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Crude oil futures burst through the $25 barrier on the New York Mercantile Exchange amid growing expectations that OPEC will extend the production cuts that have whittled down global supplies. Crude oil for December delivery rose as high as $25.45 a barrel, a 34-month high, midway through the trading session, eventually settling at $25.13 a barrel, up 22 cents.
Union Carbide and Warren Anderson, a former chief executive, were named as defendants in a lawsuit that seeks to resurrect legal claims in the United States stemming from the world's worst industrial accident--the deadly gas leak in 1984 that killed at least 7,000 people in Bhopal, India. It was unclear whether the lawsuit, which seeks class-action status for anyone killed or harmed in the disaster, could overcome earlier court rulings and settlements that limited monetary awards and the jurisdiction of claims.
Rite Aid said shareholder Leonard Green has been elected chairman of the financially troubled drugstore chain. The company also disclosed that KPMG has resigned as its auditor after refusing to re-audit the chain's recent earning statements. Green is founder of Green & Partners, an investment-banking firm that recently infused $300 million into Rite Aid. Green, who typically buys into troubled businesses, in 1997 bought home-improvement retailer Hechinger, which announced in September that it was going out of business.
Red Hat, which sells a computer operating system that competes with Microsoft's Windows, agreed to buy Cygnus Solutions for about $674 million in stock to bolster the use of its software. Red Hat will issue as many as 6.62 million shares for Sunnyvale, Calif.-based Cygnus, which makes software used to create applications that run on the Linux operating system. Durham, N.C.-based Red Hat sells a version of Linux and provides technical support.
Qwest Communications was sued by the Connecticut attorney general for allegedly switching customers to its long-distance phone service without permission. State Attorney General Richard Blumenthal said the company targeted Latino and Asian consumers and ignored warnings to stop.
Warner-Lambert, which makes the blockbuster anti-cholesterol drug Lipitor, has threatened in a letter to sever its contract with Pfizer to co-market the drug. Warner-Lambert also said it may disclose confidential parts of the contract to investors to help them weigh their options. Warner-Lambert wants Pfizer to end its $75 billion hostile takeover bid so that Warner-Lambert can complete a $71 billion merger with American Home Products.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 5.115 percent, from 5.030 percent last week. Rates on six-month bills rose to 5.215 percent from 5.120 percent. The actual return to investors is 5.269 percent for three-month bills, with a $10,000 bill selling for $9,870.70, and 5.444 percent for a six-month bill selling for $9,736.40. 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 5.50 percent last week from 5.45 percent the week before.
Mobil and Marathon Oil, which contend that the federal government owes them more than $156 million, won a Supreme Court hearing. The court will consider reviving a breach-of-contract lawsuit against the government stemming from the companies' ill-fated attempt to explore for oil and gas off North Carolina's Outer Banks. Each company paid $78 million to the government in 1981 for oil and gas leases on submerged lands 40 miles off Cape Hatteras, N.C. The suit said the firms' effort to drill exploratory wells was stymied when Congress enacted the Outer Banks Protection Act in 1990.
Air Express International, a leading U.S. freight forwarder that arranges international shipments, is being acquired for $1.14 billion by Deutsche Post, Europe's biggest mail, parcel and logistics company.
Lowe's said its fiscal third-quarter net income rose 38 percent, to $168.7 million, on sales of installed and special-order items such as custom cabinets and chandeliers.
Lycos, the fourth-most heavily trafficked Web site, said it remained slightly profitable in its most recent quarter before factoring in one-time charges for acquiring a Web music player. Lycos reported fiscal first-quarter revenue of $56 million, up 24 percent over the previous quarter and 126 percent over the year-ago quarter. It posted earnings of $714,151, excluding charges for acquisitions and one-time capital gains. It reported $28.7 million in one-time charges, including acquisition costs related to Web music player Sonique.
Revlon said it had a third-quarter loss from operations of $160.3 million and warned that its fourth-quarter loss will be bigger than expected as retailers cut excess inventories of makeup and fragrances. The company had a profit from operations of $5.6 million in the third quarter of 1998.
Toys R Us said its third-quarter profit from operations was unchanged at $20 million as it spent heavily on its Internet site, while hot-selling toys spurred sales.
Crown Books of Landover emerged from Chapter 11 bankruptcy protection with plans to issue new publicly traded stock and open an online store. Its old stock has been canceled. All of the new common stock will be distributed to holders of Crown's unsecured claims. The largest owner will be New York investment firm Shenkman Capital Management.
CSX said a trial court reduced a $2.5 billion punitive-damages award to $850 million in a case involving a 1987 tank-car fire in New Orleans. The Richmond-based railroad company said the reduced amount is still "unwarranted" and it plans to appeal the decision.
CAPTION: Treasury Bills (This graphic was not available)