Noticias - Fim de Semana 11/01/2003 - 12/01/2003
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Earnings Reports May Aid Market's Rebound: U.S. Stocks Outlo
Earnings Reports May Aid Market's Rebound: U.S. Stocks Outlook
By Danielle Sessa
New York, Jan. 11 (Bloomberg) -- U.S. stocks may get some help from the fastest earnings growth in more than two years as they rebound from the worst December since the Great Depression.
Microsoft Corp. and General Electric Co., the world's two largest companies by market value, are among 70 members of the Standard & Poor's 500 Index that are scheduled to release fourth- quarter results next week.
S&P 500 companies are expected to report 11 percent earnings growth for the quarter, according to a Thomson First Call survey of analysts. The increase would be the third in a row and the biggest since the third quarter of 2000.
``We are optimistic that fourth-quarter earnings will be pretty strong,'' said David Spika, an investment strategist at Banc of America Capital Management, which oversees $230 billion in St. Louis. With rising profits, potential tax cuts and prospects for economic growth, ``you can make a case that the market will appreciate from here.''
Higher-than-expected sales at companies including EMC Corp. and SAP AG, along with President George W. Bush's proposal for $670 billion in tax cuts, helped benchmark indexes rise for a second week.
The S&P 500 and the Dow Jones Industrial Average each gained 2.1 percent for the week, while the Nasdaq Composite Index climbed 4.4 percent. This year, the S&P is up 5.4 percent, the Dow has gained 5.3 percent and the Nasdaq has risen 8.4 percent.
All three measures fell for the third straight year in 2002, capped by the biggest December losses since 1931. The S&P 500 slid 6 percent for the month and the Dow industrials fell 6.2 percent.
Software, Oil
During the next two weeks, more than 40 percent of the S&P 500 companies will release results for the last three months of 2002. They include seven of the 10 biggest companies in the index. Microsoft, the world's biggest software maker and No. 1 company by market value, and General Electric Co., a maker of jet engines and power-generation equipment, are among them.
Exxon Mobil Corp., the world's largest publicly traded oil company, and Citigroup Inc., the biggest financial services company, are among the index members releasing results the following week.
Spika said stock indexes will snap their string of annual declines and record returns between 8 percent and 10 percent this year. Forecasters may have grown too pessimistic about earnings, setting the stage for a rally, he said.
Analysts lowered their forecasts for profit growth by more than a third during the fourth quarter. On Oct. 1, they projected an increase of 20 percent. By Jan. 1, the estimate was 13 percent, according to First Call. Profit dropped 22 percent in the fourth quarter of 2002.
``I fully expect there to be a good number of positive earnings reports in the days and weeks ahead,'' Spika said.
He's been buying shares of companies in industries that may benefit the most from a growing economy, such as Merrill Lynch & Co., Oracle Corp. and Qualcomm Inc. He's been selling stocks that gained last year, including Anheuser-Busch Cos., Procter & Gamble Co. and Lockheed Martin Corp.
False Hopes
Shares also are fairly priced, he said. The S&P 500 started the year trading at 17 times earnings forecasts for 2003, down from 22 times estimates at the start of 2002, First Call said. ``Stocks are not really cheap, but they are not expensive either,'' Spika said.
Other investors aren't so neutral in their opinion of stocks. Allen Ashcroft, a money manager at Allied Investment Advisors Inc. in Baltimore, said he's still haunted by last year's false hopes for a recovery.
``Last year was one of the worst years I ever had because I got hurt by positioning my portfolio for a rebound that never happened,'' he said. ``I always go into the year with trepidation, especially with what happened last year.''
Ashcroft's $225 million Ark Blue Chip Equity Portfolio dropped 31 percent in 2002, exceeding the 23 percent loss in the S&P 500. A rebound will be ``much slower than people anticipated'' and there is ``unease'' about earnings this year, he said.
Stalling Out
Analysts predict that profit for S&P 500 companies will increase 11 percent in the first quarter and 10 percent in the second quarter, according to First Call. The forecasts indicate that earnings growth will stall, Ashcroft said.
``Companies are not seeing growth ramping up,'' he said. He's been buying shares of household-products and capital-equipment makers, and declined to identify the stocks because he is still adding to the positions.
Some investors said consumer spending may decline because people are worried about job losses and a possible war in Iraq. Any reduction would slow the economy and cut into profit growth.
The economy unexpectedly shed jobs in December for the second straight month. The unemployment rate stayed at 6 percent, the highest in eight years. United Nations arms inspectors said Iraq is still withholding information about illegal weapons, and U.S. officials have said they will use force to disarm the country.
``Things that threaten the consumer are a big risk for the economy,'' said Charles King, who manages $1 billion at Scudder Private Investment Counsel. ``If the consumer collapses, all bets are off.''
Economy Watch
A University of Michigan survey of consumer sentiment is scheduled for Friday and will show more optimism, according to economists. Investors will also focus on government reports on inflation, due Wednesday and Thursday.
The Federal Reserve will release its so-called ``beige book,'' which provides anecdotal information on economic conditions in the country, on Wednesday.
While economic and earnings rebounds may not be as fast as some investors had anticipated, growth will be enough to propel stocks higher, Banc of America's Spika said.
``It's not going to be a rocket recovery or a rocket-type bull market,'' he said. ``But it's certainly one that will give us a positive return for the year
By Danielle Sessa
New York, Jan. 11 (Bloomberg) -- U.S. stocks may get some help from the fastest earnings growth in more than two years as they rebound from the worst December since the Great Depression.
Microsoft Corp. and General Electric Co., the world's two largest companies by market value, are among 70 members of the Standard & Poor's 500 Index that are scheduled to release fourth- quarter results next week.
S&P 500 companies are expected to report 11 percent earnings growth for the quarter, according to a Thomson First Call survey of analysts. The increase would be the third in a row and the biggest since the third quarter of 2000.
``We are optimistic that fourth-quarter earnings will be pretty strong,'' said David Spika, an investment strategist at Banc of America Capital Management, which oversees $230 billion in St. Louis. With rising profits, potential tax cuts and prospects for economic growth, ``you can make a case that the market will appreciate from here.''
Higher-than-expected sales at companies including EMC Corp. and SAP AG, along with President George W. Bush's proposal for $670 billion in tax cuts, helped benchmark indexes rise for a second week.
The S&P 500 and the Dow Jones Industrial Average each gained 2.1 percent for the week, while the Nasdaq Composite Index climbed 4.4 percent. This year, the S&P is up 5.4 percent, the Dow has gained 5.3 percent and the Nasdaq has risen 8.4 percent.
All three measures fell for the third straight year in 2002, capped by the biggest December losses since 1931. The S&P 500 slid 6 percent for the month and the Dow industrials fell 6.2 percent.
Software, Oil
During the next two weeks, more than 40 percent of the S&P 500 companies will release results for the last three months of 2002. They include seven of the 10 biggest companies in the index. Microsoft, the world's biggest software maker and No. 1 company by market value, and General Electric Co., a maker of jet engines and power-generation equipment, are among them.
Exxon Mobil Corp., the world's largest publicly traded oil company, and Citigroup Inc., the biggest financial services company, are among the index members releasing results the following week.
Spika said stock indexes will snap their string of annual declines and record returns between 8 percent and 10 percent this year. Forecasters may have grown too pessimistic about earnings, setting the stage for a rally, he said.
Analysts lowered their forecasts for profit growth by more than a third during the fourth quarter. On Oct. 1, they projected an increase of 20 percent. By Jan. 1, the estimate was 13 percent, according to First Call. Profit dropped 22 percent in the fourth quarter of 2002.
``I fully expect there to be a good number of positive earnings reports in the days and weeks ahead,'' Spika said.
He's been buying shares of companies in industries that may benefit the most from a growing economy, such as Merrill Lynch & Co., Oracle Corp. and Qualcomm Inc. He's been selling stocks that gained last year, including Anheuser-Busch Cos., Procter & Gamble Co. and Lockheed Martin Corp.
False Hopes
Shares also are fairly priced, he said. The S&P 500 started the year trading at 17 times earnings forecasts for 2003, down from 22 times estimates at the start of 2002, First Call said. ``Stocks are not really cheap, but they are not expensive either,'' Spika said.
