After Friedman, Billings, Ramsey Inc. analyst Paul Miller issued a report highlighting banks with the most exposure to these loans, a number of financial firms saw their shares nosedive. Among the biggest losers were Atlanta-based SunTrust Banks Inc. (down about 9 percent) and Memphis-based First Horizon National Corp. (down about 11 percent).

Loans to builders and developers were big business when the housing market was booming, particularly in hot spots such as the Southeast. Now in the slowdown, builders who took out the loans are struggling to make payments as demand for their projects wanes.

The biggest worry is loans involving single-family homes. The top 50 lenders had $7.8 billion in troubled single-family construction loans at the end of the first quarter, about 8 percent of the total, Miller found. Banks have just started breaking out these numbers, so there's no historical context, Miller said, but the issue is a rising concern.

“We remain very cautious on financials in general, and we recommend investors avoid or sell institutions with the largest exposure to residential construction loans,” he wrote.

First Horizon had the highest ratio of single-family construction loans to tangible common equity, a measure of a company's net worth, at 150 percent, according to the report. Also in the top 20 most exposed were Winston-Salem-based BB&T Corp. (71 percent) and SunTrust (68 percent).

Charlotte's big banks, Bank of America Corp. and Wachovia Corp., rank as the top two construction loan lenders nationwide, respectively. Their loans don't account for such an outsized portion of their portfolios, but worries about their delinquencies also are mounting.

At the end of the first quarter, Bank of America had $34.7 billion in construction loans, including $10.7 billion in single-family construction loans. The single-family loans equated to 19 percent of tangible equity. Of these loans, 8.7 percent were delinquent, according to the report.

Wachovia's construction loans totaled about $24 billion, including $8.4 billion in single-family construction loans. The single-family loans amounted to 31 percent of tangible equity. About 11.8 percent were delinquent.

Bank of America shares fell nearly 4 percent on Monday to $21.53, while Wachovia shares dropped nearly 7 percent to $13.89. BB&T shares slipped more than 5 percent to $21.68.

Construction loans on Monday became the latest source of angst wreaking havoc on bank stocks.

After Friedman, Billings, Ramsey Inc. analyst Paul Miller issued a report highlighting banks with the most exposure to these loans, a number of financial firms saw their shares nosedive. Among the biggest losers were Atlanta-based SunTrust Banks Inc. (down about 9 percent) and Memphis-based First Horizon National Corp. (down about 11 percent).

Loans to builders and developers were big business when the housing market was booming, particularly in hot spots such as the Southeast. Now in the slowdown, builders who took out the loans are struggling to make payments as demand for their projects wanes.

The biggest worry is loans involving single-family homes. The top 50 lenders had $7.8 billion in troubled single-family construction loans at the end of the first quarter, about 8 percent of the total, Miller found. Banks have just started breaking out these numbers, so there's no historical context, Miller said, but the issue is a rising concern.

“We remain very cautious on financials in general, and we recommend investors avoid or sell institutions with the largest exposure to residential construction loans,” he wrote.

First Horizon had the highest ratio of single-family construction loans to tangible common equity, a measure of a company's net worth, at 150 percent, according to the report. Also in the top 20 most exposed were Winston-Salem-based BB&T Corp. (71 percent) and SunTrust (68 percent).

Charlotte's big banks, Bank of America Corp. and Wachovia Corp., rank as the top two construction loan lenders nationwide, respectively. Their loans don't account for such an outsized portion of their portfolios, but worries about their delinquencies also are mounting.

At the end of the first quarter, Bank of America had $34.7 billion in construction loans, including $10.7 billion in single-family construction loans. The single-family loans equated to 19 percent of tangible equity. Of these loans, 8.7 percent were delinquent, according to the report.

Wachovia's construction loans totaled about $24 billion, including $8.4 billion in single-family construction loans. The single-family loans amounted to 31 percent of tangible equity. About 11.8 percent were delinquent.

