- The Washington Times - Friday, February 21, 2003

Here is a look at more of Friday's top business stories:

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Stock mutual funds saw $748 million inflows

NEW YORK, Feb. 21 (UPI) — Investors put $748 million into stock mutual funds for the four days ending Wednesday, compared with $2.9 billion in outflows the week before, according to AMG Data Services.

International funds took in $1.4 billion, the largest inflow for these funds since Oct. 2.

Emerging markets equity funds reported inflows of $252 million and technology funds had inflows of $314 million. Those figures represent the largest weekly gains by those funds since May 15 and April 17, respectively.

Taxable bond funds received $1.6 billion, with half going to investment grade corporate bond funds and half into government funds investing in mortgage-backed securities.

Investors also put $6.1 billion into money market funds and $359 million into municipal bond funds.

AMG Data Services tracks weekly data of mutual funds from companies representing 93 percent of the funds holding 59 percent of the industry's assets. Some of the top fund groups, including Fidelity Investments, Vanguard Group and Capital Research and Management Co.'s American Funds, only provide monthly data.

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Auto production declines

SOUTHFIELD, Mich., Feb. 21 (UPI) — Ward's Automotive Reports said vehicle production this week in the United States, Canada and Mexico is expected to decline to an estimated 334,966 units from the 348,655 cars and trucks built last week.

Ward's estimates, which include last week's, have calendar year North American output at 2,458,606 vehicles, up 0.2 percent from the same period last year.

U.S. automakers are expected to produce 243,056 vehicles this week, down 4.7 percent from the 255,088 cars and trucks built last week. To date, calendar 2003 U.S. vehicle output total an estimated 1,813,009 units, up 1 percent from the 1,795,078 vehicles built during the same period a year ago.

This week's Canadian vehicle production is estimated at 50,972, an 11 percent decrease from the 57,260 units assembled last week. Estimated calendar-2003 Canadian vehicle production now stands at 383,348 units, down 3.5 percent compared to the 397,151 vehicles produced during the same period in 2002.

Ward's said of the cars and trucks slated for production this week in the U.S., General Motors accounted for 34.7 percent, Ford Motor 27.5 percent and DaimlerChrysler 14 percent.

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IBM completes Rational Software deal

ARMONK, N.Y., Feb. 21 (UPI) — International Business Machines Corp. said it has closed its $2.1 billion acquisition of programming tools supplier Rational Software Corp.

The world's largest supplier of computers and technical services said it expects the deal to have little net impact on its earnings per share, both in the current quarter and for the full year 2003.

Operating income from Rational and associated benefits will be roughly offset by one-time, purchase-accounting charges, IBM said.

Analysts on Wall Street expect IBM to post earnings of $4.32 a share for 2003, according to Thomson First Call.

The closing of the Rational deal, which was first announced on Dec. 6, 2002, came one day after regulators at the European Commission in Brussels cleared the transaction. IBM previously received U.S. regulatory approval. Shareholders of Rational voted in favor of the deal on Jan. 22.

Rational, which has more than 3,400 employees, estimates that more than 600,000 software developers use tools to plan and execute complex software development projects.

Rational will be integrated into IBM as the fifth brand of IBM Software Group, a $13 billion business in 2002, IBM said.

Other IBM software brands include Lotus, its widely used corporate communications system, and Tivoli, which network administrators use to manage computers and software inside organizations.

The group also includes DB2, IBM's database software, and WebSphere, which helps pipe information between different business applications operating inside a company.

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Airborne hikes fuel surcharge

SEATTLE, Feb. 21 (UPI) — Airborne Inc., an express shipper, said it plans to raise its fuel surcharge on customers because of the spike in oil prices stemming from concerns about a possible U.S. war with Iraq.

Airborne said its existing fuel surcharge for express shipments would jump to 5.1 percent from 4.3 percent on March 3. The surcharge applies to all domestic, Canadian, and international express shipments, the company said.

Airborne will also increase the existing fuel surcharge for ground and airborne home shipments to 1.8 percent from 1.3 percent.

"Volatility in the Middle East and the threat of war has caused a sharp rise in fuel prices, one that is not expected to be short-lived," said Carl Donaway, chairman and chief executive of Airborne.

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Caraustar cuts jobs, stop production at one facility

ATLANTA, Feb. 21 (UPI) — Caraustar Industries Inc., a recycler of paper into paperboard and other products, said it will cut about 80 jobs and stop production indefinitely at its No. 2 recycled paperboard machine in Rittman, Ohio.

The company said it will take a charge of $1.2 million, or 3 cents per share in the first quarter and expects to offset the costs fully in 2003 with savings from the idling of the No. 2 machine.

Caraustar said all production from the No. 2 machine, which has an annual capacity of about 80,000 tons, will be shifted to other facilities, including Rittman's No. 3 machine.



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