New home sales surged 15 percent to a record in May, a government report showed, as an improved jobs market and expectations of further increases in borrowing costs spurred home buyers. Last month's 1.369 million annual rate compared with a 1.192 million pace in April, the Commerce Department said. The increase, fueled by more purchases in the Northeast, South and West, was the biggest monthly advance since April 1993.
Enron Strikes Deal to Sell Pipelines
Enron agreed to sell its U.S. natural-gas pipeline system for $2.35 billion, including assumption of debt, to CCE Holdings, a joint venture of Southern Union and GE Commercial Finance Energy Financial Services. The price will become the initial bid in a bankruptcy auction in September. The CCE Holdings offer beat an earlier bid of from an investor group led by former Coastal Corp. Chairman Oscar Wyatt. CrossCountry Energy, Enron's largest remaining business, includes three companies that operate 9,990 miles of pipeline with 8.5 billion cubic feet of gas capacity a day.
Fifteen airports need to expand in the next decade to meet passenger growth projections, Transportation Secretary Norman Y. Mineta said as he released a DOT study suggesting more cities should consider building new runways and control towers. At least two -- Newark's Liberty International Airport and Palm Beach (Fla.) International Airport -- do not have any new runways underway or in the planning stage. The other 13 are LaGuardia and JFK airports in New York; O'Hare International Airport in Chicago; Houston's Hobby Airport; and the airports in Philadelphia; Fort Lauderdale, Fla.; San Antonio; Albuquerque; Tucson; Orange County, Calif.; Long Beach, Calif.; Burbank, Calif.; and Oakland, Calif.
A former FleetBoston Financial employee agreed to pay $525,000 to settle allegations of trading on insider information about an acquisition of his firm by Bank of America in October. According to the Securities and Exchange Commission, on Oct. 24 Guillermo Garcia Simon purchased over half the trading volume in a series of FleetBoston call options during the last hours of trading for about $11,000. The SEC accused Simon of insider trading on Oct. 28, the day after the acquisition was announced. Simon did not admit or deny wrongdoing.
TD Waterhouse Investor Services and four other brokerages were fined $625,000 by NASD for failing to prevent investors from making illegal after-hours mutual fund trades. Orders placed after 4 p.m. are supposed to receive the next day's price to prevent an investor from taking advantage of late-breaking news that would affect share prices. The firms didn't admit or deny wrongdoing in the settlement with the brokerage industry's self regulator.
Spyware -- computer programs that install themselves and monitor users' Web-surfing habits without their knowledge -- would be banned under a measure approved by the House Energy and Commerce Committee. The panel voted 45 to 4 to pass the bill, which directs the Federal Trade Commission to fine spyware providers as much as $3 million. But Avivah Litan, an analyst at market research firm Gartner, said that spyware "is practically impossible" to stop with legislation.
AT&T slashed its 2004 profit target by almost 50 percent, to between $1 billion and $1.4 billion, after the long-distance carrier cut phone and data service rates for corporations. Rival MCI, which expects a 14 percent drop in sales this year, has offered AT&T customers discounts of as much as 40 percent.
The Pension Benefit Guaranty Corp., a government agency that acts as a safety net for corporate pension plans, expects to file more than $25 million in claims against Parmalat Finanziaria, a spokesman said. The agency said Parmalat has six pension plans in the United States that are underfunded. Parmalat collapsed in Italy's biggest bankruptcy in December.
A Houston jury awarded $7.4 million to a woman who suffered brain damage in a stroke two years ago after taking a diet supplement that contained the now-banned herbal stimulant ephedra. The jury found that San Diego marketer Metabolife International acted maliciously when it falsely told state and federal regulators that its Metabolife supplement had no adverse effects and that the company had comprehensive safety monitoring procedures.
Verizon Wireless is recalling about 50,000 LG brand cell phone batteries, some of which may be counterfeit, because they can overheat when charging. Among the 18 reports involving the TM-510 batteries, a phone exploded and burned the user, and a fire in a car began after a phone overcharged, the Consumer Product Safety Commission said. The recalled batteries can be found in black or silver phones sold nationwide by Verizon Wireless stores and the company's Web site from April 2001 to December 2002 for $150 to $200. The batteries are labeled with codes AEMLLL 02220, AEMMHH 02220, AEMLLL 02X25H or AEMMHH 02725.
Royal Dutch/Shell Group appointed Peter Voser as finance director, taking another step in rebuilding its tarnished image. Voser spent 20 years at Shell before jumping to near-bankrupt Swiss engineering company ABB in 2002. Voser will become a member of Shell's committee of managing directors, which has executive powers across the businesses of the world's third-biggest publicly traded oil company.
Maryland employers in all major industries added about 8,100 jobs in May, the largest surge during May since 1990. The state maintained a 4 percent unemployment rate for the fourth consecutive month, a drop from 4.5 percent in May 2003. The national average for May was 5.6 percent.
Apollo Group, operator of the largest for-profit education company in the United States, said fiscal third-quarter profit rose 47 percent, to $109.3 million, boosted by increased enrollment in its University of Phoenix online unit.
Nike said fourth-quarter profit increased 24 percent, to $305 million. Sales in the quarter ended May 31 climbed 17 percent, to $3.49 billion, helped by the falling dollar and last year's purchase of Converse.
PalmSource reduced its fiscal fourth-quarter losses by nearly 15 percent, to $2.9 million, as the handheld computer software producer's revenue rose 2 percent, to $17.6 million, for the three months ended May 31. It was spun off from PalmOne in October.
UAL posted a $93 million net loss for May, mainly because of reorganization costs under bankruptcy. That was down from $64 million in profit a year earlier, which included $300 million of federal aid for costs related to the Iraq war. United Airlines' parent reported $9 million of operating income last month, excluding interest expense, reorganization costs and extraordinary items, compared with a $155 million operating loss in May 2003.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.