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Home goods retailer Linens ‘n Things is considering filing for Chapter 11 bankruptcy court protection, a person familiar with the situation said on Friday.

The chain, owned by Leon Black’s buyout firm Apollo Global Management, is negotiating with creditors, which include General Electric Co (GE.N: Quote, Profile, Research), the source said.

While bankruptcy is “on the table,” it is one of many options being considered, the source said. “It is not the top option, nor is it the option that the company is currently pursuing at this very second.”

Citing people with knowledge of the situation, the Wall Street Journal reported on Friday that the retailer could file for bankruptcy protection by Tuesday.

Following a report by Bloomberg News that Linens ‘n Things had hired Conway Del Genio Gries & Co, one of the restructuring firm’s principals confirmed the hiring, but would not discuss any details.

Apollo, which bought the retailer in 2006 for $1.3 billion, declined to comment http://abc-cashadvance.com. Apollo filed this week for an initial public offering.

A Linens ‘n Things spokesman did not return a call and e-mail seeking comment.

A GE spokesman confirmed that its Commercial Finance unit is the lead agent on a $700 million revolving credit facility to Linens ‘n Things, but declined to comment further. 

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An early Easter holiday, chilly weather and recession-wary consumers combined to deliver dreary March sales results for U.S. retailers.

On Thursday, retail chains including Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research), Limited Brands Inc (LTD.N: Quote, Profile, Research), and Pacific Sunwear of California Inc (PSUN.O: Quote, Profile, Research) reported monthly sales that came in below Wall Street expectations.

Wal-Mart reported a 0.7 percent rise in March sales at U.S. stores open at least a year, which was below Wall Street expectations for a gain of 0.9 percent.

But the world’s largest retailer raised its first-quarter earnings forecast, citing expense controls and fewer markdowns, sending its shares up 2 percent to $55.24 in pre-market trading.

The ability of U.S. consumers to keep spending is being limited by rising food costs, high gasoline prices, falling home values, a credit market crunch and a weakening job market.

The Labor Department said nonfarm employment fell by 80,000 jobs in March, marking the third straight month that U.S easy payday loans. employers cut payrolls.

With consumers worried that the economy either is in or teetering on the verge of recession, they are passing over purchases of nonessential items, like furniture or clothes, in favor of basics, like laundry detergent and pasta sauce.

Meanwhile, under other circumstances, Easter shopping could have boosted March sales results, spurring early consumer demand for spring merchandise and allowing retailers to sell items at full price. 

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Members of the Federal Reserve’s policy-setting committee worried at their most recent meeting that housing and financial market stress could trigger a nasty slide in the economy, even as inflation pushed higher, minutes of the meeting released on Tuesday show.

“Some believed that a prolonged and severe economic downturn could not be ruled out given the further restriction of credit availability and ongoing weakness in the housing market,” minutes of the March 18 meeting said.

Fed economists presented a somber picture of short-term prospects — central bank staff now fully expect negative growth over the first six months of the year — but held out the possibility of a modest rebound later.

“The staff projection showed a contraction of real GDP in the first half of 2008 followed by a slow rise in the second half,” the report said, referring to gross domestic product, a broad measure of a country’s output of goods and services.

At the same time, Fed officials found recent inflation reports “disappointing,” noting also with concern that some indicators of inflation expectations were edging higher credit reports.

HARD TO SET POLICY

Policy-makers said there were limits to what could be done through interest rate cuts to deal with problems underlying the housing and financial market turmoil, but agreed trimming borrowing costs might provide some help.

However, Fed officials said it would be hard to calibrate policy responses because their aggressive rate cuts in recent months would take some time to show their effect on economic activity. 

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Chinese Internet firm Alibaba is set to speed up plans to buy back a near 40 percent stake owned by Yahoo Inc (YHOO.O: Quote, Profile, Research), as Microsoft Corp (MSFT.O: Quote, Profile, Research) threatens to go hostile with a lower bid for Yahoo.

Alibaba, keen to calm Beijing’s fears that Microsoft’s planned $42 billion takeover of Yahoo would increase foreign influence over China’s leading Internet firms, wants to fund a buyback of all or part of the 39 percent stake Yahoo owns, said a person familiar with the Chinese firm’s plans.

Analysts said this could come from a mix of foreign and local financial investors, including Chinese pension funds or state-backed firms looking to enter the Internet sector.

“Jack’s number-one thing is to maintain control,” said Hany Nada, managing partner of Granite Global Ventures, an early institutional investor in Alibaba, referring to the group’s Chief Executive Jack Ma.

Alibaba plans to exercise its ‘right of first offer’ on the stake, which is stated in a 2005 agreement with Yahoo, should the two U.S free credit report without a credit card. firms reach a deal, a source told Reuters earlier.

The ‘right of first offer’ states that Yahoo cannot transfer its Alibaba stake without first offering it to other shareholders. Alibaba believes any change of control at Yahoo, including a deal with Microsoft, would amount to such a transfer, the source said.

LOSING OUT

Alibaba may be unwilling to rule out potential business opportunities with Microsoft, for example in advertising or online trading, that would be lost if it were to buy back its stake from Yahoo. 

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Retail gas prices surged to a record above $3.30 a gallon Friday.

At the pump, gas prices rose 1.4 cents overnight to a national average of $3.303 a gallon, according to AAA and the Oil Price Information Service. That’s the latest in a series of records, and about 60 cents higher than a year ago.

