Borrowing on credit cards, auto loans and other types of consumer debt rose at an annual rate of 6.6 percent in January, the fastest pace in three months, the Federal Reserve said. Strong post-holiday sales at retail stores fueled the rise, which was double what many economists had expected. They predicted further gains in borrowing in the months ahead, bolstered by continued strength in hiring. Total consumer debt now stands at a record $2.12 trillion.
Verizon Shrinks Plan to Divest Lines
Verizon's merger with MCI would mean scaling back plans to divest local access lines, according to Doreen A. Toben, Verizon's chief financial officer. She said at an investor conference in Florida that the sale or spinoff of as many as 15 million of Verizon's 53 million lines in 29 states and the District "is going to take longer than we initially indicated and most likely be a smaller transaction." Verizon plans to buy Ashburn-based MCI for $6.75 billion.
A federal jury in New York ended its second day deliberating accounting fraud charges against former WorldCom chief executive Bernard J. Ebbers, shown leaving court with wife Kristie, left. No verdict was reached.
(Louis Lanzano -- AP)
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Lockheed Martin workers at a Marietta, Ga., plant that builds the F/A-22 fighter jet and the C-130J transport plane said they will strike today to maintain health care coverage for retired employees. International Association of Machinists members turned down the defense contractor's latest offer on Feb. 27 mainly because it would have terminated post-retirement health insurance for new employees, an officer said.
Shell's final audit of its 2002 reserves showed they were overstated by 41 percent, according to the company's amended annual report. Royal Dutch/Shell Group, Europe's second-largest oil company, said proven oil and gas reserves were 13.72 billion barrels at the end of 2002, compared with the 19.35 billion originally claimed. The restatements have led to investor lawsuits, the loss of three senior executives and more than $150 million in fines.
Airlines had their safest year in 2004, with 428 people killed of the 1.8 billion passengers who flew, the International Air Transport Association said. Accidents rose to 103, from 99 in 2003, while global traffic increased 15 percent. Fatalities have been declining steadily since a peak of 1,418 deaths in 1996, the IATA said.
McGraw-Hill, which owns Standard & Poor's and Business Week magazine, announced plans to acquire J.D. Power and Associates, known for rating customer satisfaction with products -- particularly cars -- and services. McGraw-Hill said the move is designed to strengthen its offerings in industry surveys and market research. Terms were not disclosed.
Reliability of U.S. autos improved, but Hyundai and other Asian companies still make the most trouble-free vehicles, according to a Consumer Reports survey. Customers reported an average of 17 problems per 100 vehicles for 2004 models from Chrysler, Ford and General Motors -- down from 18 in 2003 -- while Japanese and Korean automakers had a rate of 12 problems per 100 vehicles. Hyundai's Sonata was rated the most reliable vehicle.
T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday fell to 2.710 percent, from 2.715 percent last week. Rates on six-month bills rose to 2.935 percent, the highest rate since September 2001, from 2.925 percent. The actual return to investors is 2.767 percent for three-month bills, with a $10,000 bill selling for $9,931.50, and 3.021 percent for a six-month bill selling for $9,851.62. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 3.2 percent last week from 3.13 percent the previous week.
A California man was sentenced to 5 1/2 years in federal prison after using ChoicePoint and other database firms to steal personal information. Adedayo Benson, an illegal immigrant from Nigeria, pleaded guilty in November to three felony counts related to using or trying to use fake credit cards. His sister, Bibianna Benson, pleaded guilty to unlawful use of identification in September 2002 and was sentenced to 54 months.
The Securities and Exchange Commission named 19 executives, accountants and academics to an outside advisory panel to study the effect of the Sarbanes-Oxley corporate-governance law on small companies. James C. Thyen, chief executive of Kimball International, and Herbert S. Wander, a Chicago securities attorney, will head the advisory committee. The group will hold a public meeting in Washington in early April.
NASD charged former Knight Securities chief executive Kenneth Pasternak with failing to supervise an employee involved in fraudulent sales. John Leighton, Knight's former head of institutional sales, was also charged with supervisory lapses regarding the sales, which NASD said were made by Knight's leading institutional trader, Leighton's brother. Knight reached a $79 million settlement with regulators last year in connection with the sales.
DirecTV Group said Mitch Stern, who ran the company's U.S. operations, left effective yesterday. Chief executive Chris Carey will oversee operations formerly run by Stern, who will not be replaced, the company said.
INTERNATIONAL
China vowed to keep exchange-rate controls, rejecting charges from the United States and other trading partners that pegging the currency to the dollar gives Chinese exporters an unfair price advantage. At the annual session of the Chinese legislature, top officials also said they will hold down industrial investment to rein in surging growth and restrain inflation. They said they would tighten controls on land use to conserve scarce farmland and to defuse public anger over seizures of land and housing.
A federal court in Mexico ordered jeans maker Levi Strauss to pay $45 million to a former contractor wrongly targeted in a police raid seeking to crack down on clothing counterfeiters. The judgment vindicates Comexma, the Mexico City contractor that sued Levi's for the fallout from a June 2001 incident at its plant. A Levi's spokesman said the company would appeal.
A German stock market regulator recommended sanctions against Citigroup for bond trading last year that has triggered investigations into possible market manipulation. Government authorities said they passed on results of their investigation to a trading platform's sanctions committee. If the panel confirms improper conduct, Citigroup and individual traders could face temporary trading suspensions and fines of up to $330,000.
Ravelston, the Toronto holding company Conrad Black uses to control his newspaper businesses, boosted its bid to take publishing company Hollinger private by 4.8 percent after winning the support of Hollinger's independent directors. Ravelston, which owns 78 percent of Hollinger, made a cash bid of $47.4 million. The bid was to expire at midnight.
LOCAL BUSINESS
Carlyle Group, a District-based private-equity investor, plans to purchase the publicly traded stock of New York-based Insight Communications, the country's ninth-largest cable television operator. Carlyle would pay about $550 million for 86 percent of the stock not currently owned by Chairman Sidney R. Knafel and chief executive Michael S. Willner, who would retain control of five of nine seats on the company's board. The deal still requires approval of public shareholders. Also, Carlyle's James A. Baker III, a former secretary of state and Treasury secretary, will retire next month as senior counselor.
EARNINGS
Marvel Enterprises, publisher of the Spider-Man and X-Men comic books, said fourth-quarter profit more than doubled, to $30.1 million. Revenue rose 17 percent, to $100.5 million. For the year, earnings declined 18 percent, to $124.9 million, but revenue rose 48 percent, to $513.5 million.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.
