IN BRIEF

Manufacturing news sends stocks skidding

Wall Street skidded Wednesday after a weaker-than-expected reading on the manufacturing sector and a spike in oil prices to $100 a barrel triggered concerns of a further slowdown in the overall economy.

The Institute for Supply Management’s report that its manufacturing index fell to 47.7 percent for December from 50.8 percent in November raised concerns that the economy could be slowing at a quicker pace than some investors had estimated. The reading of less than 50 signals economic contraction; readings higher than 50 signal expansion.

Analysts polled by Thomson/IFR had expected manufacturing to expand modestly in December.

Light, sweet crude rose $3.64 to $99.62 per barrel on the New York Mercantile Exchange after earlier hitting $100 for the first time.

The Dow fell 220.86, or 1.67 percent, to 13,043.96. The blue chips briefly fell below 13,000 for the first time since November.

Broader stock indicators also fell sharply. The Standard & Poor’s 500 index slid 21.20, or 1.44 percent, to 1,447.16, and the Nasdaq composite index fell 42.65, or 1.61 percent, to 2,609.63.

Loveman signs on to amended contract

Gary Loveman, Harrah’s Entertainment’s chairman, CEO and president, signed an amended employment contract Dec. 31 extending his employment until June 1 or at the close of the current buyout, according to a Wednesday filing with the U.S. Securities and Exchange Commission.

The gaming company is in the final stages of a $17.7 billion buyout by private equity partners TPG Capital and Apollo Management.

The amendment is a bridge measure until Loveman, whose current contract expired Jan. 1, is signs a new contract under the new ownership.

Both TPG and Apollo have told gaming regulators that Loveman will remain in charge of the company’s day-to-day operations after the buyout.

Current salary information was unavailable. But a filing made in 2007 shows Loveman’s base salary in 2006 was $2 million annually.

WASHINGTON

Credit woes weigh on policymakers’ minds

Federal Reserve policymakers worried at their December meeting about the potential for a vicious cycle to develop in which credit problems could worsen.

That could hurt economic growth and force the Fed to act more aggressively in cutting rates, according to meeting minutes made public Wednesday.

Problems in the housing, credit and financial markets drove the Fed to do an about-face on Dec. 11 and slice its key interest rate yet again in the hope it would bolster an economy that was losing speed.

Fed Chairman Ben Bernanke and all but one of his colleagues agreed to trim the Fed key rate by one-quarter percentage point to 4.25 percent, a two-year low. The central bank ordered its key rate lowered three times last year; the December reduction was most recent one.

CLEVELAND

National City will cut its dividend in half

Regional bank National City Corp. said Wednesday it is slashing its dividend by half and shutting down its wholesale mortgage division, eliminating 900 jobs, due to weakened housing and credit markets.

The news sent National City shares down 5.3 percent, or 87 cents, to close at $15.59 Wednesday. The stock had hit a new 52-week low of $15.45 earlier in the day. The shares have been as high as $38.94 in the past year.

National City also said in a statement it plans to raise new capital during the first quarter and has hired Goldman Sachs and Co. as its capital adviser.

SEOUL, South Korea

Hyundai forecasts double-digit sales rise

Hyundai Motor Co. and affiliate Kia Motors Corp., South Korea’s biggest automakers, aim to increase sales 21 percent this year selling new cars and sport-utility vehicles in China, India and other overseas markets.

The automakers expect to sell a combined 4.8 million vehicles globally this year, compared with an estimated 3.97 million for 2007, Seoul-based Hyundai Motor said in a statement Wednesday. Hyundai will sell 3.11 million vehicles, a record.

Hyundai and Kia plan to release at least five new models, including the Genesis premium sedan and the Mohave SUV, this year to win customers from Toyota Motor Corp. in China and overcome slower growth in the U.S.

Lockheed Martin will pay to settle lawsuit

Lockheed Martin Corp., the world’s largest defense company, will pay $2.5 million to settle a U.S. discrimination lawsuit after a black employee was allegedly racially harassed, including being called the “N-word,” and received death threats after filing complaints.

Charles Daniels, a former Lockheed Martin electrician, was “subjected to a racially hostile work environment at several job sites nationwide — including threats of lynching and the ‘N-word,'” the U.S Equal Employment Opportunity Commission said in a statement.

Daniels received death threats after reporting the harassment, the government said.

NEW YORK

Treasury prices open year with strong start

Treasury prices started the year with a vigorous rally Wednesday after jolting news that the nation’s manufacturing activity shrank in December.

The benchmark 10-year yield fell back below 4 percent.

The benchmark 10-year Treasury note rallied 1.41 to 102.84 with a yield of 3.99 percent, its weakest level in a month and down sharply from 4.02 percent late Monday. Prices and yields move in opposite directions.

The 30-year long bond jumped a full 2.47 to 110.84 to 4.35 percent, down from 4.45 percent late Monday.