Tokyo stocks return to red
Tokyo stocks dipped lower at midday on Friday in volatile trading ahead
of a major reshuffle of the benchmark Nikkei 225 average.
By midday, the benchmark Nikkei 225 average was down 91.51 points or
0.48 per cent at 18,867.81. But the TOPIX index of all shares listed on the first-section
of the Tokyo Stock Exchange was up 21.41 points or 1.31 per cent at 1,650.41.
The Korea Composite Stock Price Index was up 3.56 per cent at 0.47 per
cent at 764.81.
The Taipei Weighted Index opened 0.64 per cent higher and held mostly
steady. The index was up 60.56 points, or 0.66 per cent at 9,169.61.
Hong Kong, Sydney and Singapore stock markets are closed Friday for a
In U.S.A., The Dow Jones industrial average ended up 169.09 points, or
1.58 per cent, at 10,844.05, putting it within just 80 points of the mark held before last
Friday's bungee jump of 618 points.
Technology investors nudged nearly every tech sector lower, pushing the
Nasdaq composite index down 1.69 per cent, or 62.53 points to 3,643.88.
Broader stock measures struggled during the day with the Standard &
Poor's 500 index edging up 7.07 points, or 0.50 per cent, at 1,434.54.
In Europe, London's FTSE 100, home to Europe's biggest exchange, rose
56.3 points, or 0.9 per cent, to 6,241.2, lifting its gain for the abbreviated week to 1
Leading Europe's charge thanks to a jump among media and telecom stocks
was the CAC 40 in Paris, gaining 68.05 points, or 1.1 per cent, to 6,234.51.
The Xetra Dax in Frankfurt fell 58.76 points, or 0.8 per cent, to
7,157.95, with software company SAP falling 9.4 per cent following the resignation of its
top U.S. executive late Wednesday.
Investors irked by meddling
Asian governments are falling back into bad habits, debating whether to
prop up stock prices in defiance of Western policymakers' insistence that the region must
rely for its recovery on open markets, not ministerial meddling.
As Japanese Finance Minister Kiichi Miyazawa on Tuesday faced down
calls by leading members of the ruling coalition to use taxpayers' money to support
shares, South Korea sent out mixed signals on whether it would put a floor under the
Hours after South Korea's finance ministry said the government would
indeed use public funds to stabilize Seoul stocks, Finance Minister Lee Hun-jai said
direct intervention was clearly undesirable.
Intervention in Asia is nothing new Taiwan shored up its market
when saber-rattling by Beijing unnerved investors ahead of last month's presidential
election and governments may not have to act if stocks continue to recover from
Monday's mauling. But at the very least, economists and officials said ministers risk
sending the wrong signals at a time when investors want governments to stand aside and let
market forces drive the process of economic rebuilding after the 1997 financial crisis.
EU inflation above target
Europe's annual inflation rate climbed to 2.1 per cent in March,
raising expectations that the European Central Bank (ECB) will hike interest rates when
its governing council meets next week.
Consumer price inflation in the 11-nation euro-zone breached the ECB's
target rate of 2 per cent for the first time, according to Eurostat, the European Union's
statistical arm. Inflation in February had been exactly 2 per cent.
Even though the rise was in line with economists' expectations in the
wake of soaring energy costs, the report quickly reversed early share gains on European
stock markets, sending all the region's main indexes into the red.
Ex-Bear to pay SEC $1M
Richard Harriton, the former president of investment bank Bear Stearns'
trade clearing unit, agreed to pay $1 million to settle a fraud case filed by the
Securities and Exchange Committee, the SEC said.
Harriton, 65, had been charged with propping up a now-defunct
brokerage, A.R. Baron & Co., with capital despite its allegedly illegal activities and
charging Baron customers for stock trades that he knew were unauthorized.
Meltdown hits Dow, Nasdaq
A Wall Street meltdown hit the Nasdaq and the Dow Jones industrials
Friday as both indexes suffered their worst single-day point declines.
Although both indexes moved off their lows for the day, the Nasdaq
tumbled 355.61 points (9.67 percent) to close at 3,321.17, while the Dow plummeted 616.23
points (5.64 percent) to 10,307.32.
The Standard and Poor's 500 also went into a tailspin, losing 83.97
points (5.83 percent) at 1,356.54.
The plunge came in the wake of a Labor Department report showing
accelerating inflation, suggesting the US Federal Reserve may take a more aggressive
posture in boosting interest rates.
