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Retailing: If you thought the holidays were bad ...

Major retailers reported their December sales last week, and the results were even worse than expected, said Jayne O’Donnell in USA Today. Wal-Mart was “about the only retailer to increase sales,” but its 1.7 percent gain was less than had been forecast, and the giant discounter warned that prospects for January were bleak. Macy’s said December sales dropped 4 percent from December 2007 and announced that it would close 11 underperforming stores. Regional department-store chain Gottschalks reported a 9.6 percent decline, adding a warning that “it could run out of cash by month’s end.”

Expect more such warnings in coming weeks, said Stephanie Rosenbloom in The New York Times. For most retail chains, this was “the worst holiday shopping season in decades,” with many reporting double-digit declines. And the picture will only darken in January, “typically a slow month for retailers.” A wave of bankruptcies, which has already taken out such well-known names as Linens ’n Things and Sharper Image, “is expected to grow substantially worse in coming months.”

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Outsourcing: Accounting scandal shakes India

Satyam, a major computer-outsourcing firm and one of India’s largest public companies, has been rocked by a scandal that has been dubbed “India’s Enron,” said Niraj Sheth in The Wall Street Journal. The company’s founder and chairman, B. Ramalinga Raju, confessed last week that he had “concocted key financial results, including a fictitious cash balance of $1 billion.” Indian authorities quickly arrested Raju and ousted Satyam’s board, replacing it with 10 independent directors drawn from India’s corporate elite. The company may seek a government bailout and ask clients to accelerate payments in order to stay solvent.

Aviation: Slowdown hits Boeing hard

With cash-hungry airlines canceling orders at a rapid pace, aviation giant Boeing last week announced it would lay off 4,500 workers, said Joseph Weber in BusinessWeek. The aircraft maker “has a substantial backlog of plane orders.” Still, it has been seeing new orders plunge, to 662 planes last year, “just over half the number ordered in 2007.” The order slowdown and layoffs will likely further delay the rollout of the much-anticipated 787 Dreamliner, which is already two years late.

Banking: Citi gets some good news

Tottering banking giant Citigroup sold a controlling stake in its Smith Barney brokerage unit to Morgan Stanley this week, in a deal that could give Citi a $6 billion boost, said Bradley Keoun and Christine Harper in Bloomberg.com. The price paid by Morgan Stanley for 51 percent of Smith Barney implies a value of about $20 billion for the entire unit. Citi’s remaining 49 percent stake is thus worth about $10 billion, or $6 billion after taxes, which “would flow into Citigroup’s capital.”

Financial services: The exodus from Merrill begins

Now that Bank of America has completed its purchase of Merrill Lynch, executives of the legendary brokerage firm are heading for the exits, said Charles Gasparino in CNBC.com. The latest to go are Robert McCann, head of Merrill’s “thundering herd” of stockbrokers, and investment banking chief Gregory Fleming. McCann’s departure, amid “continued tension” with Merrill President John Thain, “could lead to brokers leaving Merrill.” Many brokers are unhappy with the size of bonus payments made by BofA to retain them.