Jun 26 - Jul 02, 2000
Japan may raise spending
Senior Japanese officials hinted Monday they were prepared to boost
government spending in the current fiscal year to reinforce the country's economic
recovery, an issue at the top of voters' minds less than one week before Japan's general
Top financial bureaucrat Nobuaki Usui said he agreed with comments
Prime Minister Yoshiro Mori at the weekend that the government would be flexible in taking
extra economy-boosting steps if needed. Mori said Sunday that Japan was considering
compiling a supplementary budget for the fiscal year that started in April if the economy
showed signs of a downturn.
Japan has already spent heavily to pull itself out of its worst
post-war slump, compiling its biggest debt budget ever for the 2000-01 fiscal year and
incurring the heaviest burden of borrowings of any of the advanced countries.
Asked about Mori's comments, Usui told reporters at the premier's
office on Monday: "We are in agreement that we should act flexibly, depending on the
Economists say that if the government decides to seek extra stimulus to
support the economy, the measures should focus on structural reforms and on information
technology, one of the fastest-growing sectors in the still-fragile economy.
Japan's economy grew a robust 2.4 per cent in the first three months of
this year from the previous quarter, but there remain doubts about whether that growth is
Usui's boss, Finance Minister Kiichi Miyazawa, has said he will wait to
see figures on gross domestic product for the period from April to June not due to
be published until September before deciding whether a supplementary budget would
Gas prices flirt with record
U.S. drivers continue to be hit with sticker shock at the pump, as
gasoline prices jumped to new highs for the fourth week in a row, the Energy Department's
statistical agency reported on Monday.
The national average retail price for unleaded gasoline rose 5 cents
from last week to $1.681 a gallon (44 cents a liter), based on the Energy Information
Administration's weekly survey of 800 service stations.
The pump price is up 56 cents a gallon from last year and the highest
since the EIA began tracking weekly fuel prices a decade ago.
The price for gasoline has risen 16.2 cents over the last month because
of high crude oil prices and tight supplies for gasoline during the summer driving season.
The national price for cleaner burning reformulated gasoline is up 2.4
cents to $1.70 a gallon (45 cents a liter).
While U.S. gasoline prices are at relative highs, they are still
substantially below what drivers pay in some European and Asian countries.
The Gulf Coast states had the cheapest fuel, up 4.3 cents a gallon to
$1.519 (40 cents a liter) for conventional gasoline, while reformulated gasoline jumped
4.2 cents to $1.514.
Midwest drivers continued to pay the most for fuel, with the price for
conventional gasoline up 7.8 cents to $1.874 a gallon (50 cents a liter) and reformulated
gasoline up 3.1 cents to $2.003 (53 cents a liter).
While gasoline is above $2 in many cities, this is the first time that
gasoline topped $2 a gallon for a specific region of the country.
The Federal Trade Commission is investigating why Midwest gasoline
prices are the highest in the nation. U.S. Energy Secretary Bill Richardson has said the
government must determine if oil companies are gouging customers at the pump.
Europe opens in the red
Europe's leading markets opened lower Friday, with leading technology
and telecommunications stocks falling in the wake of losses for the sector on Wall Street
a day earlier.
London's benchmark FTSE 100 index fell 0.4 per cent to 6,387.8, as
mobile-phone operator and index heavyweight Vodafone AirTouch (VOD) down 1.5 per cent.
The CAC 40 in Paris also dropped 0.4 per cent to 6,447.27, while the
Xetra Dax index in Frankfurt was little changed at 7,051.27. But Zurich's SMI index bucked
the trend across Europe, adding 0.1 per cent.
The FTSE Eurotop 300 index, a basket of Europe's biggest companies,
fell 0.5 per cent to 1,604.46, with its computer, telecom and food companies among the
In the currency market, the euro dropped to 93.63 U.S. cents from 94.54
cents in New York Thursday morning.
Asian markets peel back
Asia's leading markets retreated Friday, with telecommunications and
Internet-related stocks losing ground in Tokyo following the first spill for the high-tech
U.S. Nasdaq composite in five days.
Japan's benchmark Nikkei 225 index closed down 142.80 points, or 0.8
per cent, to 16,963.21.
Hong Kong's Hang Seng index dropped 1.2 per cent to 15,756.07 in late
trading, while in Singapore the Straits Times index was up less than 0.1 per cent at
Elsewhere among Asia's biggest markets, the Kospi index in Seoul fell
0.4 per cent and the Taiwan Weighted index dropped 1 per cent in Taipei.
In the currency market, the U.S. dollar edged up slightly to ¥104.66
from ¥104.40 in New York Thursday morning. The euro fell slightly against the greenback,
trading at 93.84 U.S. cents, down from 94.27 cents in New York Thursday.
Nasdaq ends winning ways
The Nasdaq composite index snapped a five-session winning streak
Thursday as investors dumped technology stocks that ran up through most of June.
Cisco, Intel and Oracle tumbled, pushing the Nasdaq below the 4,000
mark it cracked for the first time in two months on Tuesday.
The Nasdaq fell 127.15 points, or 3 per cent, to 3,936.87, reversing
all of Wednesday's 50.65-point rise that put the index within 6 points of where it ended
The Dow Jones industrial average shed 121.62, or 1 per cent, to
10,376.12. The S&P 500 shed 26.95 to 1,452.18. Losses in Intel weighed on all three
In other markets, Treasury securities fell. The dollar rose against the
euro but fell versus the yen.
Mergers & Acquisitions
U.S.-based Delta Air Lines Inc. and Air
France on Thursday prepared to unveil their long-awaited plans to create the world's
fourth big airline alliance, cementing their commitment to airline pacts amid talk of
full-blown mergers on the horizon.