For the blue-chip Dow Jones index, the plunge exceeded the previous
single-day drop, 554 points on October 27, 1997.
It was also the worst point drop for the Nasdaq, topping the 349.15
point decline just last week, on April 3.
In the space of just two weeks, the Nasdaq has lost 25 percent of its
value, and the high-tech index is down 34 percent from its March 10 high of 5.048.62.
The bond market was one of the few refuges for investors, where a flock
to safety pushed the yield on the 30-year Treasury bond to 5.782 percent from 5.803
percent Thursday. Yields and prices move in the opposite direction on the bond market.
Japan banks speed up tie
Sumitomo Bank and Sakura Bank said Friday they would bring forward by a
year their planned merger to create the world's third-largest bank, in the latest sign of
the frenetic pace of restructuring in the Japanese financial industry.
The two banks said in a statement they had decided to accelerate their
merger to April 2001 to keep up with increasing competition in the industry. Other major
Japanese banks plan to complete mergers next year.
Other details about the deal emerged Friday. Owners of Sakura Bank
shares are expected to receive 0.6 of a Sumitomo Bank share for every Sakura share they
own, valuing the deal at ¥3.4 trillion ($35.9 billion) based on Friday's closing share
Sumitomo and Sakura, which have combined assets of about ¥99 trillion,
announced last October they would merge by April 2002.
Japan's banking sector has seen a flurry of merger announcements in
recent months as banks struggle to boost profitability, clean up massive problem loans and
meet the growing cost of information technology investment.
Fuji Bank, Dai-Ichi Kangyo Bank and Industrial Bank of Japan expect to
merge into Mizuho Financial Group in October, creating the world's largest bank by assets.
Sanwa Bank, Tokai Bank and Asahi Bank will become the world's number
two when they set up a holding company by next April.
And Tokyo-Mitsubishi Bank and Mitsubishi Trust joined in the merger
wave on Tuesday, announcing that they will create a joint holding company in April 2001,
the world's fifth-largest banking group by assets.
Mergers & Acquisitions
Australia and New Zealand Banking Group may
sell Grindlays Bank, its South Asia and Middle East division, to Britain's Standard
Chartered Bank for A$2.67 billion (US$1.6 billion), according to a published report
AT&TMSFT: AT&T Corp. and Microsoft Corp. are
gearing up to accelerate their global drive in cable Internet business, this time in
Japan. Japan's top two cable television operators, Jupiter Telecommunications Co., 40 per
cent-owned by an AT&T unit, and Titus Communications Corp., in which Microsoft has
just acquired a 60 per cent stake, are in merger talks, Jupiter's parent Sumitomo Corp.
Motorola plans to invest £1.3 billion
($2.1 billion) in developing a semiconductor factory in Scotland that Korea's Hyundai
built four years ago but never opened.
Electronics Boutique Holdings CorpFunco:
Boutique Holdings Corp. has raised its bid for Funco Inc. to $21 per share from $17.50,
matching an offer by Barnes & Noble Inc., Funco announced.
AXP, Wells Fargo:
American Express Co. and No. 7 U.S. banking
firm Wells Fargo & Co. said Thursday they have formed an alliance to jointly
distribute mutual funds and annuity products.
British telecom equipment maker Marconi agreed
Thursday to buy privately held MSI, a provider of software for wireless phone operators,
for $618 million in cash and stock, bulking up in the hot mobile telephone market.
Russian GDP 'to rise 4%'
The Russian economy will expand by between 4 and 4.5 per cent in 2000,
continuing its rebound from a sharp contraction in 1998, President-elect Vladimir Putin
predicted, according to media reports.
MSFT outlook downbeat
Microsoft Corp., already embattled in an antitrust case with the
federal government and 19 states, now also faces sluggish revenue growth because of slow
sales of corporate PCs and a transition to new software products.
Palm embraces challenge
When Microsoft and three computer makers rolled out the new
"Pocket PC" portable computer devices this week, many technology industry
watchers said that Palm, which currently dominates the handheld computing market, has real
cause for concern.
NASD teams with Osaka
The National Association of Securities Dealers, which owns the Nasdaq
stock market, said Wednesday it struck a deal with the Osaka Stock Exchange to build its
sibling Japanese market as a unit of that exchange.
The agreement is part of plan the NASD announced in June to build an
electronic stock market that would attract listings of Japanese technology companies and
offer Japanese investors an easier way to buy U.S. Nasdaq stocks.
