BUSINESS BRIEFS
Oil prices rise after moves by China, Russia
Associated Press
HOUSTON — Oil prices rose sharply yesterday as a large interest rate cut in China and news of a possible Russian output cut appeared to counter another round of dour economic news and larger-than-expected crude stockpiles in the U.S.
Trading followed this week's established pattern of volatility in the oil markets.
Lght, sweet crude for January delivery jumped more than 7 percent, or $3.67 to settle at $54.44 a barrel on the New York Mercantile Exchange.
Oil opened the week with a 9 percent swing upward Monday after the U.S. said it would bail out Citigroup, followed by a nearly 7 percent decline the following day on a raft of ominous economic data.
Gas prices, meanwhile, continued to fall. As many Americans hit the road for Thanksgiving, pump prices fell again overnight to a national average of $1.868 for regular unleaded, according to auto club AAA. It marked the lowest price since January 2005.
TIFFANY'S LOWERS OUTLOOK FOR 2008
NEW YORK — Tiffany & Co. yesterday reported third-quarter earnings that topped Wall Street expectations, but the luxury goods retailer warned of job cuts and lowered its 2008 outlook as consumers scale back on spending amid a tough economy.
Tighter credit and widespread layoffs have caused many consumers to cut back on non-essentials and the forecast is gloomy for the retail industry's crucial holiday shopping season. Tiffany's strong international sales had typically helped offset recent weakness in the U.S., but the company warns that Europe and Asia remain "challenging.
For the three months ended Oct. 31, the New York-based jeweler earned $43.8 million, or 35 cents per share, less than half its year-ago profit of $101.5 million, or 73 cents per share, which included a gain of 48 cents per share on the sale-leaseback of its Tokyo flagship store.
AUDIT MAY QUASH BCE BUYOUT
TORONTO — The largest leveraged buyout in history is unlikely to close after the Canadian telecom company BCE Inc. said yesterday an audit has found the proposed $35 billion deal to take the company private may not meet solvency requirements.
An investment group led by the Ontario Teachers Pension Plan Board and several U.S. partners had expected to complete its deal for BCE, the parent of Bell Canada, on Dec. 11. It would have been the biggest takeover in Canadian history.
A preliminary review by accounting firm KPMG found that BCE would not meet the solvency tests of the privatization agreement, partly due to the amount of debt involved in the transaction and current market conditions, BCE said. The company must meet the solvency requirements for the acquisition to be completed.
BCE spokesman Mark Langton said if KPMG doesn't change its mind, the deal is unlikely to proceed because the auditor must clear it as a condition of closing.
CHINA SLASHES RATES AGAIN
BEIJING — China unveiled its biggest interest rate cut in 11 years yesterday to spur borrowing and support a multibillion-dollar stimulus package to boost economic growth.
The European Union, meanwhile, urged its 27 member nations to join together in making $256.22 billion in spending and tax cuts to boost growth and bolster the consumer and businesses confidence.
China's 1.08 percentage-point cut — the fourth rate reduction in three months — reflects the government's urgency about raising private consumption and investment to supplement state spending on the stimulus package.
Interest on a one-year loan will fall to 5.58 percent, effective today, while interest paid on deposits will drop to 2.52 percent."This is the most aggressive monetary easing in recent years and should bode well for China's market performance," said Jing Ulrich, chairwoman of China equities for JP Morgan & Co., in a report to clients.
