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Closing Bell: Harley Davidson

At first glance, Timothy Geithner looks to be an odd choice to head the Federal Reserve Bank of New York. He isn't a banker, and he lacks a PhD in economics. But a closer look at Geithner shows why he's being tapped to succeed New York Fed President William McDonough, as first reported by BusinessWeek Online. In stints first at the Treasury Dept. and lately at the International Monetary Fund, the 42-year-old Geithner has earned a reputation as a cool crisis manager. He's well-known globally as a negotiator who can get his way without rancor. Most important, though, he has the respect of Fed Chairman Alan Greenspan, who worked closely with the then-Treasury official during the 1997-98 Asian crisis. While Geithner wasn't the first choice to head the New York Fed -- Stanley Fischer, himself a former IMF official, passed on the job to stay at Citigroup -- he's a fast learner whose career demonstrates that he's not one to be underestimated. Pittsburgh, once one of the capitals of Corporate America, may be going under. On Oct. 15, Standard & Poor's (MHP) cut the city's credit rating to junk status, after Mayor Tom Murphy warned that it could be pushed into bankruptcy by the end of the year. Pittsburgh, whose population has shrunk to 334,000, is the only U.S. city of more than 100,000 to carry a below-investment-grade rating. Despite layoffs of 700 city workers, Pittsburgh faces a budget deficit of $40 million this year, and the Democratic mayor has said the red ink could more than double, to $81 million, in 2004. Still, Pittsburgh cannot raise taxes without the nod from Pennsylvania's Republican-controlled legislature. Top executives at Bank One (ONE) left under fire following New York Attorney General Eliot Spitzer's investigation into mutual-fund trading practices. In early September, Spitzer targeted the Canary Capital Partners hedge fund in a complaint, and listed Bank One among the outfits that let big investors trade funds more often than ordinary investors. After probing its practices, the bank said on Oct. 15 that mutual fund head Mark Beeson had quit. A day earlier, institutional asset management head John AbuNassar left. Bank One CEO James Dimon told employees that he regretted that Canary got "special treatment." Motorola (MOT) surprised Wall Street on Oct. 13 by reporting third-quarter earnings a day early. Net income improved 4.5%, to $116 million, on sales that jumped 5%, to $6.83 billion. The next day it announced a deal to re-enter the sizzling flat-screen TV biz with Proview International of Hong Kong, which will build Motorola-branded screens. But trouble still lurks. The average sales price of Motorola's phones slumped to $145, causing that unit's operating income to fall 27%. Despite huge strides in shipments and orders for Motorola and rivals Nokia (NOK) and Samsung, pricing pressure could hurt them all. The European Union wants out from under a $116 million-a-year penalty imposed five years ago by the World Trade Organization. The EU says it is now complying with a WTO ruling saying that its ban on hormone-treated beef from the U.S. and Canada violates international trade law. The WTO said the ban was illegal in the absence of scientific evidence that cattle treated with growth hormones pose any health problems. So will Europeans start chowing down on American beef anytime soon? Not exactly. The EU has decided to continue a "provisional prohibition" on hormone-treated beef. But it still wants the penalties lifted because it has promised to keep looking for definitive scientific proof that U.S. beef is safe to eat. Senator Charles Grassley (R-Iowa) is reluctant: "There's nothing new here." >> America Online (TWX) will launch a $9.95-a-month Internet service in 2004.

>> Campbell Soup's (CPB) plans to market an organic line of tomato juice.

>> An FDA advisory panel backed the return of silicone gel breast implants. Used to seeing sales rev up every quarter, Wall Street knocked down Harley-Davidson shares by 6%, to $49.15, on Oct. 15. While profits rose 15%, Harley shipped 16 fewer motorcycles than it did in last year's third quarter, missing its own sales goal.

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