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ON THE MAINLAND
J.P. Morgan settles with insurance firms
NEW YORK >> J.P. Morgan Chase & Co. announced today that it had reached agreement with 11 insurance companies in a $1 billion legal dispute over failed financial pacts with failed energy trader Enron Corp.As a result, the companies are expected to pay more than $640 million to cover losses J.P. Morgan Chase incurred in complex commodity contracts that failed. The settlement comes a month into the trial of the claim in U.S. District court.
The New York bank said in a statement that under the agreement, "the insurance companies will pay approximately 60 percent of the amount of the surety bonds they wrote."
Manufacturing activity expands
NEW YORK >> U.S. manufacturing activity expanded strongly in December, the first growth in four months, but it is unclear if that momentum can be sustained, a private industry group said today.The Tempe, Ariz.-based Institute for Supply Management said its index of business activity was 54.7 in December, a marked improvement from the 49.2 reading in November. A reading above 50 signals the manufacturing sector is growing; a reading below 50 suggests the sector is contracting.
Analysts had forecast a reading of 50.1 for the month. The last time the index was above 50 was in August.
"The manufacturing sector rebounded in December," said Norbert J. Ore, who oversees the monthly survey for the group, formerly known as the National Association of Purchasing Management. "The question at this point is whether the manufacturing sector can continue to gather momentum during the first quarter of 2003."
The jump in the index, its best reading since June, shows that the long-depressed manufacturing sector is finding its feet, said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis.
Auto execs see little profitability
DETROIT >> Automotive executives are less confident about the industry's return to profitability than they were a year ago, and most see foreign automakers continuing to take market share from U.S. brands, a new study shows.Some 30 percent of the 100 senior auto executives interviewed by KPMG LLP said they expected lean times industrywide until 2005 at the earliest.
In KPMG's survey last year, 36 percent predicted better profits in 2003, while 24 percent forecast better profit levels in 2004.
KPMG conducted its fourth annual survey from the end of September through early November.
"It's obvious the executives no longer see profitability rebounding anytime soon," said Brian Ambrose, director of KPMG's automotive practice.
Computer spending to rise 4.6%, poll says
Framingham, Mass. >>- Top executives plan to increase spending on computer hardware and software by 4.6 percent this year, with security programs a top priority, according to a CIO Magazine poll. About 53 percent of the 335 executives surveyed last month said they plan to spend more on programs to block computer viruses and other security software.The poll on computer spending plans is conducted monthly by CIO Magazine, Deutsche Bank Securities Inc. and Prudential Securities Inc.
Security software has been one of the few bright spots in the computer industry, which is trying to pull out of a two-year slump, as companies seek to protect data from viruses and guard against hackers.
About 46 percent of executives said they plan to increase spending on computer hardware in the next year, up from 39 percent in the November poll. About 34 percent said they will leave spending unchanged and 20 percent said they will reduce spending.
IBM pays $3.95 billion to close pension gap
ArmonK, N.Y. >> International Business Machines Corp., the world's largest seller of computers and related services, paid $3.95 billion in cash and stock to fill a deficit in its U.S. employee pension plan, the company's first contribution in seven years.The payment is $950 million more than the $3 billion IBM forecast earlier this month, the company said. The falling value of stock portfolios is forcing IBM and other companies to bolster funds their employees draw on after retiring.
Ailing Global Crossing taps co-chairmen
Madison, N.J. >> Global Crossing Ltd. named Myron Ullman and Jeremiah Lambert co-chairmen of the bankrupt fiber-optic network operator following the resignation of founder Gary Winnick.Lambert, 68, and Ullman, 56, joined Global Crossing's board in April as the company, accused of inflating sales, tried to bolster investor confidence by adding independent directors.
Boeing, Hughes aided China illegally, U.S. says
Washington >> The U.S. government has charged a Boeing Co. unit and Hughes Electronics Corp. with illegally transferring space technology that may have helped China develop rockets and intercontinental missiles. The companies face possible restrictions on overseas sales, as well as more than $60 million in fines, if the State Department complaint is upheld.
