Tech's Blowout Quarter
The tech sector rocks. Google, eBay, Yahoo, Microsoft and Intel all reported strong growth in the latest quarter's sales and earnings as consumers and businesses continued to rely more heavily on the Internet and leading companies pulled away from the pack. Google's profit quadrupled, while Yahoo's was up sevenfold, in part because of the sale of its Google stock. The tech-heavy Nasdaq composite index rose to a four-year high at midweek before dropping back slightly on forecasts of slower growth next year.
Pink Slips Stack Up
Big companies, big layoffs. Hewlett-Packard said it will reduce payrolls by 14,500, or about 10 percent, as it restructures and cuts costs in support functions in an attempt to keep up with rival Dell. Kodak said it will lay off as many as 25,000 employees as consumers switch from film to digital photography. That's 10,000 more jobs than previously announced. And Kimberly-Clark plans to cut as many as 6,000 jobs and close up to 20 manufacturing plants after losing market share in tissues and diapers to Procter & Gamble.
And Then There Were Two
The bidding war for Maytag shifted to spin cycle. Early in the week, Whirlpool entered the fray, announcing it would be willing to pay as much as $1.44 billion for its longtime rival. Apparently that price was too rich for Haier, China's biggest appliance maker, and two U.S. private equity firms, which had told Maytag they were prepared to pay about $1.3 billion. Still to be heard from: a group headed by Ripplewood Holdings, another private equity firm, which thought it had an agreement to buy Maytag for $1.1 billion.
Unocal Chess Match
China's Cnooc Ltd. stood pat with its $18.5 billion bid for Unocal after the U.S. company's board accepted Chevron's sweetened offer of more than $17 billion. Unless Cnooc raises its bid, Unocal directors are likely to recommend that shareholders accept the Chevron offer because it avoids the risk that the government might block a Cnooc purchase on national security grounds. The bid from Cnooc, which is partially owned by the Chinese government, has already generated unfriendly votes and resolutions from the House and Senate.
Support for Mr. Roberts
Business groups hailed the nomination of John G. Roberts Jr. to the Supreme Court. He spent more than a decade at District-based Hogan & Hartson LLP representing major corporate clients, which may make him inclined to vote to take up complex business cases appealed to the high court. Roberts is expected to be an ally in limiting the scope of government regulation and holding down damage awards in class-action and product-liability suits. Under federal ethics rules, he would have to recuse himself from cases he handled at the firm.