By James Langton
(February 14 – 09:00 ET) – This week’s economic action won’t take place until later in the week. On Thursday, U.S. Federal Reserve Board chairman Alan Greenspan will giving his regular testimony before the Senate banking committee. The U.S. Producer Price Index comes out on Friday. The only notable release today is about U.S. business inventories. It came in at 0.5%, ahead of expectations of 0.4%.
Markets are mostly down everywhere following on Friday’s Wall Street sell-off. Telecoms and computer stocks are leading the way south. London’s FTSE is down 70 points to 6,122. France’s CAC 40 has dropped 55 points to 6,231. Only the German DAX is up 37 points to 7,649.
Merger Monday has struck in the U.S. today. There’s a deal unfolding in the fibre-optics business. Corning Inc., the biggest maker of glass fiber for telecoms, buying NetOptix Corp. for about US$2 billion in stock. CMGI Inc., an Internet venture fund, is buying Tallan Inc., another Internet firm, for US$920 million in cash and stock. World Access Inc., a U.S. long-distance phone firm, is buying WorldxChange Communications for US$934 million in stock and assumed debt.
Stocks were down overnight in Asia. Banks sliding on interest rate fears overwhelmed strength in the telecom sector. Pacific Century CyberWorks Ltd., Asia’s largest Internet company outside Japan, is raising US$1 billion to fund a proposed merger with Cable & Wireless HKT Ltd. Nevertheless the Hang Seng finished down 191 points to 17,188. Japan’s Nikkei slid too, to 19,556, down 153 points.
In other business news Microcell is reporting an accelerated loss for the fourth quarter. The firm lost $2.43 per share, down from last year’s $2.25 per share loss. It also announced that Voicestream, a U.S. company, would be taking a US$400 million stake in the firm.
Things are brighter at ATS Automation, which reported earnings of 16¢ per share up from 15¢ last year. Nortel Networks Corp. reports that it is investing US$260 million in optical networking and creating 3,400 jobs worldwide.