Global markets shaken by
Wall Street's near meltdown
Wall Street remained volatile early Wednesday following two days of
tumult that sent shivers through global financial markets.
A day after Tuesday's dizzying sell-off and a spectacular recovery left
US shares with moderate losses, the Dow Jones Industrial Average zigzagged through the
trading session and by midday Wednesday was down 86.25 points (0.77 per cent) at
The Nasdaq composite also continued its roller-coaster ride, but was
down 23.57 points (0.57 per cent) at 4,125.32 by 1615 GMT.
The Standard and Poor's 500 fell 8.26 points (0.55 per cent) at
The markets regained some stability after respected Goldman Sachs
strategist Abby Joseph Cohen said she remains "optimistic" about the outlook for
On Tuesday, the Nasdaq plunged as much as 574 points during the session
a near meltdown 13.6 per cent then staged a spectacular rebound to close at
4,148.89, a loss of 74.79 points (1.77 per cent). That came after Monday's record plunge
in the Nasdaq of 349 points.
The Dow tumbled more than 500 points as well Tuesday before moving off
its lows to close at 11,164.84, a decline of 57.09 points, or 0.51 per cent.
In Europe, major markets were lower across the board.
London's FTSE 100 tumbled 2.02 percent, Germany's Dax 2.55 per cent,
and the Paris CAC-40 2.97 per cent.
Most Asian share markets were lower Wednesday on continued US-inspired
selling of technology stocks but losses were limited as investors took refuge in "old
The key Nikkei-225 index dropped 132.16 points to end at 20,462.77,
after falling to 20,311.79.
In Hong Kong, the Hang Seng index lost 574.49 points to close at
Clinton opens 'New Economy' forum on high-tech business
US President Bill Clinton gathered high-tech moguls and financial
wizards Wednesday to herald the "new economy" and debate the warning flags
raised by the recent wild rides in the markets.
Among the gurus assembled at the day-long White House forum was Abby
Joseph Cohen of Goldman Sachs, one of the most respected stock market analysts on Wall
Street, who said she remained encouraged about the future of US share prices.
She was speaking a day after both the Dow Jones Industrial Average and
the technology-heavy Nasdaq electronic exchange suffered dramatic selloffs following
repeated warnings that certain issues were overvalued.
And there were also cautionary voices at the "White House
Conference on the New Economy." "There is going to be a correction, a sharp
one," said former deputy Treasury secretary Roger Altman, who is now a top investor.
But Clinton did not comment on the market's movements and used the
podium to trumpet his administration's economic record.
"We meet in the midst of the longest economic expansion in our
history and an economic transformation as profound as that that led us into the industrial
revolution," the president said in his opening remarks.
And he focused on one of his favourite subjects: the changes high-tech
has wrought on the financial world.
"From small businesses to factory floors, to villages half a world
away, the information revolution is changing the way people work, learn, live, relate to
each other and the rest of the world," Clinton said as he opened the "New
Microsoft Bill Gates: self-made man branded monopolist
The legendary Bill Gates computer whiz and visionary
businessman, founder of the world's leading software company remains defiant in the
face of scathing criticism.
Monday, federal Judge Thomas Penfield Jackson, in a stinging 43-page
conclusion of law, said that Microsoft "maintained its monopoly power by
anti-competitive means and attempted to monopolize the Web browser market." But the
43-year-old self-made billionaire, who created Microsoft in 1975, vowed to appeal, saying
"innovation will continue to be the Number one priority at Microsoft." The
ruling by Federal Judge Thomas Penfield Jackson ensured Gates will be remembered as a
major player in the ever-evolving relations between government and big business in the
United States, where corporations enjoy more free rein than anywhere else in the
industrialized world but are still prohibited from unduly bullying their smaller rivals.
Gates now faces a penalty phase, during which the same judge will
decide how to rectify Microsoft's abuses, possibly ordering a breakup and forever changing
the high-tech landscape.
UK seen holding rates
The Bank of England is expected to leave U.K. interest rates on hold
this week, although economists said it would be a tight decision for the central bank's
monetary policy makers, who would probably hike rates next month if not this Thursday, to
slow growth in the British economy. The BoE's monetary policy committee meets Wednesday
and will publish its interest-rate decision Thursday at noon local time. In a poll, 26 of
36 economists surveyed said they expected the committee to leave its key short-term
lending rate at 6 per cent, according to Reuters.
Indonesia faces deadline
Indonesia, close to sliding back into the economic mire, promised
Wednesday to meet a weekend deadline set by the IMF to win help from its main creditors
and secure a fresh loan.
In what has turned into a test of Indonesia's first democratically
elected government in 45 years, the International Monetary Fund has put Jakarta on notice
that unless it moves quicker on economic reform it risks losing international support.
At stake is the rescheduling of $2.1 billion in debt by its Paris Club
creditors and a fresh $400 million loan from the IMF, already delayed for a week because
of delays in Indonesia's reforms.
Indonesia has already missed target dates agreed in a letter of intent
signed with the IMF in January, in which the international body promised a loan package
worth $5 billion over the next three years.
Finance Minister Bambang Sudibyo told reporters before a cabinet
meeting that most, but not all, of the new target dates agreed with the IMF would be met.
Sudibyo said the full set of reforms set for April 8 would be
implemented on time. The IMF has said this will help Jakarta's case when it asks the Paris
Club next week to reschedule more debt.
Thailand set for upgrade
Moody's Investors Service, the U.S. credit rating agency, said Monday
that it was reviewing Thailand's ratings for a possible upgrade in a signal that the
catalyst for Asia's economic crisis was firmly on the mend.
The devaluation of the Thai baht in 1997 unleashed a chain of economic
turmoil across the region, but expectations of double-digit GDP growth this year led
economists to greet Moody's announcement as long overdue.
