Financial markets recovered quickly from jitters after terrorist bombings in London on Thursday that killed dozens, injured hundreds and paralyzed the financial capital of Europe. By week's end, stock markets had more than recovered from the initial sell-off, while oil prices fell back below $60, although only barely. The increasingly muted responses since Sept. 11, 2001, suggest the markets have been largely inoculated from the effects of terrorist attacks -- just the opposite of what terrorists had intended.
Ford and Chrysler began offering "employee discounts" on most vehicles after General Motors reported that the price promotion had helped generate its highest June sales in 19 years, adding about 7 percentage points to its market share. The discounts, along with other rebates, will reduce the price of some vehicles by as much as 25 percent, prompting analysts to warn it could undermine the industry's long-term profitability. But GM has largely offset the cost of discounts by cutting back on advertising and other marketing costs.
Managed Care Expansion
UnitedHealth Group agreed to buy PacifiCare Health Systems for $8.1 billion in cash and stock, the latest in a string of acquisitions that has made United the country's second-largest managed-care plan. The merger would give UnitedHealth 26 million subscribers, boost its presence in California and allow it to offer big corporations a nationwide network of hospitals and health providers. It would also increase its share of the Medicare market, where the Bush administration is pushing managed-care options.
A Boost for Africa
The leaders of industrialized nations promised to double, to $50 billion a year, their annual aid to the poorest African nations, while forgiving billions of dollars in outstanding debt and moving toward ending trade-distorting farm subsidies. But President Bush refused to sign on to an aggressive global warming agenda proposed by other Group of Eight leaders for rich nations to curb their greenhouse gas emissions. They had to settle for vague language acknowledging the problem of climate change and the need for action.
Wall Street is a great place whether you're coming or going. Morgan Stanley said it would pay its ousted chairman, Philip J. Purcell, a $43.9 million farewell bonus in addition to $62.3 million in previously granted stock and option awards. And his replacement, John J. Mack, inked a contract that included a roughly $27 million signing bonus and a guarantee he'd be paid as richly as his industry peers. Late Friday, however, Mack renounced the guarantee and said his pay would be tied to Morgan Stanley's performance.