In St. Louis, the average price on Friday was $3.231 a gallon, up 4.7 cents from Thursday.

In the Metro East area, the average was $3.443 a gallon, up 3.1 cents cash advance usa.

Gasoline in Missouri generally is lower priced due to taxes.

FROM STAFF AND WIRE REPORTS; JEREMIAH MCWILLIAMS AND RIDDHI TRIVEDI-ST.CLAIR CONTRIBUTED

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The Federal Reserve’s sharp cuts in borrowing costs since last summer will boost economic activity and dispel dangers posed by recent financial turmoil, Federal Reserve Governor Randall Kroszner said on Friday.

“These actions, together with steps we have taken to foster market liquidity, will help to promote growth over time and to mitigate the risks to economic activity,” Kroszner said in a speech to the Inter-American Development Bank.

The Fed has slashed benchmark rates to 2.25 percent from 5.25 percent since September as a crisis from defaults in risky subprime mortgages has escalated and pushed the economy to the brink of recession. Data released earlier on Friday showed the U.S. economy shed jobs in March for a third straight month, the first decline that long since a five-month string in 2003.

Kroszner said the Fed’s emergency steps to provide liquidity — not just to banks but also to large Wall Street investment banks and broker-dealers not normally able to tap the U.S 24 hour payday advances. central bank’s emergency lending — seemed to be soothing rattled financial markets.

“Funding pressures on some financial institutions appear to have eased somewhat as liquidity seems to have improved in several financial markets,” he said.

Kroszner’s comments echoed remarks by Fed Chairman Ben Bernanke to Congress this week. That testimony, made before the gloomy jobs report was released, was seen as suggesting the Fed may be nearing the end of its interest rate-cutting campaign.

However, in the face of evidence the job market is unraveling, financial markets boosted perceived chances of a half-percentage-point rate cut at the Fed’s April 29-30 meeting to 40 percent after the employment data. A quarter-point reduction is fully priced in to financial markets.

Kroszner said U.S. banks will continue to face challenges, but remain in sound condition overall. 

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Venezuela is preparing a “windfall” oil tax to boost the OPEC nation’s revenues from record crude prices, only months after leftist President Hugo Chavez’s nationalization crusade forced out two of the world’s largest energy companies.

The move extends Chavez’s broad campaign to boost state control over oil operations that led to legal battles with Exxon Mobil (XOM.N: Quote, Profile, Research) and ConocoPhillips (COP.N: Quote, Profile, Research) and helped spark a wave of resource nationalism throughout the Andes.

“Because of high oil prices, oil companies have excessive earnings that go beyond reasonable levels of profitability,” Legislator Angel Rodriguez told state news agency ABN.

“One way to distribute them to our people, who are the owners of the oil, is to create this tax.”

The windfall tax will take 50 percent of oil revenues above $70 per barrel, Rodriguez said, and an additional 60 percent of revenues over $100 per barrel cash advance.

Rodriguez said Congress, completely controlled by Chavez’s allies, would give initial approval to the measure this week.

The move will give Chavez new funds to shore up popularity among the nation’s poor majority that has backed him for almost a decade but is increasingly criticizing his government for nagging food shortages and rampant crime.

Supporters of the firebrand leader generally support his bare-knuckles negotiating style with foreign oil companies, which has spread to Andean allies Bolivia and Ecuador. 

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Fannie Mae, the largest provider of funding for U.S. residential mortgages, has extended forbearances for troubled homeowners in a move the company expects to ease stress on its capital.

The move allows temporary suspensions or reduced payments by borrowers for up to six months, up from four months, said Jason Allnutt, a vice president for credit loss management for Fannie Mae (FNM.N: Quote, Profile, Research) in Dallas.

Giving homeowners greater leeway will help Fannie Mae limit the costly process of purchasing bad loans out of the $2.5 trillion in mortgage-backed securities it guarantees. Under standard accounting rules, buying mortgages out of MBS trusts forces the company to revalue the loans at market levels, which last year boosted fair value losses sevenfold to $1.4 billion.

Fannie Mae is balancing the need to “keep people in their homes … with having to pull loans out of trust,” Allnutt said in an interview. “This is one of those changes that helps us in both ways.”

Longer forbearance for homeowners may give the government-sponsored enterprise more breathing room on capital as lawmakers and regulators pressure it to do more to stabilize the battered U.S. housing market. The program will complement other efforts by the GSEs, lenders and mortgage counselors to slow an epidemic in foreclosures that is threatening to push the U.S easy payday loans. economy into recession.

Heavy losses on loans purchased — whose values are determined based on the worst mortgage market in decades — and increased focus on loss mitigation have resulted in other new programs to keep borrowers in their homes. In February, Washington-based Fannie Mae announced it would begin offering unsecured loans to homeowners in arrears.

The HomeSaver advance and HomeSaver forbearance programs are bets that the loans can be “cured,” or fixed, faster and cheaper than through other loss-mitigation efforts. Such plans will work if servicers use the time to obtain more information from the homeowner, said Rick Smith, chief executive of Marix Servicing LLC in Phoenix, Arizona.

“Fannie Mae is trying to give the servicers as many tools as possible to help homeowners,” he said. But “if a servicer does not gather the financial information, then some plans will just delay the inevitable” foreclosure process and increase costs for investors, he said. 

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