12 - 25, 2001
French fearful as world slams door
Farmers were demanding action to save their industry on
Wednesday, one day after France triggered a global loss of faith in European
meat production when it revealed a foot-and-mouth outbreak.
But Agriculture Minister Jean Glavany brushed off calls for a
mass vaccination programme, preferring to stick to a policy of sealing off farms
suspected of harbouring foot-and-mouth and slaughtering livestock.
Governments around the world, including the key North
American market, on Tuesday shut their doors to French and, in many cases, all
European meat and livestock exports following the news that the British epidemic
had spread to some French cows.
So far more than 40,000 sheep, pigs and cows have been killed
For a livestock industry already suffering from the effect of
the mad-cow crisis the new embargo is a body blow, and it has caused an
atmosphere of desperation among farmers who thought they had done all they could
to halt the virus in its tracks.
French farmers knew the risks and, apparently, Francis
Leroyer's farm in La Baroche-Gonduin, in the western Mayenne region, where the
French outbreak began was well-maintained.
"Francis has one of the best kept businesses in the
region and he took all the right precautions after the warning about the
sheep," Daniel Maetairie, the village's mayor and a pig farmer himself,
told the daily Le Parisien.
"He installed disinfecting baths for his boots and
vehicles, but that looks pointless today. The virus goes too fast."
Leroyer's herd of prime dairy cattle was kept just opposite a
herd of sheep which were imported from Britain. The cattle and the sheep have
now been burned, but farmers across France have started to demand if enough has
Senate marches toward sweeping bankruptcy overhaul
Senate, after suppressing Democratic attempts to restrain
banks in issuing credit cards, moved Thursday toward passage of legislation that
would make it harder for people to wipe out debts in bankruptcy court.
The Senate voted 80-19 Wednesday to limit debate time on the
most sweeping overhaul of bankruptcy laws in 20 years. A final vote is expected
Thursday evening, but the bill would have to go to a House-Senate conference
committee and approved again by both chambers before it would reach President
A similar bill overwhelmingly passed the House on March 1.
The Senate measure is expected to gain a significant amount of support when the
vote is called, and Bush has pledged to sign the final House-Senate compromise
version when it reaches him.
There are concerns within the administration, however, over
sections of the bill Secretary of State Colin Powell said will have to be
adjusted before Bush gives it his approval.
Powell said Wednesday that the administration opposes a
provision in the legislation that could block insurer Lloyd's of London from
collecting debts from some U.S. investors.
"We strongly oppose it," Powell said in testimony
before the Senate Budget Committee. "It will cause us international
difficulties, and it opens up other opportunities for others to try to seek
Sen. Charles Grassley, R-Iowa, has been trying for at least
four years to pass the measure.
Bankruptcy overhaul bills passed the Senate in each of the
past three years, and one even made it to President Bill Clinton for signature
last December. Clinton vetoed the measure, arguing it did little to protect
This year looks to be Grassley's year, with many Democrats
supporting the bill and a friendly Republican in the White House.
Washington bans EU meat products
The United States said on Tuesday it is temporarily banning
the importation of all animals and animal products from the European Union after
France reported its first case of the highly contagious foot-and-mouth disease
in a herd of cattle.
"This temporary action is being taken following
confirmation of foot-and-mouth disease in France," the USDA said in a
Earlier on Tuesday, French officials confirmed the nation's
first case of foot-and-mouth disease since 1981 in a herd of 114 cattle at a
farm in the northwest region of the country.
The United States has not imported any cattle or beef
products from France since 1997 because of mad cow concerns.
Nasdaq falls, Dow gains
The Nasdaq composite index fell for a third time this week
Thursday, as investors nervous about slowing profit growth unloaded shares of
Oracle Corp. ahead of the software maker's quarterly earnings report.
The Dow industrials rose 57.82 points to 10,031.28, one
session after falling below 10,000 for the first time in five months. It's been
a wild week. After falling more than 400 points Monday, the Dow rose nearly 100
points the next day, only to lose more than 300 points Wednesday.
