New home sales rose by 9.4 percent in August to a seasonally adjusted 1.18 million as mortgage interest rates remained at low enough levels to continue enticing buyers worried about future rate hikes. The increase, which followed a 7.3 percent decline in July, was the largest since December 2000, the Commerce Department said. Homes sold for an average $267,000 in August, it said, and 404,000 new homes were for sale at the end of August, the most since October 1979.
Lazard Prepares for Public Offering
Bruce Wasserstein, head of Lazard LLC, will lay out plans to take public the world's biggest privately held investment bank in a transaction that values the company at about $3 billion, according to sources. Lazard may file initial public offering documents with the Securities and Exchange Commission next month, and a sale is possible as early as 2005, the people said. Lazard's working partners, who own 64 percent of the firm, will be told this week how their stakes would be converted into shares in an IPO and how long they would have to wait before cashing out, said the people, who declined to be identified. The IPO would be the biggest by an investment banking partnership since Goldman Sachs Group went public in 1999.
Computer Associates is revoking some perks for its former chief executive, who was indicted last week on charges of securities fraud and obstruction of justice. Sanjay Kumar, who stepped down as chief executive in April, signed a deal in August in which the company promised to pay for his office space and administrative assistant, his telephone and network connections and home security. When he was indicted, Computer Associates notified him that it would terminate the benefits in 60 days, it said in a regulatory filing.
Wachovia said the Securities and Exchange Commission may recommend enforcement action against its Wachovia Securities unit for alleged improper mutual fund trading. The case relates to an arrangement between a former Evergreen Investment Management employee and an individual broker, on behalf of a client, who made fund trades between December 2000 and April 2003 in excess of limits set in the fund's prospectus.
Adelphia Communications, the fifth-biggest U.S. cable operator, can keep secret how much it has to pay prospective buyers of its assets if the transactions don't go through, a bankruptcy judge ruled. Adelphia said disclosing the size of the breakup fees would hurt its negotiating power, leaving less money for creditors who filed more than $3 trillion in claims against the company.
J.P. Morgan Chase said it agreed to buy a majority stake in Highbridge Capital Management, a closely held hedge-fund company that is said to bring in about $140 million in fees annually.
American Airlines has all but eliminated a $10 round-trip fare increase that it had announced just days ago. The charge, which will remain in place in a few markets, was meant to help offset rising fuel costs, but American scaled it back because few competitors matched the move.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 1.710 percent from 1.685 percent last week. Rates on six-month bills rose to 1.950 percent from 1.870 percent. The actual return to investors is 1.741 percent for three-month bills, with a $10,000 bill selling for $9,956.78, and 1.997 percent for a six-month bill selling for $9,901.42. 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 2.14 percent last week from 2.09 percent the previous week.
Lawyers for WorldCom investors asked a New York federal judge for $144.5 million in fees for their work in settling securities fraud claims linked to the collapse of the long-distance company in 2002. The law firms were hired by the New York State Common Retirement Fund, which was chosen to lead the class-action suit.
Virgin Group said it plans to offer commercial spaceflights by 2007, with chief executive Richard Branson taking a seat on Virgin Galactic's inaugural journey. Branson said his company signed a deal to license technology from Mojave Aerospace Ventures, the firm that paid for the craft SpaceShipOne to make a historic 90-minute spaceflight.
Burger King named Halliburton treasurer Cedric Burgher as the fast-food chain's third chief financial officer in 13 months. Halliburton appointed Preston Holsinger, the finance chief at oil field drilling pipe manufacturer Lone Star Technologies, to replace Burgher.
Two top Citigroup managers are swapping jobs in a move the firm said is designed to broaden their experience. Todd S. Thomson, 43, chief financial officer and head of strategy, will become chairman and chief executive of Smith Barney. Sally Krawcheck, 39, who holds that position, will take Thomson's former job effective Nov. 5.
The Securities and Exchange Commission is warning Smith Barney brokerage clients that unsolicited e-mails asking for their financial information are an attempt at identity theft. The SEC said that in the "phishing" attack, e-mails appear to come from the firm and send investors to a Web site for an "obligatory" upgrade of customer data.
Cingular Wireless said it will sell its messaging unit Cingular Interactive to affiliates of fund manager Cerberus Capital Management for an undisclosed sum. The interactive unit provides wireless corporate e-mail and messaging services through Cingular's Mobitex data network to more than 400 companies and supports about 25 percent of all BlackBerry users worldwide.
Virgin Group started an online music store in the United States to compete with Apple Computer's iTunes and services operated by RealNetworks and Sony. The Virgin Digital service offers Web users songs for 99 cents each from more than 1 million tracks and unlimited access to 100,000 albums for a $7.99 monthly subscription.
Starbucks will raise its prices an average 11 cents a cup in North America.
Martha Stewart hasn't yet been told where she will serve her five-month sentence for lying about a stock sale, but she has been classified as federal inmate No. 55170-054.
Former Parmalat chief executive Calisto Tanzi's period of house arrest ended, after nine months of detention and questioning over the fraud scandal that engulfed his company. Tanzi will still face restrictions and will not be able to leave the Parma area, said his lawyer.
Cemex, the Mexican cement giant, said it plans to purchase British-based RMC Group, the world's biggest supplier of ready-mixed concrete, in a $4.15 billion deal that includes acquiring $1.7 billion of RMC's debt. Cemex said the purchase will make it the world's largest concrete company, with revenue of more than $15 billion.
Arlington Capital Partners, a leveraged buyout firm in the District, purchased Secor International, a large environmental consulting and engineering firm, from a group of current and former employees and managers. Arlington Capital partner Peter Manos declined to disclose the total purchase price but said Arlington put $20 million of its own money in the deal and borrowed the rest.
Walgreen's fourth-quarter profit rose 18 percent, to $327.2 million, as revenue climbed 14 percent, to $9.4 billion. The company attributed the profit increase to sales of prescription drugs.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.