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Fed chief says rate cut may be needed

By Times wires
Published November 30, 2007

WASHINGTON - Federal Reserve Chairman Ben Bernanke on Thursday hinted that another interest rate cut may be needed to bolster the economy. The worsening credit crunch, a deepening housing slump and rising energy prices probably will create some "headwinds for the consumer in the months ahead," he said. Bernanke said he expects consumer spending will continue to grow and suggested the country can withstand the current problems without falling into a recession. But he indicated that consumers could turn more cautious as they try to cope with all the stresses. A sharp cutback in consumer spending could send the economy into a tailspin. Against this backdrop, Fed policymakers will need to be "exceptionally alert and flexible," Bernanke said.

White House cuts its GDP forecast
WASHINGTON - The White House on Thursday lowered its forecast for economic growth for next year and said unemployment will likely rise as the housing slump and tight credit stunt business expansion. Under the administration's new forecast, gross domestic product, or GDP, will grow by 2.7 percent next year. Its old projection called for a stronger, 3.1 percent increase. "The housing market decline has been more significant than we expected," said Edward Lazear, chairman of the White House's Council of Economic Advisers.

Liquidators pay $48M for Levitz
WASHINGTON - A group of liquidators will pay $48-million for the assets of bankrupt Levitz Furniture Inc., marking the end of the furniture seller founded nearly a century ago. The bid by six liquidation firms was the highest received at a bankruptcy court-ordered auction held Wednesday, according to court papers. On the block were the rights to conduct going-out-of-business sales at some 70 Levitz stores,plus the retailer's inventory and leases. Levitz will also get a percentage of the proceeds of the store-closing sales.e_SClBNEW YORK

Morgan Stanley fires co-president
NEW YORK - Morgan Stanley said that Zoe Cruz, a 25-year veteran at the firm, was ousted as co-president Thursday in a sweeping management shake-up aimed at turning around the investment bank amid turmoil in the credit markets. She joins a growing list of Wall Street's top names who have been fired since the summer, including Merrill Lynch & Co.'s Stan O'Neal and Citigroup Inc.'s Charles Prince, for presiding over their firms as they became mired in the subprime mortgage tar-pit.

IHOP closes deal for Applebee's
KANSAS CITY, Mo. - Pancake house operator IHOP Corp. said Thursday it had completed its $1.9-billion purchase of casual dining chain Applebee's International Inc. Under terms of the deal, Applebee's shareholders will be paid $25.50 per share, a 4.6 percent premium over its closing price on the day before the offer was announced in July and 2 cents above where the shares ended trading Thursday. IHOP, based in Glendale, Calif., is also assuming $155-million in Applebee's debt as part of the deal.

[Last modified November 29, 2007, 22:59:29]