20 - 26, 2000
APEC conference wraps up with global trade
Leaders of the 21-member Asia Pacific Economic Cooperation (APEC)
forum on Thursday reached a compromise on a new round of global trade talks that
would include the interests of developing nations.
Led by U.S. President Bill Clinton, developed nations had
entered the annual summit hoping to urge the World Trade Organization (WTO) to
begin new talks by 2001.
Less-developed nations, led by Malaysia, feared new trade
talks would require provisions on environmental protection and workers' rights
— rules they said would suffocate their economic development.
In a compromise, APEC leaders agreed that an agenda
addressing the interests of developing nations should be drawn up before trade
"We believe that a balanced and sufficiently broad-based
agenda that responds to the interests and concerns of all WTO members should be
formulated and finalized as soon as possible in 2001 and that a round be
launched in 2001," APEC said.
The group also called for the rapid accession of China and
Taiwan to the WTO, and for progress by Russia and Vietnam in membership in the
A final sticking point for China's WTO bid is a trade pact
with Mexico, which wants assurances the Chinese won't flood its market with
cheap goods. Chinese and Mexican trade officials negotiated on the sidelines of
APEC, but by late Thursday it looked like they would have to give up and resume
talks later in Geneva, home of the WTO.
Japanese Prime Minister Yoshiro Mori said Tokyo would set
aside billions of dollars to help narrow the information technology gap in the
Mori said most of the $15 billion in aid Japan pledged to
developing countries at the Group of Eight summit in July would be used to help
bridge the digital divide in the Asia-Pacific region.
Fed holds rates steady
The Federal Reserve opted Wednesday to leave interest rates
unchanged and warned once again that it continues to see risks of accelerating
inflation — a signal to both Wall Street and Main Street that it may not be
done with its series of growth-slowing rate hikes.
As expected, the Fed's policy-making arm, the Federal Open
Market Committee, maintained its federal funds rate — the target rate at which
banks lend money to each other overnight — at 6.5 per cent. The discount rate
— the rate at which the Fed's 12 district banks lend directly to member
institutions — remained at 6 per cent.
In their statement, the members acknowledged recent evidence
that the U.S. economy is slowing from its torrid pace. Indeed, in recent weeks,
the government has reported a drop in core wholesale prices, a slowing in
creation of new jobs, and the nation's gross domestic product growth rate was
its slowest in more than a year.
Still, the committee, which currently consists of 10 voting
members and is led by Fed Chairman Alan Greenspan, chose to remain cautious
about declaring victory in their fight to rein in the economy and keep inflation
from picking up steam, derailing the record economic expansion.
"This is a sign that the committee is beginning to think
aloud about shifting to a more neutral position — but the forecast of
significantly slower growth will have to come first," said Ian Shepherdson,
chief U.S. economist at High Frequency Economics, in Valhalla, New York.
"For now, the elevated headline inflation rate and the tight pool of
available labor remain bigger concerns, so the Fed's guard is still up."
The decision means an additional reprieve for consumers from
rising interest rates on credit cards and "big-ticket" items such as
cars and home appliances. But the Fed will continue to keep a watchful eye on
the economy's progress, and will convene in December to reassess.
Chip woes rattle Asia
Widespread jitters about prospects for the semiconductor
sector took hold of Asian markets Friday, casting a pall on technology stocks
across the region after the latest tumble on the tech-rich Nasdaq market.
In Tokyo, the Nikkei 225 average closed down 42.73 points, or
0.3 per cent, at 14,544.30, undermined by weakness in bank and technology
In Hong Kong, the Hang Seng index was down 1.4 per cent at
15,081.45 in late trading with China Mobile, the No. 1 cellular-phone operator
in mainland China, dropping 2.4 per cent.
Singapore's Straits Times index fell 1.4 per cent to
1,953.97. Defense contractor ST Engineering slumped 12 per cent after it failed
to win a multibillion-dollar contract to provide light armored vehicles for the
The S&P/ASX 200 index in Sydney rose 0.8 per cent, with
telecom company Telstra adding 2.1 per cent after executives noted strong profit
margins and steady revenue growth in the first four months of the 2000/01
Among other regional markets, the KOSPI index in Seoul fell
0.7 per cent. Taipei's Taiwan Weighted index dropped 1.9 per cent as computer
Techs drag Europe down
Europe's leading markets opened in a downdraft on Friday,
with France's key index sinking more than 1 per cent after another sharp retreat
for key computer chip shares on the U.S. Nasdaq stock market a day earlier.
London's benchmark FTSE 100 index dropped 0.4 per cent to
6,405.2, the blue-chip CAC 40 in Paris slipped 1.2 per cent to 6,210.80, while
Frankfurt's electronically traded Xetra Dax shed 0.9 per cent to 6,777.51.
Among other leading European markets, the AEX index in
Amsterdam slipped 0.4 per cent and the SMI in Zurich fell 0.3 per cent.
The broader FTSE Eurotop 300 index, a basket of Europe's
largest companies, fell 0.7 per cent. The computer services sub-index shed 2 per
cent and the information technology hardware sector fell 1.9 per cent.
Semis plunge Nasdaq 4%
The Nasdaq composite index plunged more than 130 points
Thursday, coming within 30 points of its key 3,000 level after downgrades in the
semiconductor sector sparked a hefty sell-off in the tech sector as concerns
about profit growth drove investors to the sidelines.
The Nasdaq composite index tumbled 133.61 points, or more
than 4 per cent, to 3,031.88. The index is now within nearly 30 points of its
key 3,000 level, which it breached at the start of this week when it closed at
The Dow Jones industrial average slid 51.57 points to
10,656.03, while the S&P 500 shed 17.72 to 1,372.32.