Bank of America shares fell nearly 4 percent on Monday to $21.53, while Wachovia shares dropped nearly 7 percent to $13.89. BB&T shares slipped more than 5 percent to $21.68.

The 0.6 percent dip in revenue passenger miles – a unit that measures one paying passenger who flies one mile – came despite the airline adding more seats in the air for the summer, typically the busiest time for leisure travel.

In addition, the airline reported a 5.4 percent drop in total passengers in June – from almost 5.9 million last year to fewer than 5.6 million this year. Revenue hasn't dropped, however, because the carrier is charging higher fares and more fees than last summer.

US Airways operates more than 80 percent of flights in Charlotte. The dip in June traffic may indicate that the higher cost of air travel – fares and fees for services once covered by ticket prices – that has resulted from record-high fuel prices has led some travelers to stay closer to home this summer.

Scott Kirby, president of US Airways, noted how the Tempe, Ariz.-based airline generated more revenue from its seats in June, and that demand for upcoming flights hasn't softened.

“As we progress through the busy summer travel season,” Kirby said in a statement, “we continue to see strength in our forward bookings.”

Smaller crowds this summer could be yet more bad news for an industry rocked by soaring oil prices.

US Airways announced in June it will cut up to 8 percent of flights this fall and 1,700 jobs, or almost 5 percent of its workforce. Along with new fees to check bags and redeem frequent-flier miles, the airline will start charging in August for non-alcoholic drinks during flights.

And the state's lack of large-scale solar projects was among the reasons solar panel manufacturer Sencera International Corp. decided to increase its presence in the state.

“North Carolina is stepping forward in the Southeast,” said Britt Weaver, the Charlotte company's chief operating officer. “We wanted to be the first company to produce large scale modules in what is now the progressive state in the region.”

The company Monday announced plans to invest $36.8 million to build a factory in Charlotte where it will produce silicon thin-film solar modules, creating 65 jobs during the next three years.

Sencera, currently operating with 10 employees, opted to expand in North Carolina rather than relocate offshore or in the West, Weaver said. The company received a $62,000 One North Carolina Fund grant to help fund the expansion.

The expansion will make Sencera the largest of a small number of solar panel distributers and manufacturers in the state, said Steve Kalland, executive director of the North Carolina Solar Center. SBM Solar and MegaWatt Solar are also in North Carolina.

Kalland said the majority of solar projects in the state are small and residential. The state's solar industry got a boost in May when Duke Energy Corp., agreed to purchase all of the energy produced by solar company SunEdison in Davidson County.

“It's a pretty small industry in North Carolina but a pretty rapidly growing one,” Kalland said. “A lot of factors have come together to produce this uptick from policy incentives to external conditions.”

North Carolina law requires all utilities to get 12.5 percent of their electricity from renewable sources by 2021.

Solar energy's biggest opponent is cost, as one of the most expensive renewable energy resources. That cost is decreasing however, at a rate of 5 percent every year, said Weaver. He said the cost to consumers for energy from utility companies is 8 or 9 cents per kilowatt hour, whereas solar power averages 22 cents per kilowatt hour. The average household requires 4,000 kilowatts of energy a year.

Weaver said Sencera is able to manufacture panels faster, allowing them to provide them for a lower cost, 12 cents per kilowatt hour. Sencera then sells the modules to installers who can attach them to roofs of businesses and homes or use them on solar farms that produce electricity.

Still, Kalland said solar power continues to serve as the most environmentally friendly form of energy. He said there are also substantial benefits for the state.

“We have more than enough sunlight to make these products work effectively here,” Kalland said. “The more we can use the more we have the opportunity to have that money stay in the state.”

Weaver wants to see the state be a leader in the nation for renewable energy use.

“The future is bright for solar and North Carolina,” he said.

That could be a motto for the Internal Revenue Service when it comes to economic stimulus payments.

For those who qualified for the money based on 2007 income and then died, their heirs cash in.

The IRS Web site, irs.gov, says:

“Stimulus payments will be issued in the name of the individual eligible for payment on a filed 2007 income tax return … This includes situations where a person dies after filing a return or where the final 2007 income tax return was filed by a personal representative or surviving spouse.”

