Business & Finance
The European Central Bank (ECB) held key interest rates steady and praised the launch of the euro at the its first policymaking meeting of the new year in Frankfurt, Germany. Pedro Solbes, EU commissioner for economic and monetary affairs, said, "The economic situation will start improving early in 2002" in the 12-nation euro zone. The central bank has come under fire for failing to act more quickly in response to the faltering global economy. The last rate cut was Nov. 8. (See editorial, page 10.)
Kmart Corp. stock fell 13 percent to a 30-year low on Wednesday after worries that its dismal holiday sales could push the nation's second-largest discount chain closer to bankruptcy. Company officials, however, dismissed the suggestion, saying the firm has plenty of financial resources and is carrying out a turnaround plan. The sell-off began after the release of a report by a Prudential Securities analyst, who took the unusual step of warning about a possible Chapter 11 filing if Kmart fails to boost sales in the first half of the year.
In an attempt to knock South African rival AngloGold out of the race and clinch control of Australia's Normandy Mining Ltd., US suitor Newmont Mining Corp. again boosted the cash component of its bid, adding another 10 cents a share. This improved offer values the Australian company at $2.2 billion. Normandy recommended that its shareholders accept the revised offer, which comprises 50 cents cash plus 0.0385 Newmont shares for each Normandy share.
PacifiCare Health Systems of California announced it will cut 1,300 jobs, or 15 percent of its work force, in 2002. The cuts, through layoffs and attrition, are part of a plan to save the company $80 to $90 million this year by consolidating some offices and outsourcing services.
The Chicago Mercantile Exchange claims it has earned the right to be called the country's largest futures exchange, based on its 2001 trading volume which rose to the highest level in the Merc's 103-year history, reaching 411.7 million contracts. Open outcry traded 321.8 million contracts, while 81.9 million contracts traded electronically.