Bear Stearns

Shares of Visual Networks Inc. shot up 31 percent yesterday as investors reacted to a strong earnings report and equity analysts upgraded their ratings on the Rockville telecommunications software company.Visual Networks' stock gained $10.5625 to finish at $44.50.The main cause of the ascent was the company's positive second-quarter earnings, reported after the close of trading Thursday.Visual Networks posted net income of $3.4 million, or 16 cents per diluted share, compared with a loss of $5.6 million, or 28 cents per share, in the year-ago period.

ARE YOU thinking of buying a "new issue"? "The average initial public offering [IPO] doesn't work out," says Robert Natale of Bear Stearns & Co. "Typical new issues outperform for about six months and then slump, when you can buy them cheaper.""Don't buy any stock now. When you do, resist negativity of disillusioned `tech bulls' who were creamed. Then buy computers, semiconductors, etc." (A. Gary Shilling in Forbes)"During the past five years, mutual fund investors got much less than if they sank their money in the S&P 500 index fund."

WASHINGTON -- USinternetworking Inc., which lets customers use business-management software over the Internet, yesterday raised the size of its initial stock offering by 20 percent, to 6 million shares, to satisfy investor demand.The Annapolis-based start-up also lifted the price of those shares to $16 to $18 apiece from $11 to $13 established in a previous filing with the U.S. Securities and Exchange Commission.Increasing the number of shares to be sold and their expected price indicates heightened demand on the part of institutional investors, who generally compose the bulk of purchasers in an initial stock sale.

NEW YORK -- Forstmann Little & Co., a New York buyout company, said yesterday that it will invest $1 billion for a 12 percent stake in McLeodUSA Inc., allowing the provider of local and long-distance phone services to expand its fiber-optic network in Midwestern and Rocky Mountain states.Forstmann Little, led by billionaire financier Theodore Forstmann, will receive McLeodUSA preferred shares that are convertible into common stock at $36.50 each in five years. McLeodUSA, of Cedar Rapids, Iowa, may buy back the securities, which pay interest at 3.5 percent annually, after seven years.

Dutch insurer Aegon NV, which has its U.S. headquarters in Baltimore, said yesterday that its net income rose 16 percent in the third quarter, fueled by a strong performance in its U.S. operation.Aegon reported net income of $341 million for the third quarter, compared with net income of $294 million for the third quarter of 1997.The company made 59 cents a share in the three months that ended Sept. 30, up 15.9 percent from the 51 cents made in the 1997 quarter."It was a solid quarter, in line with analysts' and investors' expectations," said Jason Zucker, an analyst with Bear Stearns & Co. in New York.

U.S. stocks rose for a second day yesterday as investors snapped up shares of McDonald's Corp., PepsiCo Inc. and other consumer businesses with dependable earnings.That strategy came at the expense of Intel Corp., Microsoft Corp. and other computer-related stocks whose profits may suffer later this year from cutthroat competition in the technology industry. Computer shares have helped fuel a 15 percent rally in U.S. stocks this year.The Dow Jones industrial average surged 116.83, or 1.3 percent, to 9171.

Crestar Financial Corp. said yesterday that it made $82.7 million in the fourth quarter as the Richmond, Va.-based banking company benefited from a steady stream of new loans and fees from services.Crestar's earnings -- the equivalent of 75 cents a share for the period ended Dec. 31 -- were 17 percent higher than last year's fourth-quarter results of $70.7 million, or 63 cents a share, excluding a one-time charge of $32.5 million for the acquisition of Laurel-based Citizens Bancorp. After the charge, net income in the 1996 quarter was $38.2 million, or 34 cents a share.

Many job-hunters get discouraged when things don't go their way. Often they're waiting for that lucky break. Whether you're just joining (or rejoining) the job market or have reached a career plateau, it's easy to feel stumped when you've hit a roadblock.At some point, most successful people have felt the same way. But instead of letting inertia set in, they try another tack. Eventually, it gets them where they want to go.That's among the more important messages buried in "Women of The Street," Sue Herera's new book about female executives on Wall Street (John Wiley & Sons, 1997)

NEW YORK -- Though Wall Street isn't known as a place where women rule, there's a fast-growing segment of the securities business where women are gaining more clout than perhaps anywhere else in the industry.Wall Street executives and anecdotal evidence suggest that asset-backed bonds is one part of the securities business where women are making more headway into management ranks than other areas.The evidence includes Lesley Goldwasser, senior managing director and head of asset-backed trading at Bear, Stearns & Co.; Beth Starr, senior vice president and head of asset-backed research at Lehman Brothers Inc.; and Susan Aldworth, head of asset-backed trading at UBS Securities.

Shares of Alex. Brown Inc. and Legg Mason Inc. surged to new highs this week on speculation that one or both of them could be acquired by large financial services companies.Alex. Brown's stock raced to a 52-week high yesterday of $57 a share, up 62.5 cents, and Legg Mason's stock closed at $48.875 a share, down 12.5 cents, after setting a 52-week high of $50 on Thursday.The latest jump in stock prices follows Wednesday's announcement that Morgan Stanley Group Inc. and Dean Witter, Discover & Co. would merge to create the country's largest asset management company with a market capitalization of $23 billion and $270 billion in assets under management.

