Business Highlights

Stocks tumble on $134 oil, Fed meeting minutes

NEW YORK (AP) _ Wall Street pitched lower for the second straight session Wednesday as record-high oil prices and a bleak economic assessment from the Federal Reserve deepened investors' worry about rising costs and a shaky employment picture.

The Dow Jones industrial average fell 227 points, logging its widest two-day loss since late February.

Early in the day, stocks began falling on the surging price of oil, which shot up more than $4 and breached $134 a barrel for the first time on the futures market Wednesday.

The stock market slumped further after minutes from last month's Fed meeting were released.

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Big Oil defends profits before irate senators

WASHINGTON (AP) _ On a day oil prices leaped to unheard-of highs, senators lined up Big Oil's biggest executives and pummeled them with complaints that they're pretending to be "hapless victims" while raking in record profits.

It's all about economics, came the reply. Supply and demand. The company leaders tried to shift attention from motorists' anger over $4-a-gallon gasoline to a debate over new areas for drilling.

But senators at the Judiciary Committee hearing wanted to press the executives about public anguish over paying $60 or more to fill up a car's gas tank.

The executives, sitting shoulder to shoulder in the hearing room, said they understood people were hurting, but they tried to blunt the emotion with economic analysis.

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American to charge $15 for 1st checked bag

FORT WORTH, Texas (AP) _ American Airlines will start charging $15 for the first checked bag, cut domestic flights and lay off workers _ probably in the thousands _ as the nation's largest carrier grapples with record-high fuel prices.

American plans to cut domestic flight capacity by 11 percent to 12 percent in the fourth quarter, after the peak summer season is over. The carrier was previously planning a 4.6 percent cut.

Shares of American parent AMR Corp. tumbled 24 percent, down $1.98 to $6.22, as oil prices shot past $130 per barrel for the first time, signaling even more trouble for the nation's airlines.

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Fed sees slower growth, higher unemployment in `08

WASHINGTON (AP) _ Federal Reserve officials strongly suggested they won't be inclined to cut interest rates further even as they sharply downgraded their forecast for economic growth this year, citing damage from a housing slump, credit crunch and galloping energy prices.

Wall Street took a tumble as investors faced the weaker outlook and the possibility that the Fed's rate-cutting campaign was winding down. The Dow Jones industrials plunged more than 200 points.

In fact, the Fed's decision to lower interest rates at its April 29-30 meeting was a "close call," according to minutes of those private deliberations released Wednesday.

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Oil prices pass $134 after report of supply drop

NEW YORK (AP) _ Runaway oil prices blew past $130 a barrel for the first time Wednesday and kept going, while gasoline prices persisted in their own relentless climb, rising above $3.80 a gallon.

Supply worries, rising demand and a slumping dollar are conspiring to make filling up the car _ and paying for just about everything else _ a growing burden for Americans.

With gas and oil prices setting new records on a daily basis, many analysts are beginning to wonder whether anything can stop prices from rising.

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Time Warner to reap $9.25 billion in cable spinoff

NEW YORK (AP) _ Time Warner Inc. said Wednesday it would formally split off its cable TV business, giving the media conglomerate a $9.25 billion windfall and allowing it to focus on cable network, entertainment and publishing operations.

The separation of Time Warner Cable Inc. gets Time Warner out of the media distribution business altogether, something investors had been clamoring for.

The company announced its decision to split up last month and said Wednesday that the boards of the two companies had agreed to financial terms.

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Microsoft lures search traffic with cash rebates

REDMOND, Wash. (AP) _ Microsoft Corp. is offering cash rebates when people make purchases after using its search engine as the software maker begins to reveal how it plans to take on Google Inc. following the failure of its $47.5 billion bid for Yahoo.

Analysts and investors have been eagerly awaiting details about "Plan C" after Microsoft acknowledged that its Plan A of going solo was troubled but also withdrew its Plan B _ acquiring Yahoo _ because Yahoo executives sought more money.

Under the cash program revealed Wednesday, Web shoppers who sign up for an account and buy items found using Microsoft's Live Search cashback site will receive a percentage of the purchase price deposited into their account.

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Plan to trim cell phone cancellation fees draws criticism

WASHINGTON (AP) _ A proposal for the government to help cell phone customers avoid expensive fees when they cancel contracts with wireless companies may go down in flames after consumer advocates protested Wednesday it isn't generous enough.

Cell phone companies routinely charge customers $175 or more for quitting their service early. Under a proposal to the Federal Communications Commission, the wireless industry would give consumers the opportunity to cancel service without any penalty for up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill, among other provisions.

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GM workers begin voting to end strike at KCK Plant

KANSAS CITY, Kan. (AP) _ Union members at General Motors Corp.'s Fairfax assembly plant here began voting Wednesday on a deal that would end a three-week-old strike.

About 2,500 members of United Auto Workers Local 31 walked off the job May 5 after failing to reach an agreement on a local contract with management at the plant, which makes the hot-selling Chevrolet Malibu as well as the Saturn Aura.

The two sides bridged their differences Tuesday evening. While the union approved a national contract with GM last fall, local contracts that govern work rules, overtime and other items are negotiated separately at each location.

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By The Associated Press

The Dow fell 227.49, or 1.77 percent, to 12,601.19, after falling nearly 200 points on Tuesday. The blue chip index's two-day drop of about 427 points, or 3.3 percent, is its biggest since Feb. 28-29.

Broader stock indicators also stumbled. The Standard & Poor's 500 index fell 22.69, or 1.61 percent, to 1,390.71, while the Nasdaq composite index fell 43.99, or 1.77 percent, to 2,456.09.

Light, sweet crude for July delivery rose $4.19 to settle at $133.17 a barrel on the New York Mercantile Exchange, but prices rose as high as $134.10, up $5.12, in after-hours electronic trading. It was crude's largest one-day price advance since March 26.

In other Nymex trading, June gasoline futures rose 9.21 cents to settle at $3.3965 a gallon after rising to a trading record of $3.4081, and June heating oil futures rose 13.34 cents to settle at $3.9084 a gallon after setting a new trading record of $3.9187.

June natural gas futures rose 27.5 cents to settle at $11.64 per 1,000 cubic feet.

In London, July Brent crude rose $4.86 to settle at $132.70 a barrel on the ICE Futures exchange.