BUSINESS BRIEFS
Trader says his $7 billion loss began with bet
Associated Press
PARIS — Jerome Kerviel, the trader at the center of a massive banking scandal in France, told investigators that his spiral of trades that ended in a loss of about $7 billion for Societe Generale began with a 2005 bet that markets would fall — which proved true after the London bombings that July.
Perhaps more damaging for Societe Generale, Kerviel also claimed to investigators that his bosses at France's second-largest bank must have been aware of his massive risk-taking on markets but turned a blind eye as long as he was earning them money.
COUNTRYWIDE LOSS WON'T DETER BANK
LOS ANGELES — The $422 million loss Countrywide Financial Corp. reported yesterday didn't appear to scare off Bank of America.
Bank of America Corp. Chief Executive Ken Lewis said at an investor conference in New York the deal is still ongoing.
Countrywide's fourth-quarter earnings fell far short of Wall Street estimates, with a loss more than double what analysts predicted. But investors didn't run away from the nation's mortgage lender; instead, they sent Countrywide shares up 36 cents, or 6.5 percent, to close at $6.31.
Stock in Bank of America — which has offered $4.1 billion in stock for Countrywide — rose 74 cents, or 1.8 percent, to close at $41.94 yesterday.
FACTORY ORDERS UP IN DECEMBER
NEW YORK — Orders to factories for big-ticket manufactured goods jumped unexpectedly in December, good news amid signs that the U.S. economy may be tipping toward a recession.
Still, analysts said the 5.2 percent growth in orders — while potentially boosting industrial output in coming months — likely came from overseas demand and that domestic growth faced continuing threats from tight credit and mortgage markets that have forced consumers to retrench.
The Conference Board report yesterday that consumer confidence fell sharply in January on worries over deteriorating business conditions and a weakening job market gave another sign of consumer angst.
NORTHWEST AIR, JETBLUE IMPROVE
MINNEAPOLIS — Northwest and JetBlue lost less money in the fourth quarter than expected, even in the face of higher fuel prices, and JetBlue shares jumped more than 20 percent on the possibility of a passenger-sharing deal with Lufthansa.
It would have been a break-even quarter for Northwest Airlines Corp. if not for a loss on its stake in Pinnacle Airlines.
Discounter JetBlue Airways Corp. reported its first full-year profit in three years, and its shares soared on the news that it is negotiating with Deutsche Lufthansa AG over a "commercial agreement," which could include booking passengers on one another's planes. The German airline recently paid $300 million for 19 percent of JetBlue, giving the Forest Hills, N.Y., carrier much-needed cash but so far no code-sharing arrangements.
FEDS PULLING OUT OF POWER PLANT
ST. LOUIS — The U.S. Department of Energy, frustrated by ballooning costs for an ambitious plan to build a virtually emissions-free power plant, told federal lawmakers yesterday it plans to pull its support for the $1.8 billion project in Illinois, lawmakers said.
The Energy Department would not publicly divulge its intentions about the plant, dubbed FutureGen, or discuss what was said during the private meeting with lawmakers, saying only that it planned an announcement within days.
But some lawmakers who attended the briefing later insisted that any departure from building the coal-fired, 275-megawatt prototype power plant anywhere other than the central Illinois town of Mattoon would be unacceptable — and grounds for a possibly nasty congressional fight.
