The stock market reacted favorably as the Federal Reserve raised interest rates 0.25 percent. Many analysts said they read in the Fed statement a willingness to continue testing the view that the economy has entered an era when higher productivity allows stronger growth and lower unemployment rates without triggering serious inflation.
Phelps Dodge Corp. said it was cutting copper production and laying off 1,650 workers because of a continuing decline in prices. A week ago, Broken Hill Proprietary Co., an Australian conglomerate, said it would close copper operations in Arizona and Nevada this fall, eliminating 2,630 jobs. Copper prices have slid from $1.18 a pound in 1996 to an average of 65 cents this year, partly because of overproduction and partly because of reduced demand in Asia.
A newly sweetened bid for the banks at the center of a massive takeover controversy in France appeared futile after it was dismissed as "stingy." Banque Nationale de Paris upped its original offer for Paribas and Socit Gnral by 5 percent from the $37 billion buyout it proposed March 9. Paribas and Socit Gnral rejected that one as well and are pursuing their own merger. Executives of the three institutions met for a week to try to find an acceptable compromise, but the talks collapsed Tuesday.