French telecom equipment maker Alcatel
announced it would acquire Canadian telecom switching company Newbridge Networks in an
all-stock deal valued at $7.1 billion.
Liberty Media Corp. agreed to buy Ascent
Entertainment Group Inc. for $460 million cash.
A federal judge ruled that oil-rich Alaska
can intervene in support of BP Amoco PLC and Atlantic Richfield Co. in the Federal Trade
Commission's lawsuit to block a proposed $27 billion merger of the oil companies.
CVSRite Aid unit:
CVS Corp., the biggest U.S. operator of
drug stores, is near an agreement to buy the pharmacy benefits management business of
ailing rival Rite Aid Corp. for up to $1 billion.
Peugeot: French automaker PSA Peugeot-Citroen said that strong
sales and lower production costs led to a 51 percent surge in 1999 profit. Peugeot, it
reported net profits of 729 million euros ($732 million), up from 484 million euros in
Matsushita: Japan's Matsushita Electric, the world's largest
maker of home electronics reported that its group operating profit grew 6 percent from a
year earlier to 54 billion yen ($485 million) in the October-December quarter.
ABN Amro: Dutch banking giant ABN Amro posted a
bigger-than-expected 40.6 percent increase in 1999 earnings. It said net earnings rose to
2.57 billion euros from 1.83 billion a year earlier
AstraZeneca: AstraZeneca posted an unexpected 3 percent drop in
fourth-quarter earnings. It said quarterly profit from continuing operations fell to $564
million, or 32 cents a share, from $583 million, or 33 cents a share, a year earlier.
Reed: Anglo-Dutch publisher Reed Elsevier posted a 9 percent
fall in 1999 earnings though its shares surged on plans to beef up its online activities.
Nestle: Swiss-based Nestle beat expectations with a 12.3 percent
rise in earnings for 1999. It said net profit rose to a record 4.724 billion Swiss francs
($2.92 billion) from 4.205 billion a year earlier, thanks to rising sales volume and
improved profit margins.
Boeing strike talks set
Boeing Co. and its striking engineers and technical workers have agreed
to meet with a federal mediator for new talks in an attempt to end the 14-day-old strike.
Prudential sets Internet IPO
Prudential Plc, Britain's biggest life insurance group, unveiled plans
for a public offering of shares in its fast-growing Internet banking arm Egg, at the same
time posting a 38 percent drop in 1999 net income as the cost of clearing up a scandal
over mis-sold pensions mounted.
Pounds dips, euro firm
The Bank of England discussed intervening in the currency markets to
stem the pound's rise, according to the minutes of the Bank's last meeting published,
prompting the U.K. currency to lose ground against the dollar and the euro.
The pound fell a third of a cent against the dollar after the
announcement to reach $1.6082 and fell to a three-week low against the resurgent euro, to
around 62.50 pence.
The U.K. central bank's rate-setting Monetary Policy Committee (MPC)
has raised its benchmark interest rate twice this year as buoyant consumer demand, housing
prices and rising wage pressures threaten its 2.5 percent inflation target. Its repo rate
stands at 6 percent.
Greenspan warns again
More interest rate increases may be needed to ensure the U.S. economy
continues to expand without igniting faster inflation, but they aren't specifically
intended to deflate the zealous stock market, Federal Reserve Chairman Alan Greenspan
Last week, Greenspan put Wall Street on red alert after suggesting in
the first leg of his semi-annual testimony to Congress that the Fed would raise rates
again to slow the economy down. The Fed last lifted short-term rates in early February,
raising its benchmark Fed funds rate by a quarter point in an effort to deter consumers
and businesses from borrowing too much.
He repeated those prepared remarks verbatim to the Senate Banking
Committee in the second half of his two-part testimony, adding during the
question-and-answer session with senators that the Fed's inflation-fighting gun isn't
aimed specifically at Wall Street.
U.S. tax appeal rejected
The World Trade Organization rejected a U.S. appeal aimed at saving tax
breaks that help U.S. companies compete overseas, but Treasury Secretary Lawrence Summers
said the United States will not abandon the programme.
Although the WTO decision was to be officially released, two sources
familiar with the case, speaking on condition of anonymity, said an appellate panel had
sided with the European Union position that the Foreign Sales Corporation program was an
Japan's trade surplus falls
Japan's world trade surplus fell in January to its lowest level in two
years as rising domestic demand and surging oil prices fueled imports, Japan's government
The merchandise trade surplus the measure of all goods exported
minus those imported shrank 30.7 percent compared with the same month last year to
$4.75 billion (522.6 billion yen), the Ministry of Finance said. The surplus was
unadjusted for seasonal factors. The figure is the lowest monthly tally since January
1998, when the surplus hit $3.68 billion.
Storms hit French output
A slowdown in French industrial output in December, which economists
attributed partly to disruption caused by violent storms, poses no threat to forecasts for
continuing robust growth, economists said.
Data from the French national statistics office, INSEE, showed
industrial output fell 0.1 percent in December, compared with a rise of 1.7 percent in
November. Economists surveyed by Reuters had predicted no change in output during
"The fall in industrial output is surprising but it's not
disappointing it certainly does not endanger the growth scenario," said
Jean-Louis Mourier, an economist at Aurel.
Europe makes firm gains
European equity markets were firmly ahead in morning trade, with all of
the blue-chip indexes around 1 percent ahead as investors drove technology and telecom
shares higher, encouraged by the latest record close on the U.S. Nasdaq market.
The FTSE 100 index in London was 0.9 percent higher at 6,141.70, while
the CAC 40 in Paris rose 1.24 percent to 6,154.12 and the Xetra Dax in Frankfurt gained 1
percent to 7,720.24.
