Thursday, February 20, 2003

Business digest



From wire reports

Oil price hits new 29-month high

NEW YORK - The price of oil is nearing levels not seen since 1990 as the U.S. prepares for a potential war in Iraq at a time when crude supplies are extremely tight.

The March crude contract rose 20 cents Wednesday to finish the day at $37.16 per barrel, a new 29-month peak.

Oil futures on the New York Mercantile Exchange are just a nickel shy of closing at their highest level since Oct. 16, 1990. The highest settlement price since then was $37.20 on Sept. 20, 2000.

"People have to understand that we went into the beginning of this year with very low stocks," said Lawrence Goldstein, president of the New York-based Petroleum Industry Research Foundation. Since then, oil prices have jumped 19 percent - a trend Goldstein and other oil analysts attribute to the increased likelihood of military action in Iraq.

U.S. Bancorp to spin off its securities unit

MINNEAPOLIS - U.S. Bancorp, the eighth-largest U.S. bank, will spin off its Piper Jaffray securities unit after a three-year bear market sapped demand for underwriting stock sales and advising on mergers.

Shareholders of Minneapolis-based U.S. Bancorp will receive shares of the new company in a tax-free dividend distribution, U.S. Bancorp spokesman Steve Dale said. The bank will no longer hold an equity stake in the firm.

U.S. Bancorp hired UBS Warburg and Goldman Sachs Group Inc. to explore the spinoff in recent weeks, according to people familiar with the matter. Revenue at Piper Jaffray, purchased by U.S. Bancorp in 1998 for $730 million, declined last year.

Lucent names CEO Russo as chairwoman

MURRAY HILL, N.J. - Lucent Technologies Inc. has named president and CEO Patricia Russo as chairwoman of the telecommunications equipment maker.

Russo, 50, retains the CEO title and succeeds Henry Schacht. There are no plans to fill the position of president, spokeswoman Mary Lou Ambrus said.

Schacht, 68, is to remain as an outside member of Lucent's board. Russo said she has asked him to serve as her senior adviser, and he will oversee the company's litigation strategy.

Schacht, who led the company during its first year after being spun off from AT&T, returned in fall 2000 to try to help revive struggling Lucent.

War jitters trigger Disney hiring freeze

LOS ANGELES - The possibility of war in Iraq and continuing concerns about the economy have prompted a hiring freeze at the Walt Disney World Resort in Florida.

The freeze is for full-time employees and will last until tourism picks up, Disney said Wednesday.

"Recent events, specifically uncertainty about war, make it difficult to assess the future impact on our business," said Leslie Goodman, a spokeswoman for Disney's Theme Parks and Resorts Division.

The Orlando resort employs 53,500 people, including seasonal workers. The freeze does not apply to seasonal employees.

Smucker sees earnings below forecast

NEW YORK - Shares of J.M. Smucker Co. fell Wednesday, after the company suggested an earnings forecast for next fiscal year below Wall Street expectations, according to analysts.

Shares of the Orrville, Ohio-based maker of jams, jellies and other food products closed at $35.02, down $4.02, or 10 percent, on heavy volume on the New York Stock Exchange.

At the Consumer Analyst Group of New York conference in Scottsdale, Ariz., on Tuesday, Smucker said it sees earnings for the fiscal year beginning in May to grow 5 percent to 6 percent, said John M. McMillin, an analyst with Prudential Financial who attended the conference.

Talks continue in FCC phone competition vote

WASHINGTON - A weeklong delay in a vote on phone competition rules apparently did not resolve deep divisions at the Federal Communications Commission over rolling back requirements for companies to share access to transmission networks.

On Feb. 10, FCC Chairman Michael Powell postponed the vote until today, hopeful he could win over a third commissioner on the five-member panel for a plan favored by the regional Bells - BellSouth Corp., SBC Communications, Verizon Communications and Qwest Communications.

Negotiations continued Wednesday, but industry officials said they expected no change in the commissioners' positions.

The vote is the commission's last chance to meet a court-ordered deadline to rewrite the policy before existing rules are struck down.

Former Tyco CFO facing federal charges

CONCORD, N.H. - Tyco International Ltd.'s former chief financial officer, already charged with stealing more than $600 million from the company, now faces federal tax evasion charges.

Mark Swartz, 45, has been indicted by a federal grand jury in Concord on charges of evading almost $5 million in federal income taxes, the U.S. attorney's office said Wednesday.

The charges allege that Swartz failed to include on his 1999 tax return a $12.5 million bonus he received from Tyco in August 1999. The indictment said the bonus was the forgiveness of a $12.5 million debt Swartz owed the company.

Steel workers approve new one-year contract

WEIRTON, W.Va. - Union workers at Weirton Steel Corp. have approved a new one-year contract that cuts their pay by 5 percent and freezes accrued pension benefits at current levels.

Members of the Independent Steelworkers Union voted 1,842 to 620 to approve the contract, which also cancels a $1 per hour wage increase that had been planned for April 1. Currently, the average wage for a union worker is about $19 an hour.

The freeze is aimed at stopping a $400 million liability from becoming any larger.



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