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Biz Quicks

LAYOFFS
Tom Marano: ResCap faces big challenges.

By Bloomberg, AP and staff reports
Published: 9/4/2008 2:12 AM
Last Modified: 9/4/2008 3:47 AM

Stock market indexes finish session mixed

Wall Street finished mixed in fickle trading Wednesday.

The Commerce Department gave the market modest comfort when it said orders for manufactured products rose by 1.3 percent in July, a number higher than expected. But with automakers releasing sluggish August sales and the Federal Reserve reporting weak economic activity throughout the nation, the market proceeded cautiously.

"All the data in the last two weeks has actually been very good," said Joseph Battipaglia, the chief investment officer at Ryan Beck & Co., pointing to Wednesday's factory orders data, falling oil prices and the recent upward revision of second-quarter gross domestic product. "Despite all that, you didn't get a commensurate market performance. And that's troubling."

The Dow Jones industrial average rose 15.96, or 0.14 percent, to 11,532.88; the Standard & Poor's 500 index fell 2.60, or 0.20 percent, to 1,274.98; and the Nasdaq composite index fell 15.51, or 0.66 percent, to 2,333.73.

Lender GMAC closing all 200 retail offices

Lender GMAC Financial Services said Wednesday it will close all of its 200 retail offices and lay off about 5,000 people as it reduces its mortgage lending and servicing operations amid the housing market downturn.

The majority of the layoffs are slated for GMAC's mortgage lending division, Residential Capital LLC, or ResCap.

"While these actions are extremely difficult, they are necessary to position ResCap to withstand this challenging environment," said Tom Marano, the CEO of ResCap, which lost $1.86 billion in the second quarter.

The Fort Washington, Pa., company also said it would stop making mortgage loans through external, wholesale brokers. But it will continue servicing loans and lending through brands such as Ditech or GMAC Mortgage Direct.

GMAC is majority owned by the private equity firm Cerberus Capital Management, but General Motors Corp. of Detroit still holds a 49 percent stake in the company.

ConocoPhillips plant being restarted

ConocoPhillips said Wednesday it was restarting its refinery in Lake Charles, La., that was shut before Hurricane Gustav made landfall Monday.

The plant will return to full production in 10 to 14 days, the Houston company said in a statement on its Web site.

The company's distribution terminal in Westlake, La., had resumed service, ConocoPhillips said, but its Alliance refinery in Belle Chasse, La., remained shut.

The Lake Charles refinery can process 239,000 barrels of crude oil per day, according to the Energy Department. Alliance's capacity is 247,000 barrels a day.

ConocoPhillips said it had not yet decided whether to request supplies from the government's Strategic Petroleum Reserve.

It was still not known when the company's Magnolia platform may resume operation. It is ConocoPhillips' sole production operation in the Gulf of Mexico.

By Bloomberg, AP and staff reports

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