(AP) - JPMorgan raises Bear purchase price
NEW YORK (AP) -- JPMorgan Chase & Co.'s higher offer for Bear Stearns on
Monday gave the investment bank control of nearly 40 percent of its ailing
rival, blunting the threat that angry shareholders could scuttle the deal.
The $2.4 billion lifeline to rescue the investment house stands a strong
chance of success -- assuaging investors unhappy with a $2 per share offer by
upping it to $10 apiece. JPMorgan has faced an outcry among Bear Stearns
shareholders about the lowball offer, and faced the possibility that rival deals
would begin to surface.
Most analysts said a higher bid was unlikely, but some bondholders have
reportedly been buying the stock in order to ensure their right to vote for a
deal and prevent a bankruptcy that would wipe them out. Bear Stearns' shares --
which hit $160 last year and still traded near $80 earlier in the month --
nearly doubled to $11.25 on Monday.
Home sales rose in February
WASHINGTON (AP) -- Sales of existing homes increased unexpectedly in
February after six months of decline, but private economists said it was too
soon to say that the prolonged slide in housing is coming to an end.
The National Association of Realtors said that sales of existing homes rose
by 2.9 percent in February to a seasonally adjusted annual rate of 5.03 million
units. It marked the first sales increase since last July, but even with the
gain sales were still 23.8 percent below where they were a year ago.
Prices continued to slide. The median sales price for single-family homes
and condominiums dropped to $195,900, a fall of 8.2 percent from a year ago, the
biggest slide in the current housing slump. The median price for just
single-family homes was down 8.7 percent from a year ago, the biggest decline in
four decades.
Stocks jump on revised Bear Stearns deal
NEW YORK (AP) -- Wall Street extended its big advance Monday as investors
applauded a new agreement that will give Bear Stearns Cos. shareholders five
times the payout that was set in a JPMorgan Chase & Co. buyout deal a week ago.
Investors were also pleased by a stronger-than-expected housing report and sent
the Dow Jones industrial average up nearly 190 points while also selling bonds
sharply lower.
Beyond the troubles of the financials, Wall Street was examining the housing
sector -- the root of much of investors' angst. A real estate trade group said
sales of existing homes rose rather than declined in February, as had been
expected.
The Fed's move and even the housing figures appeared to alleviate some of
Wall Street's concerns about souring mortgage debt and lenders' resulting
hesitance to grant loans of any sort. The latest Bear Stearns deal signals that
investors' losses might not be as sizable as feared.
Justice Dept. approves XM-Sirius merger
WASHINGTON (AP) -- The Justice Department on Monday approved Sirius
Satellite Radio Inc.'s proposed $5 billion buyout of rival XM Satellite Radio
Holdings Inc., saying the deal was unlikely to hurt competition or consumers.
The transaction was approved without conditions, despite opposition from
consumer groups and an intense lobbying campaign by the land-based radio
industry.
The combination still requires approval from the Federal Communications
Commission, which prohibited a merger when it first granted satellite radio
operating licenses in 1997.
The Justice Department, in a statement explaining its decision, said the
combination of the companies won't hurt competition because the companies are
not competing today. Customers must buy equipment that is exclusive to either XM
or Sirius, and subscribers rarely switch providers.
Washington to do more to combat crisis?
WASHINGTON (AP) -- Faced with rising economic anxiety and the high-profile
rescue of a major investment bank, lawmakers are considering sweeping changes to
financial regulation and a massive effort to buy troubled home loans.
While they debate what if anything more should be done, frustrations are
building that Congress, which is halfway through a two-week recess, and the Bush
administration aren't doing enough to combat the economic impact of falling home
prices, banks' unwillingness to lend freely and a seized-up market for
mortgage-linked investments.
Housing industry groups are preparing to lobby hard for help when Congress
returns from recess March 31. Arguing that the stimulus package signed by
President Bush last month doesn't aid the housing sector enough, builders want
more-- including a new tax credit for people who buy homes.
Former Countrywide exec heads new firm
LOS ANGELES (AP) -- Stanford Kurland spent nearly three decades helping
build Countrywide Financial Corp. into the nation's largest mortgage lender.
Now, the former president of the troubled company and several key colleagues
hope to cash in as the housing market collapses.
Kurland, 55, will serve as chairman and chief executive officer of a new
company unveiled Monday that will acquire and restructure distressed mortgages.
Private National Mortgage Acceptance Co. LLC, also known as PennyMac,
intends to help borrowers restructure loans so they can avoid foreclosure and
maintain payments.
Backed by prominent investment management firms BlackRock Inc. and
Highfields Capital Management, PennyMac has even set up shop in Calabasas,
Calif., about six miles from the offices of Countrywide.
Icahn sues for Motorola board records
CHICAGO (AP) -- Motorola Inc. on Monday dismissed as an "unnecessary
distraction" billionaire investor Carl Icahn's legal efforts to force it to turn
over documents about its executives and its cell phone business.
Icahn plans to use the material in his battle to win four seats on the
Schaumburg-based company's board. Motorola prevailed in a similar proxy battle
with Icahn a year ago.
Icahn sued the company for the documents Monday afternoon in the Court of
Chancery of the State of Delaware.
Motorola said it rejected Icahn's "demand for extensive access to its books
and records" earlier this month on the belief that he does not have a credible
basis to request such an inspection.
Prescriptions drive Walgreen 2Q profits
CHAMPAIGN, Ill. (AP) -- Walgreen posted a 5 percent increase in
second-quarter profits that just beat Wall Street's expectations, but investors
greeted the news Monday with enthusiasm, driving the share price sharply higher.
The Deerfield, Ill.-based drugstore chain said improved cost controls helped
offset sluggish holiday sales.
Walgreen reported earnings of $685.9 million, or 69 cents per share, up from
$651.9 million, or 65 cents, a year ago.
Sales rose 11 percent to $15.39 billion, from $13.93 billion. Same-store
sales, or sales at stores open at least a year, gained 4.7 percent. That is a
key indicator of retailer performance since it measures growth at existing
stores.
Tiffany profit falls on items, tops view
NEW YORK (AP) -- Tiffany & Co. on Monday said its fourth-quarter earnings
fell almost 16 percent, hurt by one-time charges, but its adjusted results beat
analyst expectations and the jewelry retailer raised its outlook for this year.
The revised guidance topped Wall Street expectations, and its shares climbed
almost 13 percent.
Tiffany earned $118.3 million, or 89 cents per share, in the quarter ended
Jan. 31, down from $140.5 million, or $1.02 per share, a year ago. Excluding
one-time charges, profit was $1.27 per share, above the $1.21 analysts surveyed
by Thomson Financial expected.
By The Associated Press
The Dow rose 187.32, or 1.52 percent, to 12,548.64, after rising more than
260 points on Thursday, the last day of trading before the Easter weekend.
Broader stock indicators also advanced. The Standard & Poor's 500 index rose
20.37, or 1.53 percent, to 1,349.88, and the Nasdaq composite index rose 68.64,
or 3.04 percent, to 2,326.75.
Light, sweet crude for May delivery fell 98 cents to settle at $100.86 a
barrel on the New York Mercantile Exchange.
Other energy futures were mixed Monday. April heating oil futures fell 1.41
cents to settle at $2.9631 a gallon on the Nymex, while April gasoline futures
rose 3.61 cents to settle at $2.6412 a gallon.
April natural gas futures rose 26.4 cents to settle at $9.329 per 1,000
cubic feet.
In London, May Brent crude fell 52 cents to settle at $99.86 barrel on the
ICE Futures exchange.
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