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Week in Review | TOP STORIES--SEPT. 1-6

September 08, 2002|From Times Staff

United Airlines Hires

Another New Chief

United Airlines chose oil industry veteran Glenn Tilton to be its third chairman and chief executive in less than a year.

Tilton, formerly vice chairman of ChevronTexaco Corp., immediately met with leaders of United's powerful unions to start negotiations on concessions that the airline, a unit of UAL Corp., needs to head off a looming cash shortage.

The unions said they would work with Tilton and are preparing a recovery plan of their own that includes wage cuts. But some analysts said United, the nation's second-largest carrier behind AMR Corp.'s American Airlines, is running out of time and still could be forced into filing for bankruptcy reorganization. That probably would wipe out the value of UAL's stock, which is 55%-owned by most of United's 84,000 employees.

*

Stock Market on

Roller-Coaster Ride

Stocks zigzagged last week as economic news, worries about war with Iraq and the upcoming anniversary of the Sept. 11 terrorist attacks weighed on investors.

The market rose two days and fell two days of the holiday-shortened week, but ultimately could not overcome Tuesday's violent sell-off, which carved more than 4% off the Dow Jones industrial average.

But the week did end on a positive note, when an unexpectedly strong employment report sparked a broad rally Friday and fanned hopes that the U.S. economy may be showing signs of strength.

For the week, the Dow finished off 2.7%, while the Standard & Poor's 500 index and the technology-laden Nasdaq composite index fell 2.4% and 1.5%, respectively. It was the second losing week in a row for the major indexes.

*

August Jobless Rate

Declines to 5.7%

The nation's unemployment rate unexpectedly fell to 5.7% in August as health-care companies, contractors, temporary help agencies and the government expanded their payrolls.

The decline from July's 5.9% rate and the hiring of an extra 39,000 workers during the month heartened investors, who had expected a jump in joblessness. But the report suggested anew that the economy is headed for another "jobless" recovery like that of the early 1990s, when it took more than two years after the recession ended for employment to improve.

*

Congress Steps Up

Probe of '90s IPOs

Congress intensified its investigation of Wall Street's conduct in the late-'90s bull market and asked two more investment banks for information about their research analysts and new-stock offerings.

The House Financial Services Committee sent letters to Goldman Sachs Group Inc. and Credit Suisse First Boston. The committee is seeking details about the brokerage firms' business dealings with more than two dozen companies, including information on allocations of initial public stock offerings to company executives.

The committee asked for the data by Sept. 19 and said it may issue subpoenas if the brokerage firms do not fully comply.

The requests grew out of the committee's investigation of Citigroup Inc.'s Salomon Smith Barney and its allocation of sought-after IPO shares to top management of WorldCom Inc.

*

Health-Insurance Costs

for Workers Jump

Workers' health-insurance costs surged 27% this year for individuals and 16% for families, at the same time many employees saw their benefits reduced, according to a study by the Kaiser Family Foundation and the Health Research and Educational Trust.

The average premium increase for employers was 13%--the highest since 1990--and marked the second straight year of double-digit inflation, the study said.

The survey and separate interviews indicate no letup in premium increases in the foreseeable future. A sobering 78% of the more than 2,000 small and large businesses that responded to the survey said they probably would increase the amount their workers must pay for health coverage next year.

If trends continue, the study's authors said, some businesses will stop offering health benefits, and some low-income wage earners will decline coverage because they will no longer be able to afford their share of the costs.

The increase was driven largely by larger insurance claims stemming from higher prices for hospital services and prescription drugs and consumers' growing demand for health care.

*

Dockworkers, Shipping

Lines Continue Talks

West Coast dockworkers and shipping lines continued contract talks after a brief halt in negotiations that had heightened concerns about a possible disruption at the ports.

Bargaining subcommittees devoted to issues such as benefits and safety resumed discussions after a tense Labor Day weekend standoff in which talks broke down and the long-extended labor pact expired.

The International Longshore and Warehouse Union had accused the management group of sabotaging negotiations by trying to make a tentative agreement on health care contingent upon a deal on arbitration--a charge the management group denied.

*

Low-Emission Gasoline

Engines Backed by Study

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