. .

Dec 18 - 24, 2000

Bush promises to unite Americans

America's protracted and often convoluted election tussle ended within the space of an hour on Wednesday night when Vice-President Al Gore acknowledged Governor George Bush as the winner.

Mr Bush praised his defeated rival and asked the nation to move past the bitterness and partisanship of the past five weeks.

Mr Gore rang Mr Bush to congratulate him shortly before addressing the nation at 10pm. The vice-president's remarks were gracefully worded and he appeared to be going out of his way to confer legitimacy on Mr Bush.

The vice-president gave up the fight after the US Supreme Court on Tuesday ruled against manual recounts in the state of Florida. In his concession speech, he said while he strongly disagreed with the Supreme Court's verdict, he accepted it and was ending his election challenge.

In his turn, Mr Bush, speaking at 11pm from the chamber of the Texas state legislature, promised a spirit of cooperation and said Americans shared hopes, goals and values that were far more important than any political disagreement. He felt confident, he said, that he would be able to unite Americans.

Mr Bush will be sworn in as the 43rd president of the United States next month and will step into the White House eight years after it was vacated by his father, who was president from 1988 to 1992. Governor Bush will be only the second son of a president to become chief executive and also the fourth person to be elected as president despite losing the popular vote.

America has breathed a collective sigh of relief at the end of the election fracas, but the divisions thrown up by court challenges and disputed ballots will take time to be bridged. Mr Gore in his concession speech pointedly said his one regret was that he would not get a chance to stay on to speak for those whose voices were not heard, referring to his belief that the Democratic Party forms the natural constituency of the underprivileged. Black activists have already pledged to continue the struggle for the counting of Florida ballots and charge that elections official in the state unfairly discriminated against African Americans.

EU govts agree on expansion treaty

A ground-breaking reform treaty agreed by the European Union governments after a grueling five-day marathon summit sets the 15-nation bloc on a straight path to eastward expansion and could give a much-needed boost to the single European currency.

The treaty demolishes the last obstacles to healing Europe's lingering Cold War divisions by clearing the way for creating a unified Europe stretching from the Arctic to Turkey in the southern Mediterranean.

"This meeting will go down in the history of Europe as a grand summit," said French President and host Jacques Chirac. Added Swedish Premier Goeran Persson: "This is a big day for Europe. We are ready for enlargement."

Thrashed out after five days of tough negotiations, the Nice agreement promises that the 15-nation bloc will be ready to welcome the former communist nations of Central and Eastern Europe by 2004.

This is the first time that the EU has indicated an entry date for the 13 nations knocking impatiently on its doors. Expansion of the EU will not just create a large and united family of democratic European nations, said the bloc's leaders.

It is also expected to boost the EU's global clout and give a much-needed fillip to the euro, the bloc's single currency which has languished since its launch last year."We are making Europe more efficient and democratic, said Belgian Prime Minister Guy Verhofstadt. "We want more Europe, not less Europe."

The drive to forge a new and expanded Europe took almost 400 hours of stormy negotiations between the 15 EU governments, culminating in the longest summit in the Union's history.

But with stakes this high, brinkmanship was to be expected. "This was a difficult exercise. We touched at the most delicate issues...things that hurt," said Chirac.

Clinton disagrees with court judgment

US President Bill Clinton said on Thursday he disagreed with the US supreme court's ruling that cleared the way for George Bush's victory.

"In this election, the American people were closely divided," said Clinton. "The outcome was decided by a supreme court that was closely divided."

At the same time, Clinton pledged to help the president-elect get off to a good start, saying Americans wanted their politicians to set aside rancour and personal attacks.

Asia loses some ground

Sell-offs in internationally liquid tech issues, following in step with their U.S. counterparts, served to drive down markets in Asia Friday.

In Tokyo, the Nikkei 225 was down 1.09 per cent to 14,764,88 at midday. In Hong Kong, the Hang Seng was down 2.21 per cent at 15,155.18 by midmorning.

The benchmark Nikkei 225 average lost 162.31 points or 1.09 per cent to 14,764,88, adding to a 1.59 per cent loss the previous day.

The Hang Seng Index was down 2.21 per cent at 15,155.18 at 10:05 a.m.

The Australian share market opened sharply lower on Friday, joining U.S. and U.K. equity markets in a gloomy post U.S. election mood.

The S&P/ASX 200 index slumped 41 points or 1.3 per cent to 3,236.0, its lowest since late October.