Thailand's sovereign debt currently has an unattractive Ba1 rating from
Moody's, at the lower end of the agency's scale and akin to that assigned to high-risk
junk bonds. An upgrade would allow more international institutional investors, many of
whom are barred from junk bonds, to start investing in Thailand and should also cut the
cost of funds to Thai borrowers.
Mergers & Acquisitions
Rover: BMW said Thursday that it will consider any alternative
offer for its ailing Rover Cars arm, which the German automaker agreed last month to sell
to a U.K. venture capital firm.
Drug maker American Home Products Corp. struck a
biotechnology alliance Wednesday with Elan Corp. PLC of Ireland to develop a potential
vaccine for Alzheimer's disease.
BTAT&T: Transatlantic telecommunication allies
AT&T Corp. and British Telecommunications geared up their partnership on Wednesday,
announcing plans to invest $2 billion to establish dozens of Internet data centers
worldwide as they seek to tap growing demand for web hosting through their Concert joint
Billionaire investor Carl Icahn offered
Tuesday to purchase Nabisco Group Holdings Inc. outright in a "friendly" deal
worth nearly $5.22 billion, increasing his pressure on the company's board, which just
Monday spurned his previous partial takeover attempt.
Chemical giant Bayer Corp. has
completed the purchase of the polyols business of Lyondell Chemical Co. for $2.45 billion
in a deal that makes the German company the world's largest producer of polyurethane raw
Deutsche-Dresdner: Dresdner Bank called off its planned 30
billion ($28.7 billion) merger with Deutsche Bank Wednesday, sending a shock wave through
Europe's financial industry and prompting speculation that Dresdner, Germany's
third-largest bank, may be a takeover target for a U.S. bank.
France Telecom is closing in on a
bid for Orange, the U.K.'s third-largest cellular phone operator, according to a report
ViacomCBS: Viacom leader Sumner Redstone and CBS chief Mel
Karmazin on Tuesday predicted that federal regulators would soon give their merger deal
the thumbs up, and will also allow the combined company to keep both its CBS and UPN
Bank of AmericaAriba:
Bank of America Corp. and electronic
commerce company Ariba Inc. on Tuesday said they formed an alliance to create an
Internet-based financial services marketplace for business customers.
Finnish telecommunications equipment maker
Nokia said it would work with San Jose, Calif.-based Cisco Systems to improve
compatibility between mobile and Internet protocol (IP) backbone networks.
HP Kodak: Hewlett-Packard Co. and Eastman Kodak plan to
open a new digital photography joint venture based in San Diego within three months.
Swisscom announced a strategic alliance with
Swiss media group TA-Media and reiterated plans to float its Internet access arm Blue
Window in the second half of the year.
IBMKPNQwest: Pan European network operator KPNQwest teamed
up with U.S. computer giant IBM to create a Web hosting venture that is expected to
generate revenues of around 4 billion ($3.8 billion) within 10 years.
Pixelpark Cell Network:
German technology consultant
Pixelpark called off its planned takeover of Sweden's Cell Network and Mandator after the
collapse of its share prices slashed the value of the all-stock offer by almost half.
Thomson Travel, Britain's largest travel
business, on Tuesday rejected a $2 billion takeover offer German airline Lufthansa and
retailer Karstadt Quelle made earlier in the day in a bid to create Europe's largest
U.S., EU clash over trade
The United States and European Union argued over trade policies in
southeastern Europe on Wednesday, underscoring a deep rivalry for market share.
Deputy U.S. Trade Representative Susan Esserman, speaking at a
conference in Hungary to promote membership of southeastern European countries in the
World Trade Organization (WTO), accused the EU of undermining U.S. trade in entertainment
products in Albania, Croatia and Moldova.
She said that after a deal concerning audio-visual goods had been
struck, the EU had stepped in to demand that the three countries, seen as potential EU
membership candidates, impose more restrictive terms.
"I must say we are extremely concerned that Europe has pressured
these countries to restrict market access contrary to the spirit and the purpose of the
WTO itself," Esserman said.
The EU ambassador to Hungary, Michael Lake, said most trade relations
between the EU and the U.S. were harmonious, despite some well-publicized rows.
HK chief urges WTO entry
On the eve of a visit to Washington, Hong Kong leader Tung Chee Hwa
said Wednesday he is confident that China would be accepted in the World Trade
Organization, and that he finds it "surprising" that some members of Congress
oppose a bill granting China permanent normal trade relations with the United States.
Japan sells yen
The Bank of Japan sold yen Monday in an effort to curb the currency's
strength and bolster exports with the move coming just after the release of the
"tanken" economic survey showing that big Japanese firms believe business
conditions are improving.
The BOJ may have spent more than $10 billion on Monday to stem the
surging yen starting from 103.30 yen, market sources said. The dollar rose to an interday
high of 105.65 yen from 102.43 yen late Friday trading in New York and was last at 105.01
yen. The euro fell to 99.89 yen from 98.25 in late trading Friday.
DoCoMo eyes $10B bond
Japan's largest mobile phone operator, NTT Mobile Communications
Network Inc, on Monday filed for Finance Ministry permission to issue up to ¥1 trillion
($10 billion) of corporate bonds, a company official said.
NTT DoCoMo, as the company is commonly known, expects the Finance
Ministry to grant approval by April 11, allowing that amount of bonds to be sold at any
time in the next two years. The application is known as a shelf registration.
Coca-Cola faces lawsuit
Atlanta-based Coca-Cola Co. is facing a new deadline to settle a
lawsuit, filed by current and former minority employees who claim they were the victims of
And those involved in the lawsuit say if there is no deal, they will
make their presence known at the company's shareholder's meeting, scheduled for April 19
in Wilmington, Delaware.