Other investors aren't so neutral in their opinion of stocks. Allen Ashcroft, a money manager at Allied Investment Advisors Inc. in Baltimore, said he's still haunted by last year's false hopes for a recovery.
``Last year was one of the worst years I ever had because I got hurt by positioning my portfolio for a rebound that never happened,'' he said. ``I always go into the year with trepidation, especially with what happened last year.''
Ashcroft's $225 million Ark Blue Chip Equity Portfolio dropped 31 percent in 2002, exceeding the 23 percent loss in the S&P 500. A rebound will be ``much slower than people anticipated'' and there is ``unease'' about earnings this year, he said.
Stalling Out
Analysts predict that profit for S&P 500 companies will increase 11 percent in the first quarter and 10 percent in the second quarter, according to First Call. The forecasts indicate that earnings growth will stall, Ashcroft said.
``Companies are not seeing growth ramping up,'' he said. He's been buying shares of household-products and capital-equipment makers, and declined to identify the stocks because he is still adding to the positions.
Some investors said consumer spending may decline because people are worried about job losses and a possible war in Iraq. Any reduction would slow the economy and cut into profit growth.
The economy unexpectedly shed jobs in December for the second straight month. The unemployment rate stayed at 6 percent, the highest in eight years. United Nations arms inspectors said Iraq is still withholding information about illegal weapons, and U.S. officials have said they will use force to disarm the country.
``Things that threaten the consumer are a big risk for the economy,'' said Charles King, who manages $1 billion at Scudder Private Investment Counsel. ``If the consumer collapses, all bets are off.''
Economy Watch
A University of Michigan survey of consumer sentiment is scheduled for Friday and will show more optimism, according to economists. Investors will also focus on government reports on inflation, due Wednesday and Thursday.
The Federal Reserve will release its so-called ``beige book,'' which provides anecdotal information on economic conditions in the country, on Wednesday.
While economic and earnings rebounds may not be as fast as some investors had anticipated, growth will be enough to propel stocks higher, Banc of America's Spika said.
``It's not going to be a rocket recovery or a rocket-type bull market,'' he said. ``But it's certainly one that will give us a positive return for the year
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- Registado: 5/11/2002 11:30
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01/11 09:17
01/11 09:17
OPEC Preparing to Boost Oil Output, Lower Prices (Update1)
By Sean Evers, Alex Lawler and Stephen Voss
Vienna, Jan. 11 (Bloomberg) -- OPEC officials began preparing an increase in oil output to lower prices from around $30 a barrel as a strike in Venezuela erodes U.S. inventories.
Hossein Kazempour Ardebili, Iran's OPEC governor and the first delegate to arrive in Vienna today before tomorrow's meeting, said members are still in talks how to proceed. The group is expected by analysts to add 1 million to 1.5 million barrels to the quota of 23 million barrels a day.
``We will consult with other members to see what will happen,'' Kazempour Ardebili told reporters on arrival in Vienna. The governor will head Iran's delegation in the absence of the nation's minister, Bijan Namdar Zanganeh.
The Organization of Petroleum Exporting Countries is seeking to lower prices to its target of $22 to $28 a barrel. Venezuela's crippled oil exports and a possible U.S. war with Iraq sent oil prices up 44 percent in London last year, the second-largest gain of the past two decades.
The meeting will be OPEC's second in a month. In phone calls between the group's representatives this week, Saudi Arabia, the world's largest producer, failed to convince other members to agree to boost quotas by 1.5 million to 2 million barrels a day.
An increase of 1.5 million barrels ``appears to be the sensible approach,'' said Saudi American Bank's chief economist, Brad Bourland. ``It will certainly add downward pressure on prices.''
Officials from Saudi Arabia, the United Arab Emirates, Qatar and Libya are scheduled to arrive today. Representatives of Venezuela and Algeria are slated to arrive tomorrow. The next arrival is the Saudi delegation at 6 p.m. local time.
Calls for Oil
Oil importers from the U.S. to India, Asia's fourth-largest consumer, are lobbying OPEC to pump more oil. Rising energy prices lead to higher costs for airlines such as AMR Corp.'s American Airlines and increase gasoline and heating bills, which may undermine growth in the world economy.
A change at tomorrow's meeting won't immediately fill the loss of 2.3 million barrels a day from Venezuela.
Concerned rising prices may spur development of competing oil fields, OPEC has agreed to consider increasing output when its benchmark index stays above the target for 20 consecutive days. OPEC's benchmark price was $29.82 yesterday, the 18th trading day above the range, meaning the accord may be triggered Jan. 14.
In London, the February Brent crude-oil futures contract yesterday rose 3 cents to $29.67 a barrel on the International Petroleum Exchange. Prices reached $31.02 last month.
In Vienna on Dec. 12, OPEC set a two-pronged strategy to curb overproduction and avoid a price decline later this year. To bring members closer to the quota, the group raised the daily output target to 23 million barrels while pledging to cut supplies by as much as 1.7 million barrels a day.
Because members other than Venezuela are cheating on quotas, Sunday's expected announcement may not result in as much supply as promised. Also, some members, such as Indonesia and Kuwait, already are pumping as much as they can, analysts said.
Extra Capacity
OPEC will distribute any production increase on a pro-rata basis, based on members' current quotas, even though Venezuela can't meet its share, OPEC's president, Abdullah bin Hamad al- Attiyah, has said.
The 11-nation group holds almost 80 percent of oil reserves and pumps only a third of global supply, restraining output to bolster prices. Only Iraq isn't bound by OPEC's production agreements because its trade is under United Nations supervision.
Saudi Arabia may be capable of pumping as much as 2.5 million barrels more than it does now and pledges to make up any shortages. Saudi Arabia and the United Arab Emirates are the only OPEC producers with the ability to pump more, a Kuwaiti oil official said earlier this week.
A war with Iraq may stretch OPEC further by disrupting oil supplies from the country, which is the Middle East's third- largest producer.
Some OPEC members say an increase of 2 million barrels may flood the market in the second quarter, when demand usually declines with the end of the Northern Hemisphere winter.
OPEC Preparing to Boost Oil Output, Lower Prices (Update1)
By Sean Evers, Alex Lawler and Stephen Voss
Vienna, Jan. 11 (Bloomberg) -- OPEC officials began preparing an increase in oil output to lower prices from around $30 a barrel as a strike in Venezuela erodes U.S. inventories.
Hossein Kazempour Ardebili, Iran's OPEC governor and the first delegate to arrive in Vienna today before tomorrow's meeting, said members are still in talks how to proceed. The group is expected by analysts to add 1 million to 1.5 million barrels to the quota of 23 million barrels a day.
``We will consult with other members to see what will happen,'' Kazempour Ardebili told reporters on arrival in Vienna. The governor will head Iran's delegation in the absence of the nation's minister, Bijan Namdar Zanganeh.
The Organization of Petroleum Exporting Countries is seeking to lower prices to its target of $22 to $28 a barrel. Venezuela's crippled oil exports and a possible U.S. war with Iraq sent oil prices up 44 percent in London last year, the second-largest gain of the past two decades.
The meeting will be OPEC's second in a month. In phone calls between the group's representatives this week, Saudi Arabia, the world's largest producer, failed to convince other members to agree to boost quotas by 1.5 million to 2 million barrels a day.
An increase of 1.5 million barrels ``appears to be the sensible approach,'' said Saudi American Bank's chief economist, Brad Bourland. ``It will certainly add downward pressure on prices.''
Officials from Saudi Arabia, the United Arab Emirates, Qatar and Libya are scheduled to arrive today. Representatives of Venezuela and Algeria are slated to arrive tomorrow. The next arrival is the Saudi delegation at 6 p.m. local time.
Calls for Oil
Oil importers from the U.S. to India, Asia's fourth-largest consumer, are lobbying OPEC to pump more oil. Rising energy prices lead to higher costs for airlines such as AMR Corp.'s American Airlines and increase gasoline and heating bills, which may undermine growth in the world economy.
A change at tomorrow's meeting won't immediately fill the loss of 2.3 million barrels a day from Venezuela.
