Mexico still riding the wave
Mexico stock exchange topped Wednesday's performance by achieving a
second record close. Brazilian stocks plowed ahead fuelled largely by Petrobras and
Eletrobras shares. Activity on Toronto's exchange came from the utilities and industrial
products sectors, helping move the close out of Wednesday's decline.
Mexican shares notched up a second straight record close this week as
the country's promising economic outlook kept luring money into equities, traders said.
The key IPC stock index ended up 24.47 points, or 0.29 per cent, at 8319.67 points.
Nasdaq finishes above 5,000
The Nasdaq composite index closed above 5,000 for the first time
Thursday as investors poured money into chipmakers, wireless providers and Internet firms.
In the tug-of-war contest going on between old-economy stocks and
new-economy stocks it was the new-economy issues that carried the day
Thursday, allowing investors to forget all about the Dow's 374-point drop on Tuesday.
Thanks to a boost from two key technology components, the blue-chip
index rallied to close above the key 10,000 mark. But the gauge born in the 19th
century and home to many industrial firms, financial companies and drug makers is
still down 13 per cent this year.
In the same period, the Nasdaq is up a stunning 24 per cent, reflecting
a growing belief on Wall Street that technology stocks will continue to rise even if the
Federal Reserve hikes interest rates.
The Dow, meanwhile, jumped 154.20 points, or 1.6 per cent, to
10,010.73, recovering from a 117-point slide earlier in the session. But the gains are
misleading. Hewlett-Packard and Microsoft both so-called "new economy"
stocks combined for 77 Dow points.
The S&P 500, meanwhile, rose 34.99 points, or 2.6 per cent, to
The Russell 2000 index of smaller companies, one of the year's best
performing market gauges, rose to its 14th record of the year, gaining 11.37 points, or 2
per cent, to 606.05.
More stocks rose than fell. Advancing issues on the New York Stock
Exchange led decliners 1,691 to 1,273.
Trading volume topped 1.2 billion shares. Nasdaq winners beat losers
2,476 to 1,826. More than 1.9 billion shares changed hands.
In other markets, Treasury securities rose. The dollar fell against the
yen and was little changed vs. the euro.
AltaVista targets U.K.
U.S. internet firm AltaVista is bringing down the cost of Internet
access in Britain. Analysts say the strategy will put pressure on Internet service
providers to bring down costs. And that is exactly what European governments have been
campaigning for lower costs to consumers and increased use of the Internet.
Mergers & Acquisitions
Deutsche Bank and Dresdner Bank
announced plans to combine in a "merger of equals" to create the world's largest
financial institution with assets of more than $1.3 trillion in a deal valued by analysts
at up to 33 billion euros ($32 billion).
Southeastern Asset Management Inc.,
a Memphis, Tenn.-based investment adviser, said on Wednesday it acquired a 6 per cent
stake in Aetna Inc., the No. 1 U.S. health insurer.
The pharmaceutical arms of DuPont Co. and
Germany's Aventis SA agreed Wednesday to form a European alliance to discover, develop and
market pharmaceuticals in certain therapeutic areas.
UBS: UBS, the world's second-biggest bank in terms of assets,
said 1999 profit more than doubled to 6.3 billion Swiss francs ($3.8 billion) from 3.03
billion francs in 1998. Trading income and profits from the investment banking unit
World Bank names chief economist
The World Bank named a new chief economist, bringing in Britain's
Nicholas Stern to replace the controversial Joseph Stiglitz in the high-profile position.
Stern, former chief economist of the European Bank for Reconstruction
and Development, which is focused on eastern Europe, said that he would try to bring
"a good sense of direction" to World Bank efforts to curb poverty and boost
Banks are lax: Greenspan
The unprecedented expansion of the U.S. economy has prompted many of
the nation's banks to become lax in their lending standards a situation that could
jeopardize the banking system if left unchecked, Federal Reserve Chairman Alan Greenspan
In a speech to the Independent Community Bankers of America in San
Antonia, Texas, Greenspan said that despite the vibrant economy and exceptional banking
conditions, " we have seen how lax standards, excesses, or fraud can cause
disproportionate losses to insurance funds."
Mac knockoffs banned
Apple Computer Inc. said Wednesday it secured worldwide injunctions
that prevent three companies from making and selling personal computers that it contends
are knockoffs of its popular iMac computers.
IMF candidate faces doubt
The United States refused to endorse Germany's new choice to head the
International Monetary Fund, saying it wanted a candidate of "maximum stature"
who could garner support in Europe and the developing world.
U.K. production slips
British industrial production and manufacturing output fell more than
expected in January as the strength of the pound and interest rate rises held back growth
in Europe's third-largest economy.
Manufacturing output fell 0.4 per cent month-on-month, the biggest
decline since September 1998, compared with economists' expectations of a 0.2 per cent
rise. Industrial production, which consists of manufacturing output and production by
utilities and oil and gas extractors, fell 0.1 per cent, while experts predicted a 0.3 per
cent rise, according to Reuters.
Clinton pushes China trade
The White House is pressing for a swift vote in the U.S. Senate on a
landmark trade agreement with China, hoping to score an early victory that would put
pressure on a bitterly divided House of Representatives.
President Clinton is expected to meet with key senators Tuesday before
submitting legislation this week asking Congress to grant China permanent trading
privileges in the U.S. market.
