BUSINESS HIGHLIGHTS

Thain Resigns From Bank Of America

NEW YORK (AP) - Wall Street bonuses, a sore point as the government gives billions of dollars in bailout money to the financial industry, have apparently cost former Merrill Lynch & Co. CEO John Thain his new job at Bank of America Corp.

Thain resigned from Bank of America Thursday following news that Merrill Lynch had rushed out its year-end bonuses, paying them just before Bank of America completed its acquisition of Merrill Lynch and sought $20 billion in additional government bailout money.

The company gave no reason for Thain's departure, but its timing, coming hours after news reports about the bonuses, made it likely that there was a connection with the payouts.

Microsoft Resorts To First Layoffs, Cutting 5,000

SEATTLE - (AP) Microsoft Corp. will make the first mass layoffs in its 34-year history, cutting 5,000 jobs as demand for personal computers falls and even one of the world's richest companies gets burned by the recession.

The company announced the cuts Thursday as it reported an 11 percent drop in second-quarter profit, which fell short of Wall Street's expectations. Microsoft shares fell more than 11 percent.

Layoffs Spike, Housing Tumbles; Outlook Worsens

WASHINGTON (AP) - The number of newly laid-off Americans filing jobless claims and the pace of home construction both posted worse-than-expected results in government data released Thursday, lending urgency to the economic recovery plan President Barack Obama and Congress are scrambling to advance.

The latest batch of economic news cemented fears that the recession, already in its second year, will drag on through much of 2009.

And the furious pace of layoffs continued Thursday, with Microsoft Corp. saying it will slash up to 5,000 jobs over the next 18 months. Chemical maker Huntsman Corp. will ax 1,175 jobs this year and will get rid of an additional 490 contractors. Those - as well as other employers - have seen customer demand wane and are cutting costs to survive the fallout.

Stocks Pare Losses From Microsoft, Bank Woes

NEW YORK (AP) - Wall Street has again succumbed to bad news, closing sharply lower Thursday as more bad news about earnings and worries about the banking industry wiped out any attempts at a rally.

The major indexes, which plunged and then soared the first two trading days of the week, ratcheted up and down during the course of the session before ending sharply lower. The Dow Jones industrial average fell as much 271 points before ending down 105.

Bad news from Microsoft Corp. set the tone for the day and made clear more pain was to come before an elusive economic recovery would emerge. The company surprised investors Thursday morning by reporting its fiscal second-quarter earnings early - and the news was not good. The software giant posted an 11 percent drop in profit and said it will slash 5,000 jobs over the next 18 months.

Senate Panel Approves Geithner Tor Treasury Post

WASHINGTON (AP) - The Senate Finance Committee on Thursday cleared the nomination of Timothy Geithner as treasury secretary despite unhappiness over his mistakes in paying his taxes.

The committee approved the nomination on an 18-5 vote, sending it to the full Senate for a vote either Friday or next week. President Barack Obama is hoping for quick approval so that the point man for the administration's economic rescue effort can begin work.

The committee vote came a day after Geithner appeared before the panel to apologize for what he called "careless mistakes" in failing to pay $34,000 in taxes earlier in the decade, when he worked at the International Monetary Fund.

Sony Forecasts First Annual Net Loss In 14 Years

TOKYO (AP) - Sony Chief Executive Howard Stringer acknowledged Thursday he had not gone far enough with cost cuts and efforts to combine entertainment with electronics as his company projected its first annual loss in 14 years.

Sony Corp. said it will offer early retirement to employees at its prized TV division, seeking to trim personnel costs there by 30 percent. It is also slashing jobs at its movies, music and game businesses. Sony did not give a head count target for the reductions. It said it is cutting 1,000 temporary workers when it closes one of two TV plants in Japan.

Stringer said he and two other top executives, including President Ryoji Chubachi, will give up their entire bonus, which would halve their annual pay, according to Sony. Other executives and managers will see lower pay.