Concerned rising prices may spur development of competing oil fields, OPEC has agreed to consider increasing output when its benchmark index stays above the target for 20 consecutive days. OPEC's benchmark price was $29.82 yesterday, the 18th trading day above the range, meaning the accord may be triggered Jan. 14.
In London, the February Brent crude-oil futures contract yesterday rose 3 cents to $29.67 a barrel on the International Petroleum Exchange. Prices reached $31.02 last month.
In Vienna on Dec. 12, OPEC set a two-pronged strategy to curb overproduction and avoid a price decline later this year. To bring members closer to the quota, the group raised the daily output target to 23 million barrels while pledging to cut supplies by as much as 1.7 million barrels a day.
Because members other than Venezuela are cheating on quotas, Sunday's expected announcement may not result in as much supply as promised. Also, some members, such as Indonesia and Kuwait, already are pumping as much as they can, analysts said.
Extra Capacity
OPEC will distribute any production increase on a pro-rata basis, based on members' current quotas, even though Venezuela can't meet its share, OPEC's president, Abdullah bin Hamad al- Attiyah, has said.
The 11-nation group holds almost 80 percent of oil reserves and pumps only a third of global supply, restraining output to bolster prices. Only Iraq isn't bound by OPEC's production agreements because its trade is under United Nations supervision.
Saudi Arabia may be capable of pumping as much as 2.5 million barrels more than it does now and pledges to make up any shortages. Saudi Arabia and the United Arab Emirates are the only OPEC producers with the ability to pump more, a Kuwaiti oil official said earlier this week.
A war with Iraq may stretch OPEC further by disrupting oil supplies from the country, which is the Middle East's third- largest producer.
Some OPEC members say an increase of 2 million barrels may flood the market in the second quarter, when demand usually declines with the end of the Northern Hemisphere winter.
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News
News
US Airways machinists approve cuts
Follows approval by flight attendants in attempt to save additional $200 million.
January 11, 2003: 9:35 AM EST
NEW YORK (Reuters) - US Airways Group Inc.'s mechanics and baggage handlers voted in favor late Friday of another round of cost cuts, which are aimed at salvaging the bankrupt airline's business and their jobs.
US Airways' flight attendants and passenger service workers approved separate cuts in benefits and other rules earlier Friday, in an effort to come up with at least another $200 million the airline says it needs to counter sagging revenue.
Related stories
US Air agents OK cuts
United to cut 96 more jobs
US Airways CEO out
US Airways defers payments
The mechanics and bag handlers, who form the two main areas of US Airways workers represented by International Association of Machinists, ratified a package that will save the airline nearly $60 million a year. The two groups have already sacrificed a combined $125 million as part of the airline's campaign to lighten its expense load after filing for bankruptcy in August.
US Airways has secured $950 million in labor-related annual cost cuts, including a $100 million deal ratified by a committee of the airline's pilots.
The plans ratified by both machinist groups modify staffing and productivity rules and change workers' benefit plans. Machinists' union spokesman Joseph Tiberi said early Saturday 61 percent of mechanics voted for the new cuts, while fleet service workers passed the plan with a narrower 52 percent "yes" vote.
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US Airways machinists approve cuts
Follows approval by flight attendants in attempt to save additional $200 million.
January 11, 2003: 9:35 AM EST
NEW YORK (Reuters) - US Airways Group Inc.'s mechanics and baggage handlers voted in favor late Friday of another round of cost cuts, which are aimed at salvaging the bankrupt airline's business and their jobs.
US Airways' flight attendants and passenger service workers approved separate cuts in benefits and other rules earlier Friday, in an effort to come up with at least another $200 million the airline says it needs to counter sagging revenue.
Related stories
US Air agents OK cuts
United to cut 96 more jobs
US Airways CEO out
US Airways defers payments
The mechanics and bag handlers, who form the two main areas of US Airways workers represented by International Association of Machinists, ratified a package that will save the airline nearly $60 million a year. The two groups have already sacrificed a combined $125 million as part of the airline's campaign to lighten its expense load after filing for bankruptcy in August.
US Airways has secured $950 million in labor-related annual cost cuts, including a $100 million deal ratified by a committee of the airline's pilots.
The plans ratified by both machinist groups modify staffing and productivity rules and change workers' benefit plans. Machinists' union spokesman Joseph Tiberi said early Saturday 61 percent of mechanics voted for the new cuts, while fleet service workers passed the plan with a narrower 52 percent "yes" vote.
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EDP muda de sócio espanhol
EDP muda de sócio espanhol
Alterar tamanho
A REORGANIZAÇÃO do sector energético deverá levar a EDP a escolher a Unión Fenosa como parceiro estratégico, segundo uma fonte governamental. Depois do falhanço da Iberdrola, a Fenosa volta a ser apontada como o futuro sócio espanhol da EDP. Desta associação resultaria o segundo maior operador eléctrico da Península Ibérica.
O Governo nomeou João Talone, ex-vice-presidente do BCP, para levar a cabo a reorganização do sector energético até ao fim de Março, a tempo de as propostas serem aprovadas pelas assembleias-gerais da EDP e da Galp. Apontado como delfim de Jardim Gonçalves, Talone terá amplos poderes numa área em que o BCP tem interesses estratégicos.
Um dos cenários mais prováveis desta reestruturação é a separação da área de gás da Galp e sua posterior aproximação da EDP, medida também defendida por Jardim Gonçalves. A somar-se a esse jogo de xadrez está a Eni, sócio italiano da Galp, que chegou recentemente a um acordo com o Governo português para que tanto a EDP como a CGD assumissem um papel de relevo nas decisões sobre o futuro da Galp. Antes do fim do ano, a Eni associou-se à Fenosa no negócio do gás, o que, no caso de a EDP vir a juntar-se à empresa espanhola, permitiria fechar o círculo dos interesses em causa.
O elevado esforço financeiro para a EDP comprar uma posição na Unión Fenosa tem impedido as duas empresas de se aproximarem, mas a CGD poderá ser um instrumento na concretização desta estratégia. E poderá caber a Mira Amaral, ex-ministro da Energia de Cavaco Silva, decidir sobre um modelo com o qual não concorda plenamente.
Alterar tamanho
A REORGANIZAÇÃO do sector energético deverá levar a EDP a escolher a Unión Fenosa como parceiro estratégico, segundo uma fonte governamental. Depois do falhanço da Iberdrola, a Fenosa volta a ser apontada como o futuro sócio espanhol da EDP. Desta associação resultaria o segundo maior operador eléctrico da Península Ibérica.
O Governo nomeou João Talone, ex-vice-presidente do BCP, para levar a cabo a reorganização do sector energético até ao fim de Março, a tempo de as propostas serem aprovadas pelas assembleias-gerais da EDP e da Galp. Apontado como delfim de Jardim Gonçalves, Talone terá amplos poderes numa área em que o BCP tem interesses estratégicos.
Um dos cenários mais prováveis desta reestruturação é a separação da área de gás da Galp e sua posterior aproximação da EDP, medida também defendida por Jardim Gonçalves. A somar-se a esse jogo de xadrez está a Eni, sócio italiano da Galp, que chegou recentemente a um acordo com o Governo português para que tanto a EDP como a CGD assumissem um papel de relevo nas decisões sobre o futuro da Galp. Antes do fim do ano, a Eni associou-se à Fenosa no negócio do gás, o que, no caso de a EDP vir a juntar-se à empresa espanhola, permitiria fechar o círculo dos interesses em causa.
O elevado esforço financeiro para a EDP comprar uma posição na Unión Fenosa tem impedido as duas empresas de se aproximarem, mas a CGD poderá ser um instrumento na concretização desta estratégia. E poderá caber a Mira Amaral, ex-ministro da Energia de Cavaco Silva, decidir sobre um modelo com o qual não concorda plenamente.
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WorldCom wants a new name
WorldCom wants a new name
Bankrupt telecom company mulls name change to leave its tarnished image behind, sources say.
January 10, 2003: 6:36 PM EST
PHILADELPHIA (Reuters) - WorldCom by any other name may still be bankrupt, but the company that's become synonymous with questionable accounting wants to dump its tarnished brand and will likely adopt the name of its MCI residential long-distance unit, sources said Friday.
