TOP 10 STORIES / Feb. 19-23
1 Unocal Gas Patents May Boost Prices: The Supreme Court declined to hear an appeal by five major oil companies of lower court rulings that patents on cleaner-burning gasoline held by Unocal Corp. are valid. Unocal invited the losing companies--Atlantic Richfield Co. (now part of BP Amoco), Chevron USA, Exxon Mobil Corp., Shell Oil Products Co. and Texaco Refining Inc.--to negotiate a licensing fee, which the El Segundo oil company predicted would be less than 1 cent per gallon. But some analysts said the licensing fee could add 5 cents or more a gallon to the price of gasoline used by a third of the nation. Unocal said it expects to receive $75 million to $150 million a year in royalties from the patents. (Nancy Rivera Brooks)
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2 State’s Jobless Rate Falls: California’s unemployment rate dipped in January to 4.5%, its lowest level in more than three decades, from a revised 4.7% in December, in an apparent show of economic strength that defied the energy crunch roiling businesses around the state. But in Los Angeles County, which never enjoyed a boom rivaling the Bay Area’s surge in the late 1990s, unemployment edged up to 5.2% in January from a revised 5.1% the month before. Officials also said the state gained more than half a million jobs in 2000, the best yearlong performance since 1978. (Stuart Silverstein)
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3 More Million-Dollar Homes Sold: California’s spectacular wealth creation has propelled the housing market so high that buyers might get no more than a 1,000-square-foot tract home for seven figures in some communities. A record 11,364 homes statewide fetched $1 million or more last year, a sales volume that represents a 51% increase from 1999, according to a new report by DataQuick Information Systems. What’s more, California accounted for more than two-thirds of all million-dollar homes and condos sold nationwide in 2000. And for the first time, the Bay Area and its high-tech nouveau riche edged out Southern California, where the entertainment elite had long dominated the high-end market. (Daryl Strickland)
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4 Edison, State Reach Agreement: Gov. Gray Davis unveiled the outlines of a complex plan to keep Southern California Edison from bankruptcy, under which the state would pay $2.76 billion for the utility’s electric transmission lines. “This is an agreement that provides value to both sides,” Davis said. “The utility gets the financial wherewithal to go back in business and keep our lights on. We get commensurate value and specific benefits, which provide us long-term power at very cheap rates.” But the deal, final terms of which are yet to be negotiated, left Wall Street analysts concerned about the lack of specifics and consumer groups fearful of further electricity rate hikes. (Times Staff Writers)
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5 Dying Company Cites Energy Crisis: One of Southern California’s largest textile firms, Pico Rivera-based L.A. Dye & Print Works Inc., said it will close down in April, citing the skyrocketing cost of natural gas. The looming shutdown, which will put about 700 people out of work, is a blow to the local fabric-making trade and underscores the larger risks facing the region’s apparel industry. Meanwhile, four in 10 small companies said California’s electricity crisis has dimmed their view of the state as a place to do business and nearly two in 10 are exploring a move to another state, according to a survey released by the National Federation of Independent Business. (Times Staff Writers)
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6 Profit Warnings Heighten: Motorola Inc. said a dramatic drop in orders for its mobile phones and chips could lead to its first quarterly loss in 15 years, joining a chorus of technology companies warning of weak results. Sun Microsystems Inc. also lowered its sales and profit targets for the latest quarter. But while the technology sector has produced several high-profile earnings warnings in recent weeks, data from earnings trackers show that the profit outlook is deteriorating across a broad spectrum of industries. Until last week, 303 companies so far this year had issued “negative guidance” for the first quarter, compared with 44 a year ago, according to Joseph Kalinowski, equity strategist at IBES/Thomson Financial. Two-thirds of those firms are non-tech companies. (Times Staff Writers)
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7 Markets Ride Rough Week: The stock market staggered through a tough week as influential companies issued warnings about their business prospects and investors worried about the economy’s weakness and the government’s report that consumer prices took an unexpected jump in January. The Nasdaq composite index lost 6.7%, ending the week at 2,262.49, and the Dow Jones industrial average was off 3.3% at 10,439.87. But by week’s end most attention was focused on the Standard & Poor’s 500 index, which briefly dipped to a 20% loss from its March 2000 high--officially bear market territory--before regaining its footing to record a loss of 4.3% for the week, at 1,245.48.
(Times Staff Writers)
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8 Carpal Tunnel Claims Investigated: The Federal Railroad Administration launched an investigation into why the nation’s second-largest railroad reported no cases of carpal tunnel syndrome among its 40,000 employees last year only to later disclose that 125 workers had claimed that their jobs gave them the neuromuscular condition. The cases came to light when Burlington Northern Santa Fe Corp. was sued this month for secretly conducting genetic tests on workers who claimed they were injured on the job. A BNSE spokesman said it did not report any of the 125 cases because it determined none was work-related. Federal regulations require railroads to report workplace injuries or face fines. The railroad has not reported a case of carpal tunnel syndrome in five years. The FRA said the scope of the investigation could be expanded to other railroads, which together reported 11 carpal tunnel cases in the first 11 months of 2000. (Lisa Girion)
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9 Napster Offer Falls Flat: Attempting to settle a potentially crippling copyright-infringement suit, Napster Inc. offered to pay record companies $1 billion over five years for the right to include their music in a new fee-based Internet song-swapping service. Company executives and Thomas Middelhoff, chief of media conglomerate Bertelsmann, implored the labels to suspend their legal assault while all the parties work out a deal. Record label executives turned a cold shoulder to the bid. And with a favorable appellate ruling in hand, the Recording Industry Assn. of America sent several dozen cease-and-desist letters to Napster copycats. The RIAA also unveiled data showing that music CD sales rose just 3.1% last year after increasing 12.3% in the previous year, backing up its claims that Napster is siphoning off record sales. (P.J. Huffstutter)
10 Move to Ease Mad Cow Hysteria: Gaps in U.S. food safety regulations and enforcement have raised questions about how insulated U.S. consumers are from Britain’s migrating mad cow epidemic. U.S. consumers can’t be assured that the nation is free of the disease, experts say, mainly because of the risks from mix-ups at feed mills, imports and an undefined threat from similar diseases in other species of animals. But their overall chance of coming in contact with contaminated meat is tiny. And the chances of an epidemic? “Infinitesimally small,” said David Gray of the Harvard Center for Risk Analysis. (Melinda Fulmer)
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* These and additional stories from last week are available at https://www.latimes.com/business, divided by category. Click on “Money and Investing,” “Entertainment Business” and other topics.
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* Please see Monday’s Business section for a preview of the week’s events.
