Week in Review / April 9-13
1. Yahoo Backtracks on Porn: Responding to hundreds of thousands of complaints, Yahoo Inc. reversed course and said it would no longer allow merchants to sell pornographic materials through its online store or accept advertisements for pornographic materials or Web sites. The Times reported Wednesday that Yahoo had expanded its offerings of hard-core DVDs and videotapes and made those lucrative products easier to find. Yahoo’s chief competitors, America Online Inc. and Microsoft Corp., do not host such materials. The company had strongly defended its increased emphasis on pornography sales, describing its approach as little different from its long-standing practice of hosting merchants that sell such materials “under stringent control” to protect minors. Yahoo also reported its first-quarter operating earnings, which slightly beat Wall Street’s lowered estimates, and said it would fire 421 employees, or 12% of its work force.
(P.J. Huffstutter and Charles Piller)
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2. Confidence in Economy Erodes: Americans trimmed retail spending in March and their confidence in the economy eroded even more than expected. A sinking stock market and rounds of pink slips scared consumers away from stores in March, retailers said, making it the slowest month in an already sluggish year. The numbers triggered several companies--including
No. 1 Wal-Mart Stores Inc.--to lower first-quarter profit expectations. Government retail sales figures, which also include sales at auto dealers and restaurants, showed the first decline since November. Meanwhile, reports showing tame inflation at the wholesale level and an unexpectedly large rise in claims for jobless benefits heightened expectations that the Federal Reserve will cut interest rates further.
(Times Staff Writers)
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3. State’s Jobless Rate Up: The unemployment rate in California rose to 4.7% in March, up from 4.5% the month before and a strong clue that the U.S. downturn, dot-com failures and energy troubles have begun to cool the state economy. The increase in joblessness was the first in nine months. Still, the latest official figures also reflect an economy that remains formidable. California’s jobless rate is back to where it stood in December. What’s more, state officials said the state added jobs during the month, showing that the increase in unemployment stemmed from an influx of new job hunters rather than from layoffs.
(Stuart Silverstein)
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4. Stocks Rally: A surge in technology stocks gave the Nasdaq its best week in 10 months, and the Dow Jones industrial average jumped back above 10,000 for the first time since mid-March. The rally kicked off Tuesday, with no major news to offer an explanation. Rather, investors piled into the market on the apparent belief that no further bad news will break in the next few weeks. Reports indicating a weakening economy, which raised hopes of further interest rate cuts, added some fuel Thursday. The Nasdaq ended the holiday-shortened week up 241.07 points, or 14%, while the Dow gained 335.85 points, or 3.4%, to close at 10,102.74.
(A Times Staff Writer)
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5. Banana War Over: The United States agreed to call a truce in its bitter eight-year banana dispute with Europe, clearing the way for improved relations with a key ally in the global trade liberalization battle. Under the deal, the European Union agreed to amend a controversial banana import system opposed by Chiquita Brands International Inc. and Dole Food Co. by July 1, and the U.S. said it will drop stiff sanctions it imposed two years ago on European goods. The two governments still have half a dozen contentious trade issues on the table, including a European ban on U.S. hormone-fed beef and European anger with a U.S. system of tax breaks for exporters that was deemed illegal by the World Trade Organization.
(Evelyn Iritani)
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6. Huge Tire Verdict Awarded: A Los Angeles jury ordered Continental General Tire Inc. to pay $55 million in damages for producing a defective tire that triggered a rollover accident, leaving a young woman paralyzed from the neck down. The verdict appears to be the largest in history in a case involving tire tread separation, an issue that came to prominence last year through the massive recall of Firestone tires implicated in scores of fatal rollovers. After eight days of deliberations, the jury awarded the damages to Cynthia Lampe, 33, who became a quadriplegic in the June 1996 accident, and to her mother and father.
(Myron Levin)
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7. Amazon Brightens Outlook: Amazon.com Inc. said its first-quarter loss would be smaller than Wall Street expected and sales would exceed forecasts because of expansion in its international and consumer electronics businesses. The announcement Monday eased fears of a cash crunch at the biggest Internet retailer and boosted its stock $2.81, or 34%, to $11.18 on Nasdaq. The shares continued to rise through the week, closing at $14.67, helped in part by an upgrading of its junk-rated debt by Moody’s Investors Service. Amazon also announced an agreement to take over the Web site of bookseller Borders Group for undisclosed terms, a deal analysts said would have only a modest financial impact on Amazon.
(A Times Staff Writer)
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8. French Bank Buys TCW: Los Angeles-based investment firm TCW Inc. agreed to be acquired by French banking giant Societe Generale for more than $1.3 billion. The deal unites one of the largest U.S. employee-owned money management firms and a Southern California financial powerhouse with one of Europe’s fastest-growing financial firms. With more than $80 billion under management, TCW has a client list that includes Boeing Co., Xerox Corp. and the California State Teachers’ Retirement System. TCW will retain its name, and there are no plans to reduce its staff of about 600 or relocate from its 35-story office tower downtown, the company said.
(Debora Vrana)
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9. Boeing 717 Gets Big Order: Midwest Express Airlines said it plans to buy up to 50 Boeing 717s, giving a much-needed boost to the Long Beach-based program that has struggled in recent years to sell the 106-seat airplane. The regional airline’s firm order for 20 717s, worth about $750 million total, is the largest single deal for Boeing’s smallest jetliner since Trans World Airlines ordered 50 planes three years ago, and it should help prolong the life of Southern California’s last remaining commercial airplane-making facility. Midwest also agreed to an option to buy 30 more 717s.
(Peter Pae)
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10 Countrywide to Widen Services: Countrywide Credit Industries set plans to offer banking services over the Internet and diversify its financial services after the Federal Reserve Board granted a charter to an East Coast bank it’s acquiring. The move puts Countrywide on a more level playing field with major banks that are its chief competitors in the mortgage origination business. Countrywide, one of the top mortgage lenders on the Internet, will open the Web site later this year.
(Jennifer Oldham)
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These and additional stories from last week are available at https://www.latimes.com/business, divided by category.
* Please see Monday’s Business section for a preview of the week’s events.