Faced with the daunting prospect of rejuvenating the WorldCom brand or the costly option of coining a new name, sources familiar with the situation said the easiest option is expanding the well-known MCI brand, which has been drilled into consumers' minds by commercials featuring the likes of Michael Jordan.
"If I were them I'd definitely drop the WorldCom name -- it's associated with world-conquest gone wrong ... blubbering (former Chief Executive) Bernie Ebbers and shady practices," said Mark DiMassimo, head of DiMassimo Brand Advertising.
WorldCom said no decision has been made on its name.
"It's certainly something we're considering, and it's a process that we're taking very seriously. There is going to be a lot of research and thought put into it. But at this point no decisions have been made," said WorldCom spokesman Brad Burns.
But analysts said a simple renaming is unlikely to erase memories of the Clinton, Miss., company's $9 billion accounting scandal or TV images of its former financial chief, Scott Sullivan, being led up courthouse steps for his indictment on seven counts of accounting fraud. He pleaded not guilty.
"There's a natural tendency to think it couldn't get worse, and that the damage to the WorldCom brand is over," DiMassimo said. "But whatever they do, that new name is going to have to sail through some pretty turbulent waters."
More than a name
"The name 'WorldCom' has no credibility or viability in the financial market. But the brand name is just a piece of an overall marketing puzzle. They have to retool the company, its image and advertising and brand," said Yankee Group analyst Berge Ayvazian.
As early as next week, WorldCom's new chairman, Michael Capellas, is expected to outline for employees his priorities to help the company emerge from bankruptcy. Capellas will sketch a broad strategic framework that will be followed over the next several months with more specific details on job cuts and asset sales, sources said.
Telecommunications industry analyst Jeffrey Kagan said he expects WorldCom to start the restructuring and put to rest the financial problems before formally changing the name "so they don't risk tarnishing the MCI name."
There is some precedent to changing a name to wipe away bad memories: Discount airline ValueJet changed its name to AirTran after its 1996 plane crash in Florida killed 110 people.
Bankrupt telecom company mulls name change to leave its tarnished image behind, sources say.
January 10, 2003: 6:36 PM EST
PHILADELPHIA (Reuters) - WorldCom by any other name may still be bankrupt, but the company that's become synonymous with questionable accounting wants to dump its tarnished brand and will likely adopt the name of its MCI residential long-distance unit, sources said Friday.
Faced with the daunting prospect of rejuvenating the WorldCom brand or the costly option of coining a new name, sources familiar with the situation said the easiest option is expanding the well-known MCI brand, which has been drilled into consumers' minds by commercials featuring the likes of Michael Jordan.
"If I were them I'd definitely drop the WorldCom name -- it's associated with world-conquest gone wrong ... blubbering (former Chief Executive) Bernie Ebbers and shady practices," said Mark DiMassimo, head of DiMassimo Brand Advertising.
WorldCom said no decision has been made on its name.
"It's certainly something we're considering, and it's a process that we're taking very seriously. There is going to be a lot of research and thought put into it. But at this point no decisions have been made," said WorldCom spokesman Brad Burns.
But analysts said a simple renaming is unlikely to erase memories of the Clinton, Miss., company's $9 billion accounting scandal or TV images of its former financial chief, Scott Sullivan, being led up courthouse steps for his indictment on seven counts of accounting fraud. He pleaded not guilty.
"There's a natural tendency to think it couldn't get worse, and that the damage to the WorldCom brand is over," DiMassimo said. "But whatever they do, that new name is going to have to sail through some pretty turbulent waters."
More than a name
"The name 'WorldCom' has no credibility or viability in the financial market. But the brand name is just a piece of an overall marketing puzzle. They have to retool the company, its image and advertising and brand," said Yankee Group analyst Berge Ayvazian.
As early as next week, WorldCom's new chairman, Michael Capellas, is expected to outline for employees his priorities to help the company emerge from bankruptcy. Capellas will sketch a broad strategic framework that will be followed over the next several months with more specific details on job cuts and asset sales, sources said.
Telecommunications industry analyst Jeffrey Kagan said he expects WorldCom to start the restructuring and put to rest the financial problems before formally changing the name "so they don't risk tarnishing the MCI name."
There is some precedent to changing a name to wipe away bad memories: Discount airline ValueJet changed its name to AirTran after its 1996 plane crash in Florida killed 110 people.
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Is jobs report as bad as it looks?
Is jobs report as bad as it looks?
Economists see silver linings in a dismal report, but Iraq fears continue to weigh on job growth.
January 10, 2003: 3:18 PM EST
By Mark Gongloff, CNN/Money Staff Writer
NEW YORK (CNN/Money) - On its face, Friday's U.S. unemployment report looked flat-out horrible, with the jobless rate stuck in the mud and more than 100,000 jobs slashed from payrolls -- but many economists said things weren't all that bad, and U.S. markets seemed to believe them.
The unemployment rate stayed at 6 percent in December 2002, the Labor Department said, matching November's rate ... and April's rate ... and the August 1994 rate, the last time unemployment was so bad.
Meanwhile, a hoped-for recovery in retail hiring never materialized -- that sector shed 104,000 jobs, trumping even the manufacturing sector, which saw payrolls shrink for the 29th straight month. All together, non-farm payrolls shed 101,000 jobs in December, the worst month since February 2002.
Sounds awful, and markets reacted as expected, falling in early trading.
But a funny thing happened on the way to despair -- economists started pointing out silver linings in the report, and markets suddenly turned positive. Though they were mixed in later trading, they never sank back to their earlier levels.
"People are becoming more accepting of a slow, gradual recovery, whereas last year, they had great growth numbers in mind, and when that didn't pan out, markets got hit hard," said James Padinha, economic strategist at Arnhold & S. Bleichroeder. "As long as data don't indicate a new round of fundamental economic deterioration, we're still on the same growth track."
And many economists doubted Friday's report did signal the end of the world for the economy -- though they admit that uncertainty about problems in Iraq and North Korea, along with a glut of production capacity, sluggish profits and other woes -- could keep the labor market on ice for much of 2003.
For one thing, the unemployment rate stayed steady, and 100,000 jobs is really not that significant, statistically speaking -- some economists noted on Thursday that the margin of error for their estimates was about 100,000 jobs.
More importantly, data about the labor market get sort of freaky around the holidays, as the Labor Department tries to make seasonal adjustments to account for the hiring and firing of temporary workers -- so the data are not totally reliable.
The Labor Department also makes seasonal adjustments in January and February to account for all the pink slips given to mall Santas and other temporary help. This year, however, fewer mall Santas were hired, so fewer will be fired, and January and February's data could look even better than expected.
"[Excluding seasonal adjustments] retail employment was actually up in December, but the seasonal factors expected much more. That was especially true in the restaurant sector," John Silvia, chief economist at Wachovia Securities, wrote in a research note. "Watch out next month when the seasonals reverse!"
Another 'jobless recovery'
While 100,000 job cuts may be statistically insignificant, try telling that to the 100,000 people who lost their jobs, joining the ranks of the 8.6 million people unemployed in December, 3.2 million of whom have been out of work for 15 weeks or more.
President Bush and Congress are understandably nervous about this large group of disgruntled potential voters -- at the president's urging, the 108th Congress passed an extension of unemployment benefits in its first session on Monday.
The president almost certainly remembers the lesson of his father, who lost a re-election bid in 1992 because of a lousy job market and accusations he was unconcerned about it.
In fact, Bush's "jobless recovery" is eerily reminiscent of his father's, at least in one respect. During the 12 months that followed the 1990-91 recession, when Bush's father was president, employers cut an average of 17,580 jobs monthly. During the 12 months after the end of the 2001 recession -- assuming a new expansion started after December 2002 -- non-farm employers cut an average of 15,080 jobs per month.
With such scary figures in mind, Bush has proposed an ambitious, $674 billion plan of tax cuts and spending that he says will grow 2.1 million jobs in the next three years.
"The president remains very concerned about the potential for a jobless recovery," White House spokesman Ari Fleischer told reporters. "And this is why he calls on Congress to act as quickly as Congress can to pass a job-creating initiative that stimulates the economy and provides greater growth not only for this year, but into the future."
But, according to the New York Times, the White House has admitted that only about 190,000 of those 2.1 million jobs it thinks its plan will create will come in 2003 -- just making up for the job losses in November and December 2002.