In the currency markets, the euro continued to lose ground against the
dollar, falling to $0.9870 from its New York close of $0.9930.
German import prices rise
German import price inflation jumped to its highest rate in almost 20
years in January and regional consumer prices rose 2.1 percent, but analysts said the
gains were unlikely to prompt the European Central Bank to raise euro-zone interest rates
as early as next week.
Import prices were up 9.2 percent year-on-year, the highest level since
December 1981, and rose 0.8 percent month-on-month as a result of surging oil prices and
the weak euro.
Asia lifted by Nasdaq gain
Asia's major stock markets ended the week in upbeat fashion, posting
broad gains as expectations of an imminent telecom merger lifted Hong Kong's blue-chip
index by 1 percent and the latest record close on the U.S. Nasdaq market sparked a rally
Japan's benchmark Nikkei 225 closed up 246 points, or 1.26 percent, at
19,817.88, lifted by gains in banking and technology stocks.
In Hong Kong, the Hang Seng index rose 0.98 percent to close at
17,200.98, buoyed by the prospect of a takeover bid for Hong Kong Telecom by Pacific
Century CyberWorks (PCCW).
The Straits Times index in Singapore ended 0.64 percent higher at
2,137.21, with banking shares providing the main lift.
In another mixed session on Wall Street, investors piled into
technology issues to send the Nasdaq up 67 points to a second consecutive record close.
But declines in drug and financial stocks left the Dow Jones industrial average almost 2
percent lower at 10,092.63, falling through 10,000 in intra-day trading, while the broader
S&P 500 dipped 7.65 points to end at 1,353.04.
In the currency markets, the dollar fell to 110.87 yen near the session
close from 111.27 in late New York trading. The euro remained below parity with the U.S.
currency, trading little changed from its New York close at $0.9930.
Among smaller markets, firmer bank stocks helped the All Ordinaries
index in Sydney to close 0.5 percent higher at 3,123.70, while the Set index in Bangkok
ended 2.9 percent higher at 406.44, breaking back above the psychologically important 400
level. The KLSE Composite in Kuala Lumpur lost 0.32 percent to close at 1,006.30 while
Manila was closed for a public holiday. The Kospi in Seoul ended 2.6 points lower at
864.76, while Taiwan's Weighted index closed down 1.74 percent at 9,432.49. The JSX index
in Jakarta lost 1.4 percent to end at 565.36.
Singapore economy mixed
Singapore's economic growth fell short of predictions in late 1999, but
the government of this Southeast Asian powerhouse said the outlook for the current year is
"The chances we will end the year on the higher end of the
forecast are good," Khaw Boon Wan, permanent secretary of the trade and industry
ministry said. "The recovery is firm. I think the prospects that this year will be
better than the last year are bright."
The country's economy grew 7.1 percent year-to-year in the fourth
quarter of 1999, the Ministry of Trade and Industry said.
Though still robust, that was slower than 8.2 percent previously
estimated by the government.
Gross domestic product growth for all of 1999 came to 5.4 percent,
slightly less than the 5.6 percent the government had expected.
Clinton backs China pact
President Clinton called a potential trade accord with China "an
enormous opportunity" as he made the case for China's entry into the World Trade
The president, in a speech at the University of Pennsylvania, said
China's entry into the WTO was not only economically a good deal, but also good for the
U.S. national interest.
"We can't control what China does, and I'm not going to stand here
and tell you that they are going to turn out as we would hope. But I'll tell you this: we
can control what we do, and if we do this, 20 years from now we'll look back and wonder
why we even debated it," Clinton said.
He said stronger economic ties with the Chinese presents "an
enormous opportunity to give our children a safer world."
China-EU talks end; no pact
China and the European Union ended four days of open-market talks with
no agreement and no date set for them to resume, dealing another blow to Beijing's bid to
join the World Trade Organization.
In Brussels, EU spokesman Anthony Gooch said not enough progress was
made for negotiators to believe a deal was possible for now, but he insisted the talks
were not dead.
"We've gone as far as we can in this round," he told a news
conference. "We remain committed to a deal with China at the earliest available
Top EU negotiator Hans-Friedrich Beseler held the door open for a last
But asked if he would return to the table if summoned, he said:
"We would certainly consider it. It depends on the conditions, it depends on the
situation." European sources close to the talks said telecommunications were a major
sticking point, and negotiations had dragged on without ever reaching the issue of
insurance, a key EU concern.
It was the second setback to China's chances of successfully concluding
its 14-year quest to join the body that sets rules for global trade.
In the United States, congressional support a WTO agreement with China
was threatened, when Beijing warned Taiwan of an invasion if the island nation stalled
indefinitely on opening talks about reunification.
Taiwan enjoys strong support in Congress, which will soon be asked to
approve Washington's WTO deal with Beijing reached in November.
U.S. boosts Indian trade
The U.S. government's international trade bank plans to back loans in
local currencies to boost demand for U.S. exports and limit volatility in the currency
markets, according to a report published Monday.
The Washington-based Export-Import Bank plans to launch the scheme in
India, guaranteeing up to $1 billion in rupee loans to encourage small and medium-sized
Indian companies to buy U.S. products, according to the Wall Street Journal.
Fed eye on hot economy
The Federal Reserve will keep raising U.S. interest rates until the
supercharged pace of domestic demand slows, New York Fed President William McDonough said.
But McDonough said inflation was low and would probably even fall a
bit. And although the Fed sees growing stock market wealth driving up demand, drastic
monetary policy would probably not be needed to curb the "wealth effect," he