ECB leaves rates on hold

The ECB left the euro-zone's key interest rate unchanged at 4.75 per cent Thursday amid signs the 11-nation economy is slowing, but dampened speculation about rate cuts.

Wim Duisenberg, the president of the European Central Bank, said economic growth in the euro zone was still expected to be "robust" despite recent indications of a slowdown, warning that upward pressure on prices remains.

The European Central Bank disappointed economists who had predicted monetary authorities would tinker with their economic goals so as to create room for rate cuts next year.

The central bank targets two economic variables, aiming to keep inflation under 2 per cent, and growth in the M3 measure of money supply below 4.5 per cent a year. It's currently missing both targets, with euro-zone inflation at 2.7 per cent in October.

Dollar surges against yen

Buoyed by prospects of a George W. Bush presidency, the dollar brushed off weaker-than-expected retail sales data to push higher against both the euro and yen on Wednesday.

The yen, meanwhile, was roundly beaten after a Bank of Japan quarterly tankan survey showed business sentiment stalling.

The dollar was trading at 112.32 yen, up nearly a full yen from Tuesday's close of 111.41 yen. Overnight the dollar reached 112.73 yen, according to Reuters data, its highest level since August 1999.

Meanwhile, the dollar gained strength against the euro, with the euro buying 87.54 cents, compared with 87.88 cents at Tuesday's close.

Russia to raise oil export tariff

Russia will increase its export tariff on crude oil to 48 euros a tonne from 41 euros at a price of $30-32.50 a barrel, a spokesman for Deputy Prime Minister Alexei Kudrin said on Saturday.

Mergers & Acquisitions

AOL—Time Warner: The Federal Trade Commission Thursday approved America Online's proposed $111 billion acquisition of Time Warner after the companies agreed to a series of unprecedented concessions aimed at protecting competition in the high-speed Internet access business.

Abbott—Knoll: Abbott Laboratories won its bid for Knoll Pharmaceutical Co., a unit of German chemical giant BASF AG, and will pay $6.9 billion, published reports said Thursday.

Altera—WaferTech: Semiconductor maker Altera Corp. agreed Thursday to sell its 23 per cent stake in WaferTech LLC to Taiwan Semiconductor Manufacturing Co. for $350 million cash.

Cisco—ExiO: Extending its reach in the market for wireless Internet technology, Cisco Systems Thursday agreed to buy privately held Exi0 Communications for roughly $155 million in stock.

Shire—BioChem: British specialty drug maker Shire Pharmaceuticals Group PLC agreed Monday to buy Canadian counterpart BioChem Pharma Inc. for $4 billion in stock, broadening the U.K. company's product range into HIV and cancer therapies but sending its stock into a nosedive.

SKB—Glaxo: The $70 billion merger of U.K. drugmakers Glaxo Wellcome PLC and SmithKline Beecham PLC on Tuesday edged closer to getting U.S. regulatory clearance, which could come in time for the deal to be completed by year-end.


Oracle: Database and corporate applications software giant Oracle Corp. reported that its second-quarter earnings rose 62 per cent to $623 million, or 11 cents per share, from $384 million, or 6 cents, in the same period last year.

Adobe: The maker of Pagemaker, Photoshop, and Acrobat software said earnings before one-time items in the fourth quarter ended Dec. 1 rose to $127.2 million, or 34 cents a share, compared with $90.0 million in the year-ago period. Adobe did not give a per-share operating earnings figure for the year-ago period.

Best Buy: Electronics retailer Best Buy Co. reported a 2 per cent decline in earnings. For the quarter ended Nov. 25, Best Buy reported earnings of $57.3 million, or 27 cents a diluted share, down from earnings of $78.4 million, or 37 cents, in the year-earlier quarter.

U.S. Treasurys rise

U.S. Treasury prices rallied sharply Thursday, pushing yields to their lowest point in nearly two years after producer prices barely rose in November, bolstering views the Federal Reserve's path is clear to cut interest rates in early 2001.

Benchmark 10-year Treasury notes rose 8/32 to 103-30/32. Their yield, which moves inversely to price, fell to 5.22 per cent. Thirty-year bonds rose 12/32 to 111-25/32, yielding 5.44 per cent. Two-year notes gained 2/32 higher to 100-13/32, yielding 5.40 per cent, and five-year notes gained 5/32 to 102-14/32 to yield 5.18 per cent.

