TOP STORIES -- Dec. 26-31

Gasoline Prices Lower; Oil Has Down-Up Week

California gasoline prices dropped to their lowest level since February, according to a weekly survey released Monday by the U.S. Energy Information Administration.

The statewide average cost of self-serve regular fell 3.9 cents over seven days to $2.01 a gallon.

Although an increasing number of stations are offering regular at $1.99 a gallon or lower, the averages for Los Angeles, San Francisco and the state as a whole haven’t been below $2 since Feb. 16, government figures showed. The new average is 41.5 cents higher than last year.

Nationwide, the average fell 2.4 cents to $1.791 a gallon, 31.3 cents above year-earlier levels.

A sell-off in oil-related commodities Monday in New York trading gave way later in the week. On Wednesday, oil prices jumped $1.87 a barrel to $43.64, after car bombs exploded in Saudia Arabia’s capital and the U.S. government reported another drop in heating-fuel stockpiles for the winter. On Thursday, a barrel of light crude settled at $43.45. Oil markets were closed Friday.

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Sales of Existing Homes Surge to Record High

Sales of previously owned homes in the U.S. climbed to a record high in November as low interest rates and a rising economy kept pulling buyers into the market.

Existing-home sales rose 13.2% from a year earlier to a 6.94-million annual rate, the National Assn. of Realtors reported. The previous high was 6.92 million in June. Buyers paid more too: The median price rose 10.4% to $188,200.

November sales in the West increased 16.6%, the most of any region. Every region showed gains year over year, although sales in the Northeast slipped 1.3% from October to November.

Several factors are keeping the market bubbling, including low mortgage rates.

New housing units in California as measured by building permits issued totaled 17,460 for November, up 2.5% from October and 31.4% from November 2003, the California Building Industry Assn. said. California housing starts will total 210,000 units this year, up 7.3% from 2003, the association said.

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Wet Seal to Shutter 150 Stores, Cut Jobs

Wet Seal Inc. said that it would close about 150 stores and eliminate about 2,000 jobs.

The retailer, based in Foothill Ranch, was “finalizing the details” and not prepared to disclose which of its 463 Wet Seal stores would be shuttered, spokeswoman Helen Rotherham said. The company has hired a liquidator to manage inventory as stores are closed, a process that should be completed by the end of February.

There are 58 Wet Seal stores in California. The company employs 6,656 people nationwide.

Wet Seal’s interim chief executive, Joseph Deckop, said that the decision was difficult but was necessary to reduce costs and allow the retailer to focus on its strongest stores as it implements a new merchandising strategy.

Analysts had been waiting to learn how many stores and jobs Wet Seal -- which has posted nine straight quarters of losses -- would shed.

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U.S. Investigation of Chiron Advances

The Justice Department has interviewed several mid-level employees of Chiron Corp.’s flu vaccine operations, a source said, indicating that the federal probe of the Emeryville, Calif., company was moving ahead.

Investigators have talked in recent weeks with fewer than a dozen employees of Chiron’s vaccine business, which is based in Britain, but interviews with other executives are planned, the source said.

A spokeswoman for the U.S. attorney’s office in New York declined to comment. Robert Bennett, an attorney who represents Chiron, couldn’t be reached.

Chiron came under scrutiny in October after British regulators shut its factory in Liverpool. British authorities said they found manufacturing lapses and bacterial contamination, and the closure prevented Chiron from shipping its flu shots to the U.S.

Chiron said in mid-October that federal prosecutors in New York had subpoenaed documents related to the company’s Fluvirin flu vaccine and its Liverpool factory.

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Bid for Video Rental Firm May Turn Hostile

Blockbuster Inc., the largest U.S. video rental retailer, said it would launch a $700-million hostile bid for Hollywood Entertainment Corp. if it continued to refuse to negotiate.

Blockbuster said it would give the board until mid-January to respond to the bid Blockbuster made in November to buy Hollywood Entertainment shares for $11.50 apiece.

