Consumer spending rebounded in September, and manufacturing activity expanded in October, though at a slower pace than during the previous month. The Institute for Supply Management reported that its index for manufacturing activity continued to indicate growth in October, marking the 17th consecutive month of expansion. Separately, the Commerce Department said consumer spending expanded at a robust rate of 0.6 percent in September, despite a modest 0.2 percent increase in personal income, as purchases of big-ticket items such as cars soared. The Commerce Department also reported that construction spending was essentially flat in September after big gains of 0.9 percent in August and July.
Ovitz Says Disney 'Tainted' Him
Michael Ovitz said his 1996 ouster as Walt Disney Co.'s president "tainted" him and made him lose "seven years from my business life," a situation he hopes to repair with his just-completed testimony in the trial over his $140 million severance. Ovitz said he may have some opportunities in Hollywood if a judge rules he did nothing wrong by accepting the severance. Disney shareholders contend the former agent wasn't entitled to the payment because he should have been fired over his poor performance and ethical lapses.
Merck stock slid nearly 10 percent, to close at $28.28, following newly published reports that company marketing materials encouraged sales representatives to "DODGE!" if asked about the cardiac risks of Merck's now-withdrawn arthritis drug Vioxx and that the firm threatened a Stanford University researcher for criticizing the drug. Merck's stock is now down more than 37 percent since the company announced Sept. 30 it was pulling Vioxx off the market.
Circulation declined at most major newspapers across the country. Daily circulation at papers reporting for the six-month period ended Sept. 30 declined 0.9 percent, according to an analysis by the Newspaper Association of America, and Sunday circulation declined by 1.5 percent. The figures of four newspapers -- Newsday, the Dallas Morning News, the Chicago Sun-Times and Hoy -- were not included in the report as part of a penalty levied by the Audit Bureau of Circulations, a publishing industry reporting group.
Delta Air Lines' pilots started voting on a union contract proposal that would cut their salaries by nearly a third, and the airline announced that it secured another $500 million in financing from GE Commercial Finance. Even if the pilots accept the cuts, Delta has to persuade holders of its $20.6 billion in debt to restructure repayment terms to avoid bankruptcy.
MCI can seek repayment of $408 million that former chief executive Bernard J. Ebbers borrowed from the company without going to trial, a bankruptcy judge ruled. MCI is suing to recover the unpaid loans and to dismiss a $12 million claim by Ebbers. The company will file a motion next week asking the judge overseeing its suit to order Ebbers to pay up, MCI lawyer Marcia Goldstein said.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 1.950 percent from 1.855 percent the previous week. Rates on six-month bills rose to 2.140 percent from 2.040 percent. The actual return to investors is 1.987 percent for three-month bills, with a $10,000 bill selling for $9,950.71, and 2.193 percent for a six-month bill selling for $9,891.81. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, rose to 2.27 percent from 2.22 percent last week.
Marsh & McLennan is looking to collect into a separate account about $230 million in incentive fees at the heart of a bid-rigging probe by New York authorities as a way to help fund a possible settlement over the questioned fees.
DoubleClick, a provider of Internet advertising services, said it hired Lazard Freres to explore strategic options, including a sale, to boost the company's shareholder value.
Videsh Sanchar Nigam, India's top telephone and broadband provider, agreed to buy Tyco International's undersea fiber-optic network for $130 million cash. Videsh will take control of Tyco Global Network, a submarine telecommunications system spanning 37,000 miles and three continents. The acquisition requires regulatory approval in India and the United States.
NorthWestern, a utility owner and power producer, said it emerged from bankruptcy protection after restructuring more than $2 billion in debt and distributing common stock to its bondholders.
Corning paid $30 million to 3M to settle a dispute over 3M's 2002 acquisition of a Corning unit that produces lenses for high-definition televisions, 3M said in a regulatory filing. 3M sued Corning over a disagreement on the value of warranties on the former Corning unit's products.
A financial analyst bribed an FBI agent for inside information about white-collar investigations, then used it to manipulate stock prices for his own gain, a federal prosecutor said yesterday at the analyst's trial. Anthony Elgindy, 36, allegedly spread the information on his Web site, InsideTruth.com, while betting that the companies' stock would go down.
Robertshaw Controls is recalling 123,544 gas valves and 37,350 magnet heads used in commercial cooking equipment because the gas valve can stick open if the pilot light goes out, posing the risk of fire or explosion, the Consumer Product Safety Commission said. The affected Robertshaw TS-11 Thermal Safety Control Gas Valves carry date codes 0306 through 0432. Consumers should have the appliance examined by a gas company or technician. The company will arrange for free repair or replacement of the recalled valves.
A McLean lawyer was sentenced to 57 months in prison after pleading guilty to stock fraud in June. Thomas T. Prousalis Jr., 55, arranged to "recycle" money used to buy shares in an initial public offering for Busybox.com by using the same funds to buy more stock for insiders, prosecutors said. Prousalis must surrender to prison by Jan. 7.
Tyco International reported a fiscal fourth-quarter profit of $454 million, compared with a loss of $297 million in the same period last year. The industrial conglomerate saw a 13 percent increase in revenue, to $10.4 billion, and fewer one-time charges than in the quarter ended Sept. 30 last year.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.