16 - 22, 2000
Clinton signs China trade bill
President Clinton closed years of political and economic
debate Tuesday, and sealed a major achievement of his administration by signing
a bill extending permanent, normal trade status to China.
"Today we take a major step toward China's entry into
the World Trade Organization and a major step toward answering some of the
central challenges of this new century," Clinton said in a bipartisan White
House ceremony Tuesday afternoon.
"Trade with China will not only extend our nation's
unprecedented economic growth, it offers us a chance to help shape the future of
the world's most prosperous nation and to reaffirm our own global leadership for
peace and prosperity."
The measure is considered the most important U.S. trade
legislation since passage of the North American Free Trade Agreement in 1993.
But it faced a long campaign of opposition from labor, human rights and
conservative groups who wanted to retain the annual review of trade relations
The Senate passed the China trade bill in September after
supporters won a bruising battle in the House of Representatives in May.
Lawmakers from both sides of the aisle joined Clinton on the South Lawn of the
White House to watch him sign the measure, dubbed the U.S.-China Relations Act
The ceremony capped years of negotiations with Beijing and an
intense debate at home among the Clinton administration, business and labor
interests. It will open China's mammoth market to U.S. businesses and pave the
way for China's entry into the World Trade Organization -- it also ends a
20-year-old U.S. ritual of annually reviewing China's trade status.
U.S. business interests wanted the agreement in order to gain
access to China's market of 1-billion-plus people. But critics argued that such
an agreement would reward a repressive communist state, undermine the country's
labor and environmental protections and cost jobs for U.S. workers.
Dow plunges more than 3%
The Dow Jones industrial average tumbled nearly 400 points
Thursday, its sixth loss in as many sessions and its fifth-biggest point drop on
record, after a surge in oil prices sparked fears that rising inflation could
harm the economy.
Violence escalated in the Mideast, sending oil prices as high
as $36 a barrel, in the latest blow to a market that has sold off steadily since
The Nasdaq composite index tumbled to its worst close of the
year; the Dow hit a seven-month low.
The selling picked up by session's end, a development that
bodes poorly for any rebound Friday.
The Dow Jones industrial average fell 379.21 points, or 3.6
per cent, to 10,034.58. The Dow's fifth-worst point decline on record takes the
index back to levels not seen since March.
Worse, the index of 30 blue chip stocks is essentially
unchanged since the spring of 1999, when the Dow first crossed 10,000.
The Nasdaq composite index, which has seen dramatic losses
this month on earnings worries, held up better Thursday. Still, the index fell
93.81, or 3 per cent, to 3,070.68, below its previous lowest close of the year:
3,164.55, set May 23.
The S&P 500 shed 34.81, or 2.5 per cent, to 1,329.78.
More stocks fell than rose. Declining issues on the New York
Stock Exchange topped advancing ones 2,145 to 767, on trading volume of 1.3
billion shares. Nasdaq losers beat winners 2,966 to 1,118, as more than 2
billion shares changed hands.
In other markets, Treasury securities edged higher. The
dollar rose against the euro but was little changed versus the yen.
In New York, oil for December delivery rose $2.48 to $35.72 a
barrel and was as high as $36.90. Five U.S. sailors were killed in a possible
terrorist attack on a Navy ship in a Yemen port. And escalation in the recent
violence between Israelis and Palestinians also affected oil prices.
Congress passes landmark
A landmark auto safety bill that Congress passed Wednesday
would send auto executives to jail who withhold information about safety
The auto industry had opposed the bill, but Congress passed
it in the aftermath of the Firestone tire recall. U.S. President Bill Clinton is
expected to sign the bill into law.
The bill passed the Senate on a voice vote Wednesday just
hours after winning House approval.
The bill increases civil and criminal penalties for auto
executives who hide safety problems, requires auto manufacturers to measure the
risk of rollovers, and mandates the installation of new systems to measure tire
In addition, the bill requires automakers and their suppliers
to give the National Highway Traffic Safety Administration more information
about accidents, warranties and claims so it can identify problems earlier.
Guidant: The Cardiovascular device maker Guidant posted
third quarter net income of $122.8 million, or 40 cents a share, compared with
earnings of $98.2 million, or 32 cents a share in the year ago quarter.
Gateway: The No. 2 direct seller of personal computers
turned in a third-quarter profit that matched Wall Street's expectations.
