After IBM dalliance, Sun goes to Oracle for $7.4B
SAN FRANCISCO (AP) -- Oracle
Corp. snapped up computer server and software maker Sun Microsystems Inc. for
$7.4 billion Monday, trumping rival IBM Corp.'s attempt to buy one of Silicon
Valley's best known -- and most troubled -- companies.
The deal would end Sun's
27-year history as Silicon Valley's brash independent and shake up the
computing industry. It comes after a monthlong drama that entered its final
chapter last week.
IBM had retracted an earlier
buyout offer for Sun after the two sides couldn't agree on key details.
Bank of America posts 1Q
profit but stocks fall
CHARLOTTE, N.C. (AP) -- Bank
of America Corp. warned of worsening loan default problems Monday even as it
posted a first-quarter profit of $2.81 billion. Investors concerned about the
banking industry's health sent financial stocks and the overall market sharply
lower.
Although Bank of America
said higher revenue from the purchase of Merrill Lynch & Co. helped offset
a surge in credit costs, it took a $13.4 billion provision for credit losses
during the first three months of the year. The amount of its problem loans more
than tripled to $25.7 billion and CEO Ken Lewis said he couldn't predict when
the bank's credit morass would end.
PepsiCo offers to buy 2
bottlers for $6 billion
NEW YORK (AP) -- PepsiCo
Inc.'s $6 billion bid to buy its two largest bottlers should make the owner of
the Gatorade, Naked juices and Aquafina brands more nimble in a landscape where
soft drinks have declined in popularity in favor of healthier options like
water and juices.
The deals for Pepsi Bottling
Group and PepsiAmericas would let PepsiCo control about 80 percent of its total
North American beverage volume -- something the company and analysts said would
streamline the process of getting newer or smaller products to stores.
Wall Street tumbles as
investors dump financials
NEW YORK (AP) -- Investors
are back to worrying about banks.
Long-present unease about
soured loans bubbled over on Monday after Bank of America Corp. said it set
aside $13.4 billion to cover lending losses even as it posted earnings that
beat expectations. Other big banks have also increased loss provisions in the
past two weeks.
Financial stocks suffered
some of the day's worst declines and major market indicators tumbled more than
3 percent, including the Dow Jones industrial average, which fell 290 points to
7,841.73.
Leading economic indicators
dip more than expected
NEW YORK (AP) -- A private
sector group's index of leading economic indicators fell more than expected in
March, but the forecast called for the recession's intensity to ease this
summer.
The Conference Board said
Monday that its monthly forecast of economic activity fell 0.3 percent in March
and has not risen in nine months. Economists surveyed by Thomson Reuters
expected a 0.2 percent decline.
And without the government's
intervention in the economy, boosting the money supply and tamping down
interest rates, analysts said the forecast likely would have been worse.
Oil below $46 as stocks
tumble ahead of earnings
SIOUX FALLS, S.D. (AP) --
(AP) -- Oil prices plunged to their lowest levels in more than a month Monday
as investors, nervous about a week chock-full of corporate earnings reports,
sought safer havens in gold and the dollar.
Benchmark crude for May
delivery fell $4.45 to settle at $45.88 a barrel on the New York Mercantile
Exchange. With trading on the May contract ending Tuesday, most of the trading
has shifted to the June contract. Benchmark crude for June delivery dropped
$3.96 to settle at $48.51 a barrel.
AIG completes preferred
stock sale to government
NEW YORK (AP) -- American
International Group Inc. completed a sale of preferred stock and issued
warrants to the Treasury Department as part of a previously announced plan to
receive additional financial support from the government, according to a
regulatory filing submitted Monday.
New York-based AIG said in
the Securities and Exchange Commission filing that it sold preferred stock and
issued warrants to the government on Friday in exchange for $29.84 billion. The
new funds are now immediately available for AIG's use.
More GM workers laid off as
gov't deadlines loom
DETROIT (AP) -- General
Motors Corp. began firing 1,600 white-collar workers Monday and Fiat's CEO left
Italy to resume critical talks on an alliance with Chrysler LLC, as deadlines
draw closer for GM and Chrysler to finish their restructuring plans.
Both automakers are living
on a combined $17.4 billion in government loans and have said they'll need more
money to survive. Chrysler must cut its debt and its labor costs and forge an
alliance with Fiat Group SpA by April 30, or President Barack Obama says
Chrysler won't get any more help.
Lilly 1Q profit rises on
higher sales; stock falls
INDIANAPOLIS (AP) --
Drugmaker Eli Lilly and Co. saw its first-quarter profit soar on strong sales
but then watched its stock price dip Monday on a rough day for the broader
market.
The quarterly performance --
which included a 23 percent profit increase -- impressed analysts, but they
noted that longer-term questions remain unanswered for Lilly.
Despite the strong start to
2009, Lilly only reaffirmed -- and did not raise -- its guidance for full-year
earnings between $4 and $4.25 per share. Analysts forecast $4.14 per share.
Hasbro 1st-quarter profit
falls 47 percent
NEW YORK (AP) -- Hasbro Inc.
said Monday that first-quarter profit fell 47 percent as retailers cut back on
their inventory, but the toy maker said products tied into new movies like the
upcoming Transformers film should boost future results.
The maker of board games
such as Clue and Scrabble also said it instituted a salary freeze and is hiring
only for critical positions in an effort to cut costs.
Profit for the three months
ended March 29 fell to $19.7 million, or 14 cents per share, from $37.5
million, or 25 cents per share. That matched the estimate of analysts polled by
Thomson Reuters.
By The Associated Press
The Dow fell 289.60, or 3.6
percent, to 7,841.73.
Broader stock indicators
also lost ground. The Standard & Poor's 500 index fell 37.20, or 4.3
percent, to 832.40, and the Nasdaq composite index fell 64.86, or 3.9 percent,
to 1,608.21.
Benchmark crude for May
delivery fell $4.45 to settle at $45.88 a barrel on the New York Mercantile
Exchange.
In other Nymex trading,
gasoline for May delivery slid 8.1 cents to settle at $1.4119 a gallon and
heating oil fell by 9.1 cents to settle at $1.3316 a gallon. Natural gas for
May delivery lost 18.9 cents to settle at $3.54 per 1,000 cubic feet.
In London, Brent prices fell
$3.49 to settle at $49.86 a barrel on the ICE Futures exchange.