Decliners beat advancers on the New York Stock Exchange 1,673
to 1,195 as more than 939 million shares were traded. On the Nasdaq, losers
topped winners 2,705 to 1,172 as more than 1.5 billion shares changed hands.
U.S. biz eyes Vietnam
American business is hungry for a share of the Vietnam
market, seeking to meet its demand for soft drinks, consumer products and
high-tech telecommunications services and to gain a foothold in the massive
rebuilding of a country heavily damaged by U.S. warplanes a quarter-century ago.
More than 50 U.S. corporations are sending executives to
Vietnam during President Clinton's three-day visit. The list reads like a who's
who of multinational concerns including Boeing (BA: Research, Estimates),
Citigroup, Coca-Cola (KO: Research, Estimates), General Electric, General
Motors, Cisco Systems, Nike and Proctor & Gamble.
The companies either already have operations in Vietnam or
want to get involved in a country they see as a vast untapped market of 78
million people, about the size of the population of Germany.
Inflation rate slows
The pace of inflation slowed in October, according to a
government report released Thursday, a day after the Federal Reserve said it
continues to see risks of a pick up in consumer prices.
The Labor Department's closely watched Consumer Price Index
showed that retail prices increased 0.2 per cent in October. That was in line
with the consensus forecast of economists surveyed by Briefing.com and below the
0.5 per cent increase registered in September.
The so-called "core-CPI," which excludes
often-volatile food and energy prices, also increased 0.2 per cent in October,
matching economists' forecasts. The core figure posted a 0.3 per cent rise in
U.S. Treasurys add to gains
U.S. Treasurys rose Thursday after the nation's broadest
inflation gauge showed only a modest increase in October, solidifying optimism
that the Federal Reserve has inflation under control. 30-year Treasury bonds
gained 11/32 to 107-6/32 as their yield, which moves inversely to the price,
fell to 5.74 per cent. Benchmark 10-year Treasury notes gained 9/32 to
100-18/32, yielding 5.67 per cent. Two-year notes were 2/32 higher to 99-26/32,
yielding 5.85 per cent, while five-year notes rose 7/32 to 100-15/32, yielding
5.64 per cent.
Mortgage rates see-saw
U.S. Mortgage rates were mixed as the housing market remained
robust, according to a survey released Thursday by Freddie Mac.
The benchmark 30-year fixed-rate mortgage (FRM) averaged 7.73
per cent for the week ending Nov. 16. The average this week for a 15-year
fixed-rate mortgage was 7.41 per cent. One-year adjustable-rate mortgages (ARMs)
this week averaged 7.25 per cent.
Jobless claims drop
The number of Americans filing new claims for unemployment
benefits fell to 326,000 for the week ended Nov. 11 from a revised 346,000 the
previous week, the government reported Thursday.
U.K.' Spirent in U.S. buuy
U.K. telecom technology provider Spirent PLC agreed Thursday
to pay $1.58 billion in cash and shares for U.S.-based Hekimian Laboratories
Inc., a unit of Sweden's Axel Johnson AB, and said it might seek to list its
high-flying shares on the Nasdaq growth-stock market.
Bayer 3Q profit up 11.7%
Bayer AG, Europe's third-largest pharmaceutical firm, said
operating profit before exceptional items rose to 724 million ($621 million)
from 648 million a year earlier.
1st U.S. 'bullet train' debuts
A champagne christening in Washington, a gala welcome in New
York and fireworks in Boston were on track Thursday to celebrate the debut, at
last, of America's first bullet train.
The VIP-only inaugural run of Amtrak's Acela Express,
however, is just the first step on a long and costly road toward European-style
high-speed train travel in the United States.
If the idea catches on, Amtrak sees a bright future for
itself and for U.S. rail travel.
Oil prices edge higher
Oil prices edged higher Wednesday after a decline in already
depleted heating oil stocks in the United States and a threatened halt of Iraqi
exports sent shivers through the global oil market.
Light crude oil for January delivery rose 39 cents to $34.35
a barrel. And Brent crude oil for January delivery advanced 45 cents to $32.60.,
but still some way below a 10-year high of $35.30 hit last month.
U.S. industrial output slips
Industrial production slipped in October, according to a
government report released Wednesday, reversing gains in the two prior months
and falling short of analysts' expectations of modest growth.
Output at the country's factories, mines and utilities fell
0.1 per cent last month, compared with an upwardly revised 0.4 per cent increase
in September and a 0.5 per cent gain in August, the Federal Reserve reported.
The revised September figure was almost double the estimate that was originally
reported last month; the August figure also was revised upward.
The decline was the first monthly production decrease since a
0.2 per cent fall in July and only the second decline since early 1999.
Aventis to focus on drugs
Franco-German drug maker Aventis SA unveiled plans Wednesday
to narrow its focus on pharmaceuticals by selling its slow-growing agricultural
products unit, a divestment that analysts said could fetch up to 6 billion euros
($5.1 billion) as the company concentrates on more promising areas.
Swiss auction postponed
Swiss telecom officials postponed an auction of
next-generation mobile-phone licenses that had been due to start Monday and said
they were investigating if any illegal pacts had been made, after the number of
bidders in the auction dropped to four, matching the number of licenses on
In the wake of five companies' decisions not to participate
in the auction of Universal Mobile Telecommunications Standard (UMTS) licenses,
the Swiss Federal Office of Communication said it was investigating if there
were "any indications that unlawful agreements were made."
Mazda reports $43M loss
Automaker Mazda Motor Corp. reported a ¥4.7 billion or
$43.20 million operating loss on Friday for the past half year, hit hard by the
shrinking euro and weak sales in key European markets.