Earnings were $152.6 million, or 46 cents per share, up from $113.1 million, or
35 cents per share during last year's third quarter.
Veritas Software: The maker of data-storage software used
in corporate networks, reported third-quarter pro forma net income increased to
$70.3 million, or 16 cents per share, from $38.9 million, or 9 cents per share,
in the same period last year.
GM: General Motors Corp. posted record third-quarter
earnings per share. The world's largest automaker earned $829 million, or $1.55
a diluted share.
Bausch & Lomb: Bausch & Lomb reported
third-quarter earnings of 70 cents a share.
New York Times: Excluding one-time items The New York
Times Co. reported earnings of $75 million, or 44 cents a share, versus $60
million, or 34 cents a share for the same period last year.
Mergers & Acquisitions
Vivendi—Seagram: Despite a last-ditch appeal to
antitrust officials in Brussels Thursday, the European Competition Commission is
expected to announce Friday that Vivendi SA's $34 billion plan to buy Seagram
Co. Ltd. will face up to four months of additional scrutiny.
Deutsche—NDB: Deutsche Bank AG agreed Thursday to
acquire the remaining interest in online brokerage National Discount Brokers
Group it does not already own for nearly $1 billion.
AOL—Time Warner: European regulators conditionally
approved the $125 billion merger of America Online Inc. and Time Warner Inc.
Wednesday, diverting investors' attention back to two U.S. regulatory agencies
that still hold the power to derail the blockbuster union.
France Tel—Equant: France Telecom SA confirmed
Wednesday widespread rumors that it was in talks with data network operator
Equant NV, but warned that no takeover would take place "under current
Enel—Infostrada: Italian power company Enel SpA
strengthened its position in Europe's fourth-largest telecom market Wednesday by
agreeing to buy Infostrada SpA from Britain's Vodafone Group PLC for 12.1
billion ($10.6 billion) in cash, bonds, and assumed debt.
Intesa—BCI: Italian banking titan Banca Intesa agreed
Tuesday to buy the 30 per cent of Banca Commerciale Italiana it doesn't already
own for about 3.4 billion ($3 billion) speeding up integration with the bank it
took control of last year.
SmithKline—Block: SmithKline Beecham PLC agreed Monday
to purchase Sensodyne toothpaste maker Block Drug Co. for $1.24 billion cash,
strengthening the company's worldwide consumer health-care product line.
UPC—Tele-Columbus: Dutch cable TV operator United
Pan-European Communications NV is close to buying Germany's second-largest cable
provider Tele-Columbus from Deutsche Bank AG, said a person familiar with the
matter, in a deal reportedly worth about $1.3 billion.
Fortis—ASR: Dutch-Belgian financial services provider
Fortis said on Monday it would pay 3.3 billion euros ($2.9 billion) in stock and
cash for the 80 per cent of ASR Verzekeringsgroep of the Netherlands it doesn't
already own. The deal would make Fortis the No. 1 insurer in the Benelux region.
Shell—Fletcher: A New Zealand regulatory agency on
Thursday halted the NZ$4.6 billion ($1.8 billion) sale of Fletcher Challenge
Energy to Royal Dutch/Shell Group and Apache Corp.
US Airways—UAL Corp.: US Airways Group Inc.
shareholders Thursday voted overwhelmingly in favor of the proposed $4.3 billion
takeover by United Airlines parent UAL Corp.
Asian markets slide
Tokyo stocks ended Friday morning trade lower on broad-based
selling in blue chips after their U.S. counterparts were hit by surging oil
prices and earnings jitters, but gains in several defensive stocks limited
The Nikkei average was down 275.69 points at 15,274.95 at
midday, after recovering from an earlier low of 15,101.64, the lowest intraday
level since March 9, 1999.
The blue chip Hang Seng Index dropped 2.62 per cent to 14,679
points at the open and fell lower to 14,505.24, down 3.78 per cent at 10:05
a.m., the index's lowest intraday level since May 31.
The Taiwan Weighted index slipped 5.47 per cent or 317.33 to
5,487.68 in early trade. Taiwan Semiconductor Manufacturing Co. was limit down
at T$90.50 and rival United Microelectronics Corp. was limit down at T$55.50.
The South Korea KOSPI was down 4.62 per cent, or 24.71 points
to 510.00 in early trade.
