|
|
ONLINE FEATURES
Book Reviews
BW Video
Columnists
Interactive Gallery
Newsletters
Past Covers
Philanthropy
Podcasts
Special Reports
BLOGS
Auto Beat
Bangalore Tigers
Blogspotting
Brand New Day
Byte of the Apple
Economics Unbound
Eye on Asia
Fine On Media
Green Biz
Hot Property
Investing Insights
Management IQ
NEXT: Innovation
NussbaumOnDesign
Tech Beat
Working Parents
TECHNOLOGY
J.D. Power Ratings
Product Reviews
Tech Stats
Wildstrom: Tech Maven
AUTOS
Home Page
Auto Reviews
Classic Cars
Car Care & Safety
Hybrids
INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | |
OCTOBER 16, 2006
Edited by Harry Maurer The Dow Does It Like a groundhog gingerly poking its nose above ground, the stock market finally pushed past its previous peak. Having set a new mark on Oct. 3, the Dow on Oct. 4 stood at 11,850.6, about 1% above its high on Jan. 14, 2000. The big winners? Two old-economy companies: Altria (MO ), up 220% since the 2000 peak, and Caterpillar (CAT ), with about a 150% gain. Still, while the Dow, with only 30 stocks, stands at record heights, broader-based indexes don't look so spiffy. The S&P 500 languishes 12% below its 2000 high, while the Russell 3000 remains 8% under. One more cautionary note: Adjusting for inflation, the value of the Dow today is 12% lower than it was in January, 2000. Will that groundhog come all the way out into the sun? HP: Indictment Time On Oct. 4, California Attorney General Bill Lockyer filed four felony charges each against ex-Hewlett-Packard (HPQ ) Chairwoman Patricia Dunn, ethics officer Kevin Hunsaker, and four others involved in the corporate snooping scandal.   Airbus' Late Arrival This plane just doesn't want to take off. On Oct. 3, Airbus CEO Christian Streiff disclosed that the doubledecker A380 isn't some months behind schedule but a full two years. That'll slice $6.1 billion off profits over the next four years. Production has stalled because some factories used incompatible design software, so the electrical wiring doesn't fit into the fuselage. Streiff plans billions in cost savings to offset the financial hit. But Airbus' woes could deepen if the A380's biggest customer, Emirates, cancels some of its 45-plane order. See "Airbus—Stalled on the Runway" Know When To Hold 'Em... Apollo Management and Texas Pacific Group shoved lots of chips into the pot, bidding $15.1 billion for gambling giant Harrah's Entertainment (HET ), the company said on Oct. 2. But the paydays may be over for another sector of the biz: Internet gambling. The House and Senate passed a bill on Sept. 30 that prohibits such businesses from accepting payments for betting. It requires the Treasury Dept. and the Fed to force banks to block transactions. Online gaming stocks sank. See "Harrah's: Long Odds on the LBO" and "Online Gambling Still in the Cards?" GM: No Deal Forget about the grand alliance between GM (GM ) and Renault-Nissan that Kirk Kerkorian proposed three months ago. GM's board decided on Oct. 3 that the goodies from an alliance would flow mostly to Renault. To make that up, GM wanted $2 billion to $3 billion, says a source close to Renault. GM also wanted to be free to enter joint ventures with other carmakers. Renault CEO Carlos Ghosn said no thanks. So Kerkorian, who's talking about hiking his 9.9% stake to 12%, will have to find another way to lift GM's stock or wait for CEO Richard Wagoner's fix-it job to work. Ghosn may soon be talking to Ford (F ). See "What Will Kirk Do Now?" The EU vs. Intel? U.S. tech outfits may not have much to fear these days from domestic trustbusters, but Europe is another matter. Not long after a federal court in Delaware on Sept. 26 threw out big chunks of Advanced Micro Devices' (AMD ) antitrust suit against Intel (INTC ), the EU seemed to be gearing up for action against the No. 1 chipmaker following an inquiry into whether it used a mix of incentives and threats to keep retailers from selling AMD-equipped computers. The EU already is trying to fine Microsoft (MSFT ) nearly $1 billion for allegedly squashing competition. An Intel spokesman says its practices are fair and legal. See "EU Ready to Pounce on Intel?" A More Muscular Yuan Well, it's something. On Sept. 28 the Chinese yuan broke through the 7.90 mark against the dollar. And notions that Beijing might loosen the currency leash further were reinforced by People's Bank of China Governor Zhou Xiaochuan, who in Caijing Magazine on Oct. 1 called for greater flexibility driven by "market forces." That still may not soothe Washington hawks who think an undervalued currency is to blame for China's monster trade surpluses. The yuan has gained only 2.6% against the dollar since July, 2005, when Beijing moved from a pegged rate to a managed float. Sony Shock It all started back in August with reports that Dell (DELL ) laptops had caught fire. That led to a recall of Sony (SNE ) lithium-ion batteries in Dell machines. Apple (AAPL ) soon followed suit. Then, on Sept. 28, Sony issued a global recall for the glitchy cells, triggering recalls by Fujitsu (FTJSY ), IBM (IBM ), Lenovo, and Toshiba (TOSBF ). The problem could affect up to 10 million computers and cost the company $500 million. Those numbers, combined with other Sony snafus, including delays on the PS3 video game system, have zapped the stock by nearly 15% since Aug. 14. Aluminum Allies Move over, Alcoa (AA ). On Oct. 4, two Russian aluminum giants, Rusal and Sual, along with Swiss commodities trader Glencore International, merged to become the world's No. 1 producer. The merger is worth almost $30 billion and will create a colossus, also to be called Rusal, with annual output of some 4 million metric tons and revenues north of $9 billion. It's the latest example of a drive led by President Vladimir Putin to create "national champions" in everything from energy to aerospace. See "Russia Sees the Birth of an Aluminum Giant" Options Watch Apple (AAPL ) says its team did nothing wrong, but its captain still issued a mea culpa. The company on Oct. 4 reported that a board committee investigating the handling of options found irregularities in 15 instances between 1997 and 2002, but that no current executives engaged in misconduct. CEO Steve Jobs knew of some of the incidents but didn't benefit from them. "I apologize to Apple's shareholders and employees for these problems, which happened on my watch," Jobs said. Ex-CFO Fred Anderson stepped down from the board. Scandal Of The Week Contain the damage and change the subject: That seems to be the strategy of GOP leaders in dealing with revelations that Florida Representative Mark Foley sent sexually explicit e-mails to teenage boys who worked as House pages. House Speaker Dennis Hastert blamed Foley for lying to the leadership and asked the FBI and Florida officials to investigate any possible criminal violations by the six-term lawmaker, who resigned on Sept. 30 after being confronted with his e-mails by an ABC News reporter. Hastert, facing calls for his resignation from some family-values conservatives, tried to rally his base by telling Rush Limbaugh on Oct. 3 about the record high on Wall Street and the dangers to business of Democrats grabbing control of the House. Many in the corporate community feel they face a lose-lose choice come November: a GOP majority beset by scandals and charges of fiscal mismanagement, or a Democratic one that might raise their taxes and poke into their industries.
| | |
 Copyright 2006, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version