Stocks on Rebound
The Bush rally continued on Wall Street, capping the biggest three-week run for stocks in two years. Investors were buoyed by better-than-expected reports on retail sales, consumer confidence and the trade deficit along with an easing of oil prices. The Federal Reserve said the economy was strong enough to raise interest rates, adding another quarter point to the federal funds rate. Meanwhile, the dollar continued its slide against the yen and the euro, with the apparent blessing of the U.S. Treasury.
Labor in Reflective Mood
Reeling from continued declines in membership and an unsuccessful, $100 million effort to deny President Bush a second term, labor leaders vowed to consider a radical overhaul of the AFL-CIO early next year. Measures pushed by reformers include consolidation of the federation's 60 unions into as few as 20 and a bigger push to organize more workers, starting with those at Wal-Mart. "We have to be thick-skinned to take a hard look at ourselves -- what's working and what's not," said President John Sweeney.
Vioxx Fallout Continues
Merck said the Justice Department had launched a criminal investigation into its handling of Vioxx, the blockbuster pain-killing drug that it withdrew from the market after a study found long-term use increased the risk of heart attacks and strokes. The company warned that government probes, along with civil lawsuits, could have "highly unfavorable outcomes" for investors. Moody's, meanwhile, dropped Merck's credit rating to reflect the sudden loss of revenue and new litigation exposure.
Layoffs at Insurance Giant
More bad news for insurance giant Marsh & McLennan in the wake of those bid-rigging and kickback charges. Following a 94 percent decline in third-quarter profit, the company said it would cut 3,000 jobs, sell off the corporate jet and chauffeur-driven fleet of sedans, and end a tradition of free lunches for top executives. At the same time, settlement talks continue with New York Attorney General Eliot L. Spitzer, who on Friday filed suit against a second big insurance broker, Universal Life Resources.
SoHo in the Desert
The fastest-growing metropolis in America is about to grow even faster. Kirk Kerkorian's MGM Mirage announced plans for a new $4 billion city-within-a-city just off the Las Vegas strip that includes a 4,000-room hotel, three smaller hotels, 1,645 condos and a shopping district modeled on New York's SoHo. Not to be outdone, famed casino developer Steve Wynn is talking up a project that would include a dozen resort hotels and vacation homes built around a man-made lake, boardwalk and golf course.