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Apr 24 - 30, 2000

  1. International
  2. Finance
  3. Industry
  4. Policy
  5. Trade
  6. Gulf

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 public holiday.

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 per cent.

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 market.

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 prices.

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

ANZ—Standard: 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 Tuesday.

AT&T—MSFT: 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. said.

Motorola—Hyundai: 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 Corp—Funco: Electronics 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.

Marconi—MSI: 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 epidemic.

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 economy.

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 environment.

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 of 1999.

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 growth.

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 1999

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 earlier.

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 year ago.

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 per share.