Australia's benchmark S&P/ASX 200 index fell 38.1 points
or 1.2 per cent to 3,188.4, in early trade.
Europe ends mostly higher
Europe's main markets ended mostly higher Thursday, as
indexes in Paris and London were underpinned by oil and telecom stock strength
while Frankfurt's leading gauge got caught in a downdraft from Wall Street.
London's FTSE 100 index edged up 14.3 points, or 0.2 per
cent, to close at 6,131.9, with ad agency WPP Group (WPP) atop the list of
gainers, up 5.3 per cent.
In Paris, the CAC 40 blue-chip index added 34.58 points, or
0.6 per cent, to 5,990.70. Telecom equipment maker Alcatel (PCGE) rose 3.2 per
cent and oil company TotalFina Elf (PFP) gained 2.9 per cent.
The Xetra Dax in Frankfurt sank 96.37 points, or 1.47 per
cent, to 6,465.26, mirroring a drop for blue-chip stocks on Wall Street.
Elsewhere, Amsterdam's AEX index closed up 0.6 per cent, the
MIB30 in Milan ended down 0.9 per cent, and the SMI in Zurich finished with a
gain of 0.4 per cent.
The pan-European FTSE Eurotop 300, a broad index of the
region's largest stocks, climbed 0.6 per cent, with the information technology
sub-index rising 2.1 per cent — but down considerably from its 5.9 per cent
Import prices jump 1.5%
U.S. import prices rose last month, boosted by a big rise in
petroleum costs, the government said Thursday. The U.S. Labor Department said
import prices rose a stronger-than-expected 1.5 per cent in September after
rising 0.2 per cent in August. Economists polled by Reuters had expected a 0.6
per cent gain in import prices last month.
Jobless claims climb
The number of Americans filing new claims for unemployment
benefits were reported at 306,000 for the week ended Oct. 7, up from a revised
301,000 the week before, the government reported Thursday. Jobless claims are at
their highest level since Sept. 16, when they reached 310,000.
Euro woes continue
Currency traders and central bankers are playing a game of
cat and mouse, as the euro remains weak despite last week's rate hike by the
European Central Bank.
Traders are cautiously testing the downside, but they are not
moving aggressively to sell the euro for fear that this will trigger another
round of coordinated intervention by the Group of 7 major industrial nations.
Tokyo insurer goes under
In Japan's biggest corporate bankruptcy, Chiyoda Mutual Life
Insurance Co. said on Monday it had filed for court protection from creditors
under new fast-track laws for troubled financial-services firms.
The failure of the nation's 12th-largest life insurer, with
total debt of ¥2.9 trillion ($26.9 billion), should heat up a survival battle
in the hard-hit industry, already reeling from falling premium income, low
investment returns and weak share prices.
Those still in weak financial health will have to seek
mergers or be acquired amid the increasing competition that has developed since
deregulation opened the way for international insurers to enter the domestic
market in 1998.
China Mobile gets funds
China Mobile (Hong Kong) Ltd said on Monday it has entered
into two loan agreements totaling 12.5 billion yuan (US$1.5 billion) with a
syndicate of eight Chinese domestic and international banks to help finance its
acquisition of seven networks from its parent company.
Turmoil lifts Treasurys
Most U.S. Treasurys rallied strongly on Thursday as
escalating Middle East tensions sent oil prices rising, U.S. stocks tumbling and
investors fleeing into the safe haven of government-guaranteed securities.
Two-year notes were up 5/32 to 100-8/32, yielding 5.85 per
cent. Five-year notes gained 11/32 to 104-2/32, yielding 5.72 per cent. Ten-year
Treasury notes rose 11/32 to 100-5/32, as their yield fell to 5.73 per cent,
while 30-year bonds, capped by oil gains, rose only 5/32 at 106-3/32, yielding
5.82 per cent.
Mortgages rates flatten
U.S. Mortgage rates remained relatively unchanged this week
as the housing market continued to chart a steady course, a newly released
survey by Freddie Mac shows.
The benchmark 30-year fixed-rate mortgage (FRM) averaged 7.84
per cent for the week ending Oct. 13. The average this week for a 15-year
fixed-rate mortgage was 7.52 per cent. One-year adjustable-rate mortgages (ARMs)
this week averaged 7.23.