The Blockbuster bid bests the $10.25-a-share offer by buyout firm Leonard Green Partners and Hollywood Entertainment’s chairman, Mark Wattles. Another suitor, Movie Gallery Inc., has made an offer to buy Hollywood Entertainment’s more than 1,900 video stores and 600 game stores for an undisclosed amount.

If the Blockbuster offer is accepted, the company would pay $700 million in cash and assume $300 million in debt. Blockbuster executives said that if Hollywood Entertainment’s board let them examine its its financial records, they might raise their bid.

Neither Hollywood Entertainment nor Leonard Green Partners returned calls.

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Microsoft to Curtail Its Passport Service

Microsoft Corp. is abandoning one of its most contentious attempts to dominate the Internet after rival technology companies banded together in opposition and consumers failed to embrace the effort.

The world’s biggest software company said that it would stop trying to persuade websites to use its Passport service, which stores consumers’ credit card and other information as they surf from place to place.

The acknowledgment came after EBay Inc. posted a notice on its site, saying it would stop using Passport in late January and rely on its own service.

Passport probably drew few new customers to Microsoft products. But it was initially seen as strategically important because it could have helped the company put itself in the middle of most electronic transactions.

With more than 200 million users, Passport will continue to be the method for logging on to some Microsoft-owned services, such as e-mail system Hotmail.

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Hormel Buys Maker of Dodger Dogs

Hormel Foods Corp., maker of Spam, said it had purchased Vernon-based Clougherty Packing Co., producers of Dodger Dogs and Farmer John brand meats, for $186 million in cash.

The marriage of pork-product purveyors is expected to help Austin, Minn.-based Hormel meet production needs and strengthen its presence in California and the Southwest, particularly among the region’s growing Latino population, Hormel executives said.

The Clougherty Packing management team and its workforce of about 1,800 -- including 300 workers on hog farms in Central California, Arizona and Wyoming -- are expected to stay.

“We’re happy as heck,” said Joe Clougherty, president of his family’s namesake company.

Privately held Clougherty Packing doesn’t disclose financial results, but Hormel executives said Clougherty’s revenue was expected to be about $420 million in 2004.

Quick to quell any concerns, Clougherty added that the Dodger Dog, the extra-long hot dog named for the baseball team, would “in no way change.”

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Retailers’ Performance Still Up in the Air

Holiday retail sales are getting mixed reviews.

According to one estimate released Monday, credit card purchases through Christmas Eve were 8.1% ahead of last year. That “would indicate ... a strong holiday season,” said Michael McNamara, director of research for MasterCard Advisors, which released the report.

An industry trade group stuck with its reckoning that sales would rise 4.5% over last year. “It’s going to be an average holiday season,” said a National Retail Federation spokesman.

And the International Council of Shopping Centers figured there would be a mere 2.5% to 3% gain in same-store sales.

A report issued late Monday by Visa USA showed sales on Visa cards in the week ended Dec. 26 grew 32% to $25.4 billion from the prior year. But there’s no telling how much was due to an overall increase in the use of Visa cards.

For now, the industry waits to see how quickly consumers will turn gift cards into purchases.

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L.A. Newspaper Group Files for Chapter 11

The largest chain of community newspapers serving African American and Latino readers in Los Angeles County is seeking Bankruptcy Court protection from creditors.

Wave Community Newspapers Inc., which publishes seven weeklies with readers in nearly 40 cities and communities across the county, filed to reorganize its finances under Chapter 11 of U.S. bankruptcy laws. Records list more than 17 creditors owed as much as $10 million.

Pluria Marshall Jr., publisher and chief executive, said the filing wouldn’t affect the newspapers’ day-to-day operations or their commitment to the primarily Central and South Los Angeles communities they serve. Wave has 40 employees and a combined circulation of 150,000.

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For a preview of this week’s business news, please see Monday’s Business section.