Bank to sell 20 percent stake

Investment bank Morgan Stanley said Monday it signed a letter of intent to sell up to 20 percent of the company to Mitsubishi UFJ Financial Group Inc.

Financial terms were not disclosed. If the deal is completed, the price would be based on Morgan Stanley’s book value after Japan’s largest bank completes a due diligence review.

Current estimates have Morgan Stanley raising more than $8 billion by selling new stock.

SEATTLE

Microsoft to take on debt

Chaos in the money markets gave Microsoft Corp. an opening Monday to announce it would take on debt for the first time, launch a $40 billion stock buyback plan and raise its dividend.

The company said its board approved a $2 billion commercial paper program as part of a $6 billion, open-ended allowance for debt financing.

Microsoft also raised its quarterly dividend to 13 cents from 11 cents, payable Dec. 11 to shareholders of record Nov. 20.

RICHMOND, Va.

CarMax earnings fall 78 percent

Auto retailer CarMax Inc. said its second-quarter earnings plunged 78 percent because of a weak economy, high gasoline prices and losses in its financing arm. The results were worse than analysts expected.

Earnings for the quarter that ended Aug. 31 fell to $14 million, or 6 cents per share, from $65 million, or 29 cents per share, in the same quarter last year. Total sales fell 13 percent to $1.84 billion from $2.12 billion a year ago. CarMax said sales at stores open at least a year tumbled 17 percent during the quarter.

From wire reports