size='5'>December 2, 2003
Factory Growth Fastest in 20 Years
U.S. factory activity reached its fastest pace since 1983 in November
and construction spending hit another record high the prior month,
according to reports on Monday showing the economy's rapid growth is
reversing three years of job losses, Reuters reported. The Institute for
Supply Management said its manufacturing index jumped to 62.8 in
November, the highest since December 1983, from 57.0 a month earlier.
That easily beat the forecasts of Wall Street economists. With growth so
strong and new orders still flooding in, factories hired workers for the
first time in 37 months, according to the survey. The ISM figures also
suggested little slowdown in coming months, with factory owners
struggling to keep up with demand for goods. 'It's pretty eye-popping.
If you look at the components, everything is very positive,' said
Stephen Stanley, senior markets economist at RBS Greenwich Capital, the
newswire reported.
Companies Anxious As Options Fade On Pension Rate Fix
Lawmakers still hope to pass legislation this year fixing the rate that
companies use to calculate their pension contributions, but the strategy
for doing so is far from clear, CongressDaily reported. Meetings
scheduled this week among congressional staffers, White House officials
and business advocates are aimed at finding a way to pass a pension bill
before adjournment. In the final hours before breaking for the
Thanksgiving holiday, the Senate failed to clear a compromise pension
bill. Now, pension advocates say few options remain.
Without new Senate legislation and with the House poised to come back
into session next Monday and leave before the Senate meets again, the
Senate may not be able to adopt its own version of pension legislation.
Instead, it may have to choose between taking up the House-passed
version or not acting on pensions at all. In another scenario, the House
could adopt new compromise legislation that the Senate would pass by
unanimous consent when it meets on Tuesday. 'I don't think there's any
inclination at this point for the House to take up any Senate
compromise,' a spokesman for the House Education and the Workforce
Committee said, adding that staffers would be working this week to
determine how to proceed and that no decisions have been made, reported
the newswire.
Class Action Deal Lauded, But Fast Senate Action Unlikely
The Senate is unlikely to vote on class action reform this month,
despite last week's deal between sponsors of the bipartisan 'Class
Action Fairness Act' and three Democrats who had previously voted to
block Senate action on the measure, CongressDaily reported.
Senate leaders have scheduled a pro forma session for next Tuesday, in
hopes of passing the FY04 omnibus appropriations bill by unanimous
consent. But they do not expect to take up class action reform or any
other measure unrelated to the omnibus during that session, according to
an aide to Majority Leader Bill Frist (R-Tenn.).
Business groups lauded the class action deal. 'The current system
benefits mostly class action lawyers-the 'Class Action Fairness Act'
will change all that,' said Thomas Donohue, president and CEO of the U.S
Chamber of Commerce. But consumer groups said the compromise benefits
the business community at the expense of consumers. 'It would make it
more difficult for consumers to bring class action cases against
corporate wrongdoers in state court,' said Joy Howell, a consultant
working with a coalition of more than 70 consumer, environmental and
civil rights groups that oppose the class action bill, reported the
newswire.
Retail Analysts Yawn at Early Holiday Sales
Poring over the weekend sales figures, retail stock analysts expressed
skepticism about the optimistic projections for the holiday shopping
season, the New York Times reported. 'We believe the results over
the weekend were mixed at best, and certainly less robust than last
year,' wrote Todd D. Slater, a retail stocks analyst at Lazard
Frères & Company. Shari Schwartzman Eberts, who tracks
retailers for J. P. Morgan Securities, focused on Kohl's and Wal-Mart
Stores, in particular. Wal-Mart sales for the Friday after Thanksgiving
came in below the company's plan and will probably put sales at the low
end of expectations for the month of November, according to Eberts.
Retail Forward, a consulting firm, yesterday forecasted holiday sales
growth of 3.5 percent to 4 percent over last year, 'in line with the
somewhat restrained holiday spending plans of America's shoppers.''
Slater projected retail sales gains of 4 percent for December. Those are
lower expectations than that of the National Retail Federation, which
repeated its forecast of 5.7 percent growth for the holiday season,
reported the Times.
Levi Retains Turnaround Adviser And Replaces Its Finance
Chief
Levi Strauss & Co. replaced its CFO and retained turnaround
specialists Alvarez & Marsal in a move to help the company generate
cash and restructure, the Wall Street Journal reported. Levi said
it named Jim Fogarty, a managing director of Alvarez & Marsal, as
its interim CFO. Fogarty served as interim CFO of Warnaco Group Inc.
before it emerged from bankruptcy-court protection earlier this year.
Levi said Bill Chiasson, who has been Levi's finance chief since August
1998, is leaving the company.
More Seniors Facing High Debt, Bankruptcy
'Americans 50 and older are in much more trouble than anyone is willing
to admit,' says Harvard Law School Prof. Elizabeth Warren, the
HoustonChronicle.com reported. 'The people 50 and older going
bankrupt are us -- they're college-educated, had good jobs and owned
homes,' she explains. 'When older Americans go bankrupt at 54, there
won't be 50 years to recover. Their bankruptcy is their exit from the
middle class. They'll have no way to save themselves because those who
can't get bankruptcy protection are left to the mercy of their
creditors.' To read the article, point your browser to
href='http://www.chron.com/cs/CDA/ssistory.mpl/business/2252581'>http://www.chron.com/cs/CDA/ssistory.mpl/business/2252581.
