IN BRIEF

HOUSTON

As unrest rises among militants, oil prices up

Crude prices rose above $40 a barrel Monday as Israel and Palestinian militants exchanged rocket fire and the death toll mounted in the oil-rich region.

Light trading contributed to market volatility in the final days of 2008, with price swings of close to $5 a barrel.

Light, sweet crude for February delivery rose $2.31 to settle at $40.02 a barrel on the New York Mercantile Exchange, the first time crude has ended the day above $40 in a week. Nymex will be closed Thursday for the New Year's Day holiday.

Retail gasoline prices in the U.S. continued to fall and neared $1.60 per gallon nationally Monday.

WASHINGTON

Banks, investment firms cut back on borrowing

Commercial banks and investment firms borrowed less from the Federal Reserve's emergency lending program last week, the government said Monday, although demand for the loans remains high amid a global credit crunch.

The Fed reported that commercial banks averaged $86.3 billion in daily borrowing over the week that ended Wednesday, down from $88.4 billion for the week that ended Dec. 17.

Investment firms, meanwhile, drew $45.7 billion in the week that ended Dec. 24, compared to an average of $50.5 billion the previous week. This category includes any loans that were made to the U.S. and London-based broker-dealer subsidiaries of Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co. Inc.

NEW YORK

Kerkorian sells off remaining Ford stake

Billionaire investor Kirk Kerkorian has sold his remaining 5 percent stake in Ford Motor Co., his investment company, Tracinda Corp., said.

Kerkorian, 91, has unloaded his last 107 million shares -- a 4.89 percent stake -- ending his investment with the troubled Dearborn, Mich., automaker whose turnaround efforts he expressed confidence in this year.

Kerkorian's stake in Ford peaked in June, when he owned 6.49 percent after paying $1 billion at an average share price of $7.10. He began scaling back his ownership in October, selling shares at an average price of $2.43 each, regulatory filings show. That marked a loss of about two-thirds of his investment, or roughly $650 million.

Ford spokesman Mark Truby declined to comment on Kerkorian's withdrawal.

WASHINGTON

Investors ally to try buying failed IndyMac

A trio of private investors -- J.C. Flowers & Co., Dune Capital Management and Paulson & Co. -- has allied in an effort to buy failed thrift IndyMac, a person familiar with the deal said Monday.

The two private-equity firms and hedge fund have applied for a federal holding company charter, according to the person, who asked not to be named because the deal has not been completed.

The investors want to convert IndyMac Federal Bank, which was seized by the Federal Deposit Insurance Corp. in July in the second-largest bank failure of the year, to a stock-held institution.

A spokesman for Paulson & Co. declined to comment Monday. Representatives from J.C. Flowers & Co. and Dune Capital Management did not respond to requests for comment.

SHANGHAI, China

Delphi halts work at factory near Shanghai

U.S. car parts maker Delphi Corp. has suspended work at a factory in Suzhou due to shrinking demand amid the global economic slump, a media report and a staff member said Monday.

The factory west of Shanghai makes compressors for General Motors Corp. Calls to the plant rang unanswered Monday.

"The sudden and unprecedented decline in (car) sales globally has resulted in our only customer, General Motors North America, announcing plant closures and plant stoppages," the Hong Kong newspaper South China Morning Post quoted a Delphi internal document as saying.

"Unfortunately our only customer in 2009 is GMNA, and this has placed the Suzhou compressor plant in a very dangerous position," it said.

NEW YORK

Union's deadline on pay cut extended

The deadline for a vote to lock in an immediate 10 percent pay cut and other contract modifications for union workers at YRC Worldwide Inc., one of the nation's largest trucking companies, has been extended by a week, the company said Monday.

Ballots were to be counted by today, but company officials said it pushed the deadline to Jan. 6 because of several factors; including holiday mail volume, harsh winter weather in some parts of the U.S., and a high number of ballot requests.

Earlier this month, the International Brotherhood of Teamsters and YRC agreed to a tentative plan for union workers to take an immediate 10 percent pay cut to boost the company's slipping finances.

A trust has also been formed as part of the deal, which will give workers the opportunity to buy stock when the company starts to turn around. Union workers will be offered warrants equal to about 15 percent of the company's outstanding stock, or about 10 million shares, through the trust.

The trust can sell the stock after January 2010.

ATLANTA

Northwest seeks to delay U.S.-China service

Northwest Airlines, due to poor market conditions in light of the weakened global economy, is the latest carrier seeking to delay or cut back long-coveted U.S.-China service.

The subsidiary of Atlanta-based Delta Air Lines Inc. said in a filing this month with the Department of Transportation that it was seeking to delay proposed daily Seattle-Beijing service by a year, from March 2009 to March 2010 and delay startup of Detroit-Shanghai nonstop service by more than two months, from March 25, 2009, to June 3, 2009.

WASHINGTON

Six-month T-bill rate drops to record low

The interest rate on six-month U.S. Treasury bills dropped to its lowest level on record at the weekly Treasury auction, the government said Monday.

The Treasury Department said it auctioned $27 billion in six-month bills at a yield of 0.25 percent, an all-time low. That's down from a rate of 0.285 percent last week.

Treasury rates have fallen to historic lows as the worst financial crisis in 70 years has triggered a rush by investors to the safety of government securities.

Higher demand for such securities pushes down their yield or interest rate.

NEW YORK

Treasury prices increase as investors seek safety

Treasury prices were mostly higher Monday as investors headed for the safety of government securities amid rising tensions in the Middle East between Israel and Hamas.

The 10-year Treasury note rose 0.315 to 114.63 and its yield fell to 2.09 percent from 2.13 percent.

The 30-year Treasury bond fell 0.59 points to 137.97 and its yield rose to 2.64 percent from 2.61 percent.