Worldwide Inc.
As days shorten and the air chills, consumers typically start to plan winter getaways, making October one of the busiest months of the year for Internet travel sites, analysts said.

Not this year. As consumer confidence reached historic lows in October, the volume of visitors to Web travel portals declined 14 percent, year over year, to 38.2 million, according to ComScore Inc. Web traffic fell for nearly every major airline site.

Hardest hit were the three online powerhouses that have dominated bookings for much of this decade. Web traffic at Expedia Inc. sites plunged 25 percent, to 18.2 million visitors, while Travelocity.com LP and Orbitz saw 16 percent and 23 percent drops, respectively.

The falloff in traffic was unparalleled for the three online agencies, which grew by leaps and bounds during the economic slowdown that followed the Sept. 11 attacks as many consumers turned for the first time to the Internet to unearth bargains.

Anticipating tougher times ahead, Orbitz announced last month plans to reduce its U.S. work force by 10 percent.

"What’s happening in 2008 is a universal buckling down," said Sara Stevens, head of the travel and retail practices for Virginia-based ComScore, a market research firm that tracks Internet traffic. More than half of 1,000 consumers surveyed by ComScore in October planned to change their travel plans this holiday season online cash advance. Of those altering plans, 39 percent said they would opt to stay at home.

However, ComScore’s data did not present a complete picture of online travel activity because it measured only U.S. traffic and not overseas customers. For Expedia, "that’s leaving out a huge chunk," said Amanda Hoffman, spokeswoman for the Bellevue, Wash.-based company.

Hoffman wouldn’t disclose total traffic to Expedia’s sites. But she conceded that the Web travel giant, which controls about 50 percent of the online travel market, did see a falloff in October.

Bucking the trend were two websites that help budget-minded travelers drive better deals. Priceline.com Inc. saw a 24 percent jump in visitors in October, while traffic to Kayak.com surged 93 percent, to 7.9 million visitors.

Kayak, founded by members of the teams that helped start Orbitz, Expedia and Travelocity, has gained a following among younger, tech-savvy consumers for innovations that include a tool that allows groups of friends to plan their travel together.

Although Orbitz has predicted weak bookings into early next year, it should benefit eventually as consumers take advantage of cheaper airfares, as well as a new feature that promises refunds if prices drop after airline tickets have been purchased, said Brian Hoyt, a company spokesman. "It’s an incredible time to travel if you have discretionary income," he added.

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Tembec Inc. reported a quarterly loss Wednesday and warned that it would stay under pressure due to low lumber prices.

The Canadian forest products company said it lost $4 million ($3.2 million), or four Canadian cents a share, in its fourth quarter, compared with a profit of $22 million, or 25 Canadian cents a share, in the same period last year.

Revenue for the quarter was $629 million, down 6.8 per cent from $675 million in the year-before quarter.

Analysts were expecting an average loss of 9 Canadian cents a share before items, according to Reuters Estimates cash loan in one hour.

The company said the low U.S. dollar lumber prices it has experienced over the last several quarters have depressed results and that it expects this to continue as the slumping U.S. housing market saps demand for lumber.

Tembec shares, which closed at $1.31 on Tuesday, have dropped 9 percent in the last year.

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When people make sacrifices in a tough economy, they usually don’t start with their health.

That’s one reason the health care industry, if not exactly recession-proof, seems one of the best able to endure the economic downturn.

St. Louis’ growing medical sector includes the area’s largest employer, BJC HealthCare, with 23,500 workers. Not only are local hospitals not experiencing layoffs, many will continue to hire skilled workers, said Dave Dillon, spokesman for the Missouri Hospital Association.

"There’s always going to be a demand for health care," Dillon said.

During economic downturns, sales of prescription drugs and medical devices tend to hold up better than nonessential goods, noted David Wyss, chief economist of Standard and Poor’s.

"Generally, you’re looking for things that are necessities, not luxuries," Wyss said. "People get sick and need medical care regardless of the state of the economy."

But recent earnings show that drug makers aren’t immune from slumping sales that have plagued their peers in the retail and auto industries. Pfizer, which employs 1,200 people in its labs in the St. Louis area, said last month that U.S. sales of its best-selling product, the cholesterol drug Lipitor, fell 13 percent in the last quarter as some financially struggling patients stopped filling their prescriptions.

