Business Highlights

Stocks slide as rising dollar hits oil prices

NEW YORK (AP) _ A strengthening dollar and worries about an overheated market pounded stocks on Monday.

Stock indexes started the day higher but turned sharply lower at midmorning as interest rates rose and a rebound in the value of the dollar stalled a rally in commodities. Early gains in prices for oil and other commodities had pushed up shares of energy and materials companies.

The sharp swings in currency and commodity markets sent the Dow Jones industrial average whipsawing in a 200-point range, surrendering an early advance for a loss of 104 points to end at 9,867.96. Stocks have fallen in four of the last five days.

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Verizon profit falls 30 pct on restructuring costs

Verizon Communications Inc. reported a 30 percent drop in third-quarter earnings Monday as it couldn't sign up enough new subscribers to offset higher costs from laying off workers and absorbing an acquisition.

The nation's second-largest phone company is evolving its business _ managing the downturn of its landline phone business and putting more emphasis on cell phones and its fiber-optic FiOS TV and Internet service. Verizon said it is halfway through cutting the jobs of more than 8,000 employees and contractors by year's end.

Verizon, which is based in New York, earned $1.18 billion, or 41 cents per share, in the third quarter, compared with $1.67 billion, or 59 cents per share, a year ago.

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Madoff associate had heart attack, drowned in pool

WEST PALM BEACH, Fla. (AP) _ A man accused of making more than $7 billion off the investment schemes of jailed financial manager Bernard Madoff drowned after having a heart attack, authorities said Monday.

Jeffry Picower, 67, was found around noon Sunday by his wife, Barbara, at the bottom of a pool at their oceanside mansion. She eventually pulled him from the water with help from a housekeeper. He died a short time later at a nearby hospital.

An autopsy conducted Monday found he suffered a heart attack and drowned, said Dr. Michael Bell, chief medical examiner for Palm Beach County. The death has been ruled accidental, and the heart attack was brought on by heart disease. Toxicology tests are pending.

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Peltz joins Legg Mason board as Trian buys stake

NEW YORK (AP) _ Billionaire investor and activist shareholder Nelson Peltz is joining the board of directors of asset manager Legg Mason Inc.

Legg Mason, based in Baltimore, said Monday it was adding Peltz _ known for his investments in consumer businesses like the Wendy's burger chain and foodmaker H.J. Heinz _ after Peltz's company, Trian Fund Management LP, accumulated a 4.3 percent stake in Legg Mason.

Peltz is the CEO and a founding partner of Trian, which holds a stake in Wendy's. Peltz is on Heinz's board of directors.

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Newspaper circulation falling fast, down 10.6 pct

NEW YORK (AP) _ The decline in U.S. newspaper circulation is accelerating as the industry struggles with defections to the Internet and tumbling ad revenue.

Figures released Monday by the Audit Bureau of Circulations show that average daily circulation dropped 10.6 percent in the April-September period from the same six-month span in 2008. That was greater than the 7.1 percent decline in the October 2008-March 2009 period and the 4.6 percent drop in the April-September period of 2008.

Sunday circulation fell 7.5 percent in the latest six-month span.

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AP source: Treasury near deal on 'too big to fail'

WASHINGTON (AP) _ The Treasury Department and a senior House Democrat have decided against making financial firms pay upfront the costs of dismantling them if regulators decide they have grown "too big to fail," according to a House aide familiar with the plan.

Instead, those companies would be allowed to borrow money from the government. The government would then recoup the costs by either seizing the firm's profits or seeking restitution from the entire industry, the aide said.

The aide spoke on condition of anonymity because details had not been released. Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, was expected to announce the agreement by Tuesday.

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FairPoint phone company files for bankruptcy

PORTLAND, Maine (AP) _ FairPoint Communications Inc. had its work cut out when it grew sixfold overnight by buying Verizon Communications' land line and Internet operations in three New England states. But the nation's credit crisis and a bungled technology transfer made the task virtually impossible.

With a battered financial sheet and a tattered reputation, FairPoint filed for Chapter 11 bankruptcy protection on Monday, barely 18 months after becoming the dominant telecommunications company in Maine, New Hampshire and Vermont.

The bankruptcy filing was widely anticipated and fulfilled critics' predictions that FairPoint was taking on more than it could handle when it bought the Verizon properties for $2.3 billion.

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Retail gas prices nearing summer highs

Retail gas prices are spiking to levels last seen in the heat of summer driving season, raising fears that consumers could cut back on holiday spending.

But the crude rally propelling the jump at the pump hit the brakes Monday, as a barrel of oil tumbled more than 2 percent and the dollar strengthened after hitting a 14-month low.

The average price for a gallon of regular gasoline rose for the 13th straight day, adding sixth-tenths of a cent overnight to $2.671, according to auto club AAA, Wright Express and Oil Price Information Service.

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Caterpillar cuts 2,500 laid-off workers

PEORIA, Ill. (AP) _ Caterpillar Inc. said Monday about 2,500 laid-off employees will be permanently cut from the company and 550 others will be brought back to work by the end of next year.

The workers are among more than 22,000 laid off earlier this year as Caterpillar dramatically scaled back production due to weaker demand amid the global economic downturn. The Peoria, Ill.-based company has cut 16 percent of its work force, which now stands at just above 94,000.

But last week Caterpillar, the world's largest maker of mining and construction equipment, said it was seeing "encouraging signs" that a recovery may be under way, even as it reported a 53 percent decline in third-quarter earnings.

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Senators differ on extending homebuyer tax credit

WASHINGTON (AP) _ Top Democrats in the Senate are pressing a plan that would extend a popular tax credit for first-time homebuyers but gradually phase it out over the course of next year.

The proposal, by Majority Leader Harry Reid, D-Nev., and Senate Finance Committee Chairman Max Baucus, D-Mont., would extend the $8,000 tax credit _ which expires Nov. 30 _ through March 31. Its value would drop by $2,000 for each of the subsequent three quarters of 2010.

The plan, which could face a vote in the Senate this week, appears aimed at countering a far more generous $17 billion bipartisan plan that would extend the $8,000 credit through June 30, 2010, boost the income cap for eligibility and open the credit to all buyers, rather than first-timers.

By The Associated Press

The Dow fell 104.22, or 1.1 percent, to 9,867.96. The index fell 109 Friday. The two-day slide is the first triple-digit loss for the Dow since June 15-16.

The broader Standard & Poor's 500 index fell 12.65, or 1.2 percent, to 1,066.95. The index, which is the basis for many mutual funds, is down 2.8 percent from its recent peak a week ago. The Nasdaq fell 12.62, or 0.6 percent, to 2,141.85.

Benchmark crude for December delivery fell $1.82 to settle at $78.68 a barrel on the New York Mercantile Exchange.

In other Nymex trading, heating oil fell 4.21 cents to settle at $2.0335 a gallon. Gasoline for November delivery lost a penny to settle at $2.0338 a gallon. Natural gas for November delivery slid 27.4 cents to settle at $4.513 per 1,000 cubic feet.

In London, Brent crude for December delivery gave up $1.66 to settle at $77.26 a barrel on the ICE Futures exchange.