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Closing Bell: Visteon

Posted on May 08, 2005

Four months ago, Alan Mulally, CEO of Boeing's (BA

) commercial airplane unit, faced stinging criticism over slow airplane sales. He definitely got the message. Since then, sales have soared. On Apr. 26, Air Canada and Air-India ordered a total of 80 of Boeing's twin-engine, long-range 777s and its new fuel-sipping 787 Dreamliner. Airlines are flocking to the composite jet, which uses 20% less fuel than other planes its size. The Dreamliner has racked up 244 orders and commitments in just 15 months.

What's more, Boeing's gross order book is filling up much faster than last year -- 348, vs. 277 at this time in 2004. Shares are gaining altitude, too: They're up 18% during the past three months. The good news persuaded investors to shrug off a 14% drop in first-quarter profits, which were hurt by higher pension and compensation costs. Boeing shares inched ahead 1%, to $59.66, on Apr. 27. For Mulally, who covets the vacant top spot at Boeing, the brass ring is within reach. See you in court. That's what the Financial Planning Assn. is preparing to tell the Securities & Exchange Commission. The group is expected to file suit to try and overturn an agency rule that exempts most stockbrokers who give financial advice from the stringent investor protection standards required for registered investment advisers. Advisers must always put a client's financial interests first; brokers only need to determine whether securities are suitable for a client based on her sophistication and appetite for risk. Most FPA members are advisers, so the group wants its broker rivals held to the same standard. Many more cardholders are charging up a storm on American Express (AXP

) cards, thanks to new partners and aggressive investments in marketing and rewards programs. A new allegiance with MBNA (KRB

) -- which began issuing AmEx cards late last year after the Supreme Court struck down rules by Visa and MasterCard that prohibited U.S. banks from issuing rival cards -- appears to be paying off: For the fifth consecutive quarter, the New York-based card and travel outfit reported record earnings. Profits rose 19%, to $946 million. AmEx cardholders spent 9.5% more than in 2004, no doubt because the cards are accepted at more venues. More than a year after walking away from merger talks, Microsoft (MSFT

) and SAP (SAP

) have agreed to jointly develop a product for the first time. The application, code-named Mendocino, will create more direct links between SAP's business planning software and Microsoft's widely used Office suite. The goal: to make it simpler for users to jump between applications from both software giants. That could give SAP a leg up in its competition with Oracle. (ORCL

) Microsoft first considered buying SAP two years ago after Oracle announced plans to acquire PeopleSoft, and the two talked for several months before deciding against a deal. While short of a merger, the Mendocino pact represents a formidable alliance. The bad news keeps coming at American International Group. (AIG

) Regulators are now looking into whether the insurance giant improperly booked workers' compensation premiums through 1997, thus potentially reducing millions in contributions to state funds. Meanwhile, AIG's internal probe is likely to uncover more accounting errors, on top of the $1.7 billion reduction in net worth that the company projected after its initial investigation in late March. A company spokesman declined to comment on the state of the probes, saying that AIG will "disclose further developments when appropriate." Investors will soon get a clearer picture of AIG's finances when the company files its annual report, due on Apr. 30. -- United Airlines (UALAQ

) is willing to grant federal pension insurers up to $1.5 billion to settle bankruptcy claims.

-- Best Buy (BBY

) will open its first store in China and buy back $1.5 billion of its shares.

-- The U.S. fell to No. 16 from 13 in a global ranking of home broadband use. Investors punished auto parts maker Visteon (VC

) after it reported a first-quarter loss three times larger than expected. Shares skidded 15%, to $3.76, on Apr. 27. Visteon has been hurt by declining auto sales at Ford Motor (F

), its former parent and biggest customer.

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