"The typical safe harbors (for investors) have been pharmaceuticals," said analyst Steve Brozak of WBB Securities. "They’re no longer safe; they’re now the least bad choice."

Pfizer and Schering-Plough Corp. were able to offset weak revenue in the U.S. with higher sales abroad. But other companies, such as Merck & Co. Inc., have been less successful. Merck said recently it will cut 7,200 jobs after reporting sales declines.

Experts say pharmaceuticals are more vulnerable to economic cycles because employers have shifted more of the financial burden for care to patients, with higher copays and deductibles.

"With consumers having more cost-sharing in their benefits, you’re going to see a greater effect on their health care spending right away," said Paul Ginsburg, President of the nonprofit Center for Studying Health System Change quick pay day loan.

That means more uninsured or under-insured patients seeking care through hospital emergency rooms and other safety-net providers. Between 2000 and 2005, 125,000 people in Missouri went off employment-based health insurance, said James Kimmey, president and CEO of the Missouri Foundation for Health.

"If the recession leads even more employers to back down a bit from their current coverage levels, it could increase the uninsured pretty fast," Kimmey said.

The lagging economy and rising unemployment have made it harder for health insurers such as UnitedHealth Group Inc. and Humana Inc. to raise prices to offset higher costs and investment losses.

Health care companies least affected are those that sell inexpensive medical products directly to hospitals, bypassing cash-strapped consumers.

Becton, Dickinson & Co. and Baxter International Inc., for example, reported sharp profit gains for the most-recent quarter and boosted their full-year earnings estimates. Becton Dickinson specializes in syringes and surgical tools; Baxter sells drugs to treat blood and immune disorders.

"The products they offer aren’t high-tech things," said Aaron Vaughn, an analyst with Edward Jones. "They are health care staples that people need."

A focus on lifesaving medicine also is expected to reward makers of high-priced biotech drugs.

Genzyme Corp. and Celgene Corp., for example, have built businesses around niche drugs for life-threatening diseases. Health care investment firm Leerink Swann gives both companies an "outperform" rating, along with peers Amgen Inc., Biogen Idec Inc. and Gilead Sciences Inc.

POST-DISPATCH STAFF WRITER BLYTHE BERNHARD CONTRIBUTED TO THIS REPORT.

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But the changes are only temporary, intended to restore confidence and help ease the credit crunch.

On Tuesday, the Federal Deposit Insurance Corp. offered to insure all bank deposits in non-interest-bearing deposit transaction accounts through Dec. 31, 2009 (banks would have to pay a fee to offer the insurance, intended primarily for payment-processing accounts used by small businesses). Also, back on Oct. 3, Congress raised the basic FDIC coverage on all bank accounts from $100,000 to $250,000 per depositor per institution.

But — nobody who has written to me seemed to realize it — this $250,000 insurance limit reverts to $100,000 after Dec. 31, 2009.

"This is even the case for customers who set up long-term certificates of deposit," explained David Barr, an FDIC spokesman. Opening a 15-month or longer CD for more than $100,000 today won’t extend the insurance limit beyond $100,000 after year-end 2009.
Similarly, the basic insurance limit on National Credit Union Administration protection was raised to $250,000 but goes back to $100,000 after Dec. 31, 2009.

With FDIC and NCUA coverage, you can combine account registration categories (such as single and joint accounts, retirement and trust accounts) to protect well in excess of $250,000. For specific rules, the latest information (which can change quickly), and to make sure your bank or credit union is insured, check with the FDIC at 1-877-275-3342 or at www.fdic.gov, or with the NCUA at 1-800-755-1030 or www.ncua.gov. Both FDIC and NCUA are government agencies backed by the full faith and credit of the U.S. government.

The FDIC also insures "brokered CDs," which are certificates of deposit issued by member banks but sold through brokerage houses. When buying a brokered CD, "make sure you know from which bank it is, whether the bank is FDIC insured and whether you already have existing deposits with that bank" that may push you beyond the insurance limit, said Greg McBride, senior financial analyst for Bankrate fast cash advance loan.com.

With the higher $250,000 limit, "an investor needs to buy only from four banks to get $1 million of FDIC insured money," said Tom Ricketts, CEO of Incapital, a global investment banking firm (but remember the higher limit is good only through Dec. 31, 2009).