And while Congress acted quickly to extend unemployment benefits, a no-brainer of an issue, it's likely to take a lot more time to sort out the particulars of the Bush plan, which is dramatically different from the alternative proposed by Democrats and includes a controversial idea to eliminate the tax people pay on stock dividends.
"My problem with the Bush plan is that it's so ideologically problematic that now these guys are going to have to argue about it for a month or two," Jared Bernstein, labor economist with the Economic Policy Institute, told CNNfn's CNNmoney Morning program. "That's bad because we need to inject stimulus into the economy quickly."
Iraq concerns weigh on labor market
But many economists point out that, with the tax cut Congress passed in 2001 and a Federal Reserve that has slashed its target for short-term interest rates to levels not seen since the Kennedy administration, there's already plenty of stimulus in the pipeline.
The biggest reason nobody can get a job, some economists believe, is uncertainty about whether or not the United States will go to war in Iraq -- the same "geopolitical uncertainties" the Fed talked about late last year when cutting rates.
"The real problem here is business confidence, or the lack of it, and it stems primarily from a sense of major uncertainty," said Anirvan Banerji, research director for the Economic Cycle Research Institute. "Geopolitical uncertainty makes businesses unsure of whether or not we can have a sustainable recovery. Are they willing to stick their necks out and hire people and invest in equipment? Their answer has been, 'No.'"
Another factor throwing a wet blanket on spending and hiring is an excess of production capacity left over after a glut of spending in the late 1990s. Factories are using less than 75 percent of their capacity, according to recent Fed data.
Meanwhile, sluggish corporate profit growth has led to massive cost-cutting, and labor is a pretty fungible cost. Businesses have found they can milk more work out of fewer workers, leading to massive productivity gains that support profits and keep consumer prices low, but don't offer much incentive for businesses to hire more workers.
With all this in mind, only the most optimistic economists think the labor market will noticeably improve by the spring of this year. Many other estimates expect the weakness to linger well into 2003.
"We're not only stuck in a soft patch; we're spinning our wheels," said Bill Cheney, chief economist at John Hancock Financial Services. "To get back to full employment, we need a lot more demand, and that's hard to see coming anytime soon from either domestic or international sources
Economists see silver linings in a dismal report, but Iraq fears continue to weigh on job growth.
January 10, 2003: 3:18 PM EST
By Mark Gongloff, CNN/Money Staff Writer
NEW YORK (CNN/Money) - On its face, Friday's U.S. unemployment report looked flat-out horrible, with the jobless rate stuck in the mud and more than 100,000 jobs slashed from payrolls -- but many economists said things weren't all that bad, and U.S. markets seemed to believe them.
The unemployment rate stayed at 6 percent in December 2002, the Labor Department said, matching November's rate ... and April's rate ... and the August 1994 rate, the last time unemployment was so bad.
Meanwhile, a hoped-for recovery in retail hiring never materialized -- that sector shed 104,000 jobs, trumping even the manufacturing sector, which saw payrolls shrink for the 29th straight month. All together, non-farm payrolls shed 101,000 jobs in December, the worst month since February 2002.
Sounds awful, and markets reacted as expected, falling in early trading.
But a funny thing happened on the way to despair -- economists started pointing out silver linings in the report, and markets suddenly turned positive. Though they were mixed in later trading, they never sank back to their earlier levels.
"People are becoming more accepting of a slow, gradual recovery, whereas last year, they had great growth numbers in mind, and when that didn't pan out, markets got hit hard," said James Padinha, economic strategist at Arnhold & S. Bleichroeder. "As long as data don't indicate a new round of fundamental economic deterioration, we're still on the same growth track."
And many economists doubted Friday's report did signal the end of the world for the economy -- though they admit that uncertainty about problems in Iraq and North Korea, along with a glut of production capacity, sluggish profits and other woes -- could keep the labor market on ice for much of 2003.
For one thing, the unemployment rate stayed steady, and 100,000 jobs is really not that significant, statistically speaking -- some economists noted on Thursday that the margin of error for their estimates was about 100,000 jobs.
More importantly, data about the labor market get sort of freaky around the holidays, as the Labor Department tries to make seasonal adjustments to account for the hiring and firing of temporary workers -- so the data are not totally reliable.
The Labor Department also makes seasonal adjustments in January and February to account for all the pink slips given to mall Santas and other temporary help. This year, however, fewer mall Santas were hired, so fewer will be fired, and January and February's data could look even better than expected.
"[Excluding seasonal adjustments] retail employment was actually up in December, but the seasonal factors expected much more. That was especially true in the restaurant sector," John Silvia, chief economist at Wachovia Securities, wrote in a research note. "Watch out next month when the seasonals reverse!"
Another 'jobless recovery'
While 100,000 job cuts may be statistically insignificant, try telling that to the 100,000 people who lost their jobs, joining the ranks of the 8.6 million people unemployed in December, 3.2 million of whom have been out of work for 15 weeks or more.
President Bush and Congress are understandably nervous about this large group of disgruntled potential voters -- at the president's urging, the 108th Congress passed an extension of unemployment benefits in its first session on Monday.
The president almost certainly remembers the lesson of his father, who lost a re-election bid in 1992 because of a lousy job market and accusations he was unconcerned about it.
In fact, Bush's "jobless recovery" is eerily reminiscent of his father's, at least in one respect. During the 12 months that followed the 1990-91 recession, when Bush's father was president, employers cut an average of 17,580 jobs monthly. During the 12 months after the end of the 2001 recession -- assuming a new expansion started after December 2002 -- non-farm employers cut an average of 15,080 jobs per month.
With such scary figures in mind, Bush has proposed an ambitious, $674 billion plan of tax cuts and spending that he says will grow 2.1 million jobs in the next three years.
"The president remains very concerned about the potential for a jobless recovery," White House spokesman Ari Fleischer told reporters. "And this is why he calls on Congress to act as quickly as Congress can to pass a job-creating initiative that stimulates the economy and provides greater growth not only for this year, but into the future."
But, according to the New York Times, the White House has admitted that only about 190,000 of those 2.1 million jobs it thinks its plan will create will come in 2003 -- just making up for the job losses in November and December 2002.
And while Congress acted quickly to extend unemployment benefits, a no-brainer of an issue, it's likely to take a lot more time to sort out the particulars of the Bush plan, which is dramatically different from the alternative proposed by Democrats and includes a controversial idea to eliminate the tax people pay on stock dividends.
"My problem with the Bush plan is that it's so ideologically problematic that now these guys are going to have to argue about it for a month or two," Jared Bernstein, labor economist with the Economic Policy Institute, told CNNfn's CNNmoney Morning program. "That's bad because we need to inject stimulus into the economy quickly."
Iraq concerns weigh on labor market
But many economists point out that, with the tax cut Congress passed in 2001 and a Federal Reserve that has slashed its target for short-term interest rates to levels not seen since the Kennedy administration, there's already plenty of stimulus in the pipeline.
The biggest reason nobody can get a job, some economists believe, is uncertainty about whether or not the United States will go to war in Iraq -- the same "geopolitical uncertainties" the Fed talked about late last year when cutting rates.
"The real problem here is business confidence, or the lack of it, and it stems primarily from a sense of major uncertainty," said Anirvan Banerji, research director for the Economic Cycle Research Institute. "Geopolitical uncertainty makes businesses unsure of whether or not we can have a sustainable recovery. Are they willing to stick their necks out and hire people and invest in equipment? Their answer has been, 'No.'"
Another factor throwing a wet blanket on spending and hiring is an excess of production capacity left over after a glut of spending in the late 1990s. Factories are using less than 75 percent of their capacity, according to recent Fed data.
Meanwhile, sluggish corporate profit growth has led to massive cost-cutting, and labor is a pretty fungible cost. Businesses have found they can milk more work out of fewer workers, leading to massive productivity gains that support profits and keep consumer prices low, but don't offer much incentive for businesses to hire more workers.
With all this in mind, only the most optimistic economists think the labor market will noticeably improve by the spring of this year. Many other estimates expect the weakness to linger well into 2003.
