Investors Await Economic DataThe week’s economic data--retail...
Investors Await Economic Data
The week’s economic data--retail sales, business inventories, the producer price index and consumer confidence--may show the economy is starting to perk up.
The Commerce Department will release its January retail sales report Wednesday and offer Wall Street a hint of how consumer spending is holding up. It took a dip of 0.1% in December.
The producer price index--a measure of costs at the factory door and farm gate--will be released by the Labor Department on Friday.
Investors also will be eyeing reports on business inventories, industrial production, jobless claims and consumer confidence--hoping for more hints the economy is on the path to recovery.
Investors also are pinning their hopes on upbeat news from companies slated to report quarterly results this week, including Dell Computer Corp. and Hewlett-Packard Co.
More stock analysts are raising earnings estimates than cutting them for the first time in 15 months--a hint the worst of the market drops may be over.
Upward revisions to annual earnings rose to 51% of the total in the week ended Jan. 25, according to research firm Thomson Financial/First Call. Not since the first week of November 2000 had estimate increases outnumbered reports slashing forecasts.
More than 80%, or more than 410, of the companies in the Standard & Poor’s 500 have reported quarterly earnings so far, and a few more results will straggle in this week.
Companies slated to post their results include Applied Materials Inc. and Viacom Inc.
Other economic data due this week:
* Thursday, the Labor Department will report on prices of imported goods in January.
* Thursday, the Commerce Department will report on business inventories in December.
* Friday, the Federal Reserve will report on industrial production in January.
* Friday, the University of Michigan will issue its preliminary survey of consumer confidence for February.
Reuters
Bristol, ImClone Compromise Expected
Pharmaceutical giant Bristol-Myers Squibb Co. and its research partner ImClone Systems Inc., reeling from a setback to their anti-cancer drug Erbitux, will probably work toward a compromise even as they fight in public over control of the drug, analysts said.
ImClone’s directors are expected today to reject an ultimatum sent several days ago by Bristol-Myers Squibb, demanding a bigger share of future profit from Erbitux and more control over efforts to gain regulatory approval. The big drug maker also demanded the resignation of ImClone’s top two executives.
In September, Bristol-Myers Squibb agreed to pay up to $2 billion for a 20% stake in ImClone in the belief Erbitux would be a blockbuster drug. But the Food and Drug Administration in December refused to review the tumor-fighting drug, saying ImClone had provided insufficient clinical data.
Congress and securities regulators are investigating allegations that ImClone hid negative information about research into Erbitux.
Analysts said both companies have an incentive to compromise and avoid a lengthy court battle.
Unless a compromise is reached, Bristol-Myers will have to walk away from its deal with ImClone, or take its partner to court for breach of contract or fraud, analysts said.
Analysts said a compromise also is in the interests of ImClone, which needs to rebuild credibility with disgruntled shareholders. ImClone has lost about two-thirds of its value since the FDA decision in late December.
Reuters
Quanta Hopes to Block UtiliCorp Takeover
Quanta Services Inc., which installs power and phone lines, plans to fight an attempt by UtiliCorp United Inc., its biggest shareholder, to take control of the company’s board.
UtiliCorp, the third-biggest U.S. utility owner, said Friday in a Securities and Exchange Commission filing that it would present nine nominees to the board at Quanta’s annual meeting. A date for the meeting hasn’t been set.
Quanta Chief Executive John Colson wrote in a letter over the weekend to UtiliCorp CEO Richard Green Jr. that his company will “vigorously oppose” the move.
UtiliCorp previously tried to add to its 38% stake, prompting Quanta to amend its shareholder agreement in November to block a takeover.
UtiliCorp, based in Kansas City, Mo., said in October that gaining control of Quanta would allow it to make accounting changes and benefit from the consolidation of the companies’ financial statements.
In the Friday filing, UtiliCorp said its board nominees, if elected, would take steps to boost Quanta’s share price. UtiliCorp also would consider selling or acquiring Houston-based Quanta, which has a market value of about $738 million.
Quanta shares have fallen 58% in the last year while UtiliCorp has dropped 24%. Quanta rose 50 cents to $12.15 on Friday. UtiliCorp rose 32 cents to $22.74, both on the New York Stock Exchange.
UtiliCorp said its decision to try to oust Quanta’s board was spurred in part by the line installer’s “disappointing financial performance.” Quanta’s earnings fell 88% to $2.4million in the fourth quarter. The utility owner reported a $6.2-million loss.
Bloomberg News
