AGRICULTURE

Rain may produce higher corn prices

Rainstorms sweeping the biggest corn-producing states are damaging a crop that's already failing to keep pace with global demand for food, fuel and cattle feed. "The crop is in serious trouble," said Jim Stephens, president of Farmers National Commodities Inc. in Omaha, Neb., who helps manage more than 3,600 farms across the Midwest. The excessive rainfall will help shrink the country's harvest 10 percent this year to 11.735 billion bushels, according to the U.S. Department of Agriculture. Corn futures, up 48 percent in 2008, touched a record $6.74 in Chicago on Tuesday and may top $8 a bushel this year, Stephens said.

AUTOMOTIVE

Kerkorian to increase Ford stake

Detroit —- Billionaire financier Kirk Kerkorian said Tuesday that he will increase his stake in the Ford Motor Co. to 5.5 percent after stockholders offered to sell him nearly half of the automaker's outstanding shares. Kerkorkian's investment company, Tracinda, will buy 20 million shares of Ford at $8.50 each. That represented a modest premium over the shares' value a month ago, when he submitted his tender offer, but is 39 percent more than their closing price Tuesday of $6.12. The company's shares have been on the decline after it abandoned its goal of returning to profitability by next year and said it would significantly cut production of large vehicles in response to record-high gasoline prices.

Nardelli: Chrysler to stay private

New York —- Chrysler Chief Executive Bob Nardelli said Tuesday that he expects the automaker will be an independent company three years from now, and that Chrysler's private equity owners were not second-guessing their acquisition. Nardelli, speaking at a conference, said running Chrysler under private ownership streamlines the decision-making process. Chrysler became a private company last August after Cerberus Capital Management bought an 80.1 percent stake from Chrysler's former partner, German automaker Daimler AG, in a $7.4 billion deal.

DEALS

XTO to acquire Hunt Petroleum

Dallas —- XTO Energy Inc. said Tuesday that it will acquire privately held Hunt Petroleum Corp. for $4.19 billion in cash and stock. XTO Energy said the deal includes $2.6 billion in cash and 23.5 million shares of XTO stock. The stock portion of the deal is valued at about $1.6 billion, or $67.50 per XTO share. The sale would mean the end of the independent Hunt company, which was started by famed Texas wildcatter H.L. Hunt, who was considered one of the wealthiest men in America before his death in 1974. His heirs have fought over billions of dollars in trust fund assets.

B of A to sell hedge fund unit

Bank of America Corp. agreed to sell its prime brokerage unit for hedge funds to BNP Paribas SA, France's biggest bank, for as much as $300 million. The division provides record-keeping, securities lending and secured financing to more than 500 hedge funds and has 320 employees, BNP Paribas said.

Precision Drilling bids for U.S. firm

Precision Drilling Trust, Canada's largest oil and natural gas driller, said it made an unsolicited offer of about $2 billion for Houston-based Grey Wolf Inc. Precision's offer was for $9 a share in cash and trust units on a fully diluted basis, according to a statement Tuesday from Calgary, Alberta-based Precision Drilling.

Constellation sells wine brands

Constellation Brands Inc. sold wine brands including Geyser Peak and Columbia Winery to Eight Estates Fine Wines LLC for $209 million in cash. The brands represented about 1 million cases of wine sold in 2007, Fairport, N.Y.-based Constellation said Tuesday in a statement. The company said it is selling the holdings to reduce "brand duplication and excess production capacity."

FINANCIAL

Credit-default agreement set

Regulators and banks agreed to changes aimed at easing the risk of a collapse in the $62 trillion market for credit-default swaps. Morgan Stanley, Deutsche Bank and Goldman Sachs Group are among the 17 banks creating a system to move trades through a clearinghouse that would absorb a failure by one of the market makers, the Federal Reserve Bank of New York said Monday in a statement following a meeting with the firms.

HEALTH CARE

'Underinsured' ranks grow

Twenty-five million Americans with insurance spent at least 10 percent of their income on health care last year because of the rising cost of doctor visits and medicine, according to a study in the policy journal Health Affairs. The number of these "underinsured" people rose by more than 50 percent from 16 million in 2003, said the study by the New York-based Commonwealth Fund, a nonpartisan health research center. Insurers are increasing co-payments for patients and prescriptions and trimming benefits to hold down the cost of premiums, the fund said. "These aren't just people going into medical debt," said Cathy Schoen, senior vice president at Commonwealth Fund. "They are using their savings, they're taking out second mortgages, they're going into credit card debt for these bills."

LEGAL

Georgia Gulf faces bankruptcy threat

Georgia Gulf Corp., North America's largest maker of vinyl construction products, said it may be forced into bankruptcy unless a Delaware judge rules that the company isn't in default of $100 million in notes. The Atlanta-based company sued Sandelman Partners LP on June 8, saying the hedge fund notified it two days earlier that the 7.125 percent notes must be paid within 30 days. Sandelman holds about $44 million of the callable bond issue, due in 2013, according to court papers. "If Sandelman is permitted to accelerate the notes and to declare the amounts owed thereunder to be immediately due and payable, the company may be forced to declare bankruptcy," Georgia Gulf said in its complaint in Delaware Chancery Court in Wilmington. Georgia Gulf reported a net loss of $266 million last year on sales of $3.16 billion.