Mortgage rates move lower

U.S. Mortgage rates dipped for the third consecutive week, reaching their lowest level in 17 months.

The benchmark 30-year fixed-rate mortgage (FRM) averaged 7.42 per cent for the week ending Dec. 15. The average this week for a 15-year fixed-rate mortgage was 7.11 per cent. One-year adjustable-rate mortgages (ARMs) this week averaged 7.05 per cent.

Jobless claims down

The number of Americans filing new claims for unemployment benefits for the week ended Dec. 9 was 320,000, down from a revised 352,000 for the week before, the U.S. Labor Department reported Thursday.

Feds eye Calif. energy aid

U.S. Energy Secretary Bill Richardson said on Wednesday the federal government would step in to require power generators and marketers to ship electricity to California to prevent imminent blackouts.

"Our objective is keep the lights on in California," Richardson said at a news briefing after meeting with California Sen. Dianne Feinstein. Richardson also met with California Gov. Gray Davis, and Federal Energy Regulatory Commission chief James Hoecker to discuss the power crisis in California.

Richardson said he used his authority in the Federal Power Act and he would require out-of-state generators and marketers currently balking at selling power into California to do so immediately.

IBM to spend $1bn

IBM on Tuesday said it is building the world's largest Linux-based supercomputer for petroleum manufacturer Royal Dutch/Shell and pledged to invest nearly $1 billion in Linux efforts next year.

UK inflation rises to 2.2%

Gasoline and oil price rises pushed U.K. consumer price inflation slightly higher in November, the government said Tuesday, but the increase will do little to dent expectations of lower interest rates next year. The retail price index, excluding mortgage interest payments, rose 2.2 per cent in the twelve months ending November, quickening from the previous month's 2.0 per cent annual rate of increase, the Office of National Statistics said.

Wall St. takes a beating

Once again, worries and warnings about corporate revenue growth sent U.S. stocks reeling Thursday, led by financial and technology stocks.

The Nasdaq deflated 94.26, or more than 3 per cent, to 2,728.51. The Dow plunged 119.45 points to 10,674.99, while the S&P 500 slipped 19.06 to 1,340.93.

The Dow Transport Index fell more than 3 per cent to 2,738.15 after FedEx Corp. and United Parcel Service Inc. both issued profit warnings.

Market breadth was negative. On the New York Stock Exchange, decliners beat advancers 1,715 to 1,164, as more than 1 billion shares changed hands. Losers outpaced winners on the Nasdaq 2,642 to 1,212, as more than 1.68 billion shares were traded.

In other markets, Treasury securities edged higher.

Xerox to sell China unit

Xerox Corp., the world's biggest copier company, said Thursday it agreed to sell its China operations to Fuji Xerox Co. Ltd. for $550 million in cash, as part of its turnaround plan.

Europe falls, FTSE drops

European markets tumbled Thursday with technology stocks mirroring losses among their U.S. peers while banks slumped as analysts cut their recommendations.

London's benchmark FTSE 100 index dropped 2.2 per cent, or 139.2 points, to 6,263.8, with computer services company CMG (CMG) and index heavyweight Vodafone Group (VOD) clocking up big losses.

Frankfurt's late-trading Xetra Dax fell 126.18 points, or more than 1.9 per cent, to 6,494.03, as chip maker Infineon Technologies (FIFX) and Deutsche Bank (FDBK) tumbled.

The blue chip CAC 40 in Paris slid almost 1 per cent, or 56.64 points, to 5,905.65, led by broadcaster TF1 (PFTI) and bank BNP Paribas (PBNP).

Amsterdam's AEX index dropped almost 2 per cent, with Royal KPN down 5.2 per cent. Zurich's SMI was down 1.4 per cent and Milan's MIB30 slipped 1.8 per cent.

The broader FTSE Eurotop 300 index, a basket of Europe's largest companies, was down 1.8 per cent.

Inventories slow growth

U.S. wholesale inventories rose at a slower-than-expected pace in October, while wholesale merchants' sales were unchanged, the Department of Commerce reported on Monday.

The agency said supply of unsold goods rose 0.3 per cent, to $327.4 billion, a rate of growth smaller than the 0.4 per cent swell expected by Wall Street. The wholesale data includes inventory statistics from the second stage of the manufacturing process.

Merchants' sales were flat at $251.1 billion, the report said.