AP Executive Morning Briefing

AP Online
07-01-2004
The top business news from The Associated Press for the morning of Thursday, July 1, 2004:

Court OKs Microsoft Antitrust Settlement

WASHINGTON (AP) _ Microsoft Corp. cleared its most serious American courtroom challenge when a federal appeals court unanimously approved the antitrust settlement the company negotiated nearly two years ago with the Bush administration. The appeals court set aside objections by Massachusetts that the landmark settlement's sanctions against the world's largest software company were inadequate. It ruled 6-0 on Wednesday that the settlement was "in its entirety" in the public's interest.

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Fed Raises Interest Rate a Quarter Point

WASHINGTON (AP) _ Federal Reserve policy-makers took the first step in what they signaled should be a slow rise in interest rates. Even with the Fed's first rate increase in four years, costs to borrow money still remain a pretty good deal for Americans. The modest one-quarter percentage point increase ordered Wednesday nudged up a key short-term interest rate controlled by the Fed to 1.25 percent, from a 46-year low of 1 percent.

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Stocks End Higher on Interest Rate Hike

NEW YORK (AP) _ Wall Street ended the first half of 2004 with a moderate advance Wednesday as the Federal Reserve's widely expected interest rate hike allowed investors to put weeks of uncertainty behind them. The markets' reaction to the Fed's move _ which raises the benchmark lending rate by 0.25 percentage point _ was somewhat muted, as the hike was what investors had anticipated. The increase, bringing rates off their 45-year low of 1 percent to 1.25 percent, was the first in four years.

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Tokyo Stocks Close Mixed, Dollar Down

TOKYO (AP) _ Tokyo's key stock index rose Thursday to its highest close in two months as investors welcomed upbeat government business survey results. The U.S. dollar was down against the Japanese yen. The Nikkei Stock Average of 225 issues closed up 37.14 points, or 0.31 percent, at 11,896.01 points _ its best finish since April 28, when it ended at 12,004.29 points. On Wednesday, the index slipped 1.94 points, or 0.02 percent.

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Gold Prices

HONG KONG (AP) _ Financial institutions in Hong Kong, including the gold and stock markets, were closed Thursday for a public holiday. They reopen Friday.

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Dollar-Yen

TOKYO (AP) _ The U.S. dollar was trading at 108.07 yen on the Tokyo foreign exchange market at 5 p.m. Thursday, down 0.62 yen from late Wednesday.

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Ellison Defends PeopleSoft Bid in Court

SAN FRANCISCO (AP) _ Oracle Corp. CEO Larry Ellison defended his company's $7.7 billion bid for rival business software maker PeopleSoft Inc. as a radical but necessary move during testimony Wednesday in an antitrust trial challenging the proposed deal. "We thought the only way we could survive and prosper was through an acquisition strategy," Ellison told a packed federal courtroom in San Francisco. "Oracle had to consider a strategy we had never considered before. If we wanted to survive and grow, we (decided) we will have to start an acquisition strategy. PeopleSoft was on top of the list."

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Donohue Endorses Outsourcing of Jobs

SAN FRANCISCO (AP) _ U.S. Chamber of Commerce President and CEO Thomas Donohue is promoting overseas outsourcing of jobs as a way to boost the economy and even increase employment _ a stance that rankles jobless white-collar workers, particularly in the flagging technology industry. Donohue, speaking Wednesday night to the Commonwealth Club of California, said he believes exporting high-paid tech jobs to low-cost countries such as India, China and Russia saves companies money that they may use to create new jobs for Americans.

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United Raises Fares on Int'l Flights

CHICAGO (AP) _ United Airlines announced a 5 percent fare hike Wednesday on most flights to international destinations from the United States, citing rising fuel costs as the reason. The increase is the latest of numerous attempts by U.S. carriers this year to try to have passengers share the burden of soaring jet-fuel prices. Last month, United rescinded a $10-per-round-trip fuel surcharge on most North American fares after only a day when American Airlines was the only competitor to follow.

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Pakistani Charged With Extortion

SEATTLE (AP) _ Federal prosecutors charged a Pakistani man with attempted extortion, saying he threatened to release photos of child laborers at an Eddie Bauer apparel factory unless the company paid him hundreds of thousands of dollars, the U.S. attorney's office said Wednesday. Prosecutors allege Usman Hayat, 31, of Islamabad, e-mailed the Redmond, Wash.-based clothing retailer in February, claiming he would post the photos on the Internet or send them to the media or Eddie Bauer's creditors if the company did not pay him $685,000.

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Belnick Completes Testimony in Tyco Case

NEW YORK (AP) _ Mark Belnick, Tyco International's former top lawyer, finished testifying Wednesday after acknowledging he was promised a bonus after he showed former chief executive officer L. Dennis Kozlowski a document indicating $100,000 of Tyco's money had been sent to Kozlowski's girlfriend. But Belnick said the bonus, worth $12 million to $17 million in cash and stock, was unrelated to the so-called "mistress document." He said the bonus was from a favorable result from a Securities and Exchange Commission probe of Tyco's accounting.

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Donaldson: SEC Seeks Hedge Funds Scrutiny

WASHINGTON (AP) _ The Securities and Exchange Commission will vote in two weeks on requiring hedge funds to register with the watchdog agency, oversight that its chairman says is needed to head off potential blowups that could hurt ordinary investors. The high-risk funds, with an estimated $750 billion to $1 trillion in assets and largely unregulated, are "in many ways ... an accident waiting to happen," SEC Chairman William Donaldson said in an interview Wednesday.

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