Billionaire oilman Marvin Davis said he will pursue a bid for Vivendi Universal's U.S. assets after the second-largest entertainment company rejected a $20 billion offer, saying the assets weren't for sale. The Wall Street Journal reported that Davis and a group of private-equity companies are prepared to pay $15 billion for the assets and assume $5 billion of debt.

Morgan Stanley Cutting 2,200 Jobs

Morgan Stanley is laying off about 2,200 employees, or nearly 4 percent of its workforce, as it continues to cut costs during the prolonged economic downturn, a person familiar with the situation said. The latest cuts will reduce the size of the investment bank's workforce to 57,800, or more than 12 percent of its peak size in 2000.

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William Baker III, associate director of enforcement at the Securities and Exchange Commission and a leader of the WorldCom investigation, said he is quitting the agency at the end of the month for personal and financial reasons. Baker, 45, will join a law firm after "taking off a big chunk of time for the holidays," he said.

Lexus rated highest in the annual J.D. Power & Associates auto industry durability study for the eighth straight year, with owners of 1998 models reporting fewer than half the average number of problems. Japanese automakers held the top five spots, with Lexus followed by Infiniti, Acura, Honda and Toyota. Buick was the highest-rated American brand, at seventh.

Enron workers won a judge's approval to hire lawyers to try to recover $80 million in bonuses paid to executives just before the world's largest energy trader sought bankruptcy protection last year. Two law firms will investigate whether the bonuses, some for more than $1 million, amounted to fraudulent transfers of company assets.

RadioShack is suing Harvey L. Pitt, outgoing chairman of the Securities and Exchange Commission, and his former law firm, Fried, Frank, Harris, Shriver & Jacobson, alleging that while doing legal work for RadioShack they ignored a conflict of interest in the leveraged buyout of former subsidiary O'Sullivan Industries.

Michael J. Copps, the only Democrat on the Federal Communications Commission, plans to hold meetings with consumers and local businesses to discuss restrictions on ownership of radio and television stations. He's seeking opinions as the commission reviews whether limits on ownership of TV, radio and newspaper properties in the same city should be changed. Copps said he planned the meetings because Michael K. Powell, the FCC's Republican chairman, hadn't done so. FCC spokesman Brian Marriott said Powell doesn't object to the hearings.

UAL, the parent of United Airlines, said some of its international partners may back $200 million in loans to help the airline raise the $2 billion it needs to avoid a bankruptcy filing. The backing from partners would help the airline raise the rest of the money. The alliance, anchored by United and Deutsche Lufthansa of Germany, includes 14 members.

Verizon Communications said it will install wireless Internet technology called WiFi networks for small and medium-sized businesses. WiFi, which allows users to share Internet access inexpensively and relatively easily, has been seen as a threat to big phone companies such as Verizon because it allows homegrown networks to spread outside their control. Verizon is offering to set up wireless networks for small and medium-size businesses in Boston, with the service to be expanded in other cities later.

Cisco Systems, the world's largest maker of equipment to link computers, said accounting for stock options as an expense would have reduced fiscal first-quarter earnings 60 percent from what it reported. Net income in the period ended Oct. 26 would have been $250 million, compared with the reported $618 million, Cisco said in its quarterly report filed with the U.S. Securities and Exchange Commission. It's the first time the company gave such details for a given quarter.

The Justice Department asked a federal judge to approve two software industry figures it picked along with Microsoft to serve on a compliance committee charged with helping enforce an antitrust settlement with the world's largest software maker. The department proposed Harry Saal, who founded a company that became part of Network Associates. Microsoft suggested Franklin Fite, who served as a general manager and director in eight years at Microsoft. The third member will be selected by the other two members after they're confirmed.

Cosi, the gourmet sandwich restaurant company, is scheduled to begin trading today on the Nasdaq Stock Market. Shares are priced at $7, below the $8 to $10 the company had expected.

RECALLS

Kolcraft Enterprises is recalling about 410,000 toy flower attachments to baby walkers that can break apart and have caused facial cuts to 15 children. The walkers with the attachments were sold under the names Tot Rider and Carter's.

INTERNATIONAL

Swiss President Kaspar Villiger reiterated that bank secrecy laws will not be relaxed to help the European Union fight tax evasion, threatening to derail EU plans for members to exchange information on cross-border savings. The 15 EU countries have agreed to start swapping information by 2010 in a bid to rein in tax evasion by their residents.

EARNINGS

Barnes & Noble said its fiscal third-quarter profit rebounded from a year-earlier loss because of higher earnings from its GameStop video-game chain. The company posted earnings of $3.8 million, compared with a loss of $6.8 million a year earlier.

Smithfield Foods, the Virginia-based pork-processing company, said it earned $4.1 million in its second fiscal quarter, down 93 percent from the same period last year, because of low prices for hogs and a weak market for fresh pork products.

LOCAL BUSINESS

AOL Time Warner is selling prepaid cards in retail stores for access to its America Online Internet service. The cards cost $14.99 and provide more than 8 hours of access. The company rolled out the product as Jonathan Miller, the chief executive of Dulles-based America Online, has been planning a new strategy for the unit, which is struggling with lower advertising sales and slowing subscriber growth.

Capital One Financial shares rose 13 percent, to $33.15, on speculation that the Falls Church-based credit card issuer may be bought by American International Group, the world's biggest insurer, analysts said. AIG and Capital One spokesmen declined to comment.

Danaher agreed to buy closely held Willett International of Texas for about $110 million to expand its product-coding-and-labeling business. The D.C.-based maker of Craftsman tools said it will assume about $27 million in debt from Willet.

Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers

Workers from a Fiat plant in Arese, Italy, near Milan, protest the automaker's planned layoffs in the check-in area of the nearby Malpensa airport. Scores of flights were delayed as arrivals and departures were suspended for about half an hour.