Friday, April 2, 2004

Business digest



Gateway to close all 188 retail stores

POWAY, Calif. - Troubled computer maker Gateway Inc. announced Thursday that it will shutter all of its retail stores next week, eliminating 2,500 jobs, or nearly 40 percent of its work force.

The company said its 188 stores will close on April 9.

The company, which recently posted its 12th loss in 13 quarters, said it is exploring other retail options to sell its products.

Gateway has one remaining store in the Cincinnati area, in Forest Park. The company earlier closed a store in Florence.

Mortgage rates rise, but still relatively low

WASHINGTON - Mortgage rates climbed this week, but they are still lower than a year ago.

The average rate on 30-year, fixed-rate mortgages rose to 5.52 percent this week, up from 5.40 percent last week, Freddie Mac reported Thursday.

In mid-June last year, rates on 30-year mortgages sank to 5.21 percent, their lowest level ever.

Sales surge for U.S., Japanese automakers

DETROIT - The top two American automakers and two of Japan's biggest car manufacturers posted higher U.S. sales for March compared with last year.

General Motors Corp. said Thursday that overall sales rose 6.3 percent last month, led in part by strong mid-size car sales and a 16 percent rise in business at Cadillac.

Japan's Toyota Motor Corp. ended its best-ever first quarter in the United States with its best-ever March, as sales rose 5.5 percent. Toyota sold 464,721 vehicles in the United States in the first three months of the year.

Pickup trucks again drove sales at Ford Motor Co., as its overall business rose 2.2 percent last month.

Companywide, Chrysler's business was off 2 percent in March versus the year-ago period, but the automaker still managed to notch its second consecutive quarter of positive sales growth.

Nissan Motor Co.'s North American division had its best sales month ever, reporting business up 30.3 percent from last year.

Analysts see lower prospects for retail

U.S. retailers including Wal-Mart Stores Inc. and Target Corp. may be hurt as rising interest rates damp consumer demand in the second half of the year, said Merrill Lynch analysts, who cut their ratings on nine retail stocks.

Top-ranked department-store analyst Daniel Barry cut Wal-Mart and Target to "neutral" from "buy." Merrill Lynch also cut the recommendations on AnnTaylor Stores Corp.; Aeropostale Inc., a retailer of teen clothing; jeweler Zale Corp.; department-store chain Dillard's Inc., and discount retailers Dollar Tree Stores Inc. and Family Dollar Stores Inc.

European regulator leaves rates unchanged

FRANKFURT, Germany - The European Central Bank left interest rates unchanged Thursday despite worries about Europe's nascent economic recovery that fueled speculation the bank might consider a rate cut soon.

Bank President Jean-Claude Trichet gave no clear signal that the ECB is giving more thought to that possibility, sticking to its earlier outlook that a recovery will gather speed this year.

But he acknowledged that some recent economic indicators mean more risk for the recovery.

The bank's governing council left the key refinancing rate at 2 percent. The rate, which determines the cost of central bank credit to commercial banks, has been unchanged since a half-point cut in June.

Tyco jurors review exhibits on Day 11

NEW YORK - Jurors in the Tyco International trial asked Thursday to see exhibits related to comments that two former executives made to investors about their stock sales and company loans.

The securities fraud charge against former Tyco CEO L. Dennis Kozlowski and former finance chief Mark Swartz accuses them of falsely pumping up Tyco's stock price, then profiting by selling shares in the company.

Thursday was the 11th day of deliberations.

Pepsico extends its NFL sponsorship

PepsiCo Inc., which replaced Coca-Cola Co. two years ago as the National Football League's soft-drink sponsor, extended its contract five years through 2011. Terms weren't disclosed.

From wire reports




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