TOP 10 STORIES: Sept. 18-22
1. U.S. Tapping Oil Reserve to Lower Prices: President Clinton directed a limited release of oil from the government’s emergency reserve in an attempt to drive down oil prices. The decision came a day after Vice President Al Gore called for a release of oil from the Strategic Petroleum Reserve, prompting a decline in prices. Crude oil near-term futures fell $1.32 to close at $32.68 Friday, after Thursday’s fall of $1.24 a barrel, in New York trading. Republican presidential candidate Texas Gov. George W. Bush attacked the decision as an election-year ploy that would reduce the reserve’s effectiveness as a defense against supply cutoffs.
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2. China Trade Bill Passes: The U.S. Senate on Tuesday resoundingly approved legislation meant to expand trade between the U.S. and China, culminating a lengthy congressional debate with a major victory for U.S. business interests. Passage of the landmark bill marks the most significant step in U.S. policy toward China since the two countries opened diplomatic relations in 1979. The legislation to permanently normalize trade relations with China now heads to President Clinton, who strongly supports it. The measure helps set the stage for China’s entry into the World Trade Organization and will grant the nation the open-door trade status that the U.S. extends to most other countries.
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3. Intel Revenue Shortfall Rattles Markets: Intel, the dominant maker of PC microprocessors, sent shock waves through Wall Street with an announcement that its third-quarter revenue will rise less than expected. Intel’s stock lost 21% after the firm’s disclosure late Thursday, and jittery investors sent other technology shares down as well Friday morning, sending Nasdaq falling 214 points and the Dow 144. But stocks rebounded on declining oil prices and a rebounding euro, and even the tech sector fared remarkably well as regular trading ended Friday. The Nasdaq closed off just 25.11 points at 3,803.76, and the Dow closed up 81.85 points at 10,847.37. Intel fell a further 22%, or $13.55, to close at $47.94 in record heavy volume on Nasdaq.
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4. Washington Turns Up Heat on Auto Industry: Transportation Secretary Rodney Slater on Thursday endorsed criminal penalties for auto makers or suppliers who knowingly sell vehicles or parts with dangerous defects, a policy reversal that added to a tide of anti-industry hostility in the wake of the Firestone tire recall. Ford Motor Co. and Bridgestone/Firestone Inc. also came under withering criticism in another House hearing, as executives were asked to explain internal documents that indicated Firestone knew of design problems with the recalled SUV tires as early as 1996. After two decades in which auto makers have generally had their way in Washington, the balance of power seems to be shifting in favor of federal auto safety regulators. Congress is rapidly moving to grant new powers to regulators at the National Highway Traffic Safety Administration, and the industry seems to have been caught unprepared.
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5. Tacos Recalled Over Genetically Modified Corn: Kraft Foods Inc. recalled all Taco Bell brand taco shell products sold in U.S. grocery stores after its tests confirmed that they were made with genetically engineered corn that isn’t approved for human consumption. The first product recall linked to genetically modified foods came days after an independent lab said it found traces of the unapproved corn in the taco shells, prompting a review by federal regulators. The corn is approved for use only in animal feed because of questions about whether it could cause allergic reactions in people. No evidence of adverse health effects from the corn variety, known as StarLink, was found, Kraft said.
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6. More Temporary Tech Visas on the Way: A Senate vote moved Congress a step closer to raising from 115,000 to 195,000 the number of temporary work visas granted each year to citizens of other countries. The H-1B visas, good for up to six years, are a top priority for executives of high-technology companies, where 60% of the “specialty occupation” visa holders work. Immigrant groups so far have been unable to link the visa increase to a boost in the number of work-based green cards allowing permanent residency. They complain that most of the imported workers will never get to stay in the U.S. and that the visa holders are unfairly bound to their sponsoring employers, with little negotiating power. (Joseph Menn)
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7. Antitrust Chief Klein to Resign: Joel I. Klein, the antitrust enforcer who made the decision to take on Microsoft Corp. and billionaire Chairman Bill Gates in a landmark antitrust battle, said he will resign by month’s end. Klein, whom some lawmakers had feared would go easy on big business when he took the helm at the Justice Department’s antitrust division, elevated antitrust law to new prominence by successfully challenging some of the biggest names in commerce--including Lockheed Martin Corp. and American Airlines’ parent company, AMR Corp. There was immediate speculation that Klein might be invited back to argue the government’s case as a private lawyer hired on a contract basis. Klein declined to say what he plans to do next.
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8. Tech Giants Give Buy.com a Lift: Buy.com Inc. founder Scott A. Blum’s latest brainchild, Enfrastructure Inc., received a huge boost as Microsoft, IBM and other technology blue chips agreed to plow $100 million into the venture and to supply its clients with their products. Aliso Viejo-based Enfrastructure wants to build a national chain of business parks that make setting up shop faster and cheaper for technology companies. The company would rent out space and service packages in exchange for fees and equity. The first of 18 proposed campuses is slated to open in Orange County in December, with sites to follow shortly in New York and Denver. (Robin Fields)
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9. Spanish-Speaking Workers Win English-Only Ruling: Thirteen telephone operators who had been hired to field calls from Mexico won a record $709,284 judgment against a Texas company that fired them for refusing to abide by an English-only rule. The plaintiffs included a couple barred from speaking Spanish to each other in the lunchroom. A judge ruled against Premier Operator Services Inc., after a linguist testified that “code switching,” an unconscious tendency to lapse into a native language, cannot easily be turned off.
(Lisa Girion)
10. Teen Fined Over Web Stock Trades: A high school sophomore in New Jersey agreed to repay $285,000 that stock regulators said he made by manipulating stocks via the Internet last year. The Securities and Exchange Commission, in its first case against a minor, said Jonathan G. Lebed bought large blocks of penny stocks, hyped them on financial message boards and then dumped his shares after the price rose. Lebed, whose lawyer described him as an “avid investor,” neither admitted nor denied the commission’s findings.
Please see Monday’s Business Section for a preview of next week’s event
