IN BRIEF

CHARLOTTE, N.C.

Banks warn of big writedowns ahead

Wachovia, PNC and Bank of America warned Wednesday of bigger-than-expected writedowns and hinted that fourth quarter results could be a disappointment.

Wachovia Corp. doubled its estimate of loan loss provisions to about $1 billion for the fourth quarter, while the chief executive of crosstown rival Bank of America Corp. pointed to higher writedowns and said he expects current credit market turbulence to extend into 2008.

A third major bank, PNC Financial Services Group, said the money it will set aside to cover bad loans for the last three months of the year will be more than twice as large as in the third quarter.

WASHINGTON

Fed plans new way to heighten liquidity

The Federal Reserve on Wednesday announced a novel approach to injecting money into the banking system as it struggles to combat a severe credit crunch that threatens to drag the country into a recession.

The Fed said it would conduct two auctions next week where banks can bid for up to $40 billion in loans, money that they will have to bolster their own reserves. It marked the Fed's biggest concentrated effort to inject liquidity into the banking system since the Sept. 11, 2001, terrorist attacks.

The hope is that the extra funds will spur increased lending on the part of the banks and combat a serious credit crunch that has made loans harder to obtain for many businesses and consumers.

The Fed linked the new auction process to an announcement that it was extending a line of credit in dollars to the European Central Bank and the national bank of Switzerland so that those institutions could better deal with credit problems in Europe. The Fed said it was also coordinating with the central banks of England and Canada.

WASHINGTON

Sallie Mae reduces profit forecast for '08

Sallie Mae on Wednesday cut its 2008 profit forecast and said it failed to revive interest from an investor group that once offered to buy it for $25 billion.

The student lender's weakening financial outlook could bolster the investor group's legal argument that it should not have to pay a $900 million fee for walking away from the deal because of significant changes in economic or regulatory conditions affecting SLM Corp., Sallie's formal name.

Reston, Va.-based Sallie, the nation's largest student lender, lowered its earnings forecast for next year by more than 13 percent, blaming a new law that reduced federal subsidies and the need to hoard cash to offset bad student loans.

BOSTON

Biogen says it will remain independent

Biogen Idec said Wednesday it will remain an independent company after a search for a possible buyer failed to yield any definitive offers. The biotechnology firm's shares plunged nearly 28 percent.

The strategic review began Oct. 12 after billionaire investor Carl Icahn bought up shares of Biogen Idec, which analysts expected could have fetched a price of more than $20 billion.

Icahn's investment led to speculation that he could be preparing a buyout bid, or might seek to increase the value of his shares by encouraging a higher bid by a major pharmaceutical company.

But Biogen Idec said after markets closed Wednesday that its board had decided the firm "will continue on its present course as an independent company."

NEW YORK

Energy futures rise on news of oil-supply dip

Energy futures rose sharply Wednesday after the government reported unexpected declines in supplies of crude and heating oil last week and the Federal Reserve announced a plan to help banks weather the credit crisis.

Crude supplies fell 700,000 barrels during the week ended Dec. 7, according to a weekly inventory report from the Energy Department's Energy Information Administration. Analysts had expected a 100,000 barrel increase.

Light, sweet crude for January delivery rose $4.37 to settle at $94.39 a barrel on the New York Mercantile Exchange, and January heating oil futures jumped 12.02 cents to settle at $2.6432 a gallon. It was crude's highest close since Nov. 27.

Meanwhile, gasoline prices retreated further below $3 a gallon overnight, falling 0.5 cents to a national average of $2.99 a gallon, AAA and the Oil Price Information Service said.

January natural gas rose 3.23 cents to settle at $7.408 per 1,000 cubic feet on the Nymex.

American Pacific reports higher profits

American Pacific Corp., a Las Vegas-based specialty chemicals maker, on Wednesday said fourth-quarter net income rose from a year earlier.

In a statement, the company said its net income was $3.6 million, or 49 cents per share, for the three months ended Sept. 30, up from net income of $802,000, or 11 cents per share, a year earlier.

Operating income increased to $9.6 million from $3.5 million.

Revenue rose 44.2 percent to $61.7 million from $42.8 million.

American Pacific shares rose 76 cents, or 4.65 percent, Wednesday to close at $17.10 on the Nasdaq National Market.

NEW YORK

Treasury prices decline as Fed unveils program

Treasury prices plunged Wednesday after the Federal Reserve and other central banks announced an ambitious, coordinated program that investors hope will avert a year-end liquidity crisis.

The benchmark 10-year Treasury note fell 0.63 points to 101.38 with a yield of 4.06 percent, up sharply from 3.97 percent late Tuesday.

The 30-year long bond dropped 0.53 points to 107.63 with a yield of 4.53 percent, up from 4.47 percent late Tuesday.