Motorola to Separate Mobile-Devices and Broadband Businesses

Motorola announced it is separating its mobile-devices and broadband and mobility-solutions businesses, creating two independent, publicly traded companies. The company expects the creation of two stand-alone businesses to take the form of a tax-free distribution to Motorola shareholders. Shareholders would subsequently own shares of two publicly traded companies.

The move sent Motorola shares up 6.4% in premarket trading to $10.35 and meets a request long sought by activist investor Carl Icahn, who is seeking representation on the company's board and sued the company earlier this week to get documents related to the mobile business.

Passenger rights law rejected by Appeals Court

A federal appeals court today threw out a New York state law guaranteeing airline travelers fresh air, water and working toilets when flights have been delayed on the ground for more than three hours. "The court's decision vindicates the position of the Air Transport Association and the airlines -- that airline services are regulated by the federal government and that a patchwork of laws by states and localities would be impractical and harmful to consumer interests," the ATA said in a statement.

J.P. Morgan Chase Unveils Revised Bear Stearns Deal Terms

J.P. Morgan Chase announced an amended merger agreement for Bear Stearns, boosting the value of the deal to $10 a share from the initial valuation of $2 a share. Also, the Federal Reserve Bank of New York's $30 billion special financing was amended so that J.P. Morgan Chase will bear the first $1 billion of any losses associated with the Bear Stearns assets being financed and the Fed will fund the remaining $29 billion. The revised deal, which was negotiated over the weekend, is aimed at mollifying Bear's investors who have been furious with the $2-a-share agreement struck last weekend as the storied investment bank was on the brink of collapse.

Existing-Home Sales Move Higher Amid Sharp Price Drop

Existing-home sales climbed for the first time in seven months during February as buyers appeared to take advantage of sharply falling prices. Home resales rose to a 5.03 million annual rate, a 2.9% increase from January's unrevised 4.89 million annual pace, the National Association of Realtors said. Year over year, sales were down 24% from February 2007. The median home price was $195,900 in February, down 8.2% from $213,500 in February 2007. The 8.2% drop was the largest on record, the NAR said.

Delta announces plans to cope with increased fuel prices

Delta Air Lines on Tuesday announced a plan to cut domestic flights by 5% and eliminate 2,000 jobs. The airline said the plan is part of an effort to offset the soaring cost of jet fuel, and it hopes to achieve the job cuts through voluntary buyouts. Delta also said it will continue with plans to increase international flying, noting that higher fares cover the higher fuel costs.

Pilots at Delta, Northwest say they cannot agree on seniority

Pilots at Delta Air Lines and Northwest Airlines could not reach an agreement on seniority issues for a potential merger despite weeks of intense negotiations, according to media reports. Executives at Delta have said that the airline will not move forward unless the seniority of its pilots is protected, but some observers say the two companies could still go ahead with merger plans.

Fed Cuts Funds Rate Three-Quarter Point to 2.25%

The Federal Open Market Committee voted 8-2 to cut the fed funds rate from 3% to 2.25%, its lowest level since December 2004, and signaled more reductions are likely, unloading heavy artillery in its effort to keep the credit crunch from triggering a prolonged recession. The rate cut, though extremely aggressive by any historical measure, was likely to disappoint many on Wall Street who thought a full percentage point was needed.

The Fed's statement said: "Recent information indicates that the outlook for economic activity has weakened further. Financial markets remain under considerable stress, and the tightening of the credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters."

Boeing to protest lost Air Force tanker award

Boeing Co. officials announced Monday they would protest a U.S. Air Force decision to award a $35 billion aerial refueling contract to a joint venture of Northrop Grumman Corp. and the European parent of Airbus SAS.

The protest, to be filed with the U.S. Government Accountability Office, is the first formal challenge of a defense contracting decision lodged by Chicago-based Boeing in at least 30 years.

"Our team has taken a very close look at the tanker decision and found serious flaws in the process that we believe warrant appeal," said Jim McNerney, Boeing chairman, president and chief executive officer. "This is an extraordinary step rarely taken by our company, and one we take very seriously."

Chicago-based Boeing was considered the heavy favorite to win the contract to replace 179 Eisenhower-era tankers for the U.S. Air Force but it was bested by a team led by Airbus parent European Aeronautic Defense and Space Co. and Northrop Grumman Corp.

Both proposals involved retooling jetliners late in their commercial life cycles, either the Boeing 767 or Airbus A330, into rugged freighters built to haul fuel and cargo around the globe for the military.

The winner likely will wind up replacing all 530 tankers in the Air Force's fleet, a deal that could top $125 billion when parts and maintenance are included, analysts have estimated.

U.S. Retailers Report Mixed Sales Results; Wal-Mart Tops Forecast

March 6, 2008

U.S. retailers reported less-than-stellar results for February as a slowing economy weighed on consumers. However, for several companies sales exceeded expectations, easing some of the gloom in the sector.

Wal-Mart posted a better-than-expected 2.6% increase in sales at its U.S. stores open at least a year, excluding fuel sales. Leading the way was "continued strength in the grocery, health and wellness and entertainment" segments, Wal-Mart said. The company forecast March sales at flat to up 2%.

Target, which has reported weak same-store sales of late, reported a 0.5% increase for February, slightly better than analysts expected. Limited Brands posted a 9% decline and AnnTaylor's same-store sales fell 1.7%, but both were expected to suffer deeper declines. Pacific Sunwear said its sales rose 6%, beating expectations. Wet Seal's 8.2% drop was worse than analysts had expected.