[ Dow 12,300.36 -96.93 Nasdaq 2,417.10 -20.33 S&P 500 1,417.23 -11.38 Russell 2000 797.4

Mar 29, 11:30 AM

Current Headlines: DOW 12,300.36 -96.93 NASDAQ 2,417.10 -20.33 S&P 500 1,417.23 -11.38 RUSSELL 2000 797.40 - 4.96 TOPREGION

New Century stops sales to Freddie Mac

Troubled subprime mortgage lender New Century Financial Corp. and its subsidiaries will no longer sell mortgages directly to home financing giant Freddie Mac, New Century said Wednesday.

The lender notified Freddie Mac on Monday that it was voluntarily terminating its eligibility to sell or service loans for the government- sponsored company, according to documents filed with the Securities and Exchange Commission.

The filing did not provide a reason for the move. Freddie Mac is the second-largest buyer and guarantor of home mortgages in the country.

Last week, another government-sponsored mortgage finance company, Fannie Mae, said it would no longer allow New Century to sell it any mortgages or to act as the primary servicer of Fannie Mae loans. Fannie Mae claims Irvine-based New Century breached the terms of its contracts.

New Century, once the second-largest provider of subprime mortgages based on loan volume, has stopped making new loans due to a lack of funds and is now on the brink of bankruptcy.

TOPSTATE

Unlimited e-mail: A new reason to Yahoo

In another reminder of technology's quantum leaps, Yahoo Inc.'s free e-mail service will provide unlimited storage space to its nearly 250 million users worldwide.

With the move announced late Tuesday, Yahoo will trump its two biggest rivals in free e-mail, Microsoft Corp. and Google Inc., which provide 2 gigabytes and 2.8 gigabytes of free storage, respectively.

Yahoo's e-mail users currently get 1 gigabyte of storage, but that will start to change in May when Sunnyvale-based Yahoo plans to gradually lift all space constraints. It will take several months before all Yahoo e-mail users have infinite storage space. AOL, the fourth-largest e-mail provider, began offering free unlimited storage in September.

TOPNATION

Circuit City to lay off better-paid workers

A new plan for layoffs at Circuit City is openly targeting better- paid workers, risking a public backlash by implying that its wages are as subject to discounts as its flat-screen TVs.

The electronics retailer, facing larger competitors and falling sales, said Wednesday that it would lay off about 3,400 store workers -- immediately -- and replace them with lower-paid new hires as soon as possible.

The laid-off workers, about 8 percent of its work force, would get a severance package and a chance to reapply for their former jobs, at lower pay, after a 10-week delay, the Richmond, Va.-based company said. Circuit City Stores Inc., the No. 2 consumer electronics retailer behind Best Buy, said the fired workers earned above market-based salary ranges. They will be replaced with employees to be paid at the current market range, the company said.

-- From news services

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