McENTIRE BREAKS INTO FASHION WITH DILLARD'S: Entertainer Reba McEntire will design a line of women's clothing for Little Rock, Ark., Dillard's Inc., the department store chain announced Monday. The line will be launched in the spring in nearly half of Dillard's 347 stores. McEntire's line will include clothes for the office and sportswear, Dillard's said. Initial choices will reach some Dillard's stores in March, with new items arriving every two weeks.
NOT ENOUGH GUARDS TO PROTECT STEWART? The head of the guards union at the federal prison where Martha Stewart will serve five months said Monday that staffing shortages will make it difficult to protect her. Staffing at the minimum-security women's prison at Alderson has fallen from 60 guards four years ago to 35 because of budget cuts, said Kent Gilkerson, local president of the Council of Prison Locals. The prison houses about 1,000 inmates.
FREDDIE MAC CLOSES MARKET-MAKING OPERATIONS: Mortgage giant Freddie Mac announced Monday that it is shutting down some operations of its debt-securities sales division and transferring others - moves that experts said should tighten the company's controls after an accounting scandal. Freddie Mac restated $4.5-billion in earnings last year, ousted top executives and was fined a record $125-million in a settlement with federal regulators. Shares of Freddie Mac rose 8 cents to close at $67.30 Monday on the New York Stock Exchange.
HURRICANES DENT ROYAL CARIBBEAN: The recent slew of hurricanes disrupted Royal Caribbean Cruises Ltd. sailings, and will cut into profits in the third and fourth quarters of 2004, the cruise company said Monday. The hurricanes will cost the company 10 cents per share in the third quarter, and 2 cents to 3 cents in the fourth quarter, Royal Caribbean said. Strong bookings for the summer partially mitigated the storms' impact. The Miami company operates Royal Caribbean International and Celebrity Cruise brands. On the New York Stock Exchange, Royal Caribbean shares rose $1.41, or 3.2 percent, to $45.75.
IN BRANDON, HSBC NAME REPLACES HOUSEHOLD: HSBC, the British banking giant that bought Household International last year, is changing the name of Household's mortgage unit in Brandon today to HSBC Mortgage Services facility. The rebranding marks the final step in integrating the two companies following their merger in March 2003, HSBC said. The Brandon mortgage office is at 636 Grand Regency Blvd. Household was the biggest U.S. mortgage lender to people with blemished credit histories.
KRISPY KREME HIRES DIRECTORS TO INVESTIGATE SEC CLAIMS: Krispy Kreme Doughnuts Inc. said Monday it has hired two independent directors to chair a new special committee to investigate matters raised by the Securities and Exchange Commission. In July, the federal agency began an informal inquiry into Krispy Kreme's lowered earnings outlook and the way the company buys back franchises. Officials at the Winston-Salem, N.C., doughnut chain have defended their accounting methods and handling of franchise buybacks. Shares of Krispy Kreme closed Monday at $13.11, down 8 cents, on the New York Stock Exchange.
AIG GETS SEC NOTICE ABOUT PRESS RELEASES: American International Group Inc. said it has been informed by the staff of the Securities and Exchange Commission that it could face a civil action over three of the company's press releases, two of which came out in recent weeks. AIG, New York, said the SEC is considering recommending charging that AIG press releases dated Jan. 30, 2002, and Sept. 21 and Sept. 29, 2004 violated securities laws.
U.S. NEARS DEBT CEILING: The government should hit the national debt's $7.4-trillion ceiling this month, and the Bush administration told Congress again Monday it should raise the limit. Treasury Department spokesman Rob Nichols said the government is on track to reach the limit in early October. The government can juggle accounts to stay under the limit through mid November to avoid default, as it has in the past. But the Bush administration is urging Congress, which expects to adjourn Friday, to go ahead and raise the ceiling. The government's debt was $7.364-trillion as of Friday, $18.3-billion from the ceiling. Congress last boosted the limit in May 2003.
