Lehman stock plunges 45 percent

Lehman stock plunges 45 percent Lehman Brothers Holdings Inc. shares plunged 45 percent to $7.79, their lowest level in more than a decade, Tuesday amid investor concerns that the battered investment bank is running out of options to raise capital. The nation's fourth-largest securities firm has been seeking to boost liquidity after suffering $8.2 billion in write-downs and credit losses since the financial crisis began last year. Lehman had hoped to find a major investor before announcing third-quarter results Sept. 18.

Drop in pending sales worse than expected Pending U.S. home sales fell more than expected in July, the National Association of Realtors said Tuesday. Its seasonally adjusted index of pending sales for existing homes fell 3.2 percent to a reading of 86.5 from an upwardly revised June reading of 89.4. The index was 6.8 percent below year-ago levels. Pending sales are those with a signed purchase agreement but the deal has not yet closed. Wall Street economists surveyed by Thomson/IFR had predicted the index would fall to 88.6.

R.J. Reynolds to reduce U.S. workforce Reynolds American Inc. and its tobacco unit, R.J. Reynolds, said Tuesday they'd cut about 570 jobs, or 10 percent of their American workforce, as cigarette sellers prepare to compete more aggressively in smokeless tobacco products. The company expects the job cuts at its headquarters in Winston-Salem, N.C., to save $100 million by the end of 2010 and $55 million a year after that. Reynolds' move comes after Philip Morris USA owner Altria Group Inc. said Monday it would buy UST Inc., maker of Skoal and Copenhagen, for $10.4 billion.

Fed auctions $25 billion more in bank loans The Federal Reserve Monday auctioned another $25 billion in loans to squeezed banks to help them overcome credit problems. In the latest auction, commercial banks paid an interest rate of 2.670 percent for the 84-day loans. There were 38 bidders. The Fed received bids for $31.64 billion worth of the loans. Auction results were made public Tuesday.

Global same-store sales up at McDonald's Overseas consumers spent more at McDonald's Corp. in August, leading the nation's No. 1 hamburger chain to surprise investors by posting a big rise in global same-store sales on Tuesday. The chain said its worldwide same-store sales, or sales at locations open at least a year, jumped 8.5 percent in the month. The increase follows a rise in global same-store sales of 8 percent in July and a boost of 8.1 percent in August last year.

Software froze London exchange for 7 hours The London Stock Exchange Group PLC said Tuesday that a software glitch -- not high trading volume -- was to blame for a 7-hour shutdown that angered customers on one of the busiest days of the year on world equity markets. The exchange, facing increasing competition from new European trading platforms, also tried to reassure traders unhappy about the blackout, saying that it had changed the software programming so that a similar problem would not have such a huge effect.

KFC on high alert as secret recipe is moved Colonel Harland Sanders' handwritten recipe of 11 herbs and spices was removed Tuesday from safekeeping at KFC's corporate offices in Louisville for the first time in decades. The temporary relocation is allowing KFC to revamp security around a yellowing sheet of paper that contains one of the country's most famous corporate secrets. The recipe that launched the chicken chain was placed in a lockbox handcuffed to security expert Bo Dietl, who climbed into an armored car that whisked away with an escort from off-duty police officers. KFC President Roger Eaton's parting words to Dietl: "Keep it safe."