The Philadelphia Inquirer from Philadelphia, Pennsylvania on November 10, 2006 · Page D02
Get access to this page with a Free Trial

A Publisher Extra Newspaper

The Philadelphia Inquirer from Philadelphia, Pennsylvania · Page D02

Publication:
Location:
Philadelphia, Pennsylvania
Issue Date:
Friday, November 10, 2006
Page:
Page D02
Start Free Trial
Cancel

THE PHILADELPHIA INQUIRER Friday, November 10, 2006 Drug units to fetch 3M $2.1 billion It will take more than D2 B www.philly.com gridlock ' J .... ' '.- ' ' , - " ! f. I' . ASSOCIATED PRESS MINNEAPOLIS 3M Co., a manufacturer of products ranging from Post-it notes to weather-stripping, said yesterday that it was selling its branded drug business for nearly $2.1 billion in three separate deals. The company said the deals followed "a review of strategic options" for its drugmaking units worldwide. It said it expected the sale to close in the fourth quarter. 3M shares fell 52 cents to $78.90 in trading on the New York Stock Exchange. The three deals are: Graceway Pharmaceuticals Inc., of Bristol, Tenn., will buy 3M's pharmaceutical operations in the United States, Canada and Latin America for $875 million. Swedish drugmaker Meda AB is buying its European pharmaceutical unit for $857 million. An investment group led by Ironbridge Capital and Archer Capital have agreed to acquire its drug operations in the Asia Pacific region, Australia, and South Africa for $349 million. The businesses include the skin-cancer treatment Aldara as well as the drugs Minitran (angina), Difflam (inflammation), Duromine (appetite suppressant) and Tambocor (arrhythmia). 3M announced in April that it would try to sell the pharmaceutical unit, believing it would be worth more to a pharmaceutical company with the sales force to make it grow. 3M said then that pharmaceuticals were about 20 percent of its health-care division, where sales grew 4.7 percent in the first nine months of this year, slower than any other 3M unit. The division has about 1,050 employees worldwide. 3M estimated that 70 percent of the employees would be given a chance to stay with the acquiring companies. The health-care division also sells medical and surgical supplies, drug-delivery systems, dental products, health information systems, and microbiology products. STEPHEN MORTON Bloomberg News The container ship Northern Reliance sails to a Savannah, Ga., port. The U.S. trade gap fell in September from a record high. Cheaper oil helps trim trade deficit Trade by Country The nations with which the United States had the largest deficits and surpluses in September. In billions of U.S. dollars FROM INQUIRER WIRE SERVICES WASHINGTON The U.S. trade deficit fell in September by the most in more than five years as crude-oil prices fell and growing economies abroad spurred demand for American goods. A continuing dark cloud, however, was the nation's deficit with China, which rose to a record as retailers stocked their shelves for Christmas. That may rekindle debate on U.S. sanctions as Democrats assume leadership in Congress. The overall trade gap declined 6.8 percent, to $64.3 billion in September from a record $69 billion in August, the Commerce Department reported yesterday. The drop of $4.7 billion was better than OUR LOTUZ DRJVJJ JGJ .y '-PEPJE1 JC Buy a new 2006 Lotus Elise or Exige between September 18th and December 31st, 2006 and you'll receive a free day at the Lotus Performance Driving Experience In Las Vegas and a stay at the luxurious Bellaglo hotel. Visit your local dealer for a test drive and enter the Lotus Wine Country Getaway Sweepstakes for a chance to win a getaway to Napa Valley in a Lotus Elise including airfare, accommodations, $500 in spending money and an exclusive wine tasting at Robert Sinskey Vineyards. www.lotuscars.com Rothrock Specialty Motorcars 780 Baltimore Pike Springfield, PA 610-544-7300 www.rothrockmotors.com BUM OFPOUIES CALL PAT GERMIN0 215-854-5335 FAX: 215-854-5780 iiF3Jipp9 Business Opptys Business Opptys UMMMMMMttaltttttM Cornwell Tools, Fran- Entrepreneurs, Bus NOTICE chise, Local Areas opp. Pat.trmt to stop For more information and Available Financing smkng.HighROI assistance regarding the Available to Qualified www.nicocess.com Investigation of Business Appl icants---1 nvest- 888 320-7848 Opportunity Advertising, rnent e. Reclu!1r(e5J"" f Jiff tfHf Philadelphia Newspapers Snjce 1919- JUIhKllb coLntactf s lts readers t0 FFVcPHJDElFENEi INVEST IN A LOW-COST THE BETTER BUSINESS 215 906 7443 Q ICIMCCC TUAT flCCCDC BUREAU OF EASTERN PA .... .... i i BUJINtJJ INfll UlTLKS mni$m bVekL& CLIENTS TO SERVICE 215-985-9313 CLEANING CONCIPtJ We provide customers, I!.. training, and oca sup- m FinanciaMndependence port fc'terest free pa Business Opportunity with your own Commercial CALL forREEid'eo3'6 Wnlatl Cleaning business, start (800) 390-4747 "ai,iea withaslittlGas$1500dn. n.t. T u Q THfdai I R est au r an t-Tu r n key, uuvcrirtLL fUliy eqjpt great opptv. OF PHILADELPHIA So. Phi la area. Afforda- n . a i in i j (PA, NJ, DE) ble. 856-498-4473 Business Oppty Wanted (soo)874-1 439 - TO PLACE YOUR AD - www'covera"-com - tUltldffffflTOl DELI for sale wLiquor Nygfgyg CALL PAT GERMINO i5jgfag- to subscribe, (3)215-854-5335 pizzeria - take-out 1-800-222-2765 Great Oppty. & loc. NE mtm Phila. 267-934-8478. BiT'L economists had expected. "There should be another big improvement in the deficit in October, when oil prices fell again," said Nigel Gault, director of U.S. research at Global Insight