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November 11, 2004
Fed Lifts Rates to 2 Percent
The Federal Reserve raised U.S. interest rates yesterday by a quarter
percentage point for a fourth time this year, citing improving job
markets that likely mean more increases lie ahead, Reuters reported. The
unanimous decision by the U.S. central bank’s policy-setting
Federal Open Market Committee moves the benchmark federal funds rate to
2 percent from 1.75 percent. The Fed began to lift rates in June from 1
percent and said in its post-meeting statement it expected to be able to
keep on a “measured” course of rate increases, the newswire
reported.
Delta to Issue Shares, Cut Jobs
Delta Air Lines Inc., fighting to avoid bankruptcy, will issue up to
75 million shares to employees and creditors, Reuters reported. The
airline, which also gave more details about its restructuring plan
including job cuts, said the New York Stock Exchange will let Delta use
an exception in its shareholder approval policy to allow the issuance.
Atlanta-based Delta said any delay could “seriously
jeopardize” its financial viability.
America West Still Considers Bid for ATA
America West Holdings Corp. said yesterday it is still considering
whether to bid for part or all of bankrupt ATA Holdings Corp., parent of
low-cost carrier ATA Airlines, Reuters reported. A spokeswoman for
Phoenix-based America West said the carrier would decide before the Nov.
23 deadline whether to submit bids for review to the U.S. Bankruptcy
Court in Indianapolis. A story in Wednesday’s Indianapolis
Star said America West will make an offer for Indianapolis-based
ATA within two weeks.
Wet Seal Shares Gain on Financing, CEO Departure
Shares of Wet Seal Inc. rose 9 percent on Wednesday, a day after the
apparel retailer said its CEO had stepped down and it had arranged new
financing as it seeks to avoid bankruptcy, Reuters reported. In a
research note, Sanders Morris Harris called the capital infusion and
management changes steps in the right direction that should stave off
bankruptcy. Still, Sanders Morris said it was concerned about Wet
Seal’s longer-term prospects, given recent market share losses.
“The upcoming holiday season is going to be fiercely competitive,
and thus we believe that an erosion of market share is likely to be an
ongoing problem,” the firm said, the newswire reported.
Onex Leading Race to Buy Boeing Assets
Canadian leveraged buyout firm Onex Corp. is the leading contender to
buy Boeing Co.’s manufacturing operations in Wichita, Kansas,
according to reports from newspapers on Wednesday, Reuters reported. The
Financial Times, citing “people familiar with the
matter,” said Onex appears to be the favorite after outbidding
other contenders for the operations, which include the main Kansas plant
and two smaller sites in Oklahoma, the newswire reported.
US Airways to Keep Flying Most of Its Planes
US Airways Group Inc., which filed for bankruptcy protection in
September, today said it reached agreements with its lenders and lessors
that will let it keep flying most of its planes, Reuters reported. The
carrier operates 282 mainline jets, while its US Airways Express unit
operates 67 regional and 64 turboprop aircraft. US Airways said it had
60 days after its Sept. 12 bankruptcy filing either to agree to meet the
terms of its aircraft financing, or to negotiate alternative
arrangements.
Debt Advisor Warns Britons of Spiraling Problem
About 2.5 million Britons are spending more each month than they earn
and risk being trapped into a life of debt, an advisory group said
today, Reuters reported. Debt Free Direct, which is lobbying government
for curbs on the powers of loan sharks, said several years of low
interest rates have lulled people into taking on more debt than they can
handle as rates rise. Research shows a third of people are worried
interest rates will rise further, impairing their ability to pay off
debt, the group said, the newswire reported.