Banks, investment firms borrowing less from Fed

Commercial banks and investment firms borrowed slightly less from the Federal Reserve’s emergency lending program over the past week, although demand for those loans and other Fed relief remains elevated.

The Fed report, released Thursday, showed commercial banks averaged $88.4 billion in daily borrowing over the week ending Wednesday. That was down from $90.2 billion in average daily borrowing logged over the week ended Dec. 11.

Investment firms drew $50.5 billion over the past week. That compared with an average of $52.8 billion the previous week.

WASHINGTON

Standard & Poor’s drops outlook for General Electric to negative

Ratings agency Standard & Poor’s lowered its outlook for General Electric Co. and said there is a chance it could lose its coveted top credit rating because of ongoing troubles with its finance arm, news that sent the company’s shares down sharply.

S&P dropped its outlook for GE and the GE Capital finance unit to negative from stable, saying the erosion of earnings at GE Capital could be worse than expected in 2009 and 2010. The ratings agency affirmed GE’s “AAA” rating, but said there is a one-in-three chance that GE could lose it in the next two years.

GE shares fell $1.43, or 8.2 percent, to close at $15.96 Thursday. The negative news on the stock report helped push broader markets down late in the day.

NEW YORK

FedEx announces another round of cost-cutting measures

FedEx Corp. announced more broad cost cuts – including salary reductions – as deteriorating economic conditions continue to drag down demand, warning the outlook for 2009 remains murky.

Chief executive Frederick W. Smith said earnings are “increasingly being challenged by some of the worst economic conditions in the company’s 35-year operating history.”

FedEx reported its fiscal second-quarter earnings rose 3 percent, narrowly topping expectations. The company earned $493 million, compared with year-ago profit of $479 million.