Already a Bloomberg.com user?
Sign in with the same account.
Don't hold your breath for housing to get back on a solid foundation. New-home sales tumbled 4% in February—Wall Street economists were banking on 6.7% growth—and government statisticians sharply cut previously reported sales estimates for November through January. That cooling demand is crunching homebuilders: Florida-based Lennar (LEN
) on Mar. 27 said earnings fell 73% in the quarter ended Feb. 28, following similarly dour profit reports from KB Home (KBH
), Hovanian Enterprises (HOV
), and Toll Brothers (TOL
Mortgage lenders continue to get hammered, too. The New York Times said on Mar. 28 that subprime giant New Century Financial (NEWC
) could file for bankruptcy shortly. And BusinessWeek.com reported on Mar. 27 that federal investigators have launched a criminal probe into lending practices at Beazer (BZH
), the sixth-largest residential builder.See "Lennar Report Adds to Homebuilders' Gloom" Will laying off thousands help keep Citigroup (C
) CEO Charles Prince at the helm? The Wall Street Journal said on Mar. 26 that the bank may eliminate up to 15,000 positions, about 5% of the workforce, as part of a $1 billion restructuring scheme aimed at cutting costs and mollifying shareholders. The plan could become official when Citi reports earnings on Apr. 16. Initial investor reaction was lukewarm, with some analysts saying Prince may have to chop even more. Watch those exports: As BusinessWeek first reported on Feb. 1, heightened vigilance by the feds landed ITT in dutch for sending classified night-vision technology to prohibited nations, notably China. Now, ITT will pay. The company on Mar. 28 pleaded guilty to two felonies and agreed to a $100 million penalty, the largest ever for flouting arms export controls.See "ITT Pleads Guilty in Export Case" For rivals Intel (INTC
) and IBM (IBM
), the chip race never stops. On Mar. 26, Intel said it will lavish $2.5 billion on a wafer fab in China. Making chips locally will cut the need for costly shipping, and the technology infusion will please Beijing, improving relations in one of Intel's biggest markets. Two days later, Intel countered AMD's (AMD
) recent buy of graphics chipmaker ATI, announcing it will build graphics directly onto its processors soon. Big Blue, meanwhile, said it has created an optical chipset that will be able to download a high-definition movie in seconds. That chip could hit the market by 2010.See "Intel and AMD Take Chip Fight to China" Oracle (ORCL
) filed a Mar. 22 lawsuit against SAP that says employees associated with the German company stole some 10,000 computer files from Oracle's technical support system—then used them to improve its own products. In an unrelated event, SAP product development chief Shai Agassi said on Mar. 28 that he's quitting. He had been considered a candidate to succeed CEO Henning Kagermann. Alcatel-Lucent (ALU
) on Mar. 26 said it had captured a $6 billion, three-year contract with Verizon Wireless—a much-needed win for the equipment giant, the product of last year's $17 billion merger of France's Alcatel and New Jersey's Lucent Technologies. The deal, the biggest in Alcatel's history, follows a January profit warning that prompted many to question the combo's merits.See "Alcatel-Lucent Bags a Verizon Deal" NBC Universal and News Corp. (NWS
) announced on Mar. 22 that they'll join in creating their version of online video site YouTube—and that they'll treat copyright as holy writ. So much for the great China stock blowout. Since the 9% sell-off on Feb. 27 that took down global markets, mainland prices have resumed their incredible levitation act. On Mar. 28 the Shanghai & Shenzhen 300 Index finished up 0.7%, at a record 2797.65. It shot up 7.4% over the previous eight trading sessions, 37% for the year, and nearly 170% over 52 weeks.See "China Rides the Hyper-Growth Tiger" Boston Scientific's (BSX
) market-leading arterial stent business suffered yet another blockage. A study released on Mar. 26 of 2,287 patients with coronary disease found that stents were no better than drugs at heading off heart attacks over a 4 1/2 -year period. The company pointed out that the primary benefit of its stents is to reduce chest pain, but alarmed investors whacked the stock by 7% that day. As Tribune Co.'s (TRB
) halting sale process approached its Mar. 31 deadline, press accounts conferred lead-dog status on real estate investor Sam Zell. The reports put Zell's bid at around $8 billion. The news came as newspaper companies owning properties in large markets, including Tribune, reported nasty ad revenue drops in February. Open Skies may finally be on the horizon. On Mar. 22, European Union transport ministers approved a deal to lift restrictions on flights across the Atlantic, ending three decades of dogfights. Europeans won a key concession that calls for the deal to be scrapped unless Washington begins talks within two years to open its domestic routes and allow more foreign investment in U.S. carriers. The Bush Administration is expected to sign off on the deal on Apr. 30, and it's slated to take effect in March, 2008.See "A Flight Plan Through Open Skies" Former White House Budget Director David Stockman earned notoriety in the 1980s for publicly criticizing the Reagan Administration's budget even as he lobbied Congress to pass it. Now he finds himself in considerably hotter water. On Mar. 26 the Justice Dept. accused Stockman of duping lenders and investors in a complicated plot to conceal financial woes at Collins & Aikman. Stockman resigned as president and CEO in 2005, just before the Michigan auto-parts maker filed for bankruptcy. The onetime boy wonder—he was just 35 at the time of the budget snafu—has pleaded not guilty to felony counts of conspiracy, securities fraud, bank fraud, and wire fraud. He says he lost a fortune trying to save the company, moving into a motel near corporate headquarters in the final days, working without pay, and absorbing millions of dollars in expenses. Prosecutors also charged former CFO J. Michael Stepp, former Controller David Cosgrove, and former Purchasing Director Paul Barnaba, all of whom also declared their innocence.