Sun unmoored as acquisition talks hit standstill
SAN JOSE, Calif. (AP) --
Without IBM Corp.'s $7 billion takeover offer, Sun Microsystems Inc., a Silicon
Valley rebel known for independence, is possibly alone again. Unless a new
suitor somehow emerges, Sun will have to overcome the wobbly finances that forced
it to shop itself around.
The two sides had been
nearing an agreement before the weekend. But Sun balked at IBM's last price of
$9.40 per share, which had come down from earlier offers but still was about
double Sun's stock price before word of the negotiations leaked last month.
Defense chief proposes
weapons cuts
WASHINGTON (AP) -- Defense
Secretary Robert Gates on Monday recommended halting production of the F-22
fighter jet and scrapping a new helicopter for the president as he outlined
deep cuts to many of the military's biggest weapons programs.
Gates said his $534 billion
budget proposal represents a "fundamental overhaul" in defense
acquisition and reflects a shift in priorities from fighting conventional wars
to the newer threats U.S. forces face from insurgents in places such as
Afghanistan.
Spending on tanks, fighter
planes, ships, missiles and other weapons accounted for about a third of all
defense spending last year. But Gates noted more money will be needed in areas
such as personnel as the Army and Marines expand the size of their forces.
Stocks fall after 4-week
rally; Dow below 8,000
NEW YORK (AP) -- Wall Street
pulled back for the first time in five days Monday as investors worried about
balance sheets at banks and the quarterly results that businesses will start
releasing this week.
The Dow Jones industrials
fell 41.74, or 0.5 percent, to 7,975.85 after being down as much as 155 points.
Investors were also
disappointed that talks for IBM Corp.'s $7 billion deal to buy Sun Microsystems
Inc. have stalled -- a sign that the market is still not ready to support big
mergers.
Fund manager hit with civil
charge in Madoff fraud
NEW YORK (AP) -- New York's
attorney general filed civil fraud charges Monday against a hedge fund manager
who funneled $2.4 billion to Wall Street swindler Bernard Madoff without
telling clients where their money was going.
The complaint accuses J.
Ezra Merkin, the former chairman of GMAC Financial Services, of concealing his
links to Madoff and lying to investors about what he was doing with their
money, telling most he was personally investing their cash in things like
distressed debt.
Ford completes tender
offers, cuts $10B in debt
DETROIT (AP) -- Ford Motor
Co. said Monday it completed tender offers that will reduce its debt by 38
percent and shave millions of dollars off its interest costs.
The automaker retired about
$9.9 billion in securities issued by either the parent company or its finance
arm in exchange for cash and shares under terms of the debt buybacks.
Combined, the moves are
expected to reduce the Ford's interest expenses by more than $500 million this
year, as it tries to weather the worst auto sales downturn in 27 years.
Government cracking down on
mortgage scams
WASHINGTON (AP) -- Federal
and state officials are cracking down on mortgage modification scams, accusing
"criminal actors" of preying on desperate borrowers caught up in the
nation's housing crisis.
Government officials said
Monday that scammers are seeking to take advantage of borrowers in danger of
default by charging them upfront fees of $1,000 to $3,000 for help with loan
modifications that rarely, if ever, pay off.
The frauds often involve
companies with official-sounding names designed to make borrowers think they
are using the Obama administration's efforts to help modify or refinance 7
million to 9 million mortgages.
Corbat named CEO of Citi
Holdings unit
NEW YORK (AP) -- Citigroup
Inc. on Monday took the "interim" out of Mike Corbat's title as chief
executive of Citi Holdings, the business that includes the riskier assets at
the big banking company.
Corbat had been overseeing
the unit since Citigroup announced it was splitting its operations into two
parts in January. With losses tied to the credit crisis and recession mounting,
Citigroup separated its more traditional banking units from the riskier
operations.
In addition to the riskier
assets, Citi Holdings also oversees Citi's asset management and consumer
finance segments.
Passengers see improvements
in airline services
WASHINGTON (AP) -- Hawaiian
Airlines topped an annual quality study of U.S. air carriers as the industry
took some of the hassle out of flying last year and delivered its best
performance in four years.
The improvement came just a
year after airlines earned their worst marks for passenger complaints in more
than a decade.
Right behind Hawaiian in the
overall ratings of 17 airlines were AirTran Airways and JetBlue Airways,
according to a study based on government statistics that was released Monday by
private researchers. The legacy airlines -- AMR Corp.'s American, Continental,
Delta and UAL Corp.'s United -- were clustered in the middle, while regional
air carriers filled out the bottom rungs.
Oil prices slump to start
the week
SIOUX FALLS, S.D. (AP) --
Energy prices fell Monday, a day before major first-quarter corporate results
begin to arrive. It remained unclear if the U.S. economy has bottomed out, or
whether demand for oil and gasoline will rebound strongly this year with many
households cutting back on spending.
Benchmark crude for May
delivery fell nearly 3 percent, or $1.46 to settle at $51.05 a barrel on the
New York Mercantile Exchange.
With no major economic
reports, crude markets followed Wall Street, which sold off early following
apparent collapse of IBM Corp.'s $7 billion acquisition of Sun Microsystems
Inc. late Sunday.
Sallie Mae to add 2,000 jobs
to US in 18 months
NEW YORK (AP) -- Sallie Mae
gave some hope to the unemployed Monday, announcing it will bring 2,000 jobs to
the U.S. within the next 18 months as it shifts call center and other
operations from overseas.
The move marks somewhat of a
turnaround for the nation's largest private student lender, which two years ago
was faced with the need to slash costs amid collapsing capital markets.
Sallie Mae quickly scuttled
jobs overseas as part of a plan to save about $300 million over a 12-month
period.
By The Associated Press
The Dow Jones industrials
fell 41.74, or 0.5 percent, to 7,975.85 after being down as much as 155 points.
The Standard & Poor's
500 index fell 7.02, or 0.8 percent, to 835.48, while the Nasdaq composite
index fell 15.16, or 0.9 percent, to 1,606.71.
Benchmark crude for May
delivery fell nearly 3 percent, or $1.46 to settle at $51.05 a barrel on the
New York Mercantile Exchange.
In other Nymex trading,
gasoline for May delivery fell about 4 cents to $1.4520 a gallon and heating
oil dropped 4.74 cents to $1.399 a gallon. Natural gas for May delivery lost
10.6 cents to $3.695 per 1,000 cubic feet.
In London, Brent prices fell
$1.58 to $51.89 a barrel on the ICE Futures exchange.