Also, when calculating your insurance limit, you must total all identically registered accounts you own in the same bank, cautioned Lewis Altfest, a certified financial planner in New York City. Some readers believed incorrectly they could open an unlimited number of accounts at one bank as long as each account had a different account number and was under the insurance limit.

Another temporary protection is the government backing of money market mutual funds. The U.S. Treasury is guaranteeing the $1-dollar-a share price of any publicly offered eligible money market mutual fund that pays a fee to participate in the guarantee program.

All major money market funds, including those from fund giants Fidelity, Vanguard and T. Rowe Price, are participating. Investors cannot choose or decline to participate. Coverage is limited to the number of shares an investor owned as of the market close on Sept. 19.

The program will run until Dec. 18. The Secretary of the Treasury has the authority to renew it up through Sept. 18, 2009. For additional information, check the Treasury’s website, www.ustreas.gov, particularly the frequently asked questions at www.treas.gov/press/releases/hp1163.htm.

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Hundreds of union members and their families milled around Kiener Plaza in downtown St. Louis last month under a blazing blue Saturday sky. Some clutched placards — "InBev — Don’t forget who makes this Bud!" At exactly 1 p.m., drivers of parked tractor-trailers leaned on their horns. A blaring crescendo signaled the Teamsters were in town, ready to roll.

It remains to be seen whether the International Brotherhood of Teamsters will be so rowdy in an upcoming round of national contract negotiations with St. Louis-based Anheuser-Busch Cos.

Events are moving fast and furious: InBev of Belgium expects to finalize a $52 billion takeover of Anheuser-Busch — the biggest buyout in the history of beer — by the end of the year. A five-year contract between the Teamsters and Anheuser-Busch is set to expire Feb. 28; negotiators will go behind closed doors the week of Sept. 29 try to draw up a new contract.

For now, signs point tentatively toward a peaceful, swift and smooth labor negotiation.

"The Teamsters don’t want the uncertainty" from a long or strident standoff, said Gary Chaison, professor of industrial relations at Clark University. "InBev doesn’t want the uncertainty, and Anheuser-Busch knows it’s more valuable without uncertainty."

The Teamsters, one of the country’s biggest unions, faces an odd dynamic as InBev comes to town. The incoming owner of Anheuser-Busch is known for a tough approach toward unions in Belgium, Canada and Brazil. No one knows exactly how InBev will behave toward the Teamsters, which represent about 8,000 Anheuser-Busch employees in the U.S. — about a quarter of the company’s overall work force.

"With Anheuser-Busch, I knew where I stood to a certain degree," said Ray Wilkinson of House Springs, a fourth-generation brewery worker. "I’m concerned for my family. … Right now, I don’t know where I stand."

InBev has tried to assuage concerns about its planned acquisition. The giant Belgian brewer says it will keep all 12 of Anheuser-Busch’s U.S. breweries open, and says it expects the takeover of A-B to have little or no impact on union jobs.

But the Teamsters remain skeptical, arguing that InBev will be under pressure to make good on $45 billion of debt it shouldered to finance the purchase of Anheuser-Busch. The Teamsters wanted to know how that amount of debt — and the need to cut costs — squared with InBev’s assurances. The highly leveraged nature of the transaction raises "major credibility issues," the Teamsters said earlier this summer.

For their part, InBev and Anheuser-Busch have said the combined company will trim $1.5 billion in costs by 2011 — but mostly through economics of scale, overlapping corporate functions and cuts in the salaried, nonunion work force.

Meanwhile, the Teamsters union says its top priorities in the negotiations with Anheuser-Busch are protecting jobs, pension benefits and health care — demands that reflect the fact that many brewery workers’ dads and grandfathers also worked at Anheuser-Busch.

OPPORTUNITY

Relations between A-B and the union haven’t always been tranquil.

Ten years ago, contract negotiations between the Teamsters and Anheuser-Busch temporarily ground to a halt as things turned nasty. The union twice voted down a proposed contract before a deal was struck, narrowly avoiding a strike.

But by December 2003, the chill had thawed. Anheuser-Busch wrapped up quick negotiations with the Teamsters and emerged with a contract that has helped smooth labor relations.

By ratifying early, about 7,500 Anheuser-Busch employees covered by the contract got early wage and benefit increases and a $1,000 ratification bonus. Anheuser-Busch committed to keep all 12 U.S. breweries open during the term of the agreement and provided wage raises in all five years as well as bigger pensions.