The Nasdaq shed 31.38 points, or more than 1.6 per cent, to
1,940.71, a slide that brought the index within sight of a 27-month low. And the
S&P 500 gained 6.85 to 1,173.56 but, like the Nasdaq, remains in bear market
Advancing issues on the New York Stock Exchange beat
declining ones 1,626 to 1,420 as 1.2 billion shares traded. But Nasdaq losers
topped winners 1,980 to 1,666 as more than 1.7 billion shares changed hands.
Asia claws back
Shares prices across Asia clawed back from an early sell-off
on Thursday, but remained weak as investors reeled from Wall Street's massive
Japan's key Nikkei average fell to 11,433.88 in early trade
— touching below 11,500 for the first time since December 26, 1984 — but was
marginally higher at 11848.83.
The Hang Seng Index was trading down 0.91 per cent at
13209.06 after earlier breaking below 13,000 for the first time since October
Elsewhere, several equity markets were improving after a
negative, with Singapore's Straits Times index 0.45 per cent weaker at 1784.14
— but at its high for the earlier falling to 1757.8.
Korea's KOSPI index was 2.12 per cent weaker in early trade,
close to its 12-month lows at 531.77, while the tech-focused Kosdaq market was
faring worse, tumbling 3.82 per cent to 69.29.
Australia's benchmark all ordinaries index closed 1.1 per
cent weaker at 3188.4, off 22.6 points.
Europe sharply lower
Europe's main markets closed sharply lower on Wednesday,
although markets recouped earlier losses as Wall Street's rout was short-lived.
London stocks, which plumbed a two-year closing low on
Tuesday, fell further. The FTSE 100 index fell 1.7 per cent, or 94.8 points, to
5,625.9, with Internet data carrier Energis (EGS) diving 13 per cent.
In Frankfurt, the late trading Dax index slid 2.1 per cent,
or 128.05 points, to reach 5,834.88, after sliding more then 4 per cent before
the U.S. markets opened.
France's CAC 40 fell 1.4 per cent, or 71.37 points, to
5,115.50, after falling setting a new 17-month low of 4,978.07 earlier in the
session. In other European markets, Zurich's SMI slid 2.1 per cent and
Amsterdam's AEX fell 1.5 per cent. The MIB 30 in Milan fell 1.2 per cent.
China trade growth
China's trade growth will slow this year as the global
economy loses steam, Minister of Foreign Trade and Economic Cooperation Shi
Guangsheng said on Tuesday.
China's exports rose 14.5% in the first two months of the
year to $36.14bn while imports climbed 17.7% to $33.77bn but Shi said growth
would likely slow in coming months.
Treasurys up and down
Prices for short-term U.S. Treasury bonds rose Thursday,
driving yields to two-year lows, as dealers bet that severe stock market losses
this week will push the Federal Reserve to cut interest rates aggressively next
Two-year Treasury notes rose 4/32 to 100-25/32, yielding 4.20
per cent. Five-year notes rose 6/32 to 105-6/32 to yield 4.50 per cent.
Benchmark 10-year notes rose 4/32 to 101-18/32, yielding 4.80 per cent.
Thirty-year bonds slipped 9/32 to 101-10/32, yielding 5.29 per cent.
Mortgage rates hold tight
Long-term mortgage rates continue to hold below the 7 per
cent mark and likely will remain there if the Federal Reserve, as expected,
lowers interest rates next week, economists suggest.
The 30-year fixed rate mortgage averaged 6.96 per cent with
an average of 0.9 points for the week ending March 16. The 15-year fixed rate
mortgage hovered at 6.52 per cent, with an average 1 point. One-year adjustable
rate mortgages (ARMs) that are indexed to the Treasury averaged 6.32 per cent
this week, with an average 0.9 point.
U.S. jobless claims flat
The number of Americans filing for first-time unemployment
benefits was unchanged last week from a revised total of 375,000 in the previous
week, the U.S. Labor Department said Thursday.
U.S. trade gap sets record
America's deficit in the broadest measure of trade surged to
an all-time high of $435.4 billion last year as an increase in U.S. exports
failed to offset a huge rise in imports of consumer goods and oil.
The Commerce Department reported Thursday that the deficit in
the current account was up a sharp 31.3 per cent from the previous record of
$341.5 billion set in 1999.
