ECONOMY

Retail Sales Surge Unexpectedly

WASHINGTON — Retail sales unexpectedly surged during November in an upbeat sign for the holiday shopping season and the slowing economy. Sales by American merchants rose by a seasonally adjusted 1.0%, the Commerce Department said yesterday. The surprisingly large increase was far above Wall Street’s expectations for a 0.2% gain in sales, an important indicator of consumer spending — which makes up about 70% of gross domestic product, a measure of the economy. “It clearly suggests consumers are hanging in there, probably partially related to the decline in energy prices that freed up money in household budgets,” an analyst at economy.com, Scott Hoyt, said.

— Dow Jones Newswires

HEDGE FUNDS

SEC Proposes Raising Hedge Fund Bar

WASHINGTON — The Securities and Exchange Commission yesterday proposed making it harder to invest in hedge funds by floating a proposal to slash the number of Americans qualified to make such high-risk, high-reward investments. In another unanimous vote, the commission also proposed reasserting its power to protect hedge-fund investors against fraud by hedge-fund managers. The SEC unanimously proposed requiring investors to have $2.5 million in financial investments before investing in some privately offered vehicles, such as hedge funds. That would be in addition to current regulations, under which an investor must have $1 million in net worth — including the value of their homes — or $200,000 a year in income.

— Dow Jones Newswires

AVIATION

Qantas Agrees To $8.7B Buyout

SYDNEY, Australia — Qantas Airways Ltd., Australia’s largest airline, agreed to a sweetened $8.7 billion buyout from Macquarie Bank Ltd. and Texas Pacific Group, sealing the world’s biggest aviation takeover. The agreement, struck less than 24 hours after Qantas rejected an initial offer, comes after the group dropped conditions allowing it to walk away or be paid a breakup fee if the deal collapsed. The buyout group will get control of an airline that’s forecast a 14th straight annual profit, withstanding an industry slump that triggered $40 billion of losses by global carriers since 2001.

— Bloomberg News

United, Continental In Merger Talks; AirTran Makes Offer for Midwest

DALLAS — UAL Corp.’s United Airlines and Continental Airlines Inc. are discussing a merger as consolidation in the industry accelerates, two people familiar with the talks said. The discussions follow US Airways Group Inc.’s hostile $8.67 billion offer for Delta Air Lines Inc. on November 15. Low-cost carrier AirTran Holdings Inc. said yesterday that it offered $290 million for Midwest Air Group Inc. A United-Continental merger would combine the second- and fourth-largest U.S. airlines in terms of passenger traffic, eclipsing AMR Corp.’s American Airlines to become the world’s largest carrier.

— Bloomberg News

TECHNOLOGY

AOL Lays Off 450 Employees

MCLEAN, Va. — About 450 workers at the Dulles headquarters of AOL were laid off yesterday as the company continues restructuring away from its traditional roots as a subscription-based provider of dial-up Internet access. AOL announced in August that it planned to cut about 5,000 jobs — or roughly a fourth of its global work force — as it embarked on major changes designed to shift the company’s revenue stream from subscription fees to online advertising. Many of AOL’s key features, like e-mail accounts, are now available for free.

— Associated Press