Will the contract negotiations be swift, smooth and painless this time around? A few factors say yes.

First, rather than salivating over the opportunity to squeeze the union, InBev may want to stay in the background. If Anheuser-Busch hammers out a new union contract quickly, the Belgian company would get valuable, precise information about the labor issues and financial costs it is inheriting at America’s biggest brewer.

At the same time, the Teamsters want to demonstrate they are pragmatic employees that InBev can live with. A constructive approach to negotiations would go a long way in that direction.

"Make no mistake — we’re committed to the success of Anheuser-Busch and InBev," said Jack Cipriani, director of the Teamsters brewery and soft drink conference.

The Teamsters could benefit from negotiating with Anheuser-Busch — with whom it has had a stable relationship in recent years — rather than with InBev no fax payday advances. Lurking in the background is the possibility that, if the union drags its feet and throws up roadblocks to a new contract, InBev could close its buyout of Anheuser-Busch, swoop in and start to throw its weight around.

The next three to four months are "the window of opportunity," Paul Garver, brewery worker coordinator for the International Union of Food Workers, said at the Aug. 16 rally in downtown St. Louis. "Once this merger goes through, the promises that have been made through the media will be meaningless," said Garver, whose group is an international federation of trade unions.

If the new contract is in place before InBev takes control of the biggest U.S. brewer, InBev has to live with it. But if InBev takes over while the Teamsters and Anheuser-Busch are still negotiating, previous progress could conceivably come to naught. InBev would have the opportunity to bargain hard, and could take a very different stance toward the union than did Anheuser-Busch. If the company — or the union, for that matter — dug in its heels over unresolved issues, talks could break down.

Several observers said InBev would likely not want to rock the boat by stirring up labor trouble, even if it did have to mop up the union negotiations.

Despite the arguments for urgency, the Teamsters want to flex their muscles and demonstrate the ability to secure a solid contract. The Teamsters "can’t sell out to Anheuser-Busch just to get a deal," said Neil Martin, a Houston labor lawyer with the law firm Gardere Wynne Sewell. "They’ve got to live with the deal."

The Teamsters would put themselves at a disadvantage in negotiations by appearing too eager to get a new contract with Anheuser-Busch. Chaison said the Teamster’s current message to Anheuser-Busch is, "’We’d like to get a quick agreement with you, but it’s not the end of our world if we don’t.’"

Things are going smoothly this time in preliminary talks. Anheuser-Busch and the Teamsters recently wrapped up a few days of "professional and productive" negotiating sessions in Cincinnati, focused on local issues such as work rules at each brewery.

The upcoming national negotiations over issues such as wages and health care promise to be more difficult. Still, some Teamsters and labor analysts expect this round of contract negotiations to be uneventful, given the encouraging start. "We’re going to get a contact," said Dan McKay, president of the Teamsters Joint Council 13. "We’re going to get a good contract."

NEW REALITY

Where will the future balance of power lie between the Teamsters and Anheuser-Busch InBev? Like many unions, the Teamsters have suffered from the slippage of union membership in the U.S. The days may be gone when hard-muscled labor strife made the union feared. But the Teamsters union still has some kick and a well-earned reputation for shrewd and pragmatic negotiations.

The labor movement in general has "really taken it on the chin over the last couple of decades, but the Teamsters are better situated than a lot of manufacturing unions," said Roland Zullo, assistant research scientist at the University of Michigan’s Institute of Labor and Industrial Relations. Why? A concerted effort to diversify the union’s membership beyond truck drivers, said Zullo.

The Teamsters have lost some of their pull in the national labor movement and in state and local politics, but they "still carry clout among the workers at Anheuser-Busch, and they will still have something to say," said Henry W. Berger, emeritus professor of history at Washington University.

Now, the Teamsters are trying to rebalance the scales of power between unions and a brewing powerhouse — Anheuser-Busch InBev — that will supply one-fourth of the world’s beer. The Teamsters and other unions are trying to forge a new international partnership of unions that represent workers at InBev’s breweries in Brazil, Canada, Europe and — when the A-B takeover closes — the United States.