US AIRWAYS EXPECTS TO SAVE ON MANAGEMENT: US Airways Group Inc., which filed for bankruptcy last month for the second time in two years, expects $45-million in savings from cutting management and nonunion pay, benefits and jobs, the company said. The airline's about 3,700 senior managers and nonunion employees, including administrative personnel, will take pay cuts of 5 percent to 10 percent on Oct. 11, with higher-paid workers taking a larger decrease, the company told workers in a memo. For the most senior officers, retirement benefit contributions will also be cut 25 percent.
NETFLIX RAISES FORECAST: Netflix Inc., the world's largest mail-order video-rental service, raised its third-quarter profit forecast after its subscribers increased 73 percent to 2.23-million. The company's shares jumped 14 percent. Netflix's third-quarter net income may have risen as high as $17.5 million, the Los Gatos, Calif., company said in a statement. Netflix previously forecast net income of no more than $10.2-million.
RATES MIXED IN TREASURY BILL AUCTION: Interest rates on short-term Treasury securities were mixed in Monday's auction. The Treasury Department sold $19-billion in three-month bills at a discount rate of 1.685 percent, down from 1.710 percent last week. An additional $17-billion was sold in six-month bills at a rate of 1.990 percent, up from 1.950 percent last week. In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, rose to 2.20 percent last week from 2.14 percent the previous week.
HONEYWELL SETTLES AGE LAWSUIT: Honeywell International Inc. will pay $2.15-million to settle an age discrimination lawsuit by workers who were terminated or demoted in 1997 at AlliedSignal, which Honeywell acquired in 1999, the U.S. Equal Employment Opportunity Commission said Monday. In the settlement, Honeywell denied any wrongdoing. The company and the EEOC, which sued on behalf of the workers in 2002, both said the agreement was made to avoid "the time, expense and uncertainty of further litigation." Six of the workers will get awards ranging from $475,000 to $275,000, according to the settlement. About 25 others will each get $8,000, EEOC program analyst Edward McCaffrey said. The EEOC had charged that sales representatives in the unit were terminated or demoted in a reorganization because of their age, while younger workers with less experience were retained or offered those positions. Shares in Honeywell were down 15 cents to close at $36.61 Monday on the New York Stock Exchange.
NASD FINES 18 WALL STREET FIRMS: Eighteen Wall Street firms were fined $1.2-million by the National Association of Securities Dealers Monday for reporting violations, with SG Cowen LLC shouldering the bulk of the fine. The violations occurred under the NASD's Order Audit Trail, or OATS rules, which require companies to report specific data about the handling and execution of customer orders and some of their own orders. In the case of SG Cowen, which was fined $800,000, the NASD found that the firm failed to report OATS data for about 50-million orders received by its equity derivatives trading desk between October 1999 and March 2004. Other firms fined for OATS violations were: Goldman Sachs Group Inc.'s Spear Leeds & Kellogg unit, $75,000; Charles Schwab Corp.'s Schwab Capital Markets LP, $70,000; Credit Suisse Group's CSFB unit, $50,000; Carlin Equities Corp., $35,000; FutureTrade Securities LLC, $35,000; Pulse Trading Inc., $20,000; Scottrade Inc., $16,000; Delta Asset Management Co., $15,000; Deutsche Bank Securities Inc, $15,000; Doyle, Miles & Co., $12,500; Quantlab Securities LP, $12,500; Bank of New York Co.'s BNY Brokerage Inc., $12,000; Index Securities LLC, $11,000; Mid-Atlantic Capital Corp., $10,000; Options Trading Associates LLC, $10,000; Transcend Capital LP, $10,000; and UBS AG's UBS Securities LLC, $10,000.
FEDERAL JURY RULES IN FAVOR OF KODAK IN JAVA PATENT DISPUTE: A federal jury ruled that Sun Microsystems' Java programming language infringes on Eastman Kodak's patents. Kodak will now ask for more than $1-billion in damages in a penalty phase to start Thursday.
EARNINGS
Cryo-Cell International Inc.: The Clearwater stem cell storage company reported a 59 percent increase in revenues for the quarter ended Aug. 31. Earnings included about $1.6-million from the reversal of all prior accruals related to litigation involving PharmaStem Therapeutics following a favorable appeals court ruling in late September.