The IRS says it is only following the law as passed and has not calculated how many of the almost 105 million people to receive the checks are dead.

The payments are up to $600 a person or $1,200 for a married couple, with an additional $300 for each child, and so far have added up to more than $86 billion.

Julie Zimmermann expects to collect $97 of a stimulus payment because of the death of her father. John Studnicka, a retired salesman and Navy veteran, was 80 when he died on Mother's Day 2007, said Zimmermann, a mortgage banker who lives in Mukwonago, Wis. Studnicka's final tax return has just been completed, and the estate is awaiting a stimulus check to be divided among several heirs, Zimmermann said.

Like the $600 stimulus payment she and husband Gary received from their own taxes, her $97 share of her father's payment will find its way into their bank account, she said.

David Werner, a certified public accountant with the Milwaukee firm of Scribner Cohen & Co., said heirs of a client also probably will bank the $600 they will get. He is handling the estate of the 92-year-old widow who died last year.

The idea of the plan was to have the money spent to stimulate the economy, and for that reason, upper-income taxpayers, who are more likely to save it, were excluded. Following that logic, paying rich heirs “is kooky,” Werner said.

“But the macro economic theory of the program makes sense,” he said. “It is a way to stimulate some spending.”

Paul Wickert, president of Acc-U-Rite Tax & Financial Services Inc. in Milwaukee, prepared Studnicka's final tax return and has dealt with a number of questions about the payments. Looking at it from every angle, he believes “it's a miracle the IRS was able to pull this off, given with how this was dumped in their lap.” Finding out the economic circumstances of heirs before making payments to estates would have been an incredible complication.

As a result, the dead people get paid.

A person familiar with the company's discussions said Monday all the options are being considered as GM tries to cope with the dramatic consumer shift from trucks to cars and crossover vehicles.

The person asked not to be identified because no decisions have been made.

Critics have said GM still has too much fat in its middle management, despite cutting white-collar jobs to 32,000 last year from 44,000 in 2000. They also say the engineering, manufacturing and marketing costs are too high for it to keep all eight of its brands.

Over the years, analysts have suggested cutting or selling the Buick, Saab or Saturn brands, perhaps jettisoning them like GM did with Oldsmobile in 2004. Chevrolet and Cadillac remain the company's strongest sellers.

GM shares dropped briefly Monday afternoon to $9.92, tying their lowest point since Sept. 13, 1954, according to the Center for Research in Security Prices at the University of Chicago. Later in the afternoon, the stock rose 12 cents to $10.24. It has traded as high as $43.20 in the past year.

GM announced last month it would close four truck and sport utility vehicle plants and boost production of several existing car models. Its sales are down 16.3 percent this year.

Further job cuts could be considered by GM's board of directors when it meets in early August, The Wall Street Journal reported Monday.

Company spokeswoman Renee Rashid-Merem would not comment on potential job or brand cuts, but said the company has made it clear that action would be taken if the U.S. auto market worsened.

GM's stock price tumbled to its previous 53-year low of $9.96 on Wednesday after Merrill Lynch analyst John Murphy wrote in a note to investors that a GM bankruptcy “is not impossible if the market continues to deteriorate and significant incremental capital is not raised.”

The next day, JPMorgan analyst Himanshu Patel called the bankruptcy fears overblown but predicted GM will burn through $18 billion in 2008 and 2009 as it struggles with depressed U.S. sales.

GM has $24 billion in cash and $4.6 billion in credit on hand, he said, so it doesn't need to raise more money immediately. But he predicted the automaker will try to raise another $10 billion in the third quarter of this year by mortgaging trademarks, international operations and other assets.

Buick sales are down 21 percent so far this year, while Saab is down 29 percent and Saturn sales are off nearly 19 percent. Saab, the Swedish automaker, sold only 12,068 vehicles during the first half of 2008. Saturn sales have declined nearly 19 percent for the year even though its model lineup has been completely revamped.