The rise of global entities like Anheuser-Busch InBev means "we must all adapt to new circumstances," said Cipriani. "The Teamsters in St. Louis are adapting to a new international reality."

jmcwilliams@post-dispatch.com

314-340-8372

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Fairfax Financial Holdings Ltd. announced yesterday it has made a $72-million (U.S.) bid for Polish reinsurer Polskie Towarzystwo Reasekuracji Spolka Akcyjna, valued at 66 cents per share.

Fairfax has commitments to tender the offer from shareholders who own about 47 per cent of PTR’s shares.

The transaction is expected to close in the first quarter of 2009.

"We are excited about future prospects for the Central and Eastern European economies in which PTR is active," Fairfax chair and chief executive officer Prem Watsa said in a statement issued from the company’s head office yesterday.

"This investment will increase Fairfax’s exposure to the region and will provide a long-term platform for expansion," Watsa said pay day loan.

Fairfax is a financial services holding company that, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

Fairfax shares closed up 1 cent at $226.51 Canadian yesterday in Toronto.

The Canadian Press

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Stocks plummeted Thursday, with the Dow plunging around 345 points as mixed retail sales, lower oil prices and dour labor market readings amplified worries about a global economic slowdown.

The concerns overshadowed a better-than-expected sales report from Wal-Mart Stores and surprisingly strong readings on productivity and the services sector.

The Dow Jones industrial average (INDU) lost 345 points, or 3%. It was the fourth-biggest one-day decline on a point basis this year and the third-worst day on a percentage basis.

It was the 51st session in 2008 in which the Dow posted triple-digit losses, according to Dow Jones. That’s the worst record for the blue-chip barometer since 2002, when the Dow declined at least 100 points 67 times during the year.

The big daily swings this year reflect the markets’ volatility amid the uncertainty concerning the economy and financial sector.

The broader Standard & Poor’s 500 (SPX) index fell 3.2% and the Nasdaq composite (COMP) lost 3%.

Small caps got pummeled too, with the Russell 2000 (RUT) index plunging 3%.

Friday’s focus will be the August employment report from the government. But economists don’t expect a job market turnaround anytime soon. (Full story).

Investors have come back from Labor Day and the summer to find that few of the negatives have changed, said Gus Scacco, managing director at AG Asset Management.

"The market is looking out and trying to discount six months from now, but all the same issues are still there," he said. "And now there’s more of a realization that global growth has slowed. That’s become a front-burner issue."

Stocks were mixed Wednesday as falling oil prices, a sluggish economic reading from the Federal Reserve and weak sales reports from many automakers added to recession fears. Such concerns were magnified Thursday by the retail sales reports and economic news.

"I think the economy is really weak and this bear market is a correct reflection of that," said Len Blum, managing director at Westwood Capital.

He said that whether it meets the technical definition of a recession or not, the current environment feels like a recession and it’s being led by the consumer.

"Consumers are getting hit on a lot of fronts," he said. "They’re getting crushed at the grocery store and the gas pump, they can’t borrow and the labor market is weak."

A lot of those realities were reflected in the day’s news.

Adding to the gloom and doom in the afternoon: comments from two Fed officials that reiterated the central bank’s dour forecast. Dallas Fed president Richard Fisher discussed anemic growth. San Francisco Fed president Janet Yellen said that the credit crunch is severe and deepening and that the housing market has not bottomed yet.

Additionally, bond manager Bill Gross stated in a commentary on the PIMCO Web site that the Treasury needs to step up its efforts to help Fannie Mae and Freddie Mac and to rescue the housing industry.

Wal-Mart: The world’s leading retailer reported stronger-than-expected August sales at its stores open a year or more, a metric known as same-store sales. Sales rose 3% versus forecasts for a rise of 1.6% and included the critical back-to-school period. (Full story)

Wal-Mart (WMT, Fortune 500) shares ended the session barely lower.

Other retailers: While Wal-Mart and select other discount retailers benefited from the need for a strapped consumer to still buy essentials, mall-based clothing chains and high-end sellers suffered.

Clothing chain Abercrombie & Fitch (ANF) said sales fell 11%, versus forecasts for a 7.9% drop. Shares slumped 6.8%. Pacific Sunwear of California (PSUN) reported a decline of 6%, shy of forecasts for a drop of 8.8%. Shares dropped 4%.