Bruce Sherman, whose once-top-performing unit at Legg Mason Inc. was ravaged by losses on investments in Bear Stearns Inc. and several newspaper companies, is retiring at the end of the month. Sherman, 60, co-founded Private Capital Management, a money manager catering to wealthy investors that Legg bought in 2001 for nearly $1.4 billion. Sherman said in a brief interview yesterday that retirement was a difficult decision. "I sold the firm in 2001, and there was an inevitability of retirement at some point in time," Sherman said, noting March 31 was a logical time, since it is the end of Legg's fiscal year.

NEW YORK - Morgan Stanley Inc. shares plunged more than 22 percent yesterday as investors questioned the investment bank's future even with a major investment from Japan's Mitsubishi UFJ Financial Group. Yesterday marked the fifth straight day that shares of the nation's second-largest investment bank have been pummeled. The latest round of selling was triggered on renewed fear that Morgan Stanley's credit ratings might be cut, a move that threatens earnings power. The potential for a downgrade heightens pressure on chief executive John Mack, who spent most of yesterday meeting with major investors to reassure them about the firm.

Fannie Mae, Freddie Mac, Merrill Lynch and Lehman Bros. may be dominating the financial headlines, but a little-noticed $28 million settlement this month between the Federal Trade Commission and what's left of Bear Stearns symbolizes the housing-boom era products - and practices - that started a lot of the trouble. Once the fifth-largest investment bank on Wall Street, Bear Stearns was a major funding source for subprime and exotic mortgages: payment-option plans that allowed borrowers to buy expensive houses and run up their debts while making minimal monthly payments.

A few weeks ago, when our government nationalized Fannie Mae, which Forbes magazine last year ranked as the 57th-largest firm in the world, and Freddie Mac (No. 104), one lesson allegedly learned was that it was bad policy to allow companies to become "too big to fail," requiring the government to step in to curtail the damage. Analysts then said reforms should include changes that would preclude allowing firms to become big and powerful. That was then. This week, there were sighs of relief - if not cheers - when Bank of America (No. 2)

NEW YORK - Fear and greed are the stuff that Wall Street is made of. But inside the great banking houses, those high temples of capitalism, fear came to the fore this weekend. As Lehman Brothers, one of oldest names on Wall Street, appeared to unravel yesterday, anxiety over the bank's fate - and over what might happen next - gripped the nation's financial industry. By late afternoon, Merrill Lynch, under mounting pressure, entered into talks to sell itself to Bank of America. Dinner parties were canceled.

WASHINGTON - Senior officials from the Bush administration and the Federal Reserve informed top executives of Fannie Mae and Freddie Mac, the mortgage finance giants, that the government was preparing to seize the two companies and place them in a conservatorship, officials and company executives briefed on the discussions said yesterday. The plan, effectively a government bailout, was outlined in separate meetings that the chief executives were summoned to attend yesterday at the office of the companies' new regulator.

A reader asks: "I read your recent blog about Merrill Lynch's sale of mortgage securities for a fraction of their face value. I have a sizable (for me) investment portfolio at Merrill. Fortunately, I do not own any Merrill stock. Should I be concerned about a Bear Stearns-type collapse?" My reply: I know of no reason why investments held/managed by Merrill Lynch would be in jeopardy. The only Bear Stearns clients who lost money in connection with the firm's collapse were the ones who invested in its ill-fated hedge funds, Bear Stearns stock or directly in subprime mortgage bonds.

The Securities and Exchange Commission is adopting a temporary rule that will limit the ability of traders to bet on a drop in the shares of brokerage firms, Freddie Mac and Fannie Mae, the agency's chairman, Christopher Cox, told the Senate Banking Committee yesterday. The SEC will require traders to hold shares of the two mortgage buyers and the brokerages before they execute a short sale. The emergency order, to be in effect for 30 days, will bar a practice called naked short-selling, in which traders avoid the financial cost of borrowing shares - the way short-selling ordinarily is done - when betting that the share prices will fall.

NEW YORK - The former managers of two Bear Stearns hedge funds that have been centerpieces of the subprime mortgage crisis were indicted yesterday, marking the first criminal charges against Wall Street figures stemming from the historic subprime meltdown. The collapse in June 2007 of the now-infamous funds, which invested in securities backed by subprime home loans, sent a shudder through global financial markets and helped trigger a credit crunch that still afflicts the housing market and the overall economy.

OMAHA, Neb. -- Executives at firms badly hurt by their investment in complex mortgage-related credit securities "really didn't have any idea what risks they were involved with," investor Warren Buffett told an estimated 31,000 shareholders of his Berkshire Hathaway Inc. investing company yesterday. Berkshire's annual stockholder meetings, held every spring here in the home town of the man some people call the "Oracle of Omaha," always draw a huge crowd: Many come specifically to hear Buffett's blunt and often tart insights into the markets.