GM already has decided to study the sale of its Hummer brand. The big trucks aren't the right product for consumers facing $4 per gallon gasoline.

In the first five months of this year, the airport's on-time arrival rate was about 77 percent, up from 67 percent for the same period in 2007.

This year's improvement came after Charlotte/Douglas International Airport was plagued by delays and long lines in early 2007 – a result of bad weather and computer problems related to the US Airways-America West merger.

At this point last year, the airport was among the nation's worst for delays. This May, however, Charlotte ranked ninth among 32 major U.S. airports for on-time arrivals, and was sixth among airports in the first five months of 2008.

US Airways, Charlotte's dominant carrier, also has improved its performance this year. The airline's on-time arrival rate nationwide in May was almost 84 percent – third-best among major carriers and up from 68 percent a year earlier. Jefferson George

DISTRIBUTION

A Florida company is seeking incentives from Cabarrus County as it considers a $12 million expansion of its Harrisburg warehouse and distribution site.

County commissioners will hold a public hearing July 21 to consider a three-year incentive package for Saddle Creek Corp. worth a total of $192,780 in grants tied to county property taxes. The company said it specializes in public warehousing, transportation, contract packaging and other work.

In Harrisburg, it is considering building a 300,000-square- foot facility that would bring with it 31 full-time and 11 part-time jobs. Some 145 to 169 people work there now. Adam Bell

The plunge came as concerns grew that the two largest U.S. mortgage-finance companies may need to raise more capital to overcome writedowns and satisfy new accounting rules.

Freddie Mac fell 18 percent and Fannie Mae dropped 16 percent after Lehman Brothers Holdings Inc. analysts said in a Monday report that an accounting change may force them to raise a combined $75 billion.

Speculation that the companies may take further writedowns also weighed on the stock, said John Tierney, a credit strategist at Deutsche Bank AG in New York.

“There's a lot of apprehension about writedowns,” Tierney said. “If they have writedowns, they have to raise capital. How much do they raise and how easily can they do that? Those are the questions that everybody is asking.”

Fannie Mae and Freddie Mac have declined more than 60 percent this year, with declines accelerating in the past two weeks, on concern the companies' capital raisings since December may not be enough to overcome writedowns.

Washington-based Fannie Mae so far has raised $6 billion in capital to offset writedowns on mortgages it owns or guarantees. Freddie Mac, based in McLean, Va., raised $13.5 billion since December and said last week that plans to add $5.5 billion probably won't be fulfilled until late next month.

Brian Faith, a Fannie Mae spokesman, and Michael Cosgrove, a Freddie Mac spokesman, declined to comment.

Freddie Mac fell $2.59 to $11.91 after earlier dropping as low as $10.28. Fannie Mae declined $3.04 to $15.74 and earlier fell to $14.65.

The new FAS 140 rule that seeks to stop companies keeping assets in off-balance sheet entities may force Fannie Mae and Freddie Mac to bring mortgages back onto their books, requiring them to put up capital, Lehman analysts led by Bruce Harting wrote in a note to clients today.

Fannie Mae would need to add $46 billion of capital and Freddie Mac would need about $29 billion, the Lehman analysts wrote.

The companies will probably get an exemption from the rule because it would be “very difficult” for them to raise that amount of capital, the analysts said.

The industry depends on petroleum-based products to build and ship its boards. And surfers in search of the biggest waves have to dig deeper into their pockets to fill gas tanks or book flights to the best breaks around the world.

“We all think about oil in our cars, but very few of us really consider the fact that every little piece of manmade equipment around you is oil-based, and surfing's no different,” said Chris Mauro, who's seen the price of some surfboards double to $750 or higher.

“The price of a surfboard, it used to be something where it was pretty digestible,” Mauro said.

“Now, it's like, whoa, OK, I've got to put some serious thought into this.”

Until now, surfing has been one of the fastest growing sports industries in the nation.