Trade Representative Charlene Barshefsky said the Senate Finance
Committee could "proceed immediately" to deliberations. Republican and
Democratic leaders said the panel could vote later this month.
The legislation is sure to pass the Finance Committee, which is
responsible for trade and tax issues in the Senate. Fifteen senators on the 20-member
panel told Reuters they would support the pact.
In the 100-member Senate, the vote may be close, but Democratic leader
Tom Daschle said he expected at least 60 senators to support the White House, enough to
override a filibuster.
China's GDP to grow 7%
China's economy is expected to grow around seven percent this year,
just off last year's 7.1 per cent, according to excerpts of a State Development Planning
Price levels are likely to remain around the same as 1999, when
deflationary pressures eased but the main inflation indices were still negative, Zeng
Peiyan, head of the State Development Planning Commission, will tell China's parliament on
RipplewoodMarriott: U.S. private investment group
Ripplewood Holdings and Marriott International Inc. said on Tuesday they had agreed to
form a joint venture to acquire hotels in Japan.
Japan's Mitsubishi Motors Corp.
declined to comment on newspaper reports on Tuesday that the carmaker is in talks to form
an alliance with DaimlerChrysler AG, including a capital tie-up.
Citigroup pays Rubin $21M
Former U.S. Treasury Secretary Robert Rubin received a compensation
package worth more than $21 million during the four months he served as a co-chairman of
Yen falls after BOJ move
The Japanese yen fell across the board Wednesday after the Bank of
Japan intervened for the first time in two months in the foreign currency markets.
The Japanese central bank's sales of yen for dollars pushed the U.S.
currency up by more than one yen to around 107.50 yen from the five-week low of 105.73 hit
on Tuesday. The euro capitalized on the yen's weakness and rallied as high as 103.06 yen
from the record lows around 100.90 hit a day earlier.
The dollar was at 107.22 yen, while the euro was 102.98 yen.
Asia rises, HK at record
Asia's main stock markets mostly rose Tuesday, with Hong Kong's main
stock index climbing to a record close as by brisk demand for leading China blue chips
sparked a late-day turnaround.
In Tokyo, the 225-share Nikkei ended up 147.89 points, or 0.75 per
cent, at 19,944.24.
In Hong Kong, the Hang Seng index reversed course to close up 106.60
points, or 0.6 per cent, at 17,865.36. CITIC Pacific rallied 9 per cent to HK$43.70 amid
speculation the company was about to step up investment in high-tech projects.
The key All Ordinaries index in Sydney ended up 0.6 per cent. The
blue-chip gauge advanced 18.9 points to 3,251.0.
In Taiwan, the weighted index ended fractionally higher at 9,380.07.
Jakarta stocks slipped 0.7 to close at 562.759. Kuala Lumpur shares were nearly 1 per cent
lower as small-capitalization stocks took a hit. Manila shares slid 3 per cent, while Thai
stocks crept up 0.3 per cent amid concerns over the resilience of Thailand's economic
$1b for European Net tyros
Japanese Internet investment house Softbank unveiled plans Wednesday to
spend $1 billion to develop start-up technology companies in Britain and continental
"We believe there is enormous potential for entrepreneurial
Internet ventures in key European markets," said Masayoshi Son, Softbank's president
and chief executive.
BASF to buy back $1.9b
German chemicals maker BASF launched a 2 billion euro ($1.92 billion)
share buyback plan, seeking to cancel around 7 per cent of its stock to boost per-share
returns to investors.
BASF said the operation, said to be Germany's biggest of its kind,
would cut its capital costs by reducing the number of shares on which it pays a dividend.
Hong Kong's growth roars
Hong Kong's gross domestic product soared a better-than-expected 8.7
per cent in the fourth quarter of 1999 from the previous year, and 2.9 per cent for all of
last year, Financial Secretary Donald Tsang said Wednesday.
The report outstripped even the most bullish market forecasts, and
permitted Tsang to refrain from new taxation in the 2000/2001 budget he presented on
Noting that even he was surprised by the fast pace of the recovery,
Tsang said GDP was expected to rise 5.0 per cent in 2000.
The 1999 number follows a 5.1 per cent contraction in 1998, when Hong
Kong was in the grip of a regional financial crisis.
Economists had forecast 6.1 percent growth for the 4th quarter, 2.2 per
cent growth for 1999 and 4.9 per cent growth in 2000.
Tsang also cut sharply his estimate for the 1999/2000 budget deficit,
to HK$1.6 billion ($206 million) from HK$36.5 billion, and forecast a HK$6.2 billion
deficit for the 2000/01 financial year which begins on April 1.
"The real story is the dramatic turnaround in Hong Kong's
fortunes, especially the deficit to a mere HK$1.6 billion," said Marshall Byers,
chief operating officer at Ernst & Young.
"By the time the numbers are finished, Tsang will be in a surplus
again...this remarkable economy has proven extremely resilient in the face of extreme
The impressive figures propelled Hong Kong stocks, with sentiment
further cheered when Tsang announced there would be no tax hikes this year. He also cut
stamp duty on stock transactions to 0.225 percent from 0.25 percent.
The blue-chip Hang Seng Index finished at a record close of 17,951.43
points, up 86.07 points or 0.48 percent.