The Associated Press
Monday, March 14, 2011; 6:17 PM
Japan central bank feeds markets money after quake
TOKYO (AP) - Japan's central bank pumped a record $184 billion into money markets and took other measures to protect a teetering economy Monday, as the Tokyo stock market nose-dived following a devastating earthquake and tsunami.
The benchmark Nikkei 225 stock average slid 6.2 percent in its first day of trading since the 8.9-magnitude quake centered on northeastern Japan struck Friday, triggering enormous waves that swamped towns and killed thousands.
Escalating concerns about the financial and economic fallout - plus the risk of meltdown at damaged nuclear power reactors - triggered a plunge that hit all sectors of the stock market. The broader Topix index lost 7.5 percent.
The Bank of Japan moved quickly to try to keep financial markets calm. By flooding the banking system with cash, it hopes banks will continue lending money and meet the likely surge in demand for post-earthquake funds.
Japan quake to cost insurers almost like Katrina
LONDON (AP) - Japan's devastating earthquake and tsunami may cost the global insurance industry as much as $60 billion, which would make the disaster the most expensive ever behind Hurricane Katrina, according to early estimates.
Global insurance stocks took a hit on Monday as traders reacted to images of flattened towns and ravaged coast lines, but analysts stressed there are some mitigating factors, including the fact that damage to residential property is covered by a state-backed system and that nuclear damage is excluded from policies.
Analysts said those elements mean insurance costs will likely fall short of those associated with the Gulf Coast's Hurricane Katrina in 2005, though the full cost of Friday's 8.9 magnitude quake won't be known for some time.
Expenses will continue to mount due to ongoing aftershocks from the massive March 11 earthquake off the coast of northeast Japan and shutdowns at electronics factories, car manufacturers and oil refineries. The official death toll of 2,800 is expected to rise above 10,000.
Berkshire Hathaway to buy Lubrizol for $9B in cash
OMAHA, Neb. (AP) - Warren Buffett's company said Monday it will spend about $9 billion cash to add specialty chemical maker Lubrizol Corp. to the eclectic mix of businesses inside Berkshire Hathaway Inc.
The purchase may help satisfy Buffett's appetite for large acquisitions to boost Berkshire's earnings power, but the deal is still significantly smaller than last year's $26.7 billion acquisition of the Burlington Northern Santa Fe railroad.
Two years ago, Berkshire invested $3 billion in preferred shares of Dow Chemical to help finance Dow's $16.5 billion purchase of specialty chemical maker Rohm & Haas in 2009. That deal likely gave Buffett insight into the high-margin specialty chemical business.
In Monday's deal, Berkshire will pay $135 per share, a 28 percent premium to Lubrizol's closing stock price Friday of $105.44. The transaction also includes about $700 million in net debt.
Lubrizol, of Wickliffe, Ohio, makes chemicals for pharmaceutical companies, fuel additives for gasoline and diesel and other ingredients for the transportation sector. Last month, it reported that its fourth-quarter profit climbed 17 percent because of a $19 million tax benefit and higher sales. The company's revenue grew 11 percent to $1.32 billion.
Markets back European debt crisis deal - for now
LONDON (AP) - Greece was the big winner in the markets Monday after the EU agreed to a surprisingly broad package of measures to tackle the debt crisis that has for over a year threatened the existence of the euro currency.
On the weekend, eurozone leaders increased the lending power of the bailout fund and revealed it can be used to buy bonds directly from governments in exceptional circumstances - but only if they agree to further austerity measures. They also eased the bailout terms for Greece, significantly brightening its financial outlook.
The deal took markets by surprise, especially as German Chancellor Angela Merkel had been sounding an increasingly strident tone against paying up for profligate governments.
Though analysts said the deal doesn't mean the crisis has come to an end - the governments in the so-called "periphery" have years and years of austerity ahead of them - the hope in the markets is that the EU is better prepared to deal with another debt crisis flare-up.
Chinese premier rejects faster currency rise
BEIJING (AP) - China's premier ruled out allowing a faster rise in its tightly controlled currency to cool surging inflation, saying Monday that Beijing has to consider the impact on Chinese companies and jobs.
Premier Wen Jiabao repeated Chinese complaints that the U.S. Federal Reserve's efforts to spur American growth are partly to blame for global inflation, though he avoided mentioning the Fed by name.
Chinese prices rose 4.9 percent in February, driven by an 11 percent jump in politically sensitive food costs despite government efforts to increase supplies and curb a bank lending boom that analysts say is partly to blame.
Wen rejected letting the yuan rise faster against the dollar, a move analysts say could cool prices by making oil and other imports cheaper in Chinese currency terms. Beijing has restrained the yuan's rise since the 2008 global crisis to help exporters that employ millions of workers compete abroad.