In 2006, independent retailers of surf gear brought in $2.65 billion in revenue, up from $2.46 billion two years before. Meanwhile, U.S. retail sales of surfboards jumped from $106 million in 2004 to more than $190 million in 2006, according to the Surf Industry Manufacturers Association.

Industry numbers for 2007-08 aren't yet available, but some retailers and manufacturers say they expect that rapid sales growth to slow after seeing drops approaching 30 percent in their own operations.

Some predict the tough economic times will take a heavier toll on family-run surfboard workshops than on the large, national board makers such as Channel Islands, Lost Enterprises, Dewey Weber Surfboards and Surftech.

The smaller operations are struggling with the rising cost of petroleum-based resin used to coat surfboards.

They also face lagging orders from mainstream retailers that tend to bypass regional board brands when times are tough.

Mark Wooster, owner of Wooster Surfboards in New Smyrna Beach, Fla., said his retail sales have dropped about 20 percent this year after previous years of 40 percent growth.

Major surf and skate retailer Ron Jon hasn't ordered any of Wooster's boards for its California stores for a year because of lagging sales, he said.

The market for surfboards was complicated by the demise three years ago of Clark Foam, a company that for decades supplied 90 percent of all the foam blanks that surfboard makers shaped into individual boards.

A number of companies jumped in to fill the void, with quality taking a hit.

While most major manufacturers report board sales are flat or slightly down, the world's largest producer, Surftech, has seen a 15 percent increase during the past year, CEO Randy French said.

Still, the Santa Cruz, Calif.-based company that mass produces boards in Thailand will likely increase its prices next year to make up for the soaring cost of raw materials and shipping. It already has replaced the oil-based sheetboard inside its boards with bamboo.

“I think the trickle-down impact from these gas prices are a long way from being over,” French said. “I think it's gonna hit harder in terms of board prices and manufacturing costs maybe next year, or even the year after.”

“The public will see that there have been significant problems,” SEC Chairman Christopher Cox said in a Bloomberg Television interview. “There have been instances in which there were people both pitching the business, debating the fees and were involved in the analytical side.”

Pension and money-market funds bought AAA-rated securities backed by mortgages made to the riskiest borrowers because the instruments offered higher returns than government bonds with the same ratings. In many cases, credit raters were paid by the investment banks selling the bonds, prompting regulators and lawmakers to question their independence. Bloomberg News

Yahoo shares rose the most since Feb. 1, when Microsoft disclosed its initial offer. The software maker said it might try to buy the search business or the whole company. Microsoft has been in talks in the past week with Icahn, the billionaire who controls about 69 million Yahoo shares.

“Icahn's hand is greatly strengthened, and I think here will be a growing impetus from shareholders to go for Icahn,” said Jeff Lindsay, an analyst with Sanford C. Bernstein. “Significant disillusionment has set in with Yahoo shareholders.”

Yahoo shares advanced $2.56, or 12 percent, to $23.91 at the close of Nasdaq trading Monday. Microsoft, the world's biggest software maker, gained 5 cents to $26.03.

There can be no assurance of a transaction, Microsoft said in an e-mailed statement Monday. Yahoo responded by inviting Microsoft to make another proposal immediately, saying the software maker is the one that has repeatedly walked away from talks.

Yahoo “is now moving toward a precipice,” Icahn, 72, said in a statement Monday. “It is time for a change.”

Microsoft originally offered about $44.6 billion for Yahoo, or $31 a share. That's 62 percent more than the company's stock price before the bid. Yang rejected the offer, saying Yahoo is worth more because of its growth prospects and Asian operations.

Microsoft CEO Steve Ballmer raised the bid as high as $33 a share to sway the board, and walked away on May 3 after Yang, 39, asked for $37. That prompted Icahn to enter the fray, buying Yahoo stock and calling for the company to reopen negotiations.

“Yang is in serious trouble,” said Anthony Sabino, a law and business professor at St. John's University in New York who is following the case. “Anybody who is straddling the fence is now starting to tip over to the Icahn side.”