THE ECONOMYRates Mixed in Treasury Bill SalesThe...
THE ECONOMY
Rates Mixed in Treasury Bill Sales
The Treasury Department sold $14 billion in three-month bills at a discount rate of 1.72%, down from 1.73% last week. An additional $15 billion was sold in six-month bills at a rate of 1.85%, up from 1.84%.
The three-month rate was the lowest since Dec. 10, when the bills sold for 1.675%. The six-month rate was the highest since Nov. 26 when the rate was 1.99%.
The new discount rates understate the actual return to investors--1.752% for three-month bills with a $10,000 bill selling for $9,956.50 and 1.893% for a six-month bill selling for $9,906.50.
In a separate report, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, the most popular index for making changes in adjustable-rate mortgages, rose to 2.23% last week from 2.17% the previous week.
Associated Press
Report Says Job Cuts May Be Worst in Years
The United States is on pace to record more job losses in 2001 than it has in at least nine years, job placement firm Challenger, Gray & Christmas said.
Since the terrorist attacks Sept. 11, U.S. companies have announced 624,411 job cuts, more than the 12-month totals for every year from 1993 to 1997, the job placement firm said.
Through the end of November, companies had announced close to 1.8 million job cuts in 2001, nearly three times more than were announced in 2000 and the largest number since Challenger began tabulating such figures in 1993.
The worst year before 2001 was 1998, when 677,795 job cuts were announced.
The job losses cut across three significant economic sectors: manufacturing/industrial, high technology and travel, Challenger said. The firm compiles figures from job cut announcements and does not count actual job losses, which can come from firings, early retirements and attrition.
The telecommunications industry led the way with 292,756 planned cuts through November.
Associated Press
PHARMACEUTICALS
Schering Says New Drug Priced Lower
Schering-Plough Corp. said it will charge 18% less for its new allergy drug Clarinex than for its blockbuster Claritin, in a bid to switch patients to Clarinex before the older drug loses its U.S. marketing exclusivity late next year.
The Food and Drug Administration last week approved Clarinex, a slightly altered form of Claritin, for use in treating seasonal allergies. Schering-Plough said Friday that it plans to launch the treatment in January, but had not disclosed how it would be priced.
“Our list price to wholesalers for Clarinex will be $1.83 [per tablet], compared with $2.22 for Claritin,” company spokesman William O’Donnell said.
The discount for Clarinex, compared with Claritin, is deeper than the 5%-to-15% range that many Wall Street analysts had predicted.
Analysts have said such discounts would be necessary to woo patients to Clarinex from Claritin before December 2002, when Claritin’s U.S. monopoly is set to expire, thereby ushering in a possible flood of cheaper copycat medicines.
Schering-Plough shares closed down 93 cents to $36.18 on the New York Stock Exchange.
Reuters
TECHNOLOGY
Apple CEO Jobs Takes
$1 Salary Again in 2001
Apple Computer Inc. Chief Executive Steve Jobs took a salary of $1 in the last fiscal year while other top executives were rewarded with options for 1million shares each, a major increase in compensation, according to a filing with securities regulators.
Apple, which saw sales fall 33% in its fiscal year that ended in September, paid founder and CEO Jobs $1 again in 2001, the same salary he has drawn since 1999, the company said in its annual report filed with the Securities and Exchange Commission.
Chief Financial Officer Fred Anderson and three other senior executives were granted 1million share options, after having not been granted any such payment in 2000.
The 10-year executive options, which carry an exercise price of $16.81, were worth just over $5million and could be worth as must as $26.8million if Apple shares appreciate by 10% annually, according to the company’s SEC filing.
Separately, Apple said it expects a small loss in its retail operations for the current fiscal quarter and in all of fiscal 2002, citing the weakening economy and terrorist attacks.
Apple originally forecast the retail operation would break even in the current quarter and make a small profit this fiscal year, but scaled back its goals for the business when reporting fiscal fourth-quarter results in October.
Apple launched its first retail outlets in May and opened 27 during the year.
Shares of Cupertino, Calif.-based Apple closed up 13 cents to $21.49 on Nasdaq.
Reuters
XM Satellite Says
It’ll Meet Estimates
XM Satellite Radio Holdings Inc.’s chief executive said the company made enough sales during the holiday period to meet analysts’ estimates for 20,000 to 30,000 subscribers to the satellite radio service by Monday.
Shares of XM rival Sirius Satellite Radio Inc. gained 8%, led by expectations the companies’ sales will prove pessimists wrong, analysts said. Both money-losing companies had missed subscriber estimates after delaying the introduction of service. XM Satellite started nationwide broadcasts in November, with radios for vehicles or homes costing several hundred dollars and service offered for $9.99 a month. Sirius is scheduled to begin service Feb.14. Both companies distribute programming with fewer commercials and better sound quality than conventional radio broadcasts. On Nasdaq, New York-based Sirius rose 79 cents to $10.58, and shares of Washington-based XM Satellite fell 70 cents to $18.46.
Bloomberg News
MEDIA
Adelphia to Spin Off Business Phone Unit
Adelphia Communications Corp., the second-most indebted cable television operator, will spin off its Adelphia Business Solutions Inc. phone unit in the form of a dividend to reduce debt.
Holders of Adelphia Communications Class A common shares will receive about one-half of an Adelphia Business Class A common share for each Adelphia Communications share. The dividend is payable Jan. 11 to shareholders as of Jan. 8. Adelphia Communications last month said it would spin off the unit.
The family of Chairman John Rigas, which owns all of Adelphia Communications’ Class B common shares, will receive Adelphia Business Class B common shares and hold a majority of Adelphia Business, Adelphia Communications said.
In Nasdaq trading, Class A shares of Coudersport, Pa.-based Adelphia Communications jumped $1.96 to $29.76, and Adelphia Business, also based in Coudersport, fell 13 cents to 46 cents.
Bloomberg News
ENERGY
PG&E; Unit Gets Financing for Plants
PG&E; Corp.’s National Energy Group unit said it got $1.08billion in financing for building power plants in New York, Arizona and Massachusetts.
Some of the money is for the construction of a 1,080-megawatt plant in New York and a 1,092-megawatt generator in Arizona, spokesman David Mould said. One megawatt is enough electricity to light 1,000 U.S. homes.
The rest of the money will be for costs at a 360-megawatt plant in Massachusetts, which opened in April. The three plants run on natural gas.
As much as $625 million in additional financing is expected to be completed in the coming months, Mould said.
Societe Generale and Citigroup Inc.’s Salomon Smith Barney led the financing. National Energy Group is based in Bethesda, Md.
Shares of San Francisco-based PG&E;, owner of California’s largest utility, rose 41 cents to $19.82 on the NYSE.
Bloomberg News
Also
E.W. Scripps Co. said Paul Scripps will retire as vice president of its newspaper division, effective Monday. Scripps, 56, will continue as a member of the company’s board as a trustee of the Scripps Howard Foundation, its philanthropic arm.
