Americans' shopping spree continued into May, boosting sales at the nation's biggest retailers to better-than-expected levels for the fourth straight month. The big winners in May were specialty clothing chains, while department stores and discounters also fared well. Wal-Mart reported sales from stores open at least a year climbed 7.7 percent from a year earlier. Sears's so-called same-store sales rose 1.9 percent, Federated's increased 4.1 percent and Limited's surged up 10 percent.
Insider-trading charges where filed against a former investment-banking associate at Salomon Smith Barney and a vice president at Bank of Tokyo-Mitsubishi Trust. Prosecutors said the two men parlayed confidential information about 13 planned mergers involving Salomon clients into more than $750,000 in illicit profits. The charges allege that Salomon Smith Barney's Kevin Kirkbride tipped off Bank of Tokyo's Richard Ference about the merger discussions.
PaineWebber Group, the fifth- largest U.S. broker, said it will offer online trading in the third quarter, joining other Wall Street firms in their reluctant entry into the fiercely competitive Internet market. The announcement was made two days after Merrill Lynch said it will start offering online trading in July.
Newport News Shipbuilding decided against increasing its bid for Avondale Industries, a New Orleans-based shipbuilder. Avondale then accepted a $529 million buyout offer from Litton Industries. Avondale had agreed to accept a $470 million stock offer from Virginia-based Newport News. But Litton offered more in cash, and Avondale said Tuesday that it preferred the Litton offer but gave Newport News until yesterday to raise its bid.
Hicks, Muse, Tate & Furst has won a bidding war for control of a London-based food and furniture company. Candover Partners, a British venture-capital firm, will not top Hicks Muse's offer of $861.5 million for Hillsdown Holdings, according to a Hillsdown spokesman. For Hicks Muse, Hillsdown represents the first of a series of acquisitions that the Dallas buyout firm is planning to make in order to establish itself as a significant player in Europe's private equity industry.
Factory orders fell 1.2 percent in April, reflecting a big drop in demand for aircraft and other transportation products. The Commerce Department said the decline in orders followed a 1.9 percent advance in March and was only the second drop in the past six months. Excluding transportation, factory orders would have risen by 0.5 percent.
Mortgage rates rose this week to the highest level since September 1997. A Freddie Mac survey showed the interest rate on 30-year fixed-rate mortgages rose to 7.41 percent, from 7.23 percent last week. Rates on 15-year fixed mortgages rose this week to 7.04 percent from 6.84 percent, and the average initial rate on adjustable-rate loans rose to 5.85 percent from 5.73 percent.
A federal appeals panel has ruled that an insurance company should have the option to limit HIV-related health-care coverage to a fraction of the $1 million cap placed on other illnesses. A panel of the 7th U.S. Circuit Court of Appeals in Chicago, ruling in the case of two HIV-positive men, found that a federal law barring discrimination against people with disabilities does not apply to the content of insurance policies. The decision overturned a ruling by a federal judge last year.
All federal agencies will have to post "clear privacy policies" on their World Wide Web sites by Sept. 1, the White House has ordered.
Corporate America appears well on its way toward being prepared for the millennium bug, with 94 percent of companies in the Standard & Poor's 500-stock index expected to have their computer systems compliant by September, said Peter J. Canelo, strategist for Morgan Stanley Dean Witter. Overall, the total bill for S&P 500 companies is expected to reach $34 billion to $35 billion, Canelo said.
Roche Holding, a Swiss pharmaceutical giant, will exercise an option to buy the one-third of Genentech that it does not now own for $82.50 a share. But Roche said it intends to then reissue up to 19 percent of Genentech's stock, ensuring that the South San Francisco-based biotechnology company will remain a publicly traded concern. Genentech shares had been held down in recent months by the possibility that Roche would exercise the option, which it won in a 1990 financing deal.
Nucor rocked the steel industry and Wall Street by announcing that its highly respected president and chief executive, John D. Correnti, quit, apparently in a dispute over the company's course. Nucor, which is widely credited with revolutionizing the steel industry through its low-cost mini-mill format, named Chairman H. David Aycock to the positions Correnti had held. Aycock, who came out of retirement only last January to become chairman, is considered only an interim chief executive, however, until a permanent successor can be found, probably from inside the Charlotte-based company. Suggestions that Nucor may take a new direction disturbed investors. Nucor shares lost $4.25 to close at $47 in extraordinarily heavy trading on the New York Stock Exchange.
Sumitomo, Japan's fifth-largest general trading company, sued Chase Manhattan Bank and UBS for $761 million, alleging that they helped finance unauthorized copper trades that cost Sumitomo more than $2.6 billion in losses three years ago.
Dominion Resources of Richmond and four nearby utilities with 26 million total customers asked federal regulators to approve a plan to transfer control of their power lines to a single, independent company. Dominion, American Electric Power, CMS Energy, DTE Energy and FirstEnergy, which announced the plans last week, need Federal Energy Regulatory Commission approval to form the independent-system operator. Together, they own 43,000 miles of power lines in Indiana, Kentucky, Michigan, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.
Legg Mason, a Baltimore fund manager and brokerage, said it lowered the profit it reported for the fiscal year ended in March by 6.5 percent, to $89.3 million, after a change in accounting rules that affected its deferred- compensation stock plan.