Factory Orders Rise 2.5 Percent
Orders to U.S. factories posted the best increase in three months in August, climbing 2.5 percent, to $395.2 billion, as the manufacturing sector showed strength in the face of surging energy prices, the Commerce Department said. The increase followed a 2.5 percent drop in July, which had fed worries that manufacturing could falter as crude oil prices climbed to record levels.
Orders for durable goods, items expected to last three or more years, were up 3.4 percent in August, led by a 5.5 percent surge in orders for computers and other electronic products. Demand for cars, airplanes and other transportation equipment rose by 1.4 percent in July after a 9.1 percent plunge in transportation orders in July.
Orders for nondurable goods posted a 1.6 percent increase after a 1 percent increase in July.
Gemstar CEO Guilty Plea Delayed
Gemstar-TV Guide asked a federal judge to reject a plea agreement for former chief executive Henry C. Yuen, left, arguing that he deserved a harsher sentence for obstructing a federal investigation into company accounting practices.
Yuen was forced out of his management post in 2002 and later charged with inflating revenue. He was expected to plead guilty yesterday. Under the plea agreement, Yuen would be sentenced to two years of probation, including six months of home detention, pay a $250,000 fine and donate a total of $1 million to charities for low-income fraud victims.
U.S. District Judge John Walter said he needed additional information to determine whether to accept the plea. Yuen's sentencing is scheduled for Dec. 19. If Walter rejects the plea agreement, Yuen could face trial. Yuen's attorney, Stanley S. Arkin, did not immediately return calls seeking comment.
Nasdaq Seeks Exchange Status
The SEC proposed granting exchange status to the Nasdaq Stock Market, a change that would allow the computerized trading system to gain independence from its regulator, the NASD, and enable it to become an independent, shareholder-owned market. The SEC will gather public comment on the plan for 30 days before making a decision.
Judge Voids Calif. Privacy Law
A federal judge struck down a California law that restricts banks from selling consumers' private information to their affiliates, ruling that the state law is preempted by federal rules.
The American Bankers Association and other business groups had sued California Attorney General Bill Lockyer, arguing that the federal Fair Credit Reporting Act already regulated their ability to sell such information to affiliates in other lines of business.
The state law forced companies to offer consumers the right to opt out of sharing such information. The attorney general's office said it was weighing whether to appeal the ruling to the U.S. Court of Appeals for the 9th Circuit, which had already sided with the banks.
Chesapeake Plans Expansion
After agreeing to pay $2.2 billion in cash to buy Columbia Natural Resources from Triana Energy Holdings, Chesapeake Energy officials said they plan an aggressive expansion of Appalachian natural gas production. The company expects to boost production by up to 10 percent a year by adding six drilling rigs to the four used by Columbia and increasing capital expenditures to about $200 million a year from $65 million.
The Columbia acquisition would make Chesapeake the third-largest holder of natural gas reserves in the United States behind Exxon Mobil and ConocoPhillips, according to the company. Chesapeake expects the deal will close by Dec. 15.
Delta Cuts Domestic Flights
Delta Air Lines, which filed for Chapter 11 bankruptcy protection Sept. 14, is reducing its domestic flight schedule, mostly early in the morning and late at night, because of higher fuel costs.
Delta will notify affected passengers a few days in advance and try to offer them choices about rescheduling flights, spokeswoman Chris Kelly said. The company has no end date for the flight reductions. International flights will not be affected, she said.
Georgia-Pacific to Cut 1,100 Jobs
Georgia-Pacific, maker of Brawny paper towels and a variety of other paper and lumber products, said it is cutting 1,100 jobs in a broad restructuring that aims to save $100 million a year over the next two years.
The company said it will idle as many as four tissue paper machines and about 70 converting lines as it eliminates 850 jobs in North America. Internationally, Georgia-Pacific said it will cut 250 jobs as it reorganizes operations in France and changes its operating procedures in Britain and the Nordic region. The restructuring will cost $106 million over the next two years, the company said, including a third-quarter charge of $42 million.
MERGERS & ACQUISITIONS
FTC Approves DaVita Purchase
DaVita, a provider of dialysis services for people with kidney failure, said the Federal Trade Commission had approved its purchase of Gambro Healthcare, with the requirement that it sell 70 dialysis centers. DaVita said it expects to complete the $3.1 billion cash purchase of the U.S. unit of Gambro early this month.
Compiled from staff and news service reports.