- The Washington Times - Wednesday, February 13, 2008

Regional

Sprint Nextel Corp., the Reston mobile-phone company that lost more than a million subscribers last year, named activist investor Ralph Whitworth of the Relational Investors hedge fund to its board to help restart growth after the stock price plunged by more than half. Mr. Whitworth, 52, had pushed for Sprint to curb subscriber losses and improve operations before the ouster of Chief Executive Officer Gary Forsee last year.

Columbia, Md., chemical company W.R. Grace & Co. is seeking court approval to extend its $250 million bankruptcy loan for two years while it awaits a legal decision on how much it owes for injuries and deaths linked to its asbestos products.

Lockheed Martin Corp. won an FBI contract worth as much as $1 billion to create a modern identification system for catching criminals and terrorists, according to losing bidder Northrop Grumman Corp. Lockheed and the FBI didn’t immediately confirm the award. The 10-year contract could create the world’s largest ID database, including finger and palm prints and other physical traits.

Bethesda’s Lockheed Martin Corp. and Boeing Co., the top two U.S. defense contractors, won Air Force contracts worth a combined $498.4 million to support government rocket launches. Boeing, based in Chicago, won $288 million to support Delta IV rocket launches, the Pentagon said. Lockheed won $210.4 million to support Atlas V rocket launches.

National

The Federal Reserve auctioned another $30 billion in funds to commercial banks in an effort to combat a severe credit squeeze. The latest batch of cash brought an interest rate of just over 3 percent, down slightly from the previous auction. It marked the fifth in a series of auctions that so far have pumped $130 billion in money into the nation’s banking system.

Pessimism may be the mood on Wall Street, but a survey of top economists by the Federal Reserve Bank of Philadelphia found the forecasters predicting the U.S. will escape a recession. The bank’s venerable quarterly Survey of Professional Forecasters reckons that the U.S. gross domestic product will rise by 0.7 percent in the first quarter, and by 1.3 percent in the second.

The U.S. economy still faces a “significant threat,” which means it’s too early to start talking about removing the Federal Reserve’s accommodative stance on interest rates, San Francisco Fed President Janet Yellen said. “The threat hasn’t passed. We need to remain very focused on the downside risks to the economy,” she said.

Former Federal Reserve Chairman Paul Volcker said the illusion of wealth might put America in the poor house. “We had a bull market followed by a housing boom. It created an illusion that everyone was rich,” Mr. Volcker said. “We have been — still are — in an unsustainable position.”

IndyMac Bancorp Inc. reported the first annual loss in company history and scrapped its dividend to shore up capital as the mortgage lender had to boost its provisions for credit losses. The net loss was $509.1 million ($6.43 per share) for the quarter, compared with a profit of $72.2 million (97 cents) year ago. For last year, IndyMac posted a loss of $614.8 million ($8.28) compared with a profit of $342.9 million ($4.82) for 2006.

Citigroup Inc. plans to inject about $3.3 billion into six of the seven so-called structured investment vehicles it moved to its balance sheet last year, according to a report. The money is needed to protect the funds from further deterioration in their assets, Dow Jones said.

Florida chose Federated Investors Inc. over interim manager BlackRock Investors to take over management of its local government investment pool, hoping the private investment firm will help reassure investors who withdrew more than $15 billion in a panic last year. The pool had been managed by the State Board of Administration when it was rocked by a run after mortgage securities it held were downgraded.

New York Times Co., which is facing renewed pressure from investors, named two new candidates for its board with strong backgrounds in finance and technology. The Times said it would nominate Robert Denham, a partner at the law firm Munger, Tolles & Olson, and Dawn Lepore, the chairman and chief executive of Drugstore.com Inc., as directors.

Google and Nokia — the world’s most popular search engine and largest cell-phone maker — said that Google’s search engine will be incorporated into Nokia’s search application. The Google search engine will join Yahoo and Windows Live, which are already offered.

Amazon.com is fighting a plan by Democratic New York Gov. Eliot Spitzer to require online companies to collect sales tax from shoppers in New York, whether the companies are in New York or not. Mr. Spitzer’s proposed budget would require Internet giants like Amazon to collect tax on an estimated $47 million in sales to New Yorkers.

Anti-tobacco lawyer Richard Scruggs and his son Zach asked a federal judge in Oxford, Miss., to dismiss bribery charges against the two men or suppress government evidence and move their trial to a different city. The father and son, also a lawyer, called charges they conspired to bribe a state judge who would decide their share of $26.5 million in legal fees “outrageous government conduct.”

The estranged wife of L. Dennis Kozlowski said the imprisoned former chief executive of Tyco International Ltd. has delayed paying off a $70 million fine to avoid his obligations to her, according to her lawyer. Karen Kozlowski filed a motion in Florida state court to compel her husband, who made $300 million from 1998 to 2002 as Tyco’s CEO, to disclose his remaining assets.

U General Electric Co. said it will get about 60 percent of infrastructure sales from overseas this year, a five-percentage-point increase from last year, as the U.S. economy wanes and developing countries add electrical capacity to fuel growth. A shift in global economic forces, led by China and the Middle East, means a slowing U.S. economy won’t hurt trading partners like Brazil as much as a decade ago, GE said.

International

Venezuela’s state oil company, Petroleos de Venezuela SA, said that it has stopped selling crude to Exxon Mobil Corp. and has suspended commercial relations with the U.S. oil company in response to Exxon Mobil’s efforts to seek legal redress for the nationalization of its oil ventures in Venezuela. The impact on Exxon Mobil was not immediately clear.

PresidentHugo Chavez’s policies have cut Venezuela’s oil output by 1.2 million barrels a day, enough to supply 80 percent of U.S. East Coast demand, according to Cambridge Energy Research Associates. Production from Venezuelan fields has plunged by more than one-third since Mr. Chavez assumed the presidency in 1999 because of a lack of investment by the country’s state oil company, the firm said.

From wire dispatches and staff reports


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