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Closing Bell: Verizon Communications


Since JetBlue Airways (JBLU

) took off in early 2001, CEO David Neeleman has been able to do no wrong. He expanded his New York upstart from coast to coast, winning customer plaudits for its bargain fares and in-flight TV. And he made money doing it.

But now, Neeleman has been humbled. On Sept. 22, the Electronic Privacy Information Center accused JetBlue of violating its own privacy policy by giving a defense contractor passenger data last year as part of a security project. The nonprofit group filed a complaint with the Federal Trade Commission and asked it to investigate. A day later, JetBlue was facing a civil suit.

Neeleman, 44, moved fast. He zapped e-mail apologies to irate customers and hired Deloitte & Touche to review what went wrong. "I take responsibility," he says. "It won't happen again." But with no sign that the flap will hurt traffic, investors sloughed it off: JetBlue stock hit $60.50, an all-time high, on Sept. 23, as it joined the Standard & Poor's Midcap 400 index. The do-not-call list has been put on hold. On Sept. 23, a week before the list was to take effect, a federal district judge in Oklahoma ruled that the Federal Trade Commission had no authority to establish the registry, which attracted some 50 million people seeking to block unwanted calls. But 50 million people can't be wrong, especially when politicians are in the mix. House Energy & Commerce Committee Chairman Billy Tauzin (R-La.) and ranking member John Dingell (D-Mich.) say they'll move quickly to give the FTC new power. Still, telemarketers vow to take the battle to the U.S. Supreme Court. The Murdoch dynasty may soon control the English skies. If his father has his way, James Murdoch, News Corp. (NWS

) Chairman Rupert Murdoch's 30-year-old son, will become CEO of News Corp.'s 34.5%-owned British Sky Broadcasting Group. James, who currently runs News' Asian-based Star TV satellite service, would succeed BSkyB (BSY

)'s longtime CEO Tony Ball, who will remain a consultant through May, 2004. The BSkyB board said independent board members will choose a successor to Ball, who sources say recently had disagreements with Murdoch, the board's chairman. BSkyB's stock slid amid concerns about the younger Murdoch's relative lack of experience. Are the boom times back on Wall Street? On Sept. 23, Lehman Brothers and Morgan Stanley reported third-quarter profits double those of the year before, and Goldman Sachs (GS

)' profits jumped 30%. But investment bankers aren't high-fiving each other just yet. Bond trading helped boost most firms' bottom lines. Revenues from underwriting stocks and advising on mergers improved only slightly. Morgan Stanley and Goldman both told investors that their equities businesses are picking up. While the Street has definitely entered a recovery mode, it's not yet a strong rebound. On Sept. 22, the Federal Communications Commission approved a controversial $3.5 billion merger that will create the largest Spanish-language media conglomerate in the U.S. Leading Hispanic cable and broadcast TV network Univision Communications (UVN

) will team up with the No. 1 Spanish-language radio chain Hispanic Broadcasting (HSP

) to compete for the eyes and ears of the nation's 38 million Hispanics. The 3-to-2 vote split along partisan lines. The Republican majority, led by Chairman Michael Powell, argued that the merger would enable the Spanish-language giant to compete better with mainstream U.S. media. Some Hispanics in Congress opposed the deal on the grounds that Univision, led by a non-Hispanic chairman, would have too much control over the U.S. Hispanic media. -- Nintendo (NTDOY

) cut the U.S. price of its Game Cube console by a third, to $99.

-- The U.S. Justice Dept. indicted PurchasePro execs for allegedly inflating revenues in a scheme with AOL.

-- Cisco Systems (CSCO

) authorized the buyback of $7 billion of its common shares. Times are still tough in telecom. Citing weak demand, Verizon (VZ

) Communications on Sept. 23 lowered its 2003 earnings forecast to a range of $2.56-$2.60 a share. That's down from an earlier $2.70-$2.80. Verizon shares slid 4.6%, to $33.13, on the news.


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