On the high end, Saks (SKS) said same-store sales fell 5.9% versus forecasts for a drop of 4.7%. Shares were little changed. Nordstrom (JWN, Fortune 500) said same-store sales slumped 7.9%, worse than the 7.1% consensus. Shares slipped 4%.

Jobs: The number of Americans filing new claims for unemployment jumped unexpectedly last week, rising to 444,000 from a revised 429,000 the previous week, the government said. Economists surveyed by Briefing.com thought claims would fall to 420,000 last week.

A separate report from payroll services firm ADP showed that the private sector lost 33,000 jobs in August, eclipsing forecasts for a drop of 30,000 payday loan.

The report can sometimes be a harbinger of the broader government-issued monthly employment report, due Friday. Employers are expected to have cut 75,000 non-farm jobs from their payrolls, after cutting 51,000 in July. The unemployment report, generated by a separate survey, is expected to hold steady at 5.7%.

Other economic news: Other reports were more positive. Second-quarter productivity was revised up to a 4.3% annualized rate from an initial rate of 2.2%. Economists thought it would be revised up to a 3.5% rate.

At the same time, unit labor costs, the report’s inflation component, showed a bigger-than-expected decline, suggesting that the boost in productivity has not boosted wages.

And the Institute for Supply Management’s reading on the services side of the economy showed expansion in the sector, versus forecasts for further erosion. The index rose to 50.6 in August from 49.5 in July. Economists thought it would hold steady at 49.5. Any number over 50 signals expansion and a number below it signals weakness.

Company news: Ciena (CIEN) reported a steep drop in fiscal third-quarter profit and warned that fourth-quarter sales won’t meet forecasts as large customers delay purchases due to the weak economy. Shares of the network-gear maker slumped almost 25% in active Nasdaq trade and dragged on the technology sector. (Full story).

Cisco (CSCO, Fortune 500), Oracle (ORCL, Fortune 500), Intel (INTC, Fortune 500), Yahoo (YHOO, Fortune 500), Amazon.com (AMZN, Fortune 500) and Google (GOOG, Fortune 500) were among the big tech stocks sinking.

Blue chips were hit hard too, with 29 of 30 Dow components sliding. The lone exception was Coca-Cola (KO, Fortune 500).

The Dow’s biggest losers were financial components AIG (AIG, Fortune 500), American Express (AXP, Fortune 500), Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and JP Morgan Chase (JPM, Fortune 500).

Caterpillar (CAT, Fortune 500) declined 5.6%. The heavy-equipment maker has been sliding for the last few sessions and was also reacting Thursday to fellow machinery maker Terex (TEX, Fortune 500)’s warning that 2008 profit won’t meet forecasts. Terex fell almost 20%.

Aluminum producer Alcoa (AA, Fortune 500), aerospace companies Boeing (BA, Fortune 500) and United Technologies (UTX, Fortune 500), automaker General Motors (GM, Fortune 500) and telecom Verizon Communications (VZ, Fortune 500) all lost around 4%.

Among other movers, airlines, railroads and truckers declined, dragging down the Dow Jones Transportation (DJTA) average by 2.7%.

Market breadth was negative. On the New York Stock Exchange, losers beat winners five to one on volume of 1.3 billion shares. On the Nasdaq, decliners topped advancers by nearly four to one on volume of 2.38 billion shares.

Fuel prices: U.S. light crude oil for October delivery fell $1.46 to settle at $107.89 a barrel on the New York Mercantile Exchange, a fresh five-month low.

Prices slipped after the government’s weekly inventories report showed crude stockpiles tumbled unexpectedly. Investors were also keeping an eye on updates about the damage from Gustav to Gulf Coast oil facilities, which account for about 25% of U.S. oil production.

Oil has fallen steadily over the last few weeks after tumbling more than 20% off the record high of $147.20 a barrel hit on July 11. Worries about Gustav’s impact initially added to that rise, but the storm proved to be less destructive than had been feared, and oil prices resumed their slide on bets of a global economic slowdown. (Full story)

Gas prices declined for a fourth straight day, according to a national survey of credit-card activity. Even the Gustav-ravaged Gulf Coast states saw prices decline.

Other markets: In global trade, Asian and European markets ended lower.

In the bond market, Treasury prices rallied, lowering the yield on the benchmark 10-year note to 3.62% from 3.70% late Wednesday. Prices and yields move in opposite directions.