MEDIA

Sporting News to be retooled

St. Louis —- The Sporting News is making major changes that reflect shifts in the way sports news is consumed. It plans to start a free digital sports newspaper in July called Sporting News Today. It will deliver scores and statistics to subscribers' in-boxes every morning. Sporting News officials say the print edition will be reintroduced as a biweekly publication with more color.

REAL ESTATE

Home builders' ratings lowered

Fitch Ratings on Tuesday slashed its issuer default ratings for eight home builders, bumping three —- Ryland Group Inc., D.R. Horton and Centex Corp. —- into "junk" status. Atlanta-based Beazer Homes USA, which already had a noninvestment-grade rating, was lowered further.

Carter lays off 11 employees

Carter, the Southeast's oldest and largest privately held full-service commercial real estate firm, has laid off 11 employees who worked in information technology and marketing, and on the help desk. The layoffs represent about 7 percent of Carter's work force in Atlanta. "Economic conditions are a factor, but they are not the only factor," said Scott Taylor, Carter's president. "There was a careful and thorough study, and the results produced a restructuring effort. This is the right structure for Carter for the long term." Carter is involved in a wide array of real-estate-related activities covering investment, development, transactions and property management. The 50-year-old company is headquartered at Atlantic Station but also has offices in Birmingham, Orlando and Tampa. It employs about 400 people overall, Taylor said.

REGULATORY

Task force to study commodity trading

Washington —- As spiking fuel and food prices rattle markets and consumers worldwide, the U.S. government on Tuesday formed an interagency task force to assess developments in oil and other commodity markets. The task force is comprised of staff from the Commodity Futures Trading Commission, the Federal Reserve, the Securities and Exchange Commission, and the departments of Treasury, Energy and Agriculture. It will examine oil supply and demand factors, investor practices and the role of new players in the markets, such as speculators and index traders, according to a CFTC news release. "High commodity prices are posing a significant strain on U.S. households, and the interagency task force will aid public and regulatory understanding of the forces that are affecting the functioning of these markets," the CFTC said.

Rules proposed for ratings agencies

Washington —- Federal regulators are proposing new rules to stem conflicts of interest and enhance disclosure for Wall Street's credit-rating industry, which has been criticized for failing to identify risks in subprime mortgage investments. The big rating agencies are crucial gatekeepers, issuing ratings on the creditworthiness of public companies and securities. Their grades can be key factors in determining a company's ability to raise or borrow money, and at what cost which securities will be purchased by banks, mutual funds, state pension funds or local governments. The Securities and Exchange Commission is scheduled to vote today on the rules.

RETAILING

Sales rise 1.8% year-over-year

U.S. retail sales rose 1.8 percent last week compared with a year earlier, the biggest gain in more than a month, as consumers spent their federal tax-rebate checks at Wal-Mart and other discount chains. Sales at stores open at least a year may climb 2 percent to 3 percent in June, the International Council of Shopping Centers said Tuesday in an e-mailed statement. Consumers have curbed spending on nonessential items such as furniture in the face of the worst housing slump in at least 25 years, gasoline hitting $4 a gallon and rising unemployment. Rebate checks may help bolster spending this month, the ICSC said. "With gasoline prices at the pump rising to about the $4-per-gallon threshold, we expect consumers to remain conservative in their spending," ICSC chief economist Michael Niemira said.

TECHNOLOGY

EU official takes swipe at Microsoft

Brussels, Belgium —- The EU's top antitrust official called Tuesday on member governments to use open-source software, an apparent jab at Microsoft's proprietary technology. "No citizen or company should be forced or encouraged to choose a closed technology over an open one, through a government having made that choice first," European Competition Commissioner Neelie Kroes said at a conference organized by OpenForum Europe, a nonprofit group that advocates open standards. Choosing technology formats that can be used by different vendors —- often without paying a fee —- is "a very smart business decision," Kroes said.

TELECOM

IPhone buyers to get a break

AT&T Inc. said customers who bought Apple Inc.'s iPhones at its stores on or after May 27 can exchange the handset for the faster, cheaper new model and get some money back. Apple on Monday said it will offer two new versions of the iPhone. Each costs $200 less than its predecessor. Clients will get a refund for the price difference, minus a 10 percent restocking fee, AT&T spokesman Wes Warnock said in an interview.

TRANSPORTATION

Richmond-N.Y. flights to be added

AirTran Airways announced Tuesday that it plans to start flying twice daily between New York's LaGuardia Airport and Richmond. AirTran plans to start the nonstop flights Aug. 7 on its Boeing 717s, which have 12 business-class and 105 coach seats. AirTran, which has its main hub in Atlanta, already flies from Richmond to Atlanta and Orlando.

UTILITIES / ENERGY

Gasoline demand declines sharply

U.S. gasoline demand fell 3.8 percent last week, a sign record pump prices are prompting drivers to spend less time on the road, MasterCard Inc. said. Consumers purchased an average 9.086 million barrels of gasoline a day in the week ended June 6, down from 9.443 million a year earlier, MasterCard said in its weekly report.