"We're not only stuck in a soft patch; we're spinning our wheels," said Bill Cheney, chief economist at John Hancock Financial Services. "To get back to full employment, we need a lot more demand, and that's hard to see coming anytime soon from either domestic or international sources
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Earnings season kicks off
Earnings season kicks off
Company results in the week ahead could give investors something to hum about.
January 10, 2003: 4:50 PM EST
By Justin Lahart, CNN/Money Staff Writer
NEW YORK (CNN/Money) - So far 2003 has been sweet for investors.
Leaving December's funk behind, stocks have powered forward to one of their best annual starts on record. With enthusiasm mounting that this is the year the economy gets back on track, investors have met good news, like the bigger-than-expected Bush economic plan, with glee, and have looked past bad news, like Friday's soft jobs report.
The rosy optimism can't last forever, right? There is still Iraq, after all, and North Korea, as well as higher energy prices, a mounting budget deficit, tapped-out consumers and a lingering risk aversion among companies that is stifling growth.
Maybe 2003 really is the year that everything gets better, but at some point, the old worries have got to encroach on investor giddiness. (For a look at key events in the week ahead, click here.)
But maybe not right away.
"Given the lift off -- which I totally missed -- it's going to be tough to break the markets down," said Raymond James chief investment strategist Jeff Saut, who thinks stocks should hang in well until Jan. 28, when President Bush's State of the Union address may revive geopolitical jitters.
Eyeing earnings
In the coming week the fourth-quarter reporting season is going to kick off in earnest, and if past is any sort of prologue, that should be good for the market. The reason: Companies that aren't able to meet profit expectations typically issue earnings warnings ahead of time.
Getting better
The percentage of negative preannouncements is down for the fourth quarter
Quarter Negative preannouncments Positive preannouncements
Fourth quarter 2001 45% 26%
Third quarter 2002 53% 23%
Fourth quarter 2002 43% 27%
* Through Jan. 10; other quarters are for comparable period.
Source: First Call
(To not issue a warning has come to be seen as a sign that management doesn't have a handle on things -- witness what investors just did to Alcoa's stock.) So by the time earnings season rolls around, the tendency is for companies to report results that meet or beat expectations.
This time around could be particularly swell. According to earnings tracker First Call, the ratio of companies that have said results will be worse than expected to companies that have said results will be better is 1.6. For the third quarter, that ratio was 2.5 and for the fourth quarter of 2001 it was 1.7. The implication is that fourth-quarter earnings growth for companies in the S&P 500 could be significantly better than the currently expected 10.8 percent.
"We think when all is said and done, you're talking about something like 13 percent growth," said First Call research manager Joe Cooper. (For a look at seven earnings reports next week that matter most, click here.)
Rocket juice
Saut thinks that there's something more than just investor enthusiasm and expectations of market-pleasing earnings that's set stocks rallying.
He points out that many of the hedge funds that were with us at the beginning of 2002 were shut down by the time the year came to a close. He suspects these were forced closures -- clients pulling their money away from managers who had bet poorly. The way hedge fund rules work, investors have only one opportunity a year to exit the funds. They notify the fund by the end of November, and the fund is required to give them back their money (or what's left of their money) by year end.
So maybe the reason that the Santa Claus rally that people were looking for at the end of December didn't come this year was that too many funds were selling their positions.
"Once they got done liquidating, the selling ended," said Saut. The result was a "throwback rally" which was abetted by a raft of new pension money and the conventional wisdom that markets never go down four years in a row.
Econ-o-rama
Not just the raft of feel-good earnings reports, but some kind news on the economic front could also help stocks along in the week to come. The big reports are retail sales on Tuesday and industrial production on Friday, but there will also be the producer price index, the consumer price index, the Philly Fed report and the Michigan sentiment report to keep things lively.
"The retail sales and industrial production numbers could be better than people expect," said Bank One chief economist Diane Swonk.
Retail sales should be helped along by continued strength in automobile sales, where generous incentives continue to draw buyers into the showrooms. And the holiday season may not have been as bad as the dismal December chain store sales suggested. Productivity gains, and the implications of the surprising strength in the Institute for Supply Management's purchasing managers' index (even if some of it was overstated) suggest that industrial production could come in well.
Key events in the week ahead
There's a slew of company results coming up in the coming week. Click here to see the ones that matter most.
December retail sales come out Tuesday. Thanks in large part to generous incentives from the auto companies, economists surveyed by Briefing.com expect sales grew by 0.6 percent, compared with 0.4 percent growth in November. Excluding autos, they expect sales grew by 0.4 percent versus November's 0.5 percent.
The producer price index, which tracks inflation at the wholesale level, comes out Wednesday. After unexpectedly dipping 0.4 percent in November, economists think it rose 0.2 percent in December. That's still low and somewhat surprising given the gains in many commodity prices.
The Department of Commerce releases its November report on business inventories Wednesday. Usually this doesn't garner much interest -- economists already know much of what's in it -- but if it differs significantly from expectations it can have implications for gross domestic product estimates. Economists forecast inventories grew by 0.2 percent in November compared with growth of 0.2 percent in October.
The Federal Reserve puts out its Beige Book -- a collection of anecdotal reports on the economy collected by regional Fed banks -- on Wednesday. At times the Beige Book can move markets and it is almost always worth reading if you want a good snapshot of what the economy looks like.
The key read on inflation, the consumer price index, is due out Thursday. Here, too, there has been little movement -- prompting many commentators to worry over the threat of deflation. Economists expect the CPI grew by 0.2 percent in December against 0.1 percent growth in November.
Investors get their first look at how the manufacturing economy is doing when the Philadelphia Fed releases its report on manufacturing activity in its region on Thursday. Economists expect the Philly Fed index climbed to 9.1 for January from 7.2 in December. Any number over zero represents growth
The Fed releases its December report on industrial production and capacity utilization Friday. Economists expect that production grew by 0.2 percent against November's 0.1 percent, and that capacity utilization will come in at 75.7 percent compared with the previous 75.6 percent.
Michigan releases its preliminary read on consumer sentiment for January on Friday. Economists don't put much stock in this one -- there's a world of difference between how people say they feel and how they act -- but the market often reacts. Expectations are for the sentiment index to climb to 88 from December's final sounding of 86.7.
Company results in the week ahead could give investors something to hum about.
January 10, 2003: 4:50 PM EST
By Justin Lahart, CNN/Money Staff Writer
NEW YORK (CNN/Money) - So far 2003 has been sweet for investors.
Leaving December's funk behind, stocks have powered forward to one of their best annual starts on record. With enthusiasm mounting that this is the year the economy gets back on track, investors have met good news, like the bigger-than-expected Bush economic plan, with glee, and have looked past bad news, like Friday's soft jobs report.
The rosy optimism can't last forever, right? There is still Iraq, after all, and North Korea, as well as higher energy prices, a mounting budget deficit, tapped-out consumers and a lingering risk aversion among companies that is stifling growth.
Maybe 2003 really is the year that everything gets better, but at some point, the old worries have got to encroach on investor giddiness. (For a look at key events in the week ahead, click here.)
But maybe not right away.
"Given the lift off -- which I totally missed -- it's going to be tough to break the markets down," said Raymond James chief investment strategist Jeff Saut, who thinks stocks should hang in well until Jan. 28, when President Bush's State of the Union address may revive geopolitical jitters.
Eyeing earnings
In the coming week the fourth-quarter reporting season is going to kick off in earnest, and if past is any sort of prologue, that should be good for the market. The reason: Companies that aren't able to meet profit expectations typically issue earnings warnings ahead of time.
Getting better
The percentage of negative preannouncements is down for the fourth quarter
Quarter Negative preannouncments Positive preannouncements
Fourth quarter 2001 45% 26%
Third quarter 2002 53% 23%
Fourth quarter 2002 43% 27%
* Through Jan. 10; other quarters are for comparable period.
Source: First Call
(To not issue a warning has come to be seen as a sign that management doesn't have a handle on things -- witness what investors just did to Alcoa's stock.) So by the time earnings season rolls around, the tendency is for companies to report results that meet or beat expectations.
This time around could be particularly swell. According to earnings tracker First Call, the ratio of companies that have said results will be worse than expected to companies that have said results will be better is 1.6. For the third quarter, that ratio was 2.5 and for the fourth quarter of 2001 it was 1.7. The implication is that fourth-quarter earnings growth for companies in the S&P 500 could be significantly better than the currently expected 10.8 percent.