The dollar gained versus the euro and fell versus the yen.

COMEX gold for December delivery fell $5 to $803.20 an ounce. 

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French bank Societe Generale SA said Tuesday net profit fell 63% in the second quarter, after its investment banking unit posted a loss.

Net profit dropped to $1 billion in the second quarter from $2.71 billion a year ago, SocGen said in a statement.

Continued turmoil in global financial markets led SocGen’s corporate and investment banking unit to a $290 million loss, compared with a $1.12 billion profit a year earlier, the bank said.

SocGen is still managing the fallout from $7.18 billion hit it took closing what it calls unauthorized positions by former trader Jerome Kerviel cash advance loan. The loss was announced in January but included in the bank’s 2007 results.

France’s second-largest bank has tightened security and changed its top management this year, splitting the posts of CEO and chairman.

CEO Frederic Oudea, promoted from CFO in May, said the second quarter result "reflects the robustness" of the bank’s portfolio of activities, despite what he calls "a crisis on an exceptional scale." 

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Psst! Here’s one you can trade on: The Securities and Exchange Commission, buffeted on all sides from the great leverage collapse of 2008, is now going to get to the bottom of the age-old dilemma of the trading desk rumor.

In a press release Sunday night that coincided with the opening of Asian markets, the SEC announced it was conducting examinations at brokers and hedge funds to determine if false information is being deliberately spread by traders to manipulate stock prices.

Philosophically, there’s little argument against cracking down on those who knowingly develop or pass on bad info. After all, such bald attempts to manipulate the market have long been illegal.

But given that sharing of rumors and information - some of it good, some not - occurs constantly across trading desks, there appear to be some truly head-scratching aspects to the SEC’s move.

The first is that the agency’s overburdened enforcement unit is already looking into, to name just a few - mortgage originator fraud, investment dealer disclosure on auction-rate securities, and broker valuations of the arcane vehicle known as collateralized debt obligations (CDOs) that has been the source of so much misery on Wall Street.

Now the watchdogs are going to chase down down trading desk rumors too?

The second is that much of the impetus of this investigation appears to have come from senior executives at several Wall Street brokerages outraged over the effect rumors are having on their companies’ stock prices.

Last week, for example, Lehman Brothers saw its share price hurt last Thursday when a story made the rounds - and was picked up by CNBC - that stock-trading giant SAC Capital and giant bond manager PIMCO had ceased trading with the firm.

A likely death-blow if true, but it was easily disproved. The stock, which closed at $19.74 on Wednesday, dropped to $15.79 before rallying to close at $17.30 on Thursday. Whatever the story is behind the origination of the rumor, shorting Lehman’s stock that day proved to be a pretty volatile - if not outright crummy - trade for those who piled on http://easy-quick-payday-loans.com.

More important, while Lehman chief executive Richard Fuld has a well-documented antipathy towards shortsellers who question his firm’s financial health, he and his deputies made decisions that have saddled the company with big losses and required it to make repeated trips to the markets to raise more capital.

So which has proven more painful for Lehman shareholders: the quick-buck artist who passes on some bogus tip - or Lehman’s decision to become the most aggressive investment bank to speculate on Southern California real estate?

Then there’s the case of Bear Stearns. A cottage industry of sorts, typified by a much-discussed Vanity Fair article, has developed that blames shortsellers for Bear’s near-collapse and subsequent fire sale to JPMorgan Chase (JPM, Fortune 500).

It’s true there was no shortage of rumors swirling around Bear Stearns on the eve of its mid-March rescue. Like most trading desk rumors, they were easily disproved and immediately forgotten.

Ultimately, what allowed the run on the bank were the huge holes in Bear’s balance sheet. Alone among Wall Street’s big brokers, Bear Stearns had a nearly $33 billion gap between what it had borrowed short-term and what it had available to repay those loans. No other broker had anything like this exposure.

In the end, the people who did business with Bear Stearns came to see it as a highly-leveraged, mortgage-bond-centered hedge fund and wanted less exposure to it.

Veteran analyst Barry Ritholtz, in his "Big Picture" blog, put it well in a post Friday. "Why is it that all these rumor-mongerers and shorts are only bringing some firms to their knees? How come they always seem to be the over-leveraged, under-capitalized, unhedged, most poorly-managed companies?"  

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