A proposed $115 billion merger between
U.S. telecommunications giants WorldCom Inc. and Sprint Corp. has run afoul of antitrust
regulators in Europe, a development that sinks the deal unless the companies make some
extraordinary, last-minute concessions.
TIBurr-Brown: Texas Instruments agreed to acquire
Burr-Brown Corp. Wednesday for $7.6 billion in stock, bolstering its efforts to establish
a commanding position in the high-performance analog chip sector.
Computer Sciences Corp. said it agreed
to buy insurance software company Mynd in a $568 million cash deal that will enhance
Computer Science's ability to serve clients in the financial services industries.
Singapore Power agreed to buy an Australian
power-transmission network from U.S.-controlled GPU PowerNet for A$2.175 billion ($1.3
billion), the latest bid by a state-controlled Singapore firm to break out of the tiny
INGReliaStar: Dutch financial services powerhouse ING
Groep NV bulked up its coffers to fund the planned buyout of U.S.-based ReliaStar on
Wednesday, saying it has completed the sale of a stake in insurer Aegon NV, raising 2.9
billion euros ($2.8 billion) after tax.
Nabisco Holdings Corp. drew buyout
bids from Philip Morris Cos. and a joint offer from UK-based Cadbury Schweppes Plc and
France's Groupe Danone SA, as part of an auction process for the packaged food company
that could fetch as much as $55 per share, or $14.6 billion, for the company, according to
a published report Thursday.
Serono: Serono SA, the world's largest maker of fertility drugs,
announced plans Thursday for a $2 billion global share sale to fund future expansion of
the Swiss firm's operations, possibly including acquisitions.
WarnerEMI?: A group of shareholders in EMI Group Plc has
asked for a delay in voting on the proposed $20 billion tie-up with U.S.-based Warner
Music amid growing expectations of a counter-bid, the Financial Times reported on Friday.
RioNorth: Rio Tinto PLC on Friday offered A$3.8 billion
($2.3 billion) for Australian miner North, attempting to create the world's second-largest
iron ore producer. The bid met with a hostile response from its target.
American General settles
American General Corp., the No. 3 U.S. life insurer, agreed to pay $206
million to nine million black and poor Americans to settle accusations of overcharging
them for insurance policies, marking one of the largest corporate payouts in a racial bias
Coke invading North Korea
Coca-Cola Co. has a shipment of Coke waiting on the North Korean border
and expects this week to become the first U.S. consumer products maker to crack open the
communist country's market.
ECB keeps rates on hold
The European Central Bank left its key interest rate unchanged at 4.25
per cent in a widely-expected decision Wednesday following the half-percentage point hike
in short-term rates two weeks ago.
Spain's GDP up
Spain's gross domestic product grew an annual rate of 4.1 per cent in
the first quarter, the government reported Wednesday, in the latest sign one of the euro
zone's hottest economies has continued to pick up speed.
The figure was an increase from a yearly rate of 3.9 per cent in the
fourth quarter last year, the National Statistics Institute said. Domestic demand, which
has contributed to one of highest inflation rates in the 11-nation euro zone, climbed 4.3
per cent, slightly up from the final quarter of 1999 but lower than the 5.5 per cent peak
of the first quarter a year ago.
Greece joins euro club
Greece finally won approval on Monday from European Union leaders to
become the 12th member of the region's single-currency zone, putting aside disappointment
after missing the boat in January 1999.
Greece will adopt the euro from January 1, 2001, and EU finance
ministers meet later to put their official seal on an official drachma conversion rate of
340.75 to the euro, an EU official said.
"Greece has been adopted, it was purely a formality," a
European Union official said after the leaders passed the Greek application on the
recommendation of the European Commission.
UK hit by more job cuts
Steelmaker Corus Plc completed a week of miserable news for British
workers Friday by announcing plans to slash 1,400 jobs. It was the latest of a string of
big job cuts announced in the past few days, highlighting a mismatch between the skills of
the sacked workers and those demanded by expanding companies.
Clothes retailer C&A dumped almost 5,000 shop workers Thursday
after deciding to close all 109 of its U.K. stores, while earlier in the week aircraft and
armaments firm BAE Systems Plc said it would slash 3,800 positions. That takes the number
of job cuts announced this week to more than 10,000.
OPEC accord good for oil stocks
Among European oil stocks early Thursday, BP Amoco (BPA) rose 2.6 per
cent, Shell Transport and Trading (SHEL) jumped 2.3 per cent and French No. 1 Total Fina
Elf (PFP) added 1.2 per cent after OPEC's announcement that it would raise oil production
by 708,000 barrels a day.
The increase is "not nearly enough to make a significant dent in
prices," Bruce Lanni, an oil analyst at CIBC World Markets, said Wednesday.
Europe's benchmark for oil prices, Brent crude oil for delivery in
three months, gained 23 cents to $29.25 after the OPEC statement.
Separately, BP Amoco was reported as planning to buy a 2.2 per cent
stake in Sinopec, China's second-largest oil company, when it launches an initial public
offering this summer, according to the Financial Times.
French industry output dips
French industrial production fell in April amid a slowdown in the auto,
consumer goods and food sectors, official data showed Thursday.
National statistics institute INSEE said its industrial production
index, excluding construction, fell 0.2 per cent in April after revised gain of 0.8 per
cent in March. Economists expected an increase of 0.4 per cent for April, according to a
Economists suggested the figure is likely to amount to a temporary blip
lower, however, saying euro-zone interest rates, the weak euro and French competitiveness
should keep output robust through the remainder of the year.
On an annualized basis, production rose 4.8 per cent in the three-month
period ended April 30, in line with forecasts. Manufacturing output, which excludes
construction, energy, food and agriculture, was down 0.2 per cent for the month and up 5.7
per cent on the year.