Business Digest


September 01, 2004

Price of oil drops to $42.12 a barrel, down by 16 cents

The price of oil slid toward $42 a barrel yesterday despite confusion about the status of Iraqi exports, indicating that the market has become less worried about the global balance of supply and demand.

With the busy summer driving season nearing an end, the demand for oil from refineries is expected to taper off - and that contributed to the decline in prices, traders said. The government releases its weekly energy supply report today, and most analysts expect commercially available supplies of oil and gasoline to grow or remain flat.

Yesterday, a barrel of crude was quoted at $42.12, down 16 cents, on the New York Mercantile Exchange. Crude futures have declined by about 14 percent since Aug. 19, when they settled at a record high of $48.70 per barrel on the exchange.

Justice reaches settlement to allow Bumble Bee deal

The Justice Department's antitrust division has reached a settlement to allow the proposed acquisition of fish processor Bumble Bee Seafoods LLP by Connors Bros. Income Fund, the world's biggest producer of canned sardines.

Under the settlement announced Tuesday, Connors Bros., based in Blacks Harbour, New Brunswick, will divest its Port Clyde, Nova Scotia, sardine snack business, preserving competition in that market, said R. Hewitt Pate, assistant attorney general for the division.

Connors has processor plants in New Brunswick and Maine and its own fishing fleet. Bumble Bee, based in San Diego, produces canned tuna, salmon and other seafood products. When the deal was announced in February, Bumble Bee was valued at about $385 million.

Gates' filing, investment by Snyder lifts Six Flags

Pressure from Microsoft chairman and shareholder Bill Gates over a sagging financial outlook and news that Washington Redskins owner Daniel Snyder has bought nearly 9 percent of Six Flags Inc. drove the amusement park company's shares up nearly 25 percent yesterday.

In a Securities and Exchange Commission filing by his Cascade Investment firm, Gates, who owns 11.5 percent of Six Flags stock, said he was "increasingly dissatisfied" with the financial performance.

The filing says Gates plans to press officials for answers on Six Flags' decision-making process and finances, which include a stock price that has plunged in recent months. It also says Gates might seek to have another person placed on Six Flags' board of directors.

In a filing Monday, Snyder reported that between Aug. 11 and 30 he bought 8.15 million shares of Six Flags for about $34.5 million through his investment vehicle. In the filing, Snyder said he believes the shares are undervalued, and that officials have not done enough to outpace competitors.

Fidelity cuts expenses on 5 equity index funds

Fidelity Investments Inc., the biggest U.S. mutual fund company, said yesterday that it reduced expenses on five equity index funds, which the firm said will make them among the industry's lowest-cost index funds.

As of yesterday, the expense ratios of Spartan 500, Spartan Total Market, Spartan Extended Market, Spartan International and Spartan U.S. will be capped at 10 basis points, or 0.1 percent, Fidelity said Previous limits ranged from 0.19 percent to 0.47 percent.

Fidelity, which managed $1 trillion in assets as of July 31, eliminated costs on dozens of mutual funds in the past 18 months and lowered commissions for some online stock trades. The changes aim to make the firm more competitive with rivals such as Vanguard Group, the second-largest U.S. mutual fund company, and Charles Schwab Corp., the biggest discount brokerage.

Schwab changes its mind, to sell investment division

Backpedaling from a recent expansion, Charles Schwab Corp. is selling an institutional investment and research division to Swiss banking giant UBS AG for $265 million, another step in the struggling stock brokerage's push to regain its Main Street appeal.

The all-cash deal, announced yesterday, represents a humbling about-face for San Francisco-based Schwab, which will sustain a substantial loss on the sale of its SoundView Capital Markets group.

UBS hopes to use the acquisition as a springboard toward becoming the one of the top traders on the Nasdaq stock market. The deal would affect about 500 Schwab employees.

3 ex-Invesco executives ordered to pay $340,000

Three former executives of Invesco Funds Group were ordered yesterday to pay more than $340,000 to settle allegations that they allowed some clients to use the funds for market-timing, the Securities and Exchange Commission said.

Timothy J. Miller, Invesco's former chief investment officer and a portfolio manager, and Thomas A. Kolbe, Invesco's former national sales manager, are to pay $150,000 in penalties each and $1 in disgorgement of any improper gains.

Michael D. Legoski, a former assistant vice president in Invesco's sales department, was ordered to pay $40,000 in penalties and $1 in disgorgement.

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