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Bad News? What Bad News?

Investors sported rose-colored glasses on Oct. 1, pushing the Dow, which not long ago was languishing near 13,000, up nearly 200 points to close at a record 14,087. Oddly, the impetus seemed to stem from two downers: Banking monoliths Citigroup (C) and UBS (UBS) both said third-quarter earnings will get clobbered as they write down $9 billion in subprime mortgages and high-yield loans used to finance buyouts. (Deutsche Bank (DB) weighed in with $3.09 billion in charges on Oct. 3.) Meanwhile, a planned $2.25 billion private equity-backed buyout of data-management company Acxiom (ACXM) got scrubbed—the latest deal to fall by the wayside.

So why did investors cheer? They're eager to believe the worst is over for the credit markets, and they're pleased banks are coming clean. But they're also nervous about the key September jobs number due out on Oct. 5.

See "Behind the Market's October Surprise"

In its Sept. 26 deal with the UAW, General Motors (GM) guaranteed wages, benefits, and jobs for most of its 74,000 workers. But the tentative four-year contract leaves a few small plants in jeopardy. GM said it had guaranteed work or investment in 16 factories. The deal says 11 others could be closed, sold, or downsized between now and 2011, according to documents detailing the agreement. Seven were previously on the hit list. The moves threaten hundreds of workers, though the company may transfer some to other plants or buy them out.

The giant Finnish handset maker makes its biggest acquisition ever, and grabs...a digital mapping service? No, Nokia (NOK) isn't lost. In agreeing to buy Chicago-based Navteq (NVT) for $8.1 billion, it's staking out the evolving business of mobile search. The price was steep, but as mobile phones morph into handheld computers with global positioning capability, Nokia wants control of the mapping data that Navteq turns out.

See "Nokia to Pay $8.1 Billion for Navteq"

Beware the mighty loonie. In a startling sign of the newfound strength of the Canadian dollar, Toronto-Dominion Bank (TD) is snapping up Commerce Bancorp (CBH), a booming New Jersey bank. TD on Oct.2 said it'll pay $8.5 billion in cash and shares for Commerce, a 7% premium to the stock price on Oct. 1. Commerce has had a tumultuous year. In June founder and longtime CEO Vernon Hill stepped down amid a slew of investigations into unsavory insider deals.

Is something rotten at Airbus parent European Aeronautic Defence & Space? French daily Le Figaro said on Oct. 3 that stock market regulators, in a preliminary report, allege that some 1,200 EADS employees and board members unloaded shares before the stock nosedived in June, 2006, on disclosure of production snafus on the Airbus A380. The report recommends prosecution of 21 top officials including Airbus' current boss, Thomas Enders, said the newspaper. EADS denounced the leak and declined further comment. Most of the individuals named have previously denied trading on advance knowledge.

See "Did Insiders Bail on Airbus Woes?"

A lot of folks couldn't figure out why eBay (EBAY) in late 2005 agreed to pay up to $4.3 billion for a fast-growing but money-losing Internet phone service called Skype. On Oct. 1, eBay admitted the price was too rich. It took a $1.43 billion charge against earnings because Skype hasn't proved as profitable as eBay expected. And because it never fit with eBay's auction business, analysts speculate Skype could get spun off.

See "Ebay's Skype Bubble Bursts"

Did anyone really think he would quietly leave office? Autocratic Russian President Vladimir Putin gave a glimpse of his plans on Oct. 1 by strongly hinting he has eyes for the Prime Minister's job, which he could win by running for Parliament in December. Putin is due to step down as President next March. As Premier, he would be well-placed to exercise power, especially if the next President is a lightweight crony.

The world's No. 1 retailer tried to win a bank charter in the U.S. and got shot down. But the Mexican Banking & Securities Commission on Oct. 2 said "Sí," clearing the way for branches to open in November. The bank, called Banco Wal-Mart, will start small, with branches in a dozen or so of the 964 company stores and restaurants in some 130 Mexican cities. The government hopes Wal-Mart's (WMT) entry will help extend banking services to the 80% of Mexicans who lack them and bring down fees charged by big Mexican banks.

See "Wal-Mart, Stay Out of Banking, Period" Procter & Gamble (PG) continues to offload brands. Aiming to focus on more lucrative businesses like beauty care, the company has retained Blackstone Group (BX) to explore the sale of its Folgers coffee, Pringles chips, and Duracell batteries businesses, The Financial Times reported on Oct. 1. CEO A.G. Lafley has already sold off most food brands, while Duracell is locked in price wars.

Despite official denials, the ice may be getting thin under Patricia Russo. The board of telecom-equipment maker Alcatel-Lucent (ALU), which on Sept. 13 posted its third profit warning this year, is asking CEO Russo to present a turnaround plan by Oct. 30. The board said on Oct. 2 that it "supports Pat Russo and the leadership team."

See "Hard Times at Alcatel-Lucent"

CEO Richard Lenny on Oct. 1 said he'll quit the candy company at the end of the year, apparently because he feels stymied by the trust that controls it. He'll be replaced by COO David West.

The trial made The Office look like a model of corporate decorum. It featured lurid tales of a star player trysting with an intern in a parked car and a powerful boss who allegedly asked one of his top lieutenants to go "off site for some private time" with him. And in the end, it may cost Madison Square Garden—and its owner, Cablevision Systems (CVC)—dearly. On Oct. 2 a federal jury decided that MSG must pay $11.6 million in punitive damages to former New York Knicks marketing executive Anucha Browne Sanders after concluding that Knicks President and Coach Isiah Thomas subjected her to verbal abuse and unwanted advances. Browne Sanders is also asking for $9.6 million in compensatory damages. Thomas maintained his innocence after the verdict, and Cablevision attorneys say they'll appeal. Employment lawyers call the scandal a case study in how not to handle a harassment complaint. For example, management excused Thomas' behavior—then fired Browne Sanders upon learning she was planning to sue, and later hastily wrote a memo spelling out reasons for letting her go.

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