"We think when all is said and done, you're talking about something like 13 percent growth," said First Call research manager Joe Cooper. (For a look at seven earnings reports next week that matter most, click here.)
Rocket juice
Saut thinks that there's something more than just investor enthusiasm and expectations of market-pleasing earnings that's set stocks rallying.
He points out that many of the hedge funds that were with us at the beginning of 2002 were shut down by the time the year came to a close. He suspects these were forced closures -- clients pulling their money away from managers who had bet poorly. The way hedge fund rules work, investors have only one opportunity a year to exit the funds. They notify the fund by the end of November, and the fund is required to give them back their money (or what's left of their money) by year end.
So maybe the reason that the Santa Claus rally that people were looking for at the end of December didn't come this year was that too many funds were selling their positions.
"Once they got done liquidating, the selling ended," said Saut. The result was a "throwback rally" which was abetted by a raft of new pension money and the conventional wisdom that markets never go down four years in a row.
Econ-o-rama
Not just the raft of feel-good earnings reports, but some kind news on the economic front could also help stocks along in the week to come. The big reports are retail sales on Tuesday and industrial production on Friday, but there will also be the producer price index, the consumer price index, the Philly Fed report and the Michigan sentiment report to keep things lively.
"The retail sales and industrial production numbers could be better than people expect," said Bank One chief economist Diane Swonk.
Retail sales should be helped along by continued strength in automobile sales, where generous incentives continue to draw buyers into the showrooms. And the holiday season may not have been as bad as the dismal December chain store sales suggested. Productivity gains, and the implications of the surprising strength in the Institute for Supply Management's purchasing managers' index (even if some of it was overstated) suggest that industrial production could come in well.
Key events in the week ahead
There's a slew of company results coming up in the coming week. Click here to see the ones that matter most.
December retail sales come out Tuesday. Thanks in large part to generous incentives from the auto companies, economists surveyed by Briefing.com expect sales grew by 0.6 percent, compared with 0.4 percent growth in November. Excluding autos, they expect sales grew by 0.4 percent versus November's 0.5 percent.
The producer price index, which tracks inflation at the wholesale level, comes out Wednesday. After unexpectedly dipping 0.4 percent in November, economists think it rose 0.2 percent in December. That's still low and somewhat surprising given the gains in many commodity prices.
The Department of Commerce releases its November report on business inventories Wednesday. Usually this doesn't garner much interest -- economists already know much of what's in it -- but if it differs significantly from expectations it can have implications for gross domestic product estimates. Economists forecast inventories grew by 0.2 percent in November compared with growth of 0.2 percent in October.
The Federal Reserve puts out its Beige Book -- a collection of anecdotal reports on the economy collected by regional Fed banks -- on Wednesday. At times the Beige Book can move markets and it is almost always worth reading if you want a good snapshot of what the economy looks like.
The key read on inflation, the consumer price index, is due out Thursday. Here, too, there has been little movement -- prompting many commentators to worry over the threat of deflation. Economists expect the CPI grew by 0.2 percent in December against 0.1 percent growth in November.
Investors get their first look at how the manufacturing economy is doing when the Philadelphia Fed releases its report on manufacturing activity in its region on Thursday. Economists expect the Philly Fed index climbed to 9.1 for January from 7.2 in December. Any number over zero represents growth
The Fed releases its December report on industrial production and capacity utilization Friday. Economists expect that production grew by 0.2 percent against November's 0.1 percent, and that capacity utilization will come in at 75.7 percent compared with the previous 75.6 percent.
Michigan releases its preliminary read on consumer sentiment for January on Friday. Economists don't put much stock in this one -- there's a world of difference between how people say they feel and how they act -- but the market often reacts. Expectations are for the sentiment index to climb to 88 from December's final sounding of 86.7.
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
Microsoft Settles in California, Showing Desire to End Wrang
Microsoft Settles in California, Showing Desire to End Wrangles
By Dan Goodin
San Francisco, Jan. 11 (Bloomberg) -- Microsoft Corp., trying to unsnarl legal entanglements on both sides of the Atlantic, will pay up to $1.1 billion to settle lawsuits alleging the world's biggest software maker violated California antitrust law.
Microsoft, which in November settled antitrust litigation with the Bush administration and nine states, still faces a raft of lawsuits from customers and competitors and an investigation by the European Commission. Friday's settlement is the clearest sign yet that the company has made resolving the encumbrances a high priority, an investor said.
``There's no question they'd like to clean the slate as much as possible,'' said Ned Riley, who helps manage $110 billion at State Street Global Advisors and owns Microsoft shares. ``They'd like to resolve all the issues and move on with the next generation of software.''
The California settlement must be approved by the state court judge overseeing the case as well customers who joined the lawsuit. Redmond, Washington-based Microsoft expects final approval by late summer or early fall. Purchasers will then have four months to submit claims.
A previous proposal to settle 150 class-action lawsuits by equipping schools in poor neighborhoods with $1 billion worth of computers and software was rejected last January. U.S. District Judge J. Frederic Motz said the plan would extend Microsoft's Windows software monopoly by favoring it in one of the few markets where it still faces competition.
Voucher Plan
California purchasers of Microsoft products will receive vouchers that can be used to buy any manufacturer's personal computer and software that runs on it, Microsoft General Counsel Brad Smith said. Two-thirds of unclaimed funds will go to California schools in low-income areas; the rest will revert to Microsoft.
Microsoft, which faces similar lawsuits in 16 states and the District of Columbia, is trying to clear up litigation after a federal appeals court in 2001 found the company illegally protected its Windows operating system monopoly. The ruling is binding in many of the cases, making them easier to win, legal analysts have said.
``This agreement marks a significant step forward in our work to resolve our antitrust legal issues,'' Smith said on a conference call. ``Today's settlement resolves the cases that represented, by a very substantial margin, the largest group of lawsuits.''
Funds Set Aside
Microsoft is still calculating how much of the $1.1 billion it may ultimately have to pay, Smith said. The answer will depend on the number of people who file eligible claims and other factors. The company set aside $660 million to cover antitrust lawsuits and plans to say whether it expects to adjust that figure on a Jan. 16 conference call previously scheduled to discuss earnings.
Microsoft's shares rose 11 cents to $55.92 as of 4 p.m. New York time in Nasdaq Stock Market trading. The settlement was announced after trading finished.
People who bought Microsoft operating systems or programs for word processing and spreadsheets for use in California between Feb. 18, 1995 and Dec. 15, 2001 are eligible for a voucher, Smith said. Vouchers will range from $5 to $29 depending on the type of product consumers purchased.
Eugene Crew, the lawyer representing the plaintiffs, said about 13 million consumers and businesses had joined the suit.
``Without a doubt this is the largest settlement of any case under California antitrust law,'' Crew said in an interview.
California is one of only about 20 states that allow consumers to sue businesses for overcharges even if they purchased goods indirectly from a third party. Most of the 16 other states where cases are pending against Microsoft also allow indirect purchasers to sue businesses, said Crew.
Setback
Microsoft was dealt a setback in the case in October when a California judge ruled that the U.S. appellate court's June 2001 ruling that Microsoft had violated federal antitrust laws could be used in the consumers' suit.
Microsoft had sought to keep the findings from being given to the jury in the California case, which was scheduled to go to trial Feb. 24. Microsoft agreed to settle the U.S. case after the appeals court ruling.
On another front in Microsoft's antitrust battles, a federal judge in Maryland said yesterday the company must face multimillion-dollar antitrust damage claims by software industry rivals Burst.com and Be Inc.
Judge Motz said the companies presented ``sufficient allegations'' that they suffered economic harm when Microsoft illegally defended its Windows monopoly for personal computer operating software.
By Dan Goodin
San Francisco, Jan. 11 (Bloomberg) -- Microsoft Corp., trying to unsnarl legal entanglements on both sides of the Atlantic, will pay up to $1.1 billion to settle lawsuits alleging the world's biggest software maker violated California antitrust law.
Microsoft, which in November settled antitrust litigation with the Bush administration and nine states, still faces a raft of lawsuits from customers and competitors and an investigation by the European Commission. Friday's settlement is the clearest sign yet that the company has made resolving the encumbrances a high priority, an investor said.
