September 19, 2008 in City

Putnam shuts down fund

 

Putnam Investments on Thursday suddenly closed a $12 billion money-market fund and announced plans to return investors’ money after institutional clients pulled out cash despite the fund’s lack of exposure to troubled financial firms such as Lehman Brothers Holdings Inc.

The move, believed to be unprecedented in the nearly $3.4 trillion money-market fund industry, came a day after asset managers sought to reassure investors in the wake of a massive pullout from large retail fund Reserve Primary Fund. The run on that fund caused its assets to plunge in value by nearly two-thirds and fall below $1 for each dollar invested, exposing investors to losses of 3 cents on the dollar.

SEATTLE

Boeing answers union proposals

The Boeing Co., whose aircraft assembly workers walked out earlier this month, responded Wednesday to union contract proposals for engineers and technical workers. Union leaders said they were disappointed with what the company had to say.

The exchange came during preparations for full-scale negotiations covering nearly 21,000 workers represented by the Society of Professional Engineering Employees in Aerospace, which presented its opening proposal to Boeing on Sept. 10.

A Boeing spokeswoman said the company’s presentation was “more of a philosophical approach” than an issue-by-issue response.

SPEEA’s only full-scale strike against Boeing was in 2000.

NEW YORK

Kraft Foods joins DJIA

Dow Jones & Co. said Thursday that Kraft Foods Inc. will replace struggling insurer American International Group Inc. in the Dow Jones Industrial Average when trading begins Sept. 22.

In a statement, Robert Thomson, managing editor of the Wall Street Journal, said another financial company is not being added to the 30-stock index because of “extremely unsettled conditions.” Kraft was chosen because there is no food maker on the DJIA, said Thomson, who oversees the makeup of the widely watched index.

Stocks added to the DJIA index have no set pre-determined criteria but must be established U.S. companies that are considered leaders in their industries.

From wire reports

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