TOP 10 STORIES / March 5-9
1 Congress Reverses Work Safety Rules: Under intense lobbying from business groups, Congress moved quickly to repeal federal rules issued in November to protect workers from repetitive stress injuries. President Bush said he would sign the repeal. The ergonomic standard, which was issued by the Occupational Safety and Health Administration, would have required employers to redesign jobs that caused musculoskeletal injuries, such as carpal tunnel syndrome, tendinitis and back strain. About 1.8 million such injuries are reported each year, according to federal surveys of company logs, but OSHA estimates the real number is at least double that. Blue-collar production workers, such as those in meat packing and poultry processing, are most at risk for such injuries. Business groups, led by the National Assn. of Manufacturers, argued the measure would be too costly and would have questionable benefits.
(Nancy Cleeland)
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2 Intel Warning Rattles Wall Street: Intel Corp. sharply reduced revenue estimates for the first quarter Thursday and unveiled plans to cut 5,000 jobs through attrition to counter the effects of a worsening economy and slack demand for computers and electronics. Shares of the world’s largest semiconductor maker fell sharply on the news and Friday led a downdraft on Wall Street that sent technology stocks as well as the Dow Jones industrial average and the Nasdaq tumbling. Nasdaq plummeted 115.95 to close at 2,052.78, nearing a historic percentage drop from its close above 5,000 a year ago. Intel said it expects sales to fall 25% from the fourth quarter’s $8.7 billion. Its Silicon Valley neighbor National Semiconductor Corp. posted sharply lower third-quarter earnings and warned that its fourth-quarter profit would fall well short of forecasts. Earlier in the week, similar news came from Cypress Semiconductor Corp., LSI Logic Corp. and Vitesse Semiconductor Corp. (Elizabeth Douglass)
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3 Jobless Rate Unchanged: The U.S. unemployment rate held steady at 4.2% in February and employers created far more new jobs than expected, the government said in an unexpectedly rosy report that prompted analysts to wonder whether the worst of the economic slowdown had passed. The news contributed to the steep decline in stock markets Friday on expectations that it will temper interest rate cuts by the Federal Reserve in the first half of the year. The Dow skidded 213.63 to 10,644.62 on Friday, hurt also by declines in leading technology companies. (A Times Staff Writer)
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4 Cisco to Slash Staff: Cisco Systems Inc., the No. 1 maker of computer-networking equipment, said it will cut up to 8,000 jobs because of a slowing U.S. economy and signs of slowing overseas. The company plans to cut up to 5,000 full-time employees, or 11% of its work force, and most of its contract workers, through attrition, layoffs and consolidation. Cisco also said it now believes that the technology sector’s slowdown in capital spending could extend beyond two quarters. Cisco shares closed down $2.19 to $20.63 on Nasdaq before the announcement. (A Times Staff Writer)
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5 Kroger Uncovers Fishy Numbers at Ralphs: Kroger Co., the nation’s largest supermarket chain, said it restated its profits for the last three years because of accounting irregularities at Ralphs Grocery Co., the big California chain it acquired in 1999. Kroger, based in Cincinnati, said a group of former Ralphs officials collaborated to “manage earnings” at the chain and concealed their actions from Kroger senior management and the accounting firms auditing Ralphs’ books. Kroger said the officials are no longer with the company, and it hasn’t yet decided whether to take legal action. But Ron Burkle, chairman of Ralphs’ former parent at the time some of the alleged irregularities took place, said he was unaware of any earnings manipulation.
(James F. Peltz)
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6 Judge Pulls Plug on Napster: Napster Inc.’s freewheeling days as a haven for music piracy were brought to an end as a federal judge ordered the popular service to block all copyrighted songs identified by the music companies. The preliminary injunction, issued Monday by U.S. District Judge Marilyn Hall Patel, requires the major music labels to provide Napster with the song titles, artist names, file names tied with the copyrighted tunes and proof that they control the copyrights. The firm then will have three business days to come up with a comprehensive plan for blocking unauthorized files. Adding to the company’s troubles, a second wave of copyright-infringement lawsuits crashed on Napster as rivals and other entertainment companies piggybacked on the injunction.
(P.J. Huffstutter)
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7 Yahoo Earnings Will Disappoint: Internet bellwether Yahoo Inc. became another victim of the technology meltdown Wednesday. The company said its revenue will fall dramatically below its earlier projection for the first quarter. The company also said it will replace Chief Executive Tim Koogle, who will remain Yahoo’s chairman. Yahoo said it expects revenue to reach $170 million to $180 million, down from the range of $220 million to $240 million it forecast earlier. The company expects only to break even instead of earning 5 cents a share, the previous estimate. Given the uncertain economy, Yahoo said, it may simply break even in 2001. (Charles Piller)
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8 Broadcom Sees Shortfall: Broadcom Corp. finally joined the chorus of bad news coming from communications chip makers with a warning that its first-quarter results will badly miss expectations, in part because its biggest customer canceled a major contract. The Irvine company said it expects earnings of 8 or 9 cents a share instead of the 25 cents analysts expected, with sales as much as 21% lower than the $398 million analysts forecast. Broadcom also said the Securities and Exchange Commission is examining an unusual accounting method it used in five acquisitions last year. Shares of Broadcom plunged 16% on the news to $40.25, their lowest point in nearly two years. They closed the week even lower, at $38.63, on Nasdaq. (Karen Alexander)
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9 3 Indicted in Online Auction Probe: A federal grand jury indicted three men accused of running an Internet ring that illegally bid up online auction prices for art on EBay, including the aborted $135,000 sale of a fake Richard Diebenkorn painting that drew national attention last year. The indictment, the first criminal case for abuse of the popular Web auction, alleges the three men worked together from late 1998 to June 2000 to create phony user IDs on EBay and to dramatically inflate prices of innocuous paintings they found at secondhand shops.
(A Times Staff Writer)
10 AOL Time Warner Revamps TV Operations: In a move that breaks down entrenched Time Warner fiefdoms, AOL Time Warner Inc. merged its broadcast and cable networks and named the founder and chairman of the company’s WB network, Jamie Kellner, as chief. Wall Street applauded the surprise decision, AOL’s first major corporate realignment since the acquisition of Time Warner in January made it the world’s largest media company. Analysts see Kellner’s appointment as a signal that Turner cable networks such as CNN, TBS and TNT will get a much-needed revitalization. Kellner built the WB into the top-rated network for teens and young adults.
(Sallie Hofmeister)
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* These and additional stories from last week are available at https://www.latimes.com
/business, divided by category.
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* Please see Monday’s Business section for a preview of the week’s events.