Nasdaq Japan, a joint venture between the NASD and Japanese technology
investor Softbank Corp., is set to begin operating in June. Nasdaq Japan will be in direct
competition with the Tokyo Stock Exchange, the country's largest equities market.
Jobless claims down
The number of Americans filing new claims for unemployment benefits
fell to 257,000 for the week ended April 15 from a revised 266,000 the prior week, the
U.S. Department of Labor said Thursday.
World Bank, IMF conclude Washington meetings amid protests
World finance officials closed out the most tumultuous meetings in the
history of the International Monetary Fund and World Bank on Monday with renewed pledges
to hasten debt relief for poor countries and increase support for fighting the AIDS
A final statement from the Development Committee, which sets policy for
the World Bank, disagreed with the thousands of protesters who had thronged the streets by
describing the multilateral lenders as "a powerful force" for good in the global
The demonstrators had complained during a week of escalating protests
that World Bank policies made poor countries even poorer and that the bank and the IMF
were not doing enough to aid debtor states or curb the scourge of AIDS.
"We were a bit nonplused," said World Bank President James
Wolfensohn, who was awakened before dawn on Saturday by demonstrators who said bank
lending increased indebtedness and poverty, promoted sweatshops and destroyed the
The bank's key role was to reduce poverty around the world, he said.
Yen powers ahead
The yen rose against the dollar and the euro Monday after the Group of
Seven nations failed to make any direct mention of the appreciating currency in its
communiquÈ over the weekend. Inflation concerns and fears of a global stock market
meltdown also hurt the U.S. currency as investors looked for safe-haven currencies.
The yen stood at around ¥103.73 against the dollar in mid-afternoon
European trading, slightly weaker than its two week high of ¥103.24 touched overnight but
up from ¥104.74 in New York late Friday. The euro remained weak at $0.9565 and against
the yen at ¥99.20.
Apple: Apple Computer Inc. reported a higher-than-expected
fiscal second-quarter profit. Including one-time gains, Apple's net income rose to $233
million, or $1.28 per share, from $135 million, or 84 cents per share, in the same period
McDonald: McDonald's Corp. posted first-quarter earnings of
$450.9 million, or 34 cents per share. The fast-food restaurant operator recorded
quarterly revenue of $9.51 billion, up 8 per cent from a year earlier.
Microsoft: Microsoft reported third quarter earnings of 43 cents
a share. Revenue was up 23 per cent to $5.66 billion. CFO John Connors said demand for
business PCs remained slow in the quarter and the company is guarded about near term
Continental: Continental Airlines reported first-quarter
earnings of $14 million, or 21 cents per diluted share, a 73 per cent decrease from the
$52 million, or 71 cents it earned a year earlier
Knight Ridder: Publisher Knight Ridder earned 74 cents a diluted
share, up 14 per cent from the 65 cents per diluted share earned in the first quarter of
UPS: United Parcel Service reported first-quarter profit of $674
million, or 56 cents per diluted share, topping both its earnings of 44 cents a year
Bristol-Myers: Bristol-Myers Squibb reported earnings of 62
cents a share, versus 54 cents a share the prior year, and net sales of $5.26 billion
versus $4.85 billion in 1999.
Gillette: Consumer products firm Gillette Co. reported
first-quarter earnings of $258 million, or 24 cents per share, essentially unchanged from
a year earlier.
Times Mirror: Times Mirror, which soon will merge with media
conglomerate Tribune Co., reported first-quarter income from continuing operations of
$57.9 million, or 90 cents a diluted share, versus $50 million, or 60 cents per share, a
Schering-Plough: Schering-Plough, the drug and personal products
maker, reported profit of 42 cents a diluted share.
Polaroid: Polaroid Corp. reported a narrower-than-expected
first-quarter loss of 13 cents per share
BellSouth: BellSouth Corp. reported profit of $981 million, or
52 cents a share, compared with $895 million, or 46 cents a share, a year earlier.
Sunoco: Sunoco Inc. reported net income of $78 million, or 87
cents a share, versus $19 million, or 21 cents a share, for the first quarter of 1999.
Union Pacific: Union Pacific Corp. reported profit of 74 cents a
share, versus 52 cents a share in 1999.
IDEC: IDEC earned $3.6 million, or 7 cents per diluted share, a
25 per cent drop from profits of $4.8 million, or 10 cents per share, a year earlier.
Quaker: Quaker Oats Co. posted a 24 per cent increase in
first-quarter operating income Thursday. Quaker said it earned $189.3 million, or 77 cents