Business news
Interest rates topic of Greenspan talks
Washington Federal Reserve Chairman Alan Greenspan said Tuesday the central bank is standing ready to deal with potential threats to the economy including the “fortunately low but still deeply disturbing possibility” of a new terrorist attack.
The comments, which came at Greenspan’s confirmation hearing for a fifth term as Fed chairman, followed a recent warning by Attorney General John Ashcroft that the terrorist network al Qaeda was “90 percent” ready to attack the United States.
Greenspan told the Senate Banking Committee that the U.S. economy was able to emerge relatively unscathed from the Sept. 11, 2001, attacks, which forced Wall Street to close temporarily and led the central bank to flood the banking system with massive amounts of money to make sure that all U.S. financial institutions had the resources to meet withdrawal demands.
Private economists widely believe Fed officials will begin raising interest rates at their next meeting on June 29-30, pushing the federal funds rate from a 46-year low of 1 percent up by the first of what are expected to be a series of quarter-point increases.
Despite the impending rate hikes, something that politicians often rail against, members of the Banking Committee widely predicted a quick confirmation for Greenspan, who was first nominated as Fed chairman in 1987 by President Ronald Reagan and has gone on to serve under four presidents.
Lawmakers try to halt junk-fax regulations
Washington Key House members on telecommunications issues are moving to overturn regulations aimed at preventing offices and homes from becoming inundated with junk faxes even before the already-delayed rules take effect.
The chairman of the House Energy and Commerce telecommunications subcommittee, Rep. Fred Upton, R-Mich., said he planned to introduce a bill today to rescind Federal Communications Commission regulations requiring senders of commercial faxes to get prior written approval from recipients.
At a hearing Tuesday, Upton called his proposed bill “common-sense regulatory relief” for businesses and associations that would be burdened with cumbersome paperwork once the FCC regulations took effect
The FCC rules were originally scheduled to take effect last August but were delayed until January 2005 amid an outcry from some businesses. The fax regulations were approved at the same time as the national “do-not-call” registry, which protects consumers who sign up from unwanted telemarketing calls.
Panel rules against nonunion employees
Washington Employees at nonunion workplaces are not entitled to have colleagues accompany them in disciplinary meetings with superiors, the National Labor Relations Board says.
In a 3-2 decision last week that was announced Tuesday, the board overruled a 2000 case that extended to nonunion workers the right, under the National Labor Relations Act, to have a co-worker present when they think the meeting might result in discipline.
The board said IBM Corp. was justified in denying requests by three employees who were not represented by a union to have a co-worker present during investigatory interviews into allegations they engaged in harassment.
Virgin America buys Airbus airliners
Washington The Virgin Group Ltd.’s new U.S.-based low-fare airline announced Tuesday that it has agreed to buy and lease up to 105 narrow-body jets from Airbus SAS and that the carrier would be named Virgin America.
Virgin America’s top executive, Frederick Reid, said at an industry luncheon in Washington, D.C., that the airline has placed a firm order to buy 11 A319s and seven A320s from the France-based manufacturer, to be delivered early in 2005. The carrier will lease 15 more A320s from GE Capital Aviation Services, a unit of General Electric Co.
The A319s typically carry 124 passengers, while the A320s carry about 150 passengers, according to Airbus.
MGM Mirage board OKs Mandalay deal
Las Vegas MGM Mirage Inc.’s board on Tuesday approved a $4.8 billion cash offer for it to buy Mandalay Resort Group in a deal that would create the industry’s dominant casino operator.
MGM Mirage’s offer is contingent upon it being accepted by Mandalay, according to a source familiar with the lengthy closed-door MGM Mirage board meeting.
Mandalay’s board also was considering the buyout offer later Tuesday.
The deal would pay Mandalay $71 per share. The agreement also includes the assumption of $2.5 billion in Mandalay debt and $600 million in bonds that can be exchanged for stock in the company.
MGM Mirage Inc. has said the cash price represents a 30 percent premium to Mandalay’s closing share price on June 3, the day before MGM Mirage’s initial offer of $68 per share was disclosed.
Earnings roundup
“Pier 1 Imports Inc.’s profit for its latest quarter plummeted 38 percent, as less effective advertising and inconsistent store performance hurt customer traffic and sales. The home-furnishings chain also issued an earnings outlook that was below Wall Street expectations.
“Circuit City Stores Inc., the nation’s No. 2 consumer electronics chain after Best Buy Co. Inc., said Tuesday its loss narrowed to $5.9 million in its first quarter as sales rose nearly 7 percent.
“Oracle Corp. registered its sixth consecutive quarter of double-digit earnings growth as the world’s second-largest software maker continued to capitalize on corporate America’s gradual upturn in technology spending.