``There's no question they'd like to clean the slate as much as possible,'' said Ned Riley, who helps manage $110 billion at State Street Global Advisors and owns Microsoft shares. ``They'd like to resolve all the issues and move on with the next generation of software.''
The California settlement must be approved by the state court judge overseeing the case as well customers who joined the lawsuit. Redmond, Washington-based Microsoft expects final approval by late summer or early fall. Purchasers will then have four months to submit claims.
A previous proposal to settle 150 class-action lawsuits by equipping schools in poor neighborhoods with $1 billion worth of computers and software was rejected last January. U.S. District Judge J. Frederic Motz said the plan would extend Microsoft's Windows software monopoly by favoring it in one of the few markets where it still faces competition.
Voucher Plan
California purchasers of Microsoft products will receive vouchers that can be used to buy any manufacturer's personal computer and software that runs on it, Microsoft General Counsel Brad Smith said. Two-thirds of unclaimed funds will go to California schools in low-income areas; the rest will revert to Microsoft.
Microsoft, which faces similar lawsuits in 16 states and the District of Columbia, is trying to clear up litigation after a federal appeals court in 2001 found the company illegally protected its Windows operating system monopoly. The ruling is binding in many of the cases, making them easier to win, legal analysts have said.
``This agreement marks a significant step forward in our work to resolve our antitrust legal issues,'' Smith said on a conference call. ``Today's settlement resolves the cases that represented, by a very substantial margin, the largest group of lawsuits.''
Funds Set Aside
Microsoft is still calculating how much of the $1.1 billion it may ultimately have to pay, Smith said. The answer will depend on the number of people who file eligible claims and other factors. The company set aside $660 million to cover antitrust lawsuits and plans to say whether it expects to adjust that figure on a Jan. 16 conference call previously scheduled to discuss earnings.
Microsoft's shares rose 11 cents to $55.92 as of 4 p.m. New York time in Nasdaq Stock Market trading. The settlement was announced after trading finished.
People who bought Microsoft operating systems or programs for word processing and spreadsheets for use in California between Feb. 18, 1995 and Dec. 15, 2001 are eligible for a voucher, Smith said. Vouchers will range from $5 to $29 depending on the type of product consumers purchased.
Eugene Crew, the lawyer representing the plaintiffs, said about 13 million consumers and businesses had joined the suit.
``Without a doubt this is the largest settlement of any case under California antitrust law,'' Crew said in an interview.
California is one of only about 20 states that allow consumers to sue businesses for overcharges even if they purchased goods indirectly from a third party. Most of the 16 other states where cases are pending against Microsoft also allow indirect purchasers to sue businesses, said Crew.
Setback
Microsoft was dealt a setback in the case in October when a California judge ruled that the U.S. appellate court's June 2001 ruling that Microsoft had violated federal antitrust laws could be used in the consumers' suit.
Microsoft had sought to keep the findings from being given to the jury in the California case, which was scheduled to go to trial Feb. 24. Microsoft agreed to settle the U.S. case after the appeals court ruling.
On another front in Microsoft's antitrust battles, a federal judge in Maryland said yesterday the company must face multimillion-dollar antitrust damage claims by software industry rivals Burst.com and Be Inc.
Judge Motz said the companies presented ``sufficient allegations'' that they suffered economic harm when Microsoft illegally defended its Windows monopoly for personal computer operating software.
- Mensagens: 23939
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Noticias - Fim de Semana 11/01/2003 - 12/01/2003
Índices norte-americanos invertem tendência e encerram no sentido ascendente (act)
As Bolsas nos Estados Unidos (EUA) que iniciaram em queda, encerraram a subir, com o Nasdaq a crescer 0,65 % e o Dow Jones a valorizar 0,10%, com os especialistas a desdramatizarem a redução de postos de trabalho em Dezembro hoje anunciada.
O Nasdaq [CCMP] encerrou nos 1.447,75 pontos e, o Dow Jones [INDU] subiu para os 8.784,95 pontos.
O Departamento do Trabalho revelou dados do desemprego que contrariaram as estimativas dos economistas, que apontavam para a criação de 20 mil novos postos de trabalho. Ao invés, os indicadores revelaram que se assistiu a uma redução de 101 mil empregos.
Na abertura, os índices reagiram a esta informação, tendo os investidores reanimado o mercado, depois dos especialistas do mercado valorizaram a criação de empregos no sector da distribuição.
A recuperação lenta do mercado é um dado assumido pelos investidores que olharam, nos dados hoje divulgados, para os factores favoráveis na economia.
O anunciado corte nos impostos e aposta na criação de emprego do presidente George W. Bush foram tidos em conta nas negociações da sessão bolsista em Nova Iorque.
As acções da McDonalds subiram 1,90% e da Coca-Cola aumentaram 1,68%. A quedas dos títulos da Wal-Mart e da Iuntel ajudaram o índice Dow Jones a recuperar as perdas iniciais.
O índice Nasdaq, por seu lado, foi auxiliado na tendência ascendente pelas acções da operadoras Nortel, da tecnológica Lucent, além das apreciações da Yahoo! e da Oracle.
ADR da PT subiu 3,06% em Nova Iorque
O «American Depositary Receipt» (ADR) da Portugal Telecom (PT) [PTC] fechou nos 7,41 dólares (7,01 euros), com uma valorização de 3,06 %, enquanto em Lisboa a empresa fechou nos 7,03 euros. Cada ADR representa uma acção da PT.
O ADR da Electricidade de Portugal (EDP) [EDP] fixou-se nos 17,67 dólares ( 16,71 uros) a cair 0,34 %, enquanto em Lisboa a empresa fechou nos 1,67 euros. Cada ADR equivale a 10 acções da eléctrica nacional.
Fonte: Canal de Negócios 2003/01/10 21:23:53h
As Bolsas nos Estados Unidos (EUA) que iniciaram em queda, encerraram a subir, com o Nasdaq a crescer 0,65 % e o Dow Jones a valorizar 0,10%, com os especialistas a desdramatizarem a redução de postos de trabalho em Dezembro hoje anunciada.
O Nasdaq [CCMP] encerrou nos 1.447,75 pontos e, o Dow Jones [INDU] subiu para os 8.784,95 pontos.
O Departamento do Trabalho revelou dados do desemprego que contrariaram as estimativas dos economistas, que apontavam para a criação de 20 mil novos postos de trabalho. Ao invés, os indicadores revelaram que se assistiu a uma redução de 101 mil empregos.
Na abertura, os índices reagiram a esta informação, tendo os investidores reanimado o mercado, depois dos especialistas do mercado valorizaram a criação de empregos no sector da distribuição.
A recuperação lenta do mercado é um dado assumido pelos investidores que olharam, nos dados hoje divulgados, para os factores favoráveis na economia.
O anunciado corte nos impostos e aposta na criação de emprego do presidente George W. Bush foram tidos em conta nas negociações da sessão bolsista em Nova Iorque.
As acções da McDonalds subiram 1,90% e da Coca-Cola aumentaram 1,68%. A quedas dos títulos da Wal-Mart e da Iuntel ajudaram o índice Dow Jones a recuperar as perdas iniciais.
O índice Nasdaq, por seu lado, foi auxiliado na tendência ascendente pelas acções da operadoras Nortel, da tecnológica Lucent, além das apreciações da Yahoo! e da Oracle.
ADR da PT subiu 3,06% em Nova Iorque
O «American Depositary Receipt» (ADR) da Portugal Telecom (PT) [PTC] fechou nos 7,41 dólares (7,01 euros), com uma valorização de 3,06 %, enquanto em Lisboa a empresa fechou nos 7,03 euros. Cada ADR representa uma acção da PT.
O ADR da Electricidade de Portugal (EDP) [EDP] fixou-se nos 17,67 dólares ( 16,71 uros) a cair 0,34 %, enquanto em Lisboa a empresa fechou nos 1,67 euros. Cada ADR equivale a 10 acções da eléctrica nacional.
Fonte: Canal de Negócios 2003/01/10 21:23:53h
- Mensagens: 23939
- Registado: 5/11/2002 11:30
- Localização: 4
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