Qatar pays $2.8 billion for Spanish power stake
DUBAI, United Arab Emirates (AP) - An arm of Qatar's sovereign wealth fund agreed Monday to buy more than 6 percent of Spanish power utility Iberdrola SA for just over 2 billion euros, strengthening the gas-rich Gulf nation's financial ties to Europe.
As part of the deal, Qatar Holding and Iberdrola said they will work together to develop new electricity-related business projects, mainly in fast growing and emerging markets.
Qatar Holding will pay euro2.02 billion ($2.82 billion) for the stake, which will mostly come from nearly issued shares. It said the deal is part of its strategy of building a diverse portfolio of global businesses.
UPS CEO gets 2010 total compensation of $9.5M
NEW YORK (AP) - The chairman and chief executive of United Parcel Service Inc. received total compensation last year valued at $9.5 million, a 73 percent jump from 2009, according to an analysis by The Associated Press.
Scott Davis, 58, received a base salary of $1 million in 2010, the same as the year before, according to a filing Monday with the Securities and Exchange Commission. The bulk of his compensation, though, was in the form of stock awards. Davis' stock was worth about $7.8 million at the end of last year, more than double the $3.9 million his shares were worth at the end of 2009.
He also received option awards valued at $437,514 last year, about the same as 2009. His performance-based cash bonus jumped 78 percent to $232,000 from $130,523 in 2009.
Davis' perks for things like life insurance, financial planning and health care benefits slipped slightly from 2009, down 4 percent to $30,097.
Corning CEO got $9.35 million in 2010
CORNING, N.Y. (AP) - The chief executive and chairman of Corning Inc. saw his pay package rise by 19.6 percent last year, as the specialty glassmaker benefited from surging demand for ultra-thin glass used in television monitors, smart phones and touch-screen tablets.
Wendell Weeks, 51, received total compensation valued at $9.35 million in 2010, up from $7.82 million the previous year, according to an Associated Press analysis of a proxy statement filed Monday.
His base salary of $1.07 million rose 3.8 percent from the previous year. But his combined performance-based cash bonus and stock and options awards jumped 22.6 percent to $7.85 million, from $6.4 million in 2009.
Weeks became CEO in April 2005. He succeeded James Houghton, the patriarch of the company that his great-great-grandfather founded in 1851.
Weeks' pay package included a performance-based cash bonus of $6.72 million, and options awards valued at $1.13 million.
It also comprised $429,114 in perquisites, or "perks," up 12.2 percent from 2009. They included a retirement plan contribution totaling $178,715; $149,296 for home and personal security; and $85,241 for the personal use of company aircraft.
India's inflation worse than expected in Feb
MUMBAI, India (AP) - India's inflation quickened to an uncomfortable 8.3 percent in February, while solid growth in production and exports failed to stem the outflow of foreign portfolio investment in Asia's third largest economy.
The inflation figure announced by the government Monday was higher than expected and suggests the central bank may continue raising interest rates when it meets later this week. Central bankers across Asia are struggling to tame rising prices and India has been among the most aggressive in hiking rates.
The figure topped a CNBC-TV18 poll that forecast 7.8 percent inflation and was higher than January's 8.2 percent increase.
The government also said December inflation was 9.4 percent, rather than 8.4 percent as previously announced.
Food inflation - long blamed for India's rising prices - has eased since January, but manufacturing inflation, which the central bank watches closely, jumped 1.3 percent from January.
Uncertainty in global oil markets has worsened inflation jitters in a country that imports three-quarters of its oil.
Time Warner Cable launches iPad app with live TV
NEW YORK (AP) - Time Warner Cable Inc. is launching an iPad application that plays live TV, becoming the first cable or satellite company to do so.
The app will be free to download on Tuesday morning, but it will only work for people who subscribe to both video and Internet service from the New York-based cable company. Even then, it only works in the home, when the iPad is connected to the company's cable modem via a Wi-Fi router.
Rob Marcus, the company's chief operating officer and president, said the app will play 30 basic cable channels in high definition to start, but that number should expand soon.
By The Associated Press
The Dow Jones industrial average lost 51.24, or 0.4 percent, to 11,993.16. The Nasdaq composite dipped 14.64, or 0.5 percent, to 2,700.97.
The S&P index, the basis for most U.S. mutual funds, fell 7.89 points, or 0.6 percent, to 1,296.39.
Benchmark West Texas Intermediate for April delivery added 3 cents to settle at $101.19 per barrel on the New York Mercantile Exchange. It dropped below $99 earlier in the session. In London Brent crude lost 17 cents to settle at $113.67 on the ICE Futures exchange.
In other Nymex trading for April contracts, heating oil added 3.48 cents to settle at $3.0638 per gallon and gasoline futures lost 2.74 cents to settle at $2.9603 per gallon.