Fannie Mae announced a new home-mortgage product for borrowers with past credit difficulties. The Timely Payment Rewards mortgage will offer loans, made by 26 affiliated lenders, at as much as 2 percentage points below what sub-prime borrowers now must pay. After two years of on-time payments, the rate will be reduced another percentage point. Improvements in risk assessment now allow qualified borrowers to be identified, said Franklin D. Raines, Fannie Mae chairman.
Cyprus Amax Minerals accepted a sweetened $1.8 billion offer from Phelps Dodge, the nation's largest copper producer, ending their six-week takeover battle. Phelps Dodge said the merger with Cyprus would create a lower-cost global copper producer and allow the companies to integrate operations in the Southwest. Phelps Dodge raised its bid to $19.74 a share from $19.02 to persuade Cyprus Amax to abandon its plans to merge with rival Asarco. Both Phelps Dodge and Grupo Mexico SA would like to acquire Asarco.
A Former Ucar International executive agreed to plead guilty and serve 17 months in jail for fixing prices of a key steel-making component. Robert Krass, who was chairman and chief executive of the world's largest producer of graphite electrodes, also agreed to pay a $1.25 million fine, the Justice Department said.
New York prosecutors unsealed an indictment against Martin Armstrong, a commodities futures trader who authorities allege defrauded a group of Japanese corporate investors as he racked up about $367 million in losses in the market. According to the 14-count indictment, Armstrong spent millions of dollars obtained from the sale of notes issued by the company he founded, Princeton Economics International, on rare coins and antiquities.
Christine Beyer, a former New York Stock Exchange floor broker who admitted last year to misusing her access to the NYSE to make illegal trades, has been barred from the securities industry for five years, regulators said. Beyer, one of eight NYSE floor brokers accused of making $11.1 million in illegal trading, settled Securities and Exchange Commission administrative charges in the case by agreeing to the SEC action. She neither admitted nor denied the findings made by the SEC.
General Motors chief executive John F. Smith Jr. said auto sales will decline somewhat in 2000 from this year's record pace, but he predicted a good year overall. Industry analysts expect 1999 U.S. sales to finish at about 16.5 million vehicles, up from 15.5 million in 1998, and to drop to about 16 million vehicles in 2000. Some analysts believe the market may be peaking, as evidenced by heavier consumer discounts.
Axa of France, the world's largest insurance company, said first-half profit rose 27 percent, to $1.24 billion, as gains on investments soared.
Safeway said fiscal third-quarter profit rose 15 percent, to $223.4 million. The earnings worked out to 44 cents a share, which matched the average estimate of analysts surveyed by First Call but was less than predictions of 46 cents posted on the Web site StreetIQ.com. Safeway's stock fell $4.18 3/4, or 9.9 percent, to $38.06 1/4 on the New York Stock Exchange.