Saturday, June 08, 2002

Business Digest


Buyers use more credit

        Americans increased their borrowing in April at the fastest pace in five months, especially with credit cards. Consumer credit rose by a seasonally adjusted $8.9 billion, or at a 6.3 percent annual rate, the Federal Reserve reported Friday.

        The advance — bigger than many economists' expectations — offered an encouraging sign consumers will continue to spend and help along the economic recovery.

        Demand for revolving credit rose $4.1 billion, or at an annual rate of 7 percent in April. For nonrevolving credit, including new cars and vacations, demand grew by $4.8 billion in April, or at an annual rate of 5.8 percent.
       

Jury asks for review

        Jurors in Arthur Andersen LLP's obstruction of justice trial in Houston asked Friday for a rerun of testimony from the firm's former top Enron Corp. auditor about his guilty plea to the same charge.

        In their second day of deliberations, the jury wanted to review testimony from David Duncan about his April 9 guilty plea to directing mass shredding of documents. Mr. Duncan, 43, spent more than four days on the stand last month.

        The jury had asked Thursday for an entire transcript of Mr. Duncan's testimony, but the judge said they could have portions read back to them.
       

Sale unblocked

        A judge overturned an order from the Kansas insurance commissioner blocking the sale of the state's largest health insurance company to an Indiana firm.

        Shawnee County District Judge Terry Bullock sent the proposed acquisition of Blue Cross-Blue Shield of Kansas by Anthem Insurance Companies, of Indianapolis, back to Insurance Commissioner Kathleen Sebelius for another review Friday. But the judge left open the possibility that Ms. Sebelius could reject the sale for different reasons.

        Ms. Sebelius ruled in February that premiums for people insured by Blue Cross would have increased too much to boost profits if it were purchased by Anthem.
       

User list inflated?

        Adelphia Communications reportedly overstated the number of cable television subscribers it had by as much as 10 percent, raising further questions about the company's accounting practices as it teeters on bankruptcy.

        The Wall Street Journal, citing unidentified sources, said Friday that Adelphia inflated its subscriber count by 400,000 to 500,000 by counting customers who purchased high-speed Internet connections and by other means. The inflated numbers and the work of accounting firm Deloitte & Touche are being investigated by the Securities and Exchange Commission and federal prosecutors, the Journal reported.
       

Strike might end

        Hershey Foods Corp. and union members representing 2,700 workers reached a tentative agreement to end a six-week strike at two plants over health-care costs.

        Union members will vote today, Hershey said. Union members at two plants near Hershey, Pa., had been working without a contract since November and walked out April 26. The sides had disagreed over proposed health-care cost increases and retroactive pay increases.
       

Changes at NASD

        The National Association of Securities Dealers board voted to merge the group with its regulatory arm, a restructuring made possible by the separation of the Nasdaq Stock Market, the NASD announced.

        The changes, which take effect immediately, create a single regulation unit with three divisions reporting to NASD chairman and chief executive officer Robert Glauber. The board also approved the hiring of up to 60 new staffers for the unit, which may market its services to other exchanges. The new staffers will help enforce new rules on analysts' conflicts and a new anti-money laundering law, the NASD said.

        The restructuring is the fourth since a 1996 settlement in which the Securities and Exchange Commission censured the NASD for failing to police the Nasdaq market.

       



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