The increase for the year came as no surprise, given that the
quarterly deficits rose steadily to record highs. The fourth-quarter deficit
rose to $115.3 billion, a 1.9 per cent increase from the $133.1 billion
The quarterly figures on the current account paint the
fullest picture of America's trade troubles. They cover not only goods and
services, which are reported in the government's monthly trade statistics, but
also investment flows and unilateral transfers, a category that includes foreign
AXA: French insurer AXA's 2000 net profit after goodwill
writedowns and before one-off items came in at 2.261 billion euros, up from
1.865 billion a year earlier. Net profit before goodwill and exceptionals rose
24.2 per cent to 2.540 billion euros from 2.045 billion.
Kingfisher: U.K.-based retail and home improvement chain
Kingfisher said annual pretax profit fell 16 per cent. Kingfisher, said profits
before tax and one-offs were £606 million ($887 million).
BASF: Chemicals giant BASF reported a 15 per cent jump in
annual profits. Europe's largest chemicals firm said it made an operating profit
before one-off items of 3.4 billion ($3.1 billion). Net profit for the year was
virtually unchanged at 1.24 billion.
Trinity: Trinity Mirror, Britain's largest newspaper
publisher, said on Thursday that underlying profits rose 12 per cent to £196
million ($283 million) last year.
Credit Suisse: Credit Suisse, Switzerland's
second-largest bank said 2000 net profit rose to 5.8 billion Swiss francs ($3.5
billion), or 20.8 francs per share, from 5.2 billion francs, or 19.2 francs, a
Japanese banks take a hit
In the latest challenge to the Japanese economic outlook,
international debt rating agency Fitch said on Wednesday it has placed warnings
on individual ratings of 19 Japanese banks, including the world's biggest
banking group, Mizuho Holdings Inc.
The action was taken in response to growing concern over the
impact of falling share prices and lingering asset quality problems on the
banks' capital adequacy, performance, and prospects, Fitch said in a report.
UK jobless falls
Unemployment in Britain has fallen below the symbolic one
million mark for the first time in 25 years, far below the European average.
National Statistics reported the number of jobless people claiming unemployment
benefit fell by 10,600 in February to 996,200 — the lowest level since
Mergers & Acquisitions
Tyco—CIT: Tyco International Ltd. agreed Tuesday to
acquire commercial finance firm CIT Group Inc. for $9.2 billion in cash and
stock, giving the diversified manufacturer a financial services arm.
Barrett—Shell: Barrett Resources Corp. announced Monday
that it will now consider the $1.8 billion takeover offer from Shell Oil Co., a
unit of Royal Dutch/Shell Group.
Novell—Cambridge: Computer networking software vendor
Novell Inc. said Monday it will buy technology consulting firm Cambridge
Technology Partners Inc. for $266 million in stock.
SPX—United Dominion: SPX Corp., which supplies parts
and services to vehicle manufacturers, agreed Monday to buy United Dominion
Industries Ltd. for $954 million in stock plus the assumption of $876 million in
debt, bring the total transaction value to $1.83 billion.
Pru—American Gen.: British insurer Prudential on Monday
agreed to buy American General for $26.5 billion, in one of the largest
insurance industry deals of all time. But the news sent the British firm's
shares down 13 per cent.
Sony, IBM set chip venture
Sony Computer Entertainment Inc., maker of the PlayStation 2
game console, said Monday it would join forces with Toshiba Corp. and IBM in a
$400 million, five-year plan to develop a new type of microprocessor. The three
said they aim to create next-generation chips with processing power equal to a
supercomputer that could be used in a variety of "intelligent"
consumer electronics able to communicate with each other or connect with the
Japan's finances 'close to collapse'
Japanese Finance Minister Kiichi Miyazawa warned Thursday its
finances are on the brink of disaster.
Miyazawa told a parliamentary committee that the country's
finances "are very close to collapsing."
Miyazawa blamed the country's burgeoning public debt. Japan's
$5.4 trillion public debt equals 130 per cent of its gross domestic product.
This is a higher ratio than any other leading industrial democracy.