Genesis Health Completes Spin-off
Genesis Health Ventures Inc. said on Monday it has completed the
spin-off of its nursing home and rehabilitation unit and it will change
its name to NeighborCare Inc., effective Dec. 2, Reuters reported.
Shareholders of record as of Oct. 15 received 0.5 shares of Genesis
HealthCare, the rehabilitation and nursing home business, for each share
of Genesis Health Ventures, the company said in a statement. Genesis
HealthCare and NeighborCare will trade as separate companies on Dec. 2
on the NASDAQ National Market System. Fractional shares will be paid in
cash and will not be tax free, the company said.
Genesis Health Ventures had an IPO price of $20.33 on October 2,
2001, when it emerged from chapter 11. Genesis Health Ventures had filed
for bankruptcy in June 2000 because of Medicare cutbacks in the late
1990s and a $2.4 billion debt load. For the company's third quarter
ended June 2003, the company had $575.7 million in long-term debt,
reported the newswire.
Kmart Names New CFO, Apparel Officer
Discount retailer Kmart Holdings Corp. on Monday named James Donlon III
as its first post-bankruptcy CFO, Reuters reported. Donlon comes to
Kmart after 25 years at automaker DaimlerChrysler. The retailer has not
had a CFO since Al Koch of turnaround firm AlixPartners left following
Kmart's emergence from chapter 11 in May. The Troy, Mich.-based retailer
also named John Goodman chief apparel officer. For 11 years, Goodman
worked for Gap Inc., parent of Old Navy, Banana Republic and Gap stores.
Kmart spokesman Jack Ferry said both would take up their new positions
at the beginning of 2004, reported the newswire.
Enron to Auction Houston HQ Building
Enron Corp. today will start to auction off its gleaming 50-story
headquarters in downtown Houston, Reuters reported. Enron spokesman Eric
Thode said on Monday that bids would be taken at a Houston law firm from
anyone who put up $3 million in earnest money. The auction could take
two to three days to complete, he said. Bidding was expected to start at
around $55 million.
Enron filed for bankruptcy on Dec. 2, 2001. At its peak, Enron
employed 20,000 people worldwide including 7,500 in Houston. Now it has
12,000 employees, with only 1,200 at the headquarters. They will move
into smaller downtown Houston offices at the end of February, the
company has said, the newswire reported. The building sale is subject to
the approval of the U.S. Bankruptcy Court in New York.
Court OKs Fleming's Exclusivity Extension For Chapter 11 Plan
The bankruptcy court overseeing the chapter 11 case of Fleming Cos.
has extended the company's sole right to file a plan of reorganization
and lobby for creditor support.
An order issued on Tuesday from the U.S. Bankruptcy Court in Wilmington,
Del., gives the company until Jan. 30, 2004, to file a plan and until
March 30, 2004, to gain creditor approval. Fleming is a holding company
that operates a retail store business and a fuel distribution
business.
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Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
Cerberus Bid For Air Canada Includes Former Prime Minister, Report
Says
Former Canadian Prime Minister Brian Mulroney would become chairman of
Air Canada if New York hedge fund Cerberus Capital Management L.P. is
chosen as the airline's new equity partner, the Financial Post
said on Friday. Mulroney is senior legal adviser to Cerberus, which
launched a revised bid for Air Canada after the company's board chose
Hong Kong businessman Victor T.K. Li to provide C$650 million in equity
financing to fund its emergence from bankruptcy protection. Cerberus had
been a finalist in the equity-solicitation process, but had lost to Li's
Trinity Time Investments in part because of the board's concerns about
regulatory risk and Canadian investment rules, court documents show.
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Copyright (c) 2003 Dow Jones & Company, Inc. All Rights Reserved
FAO Stock Halted on Nasdaq
Shares of troubled toy retailer FAO Inc., parent of the FAO Schwarz
chain, were halted on Tuesday on Nasdaq for news pending, Reuters
reported. A spokesman said the company, which has been in talks with
lenders after receiving default notices earlier this month, will issue a
statement shortly. FAO emerged from bankruptcy protection in April, 3
months after filing for chapter 11 in the wake of last year's dismal
holiday season.
Jones Apparel Expects Kasper to Boost '04 Results
Jones Apparel Group Inc. said on Tuesday it expects the acquisition of
Kasper A.S.L. Ltd. to boost its 2004 earnings and revenue, Reuters
reported. Jones said the acquisition, which closed on Monday, should add
15 cents to the earnings of $2.25 to $2.50 a share it had been expecting
next year, raising the forecast to a range of $2.40 to $2.65. Kasper
will also add $415 million to $435 million to its 2004 revenue forecast
of $4.0 billion, Jones said. Kasper, which manufactures women's suits
and sportswear under the Anne Klein, Kasper, Le Suit and Albert Nipon
labels, had been operating under chapter 11 bankruptcy protection.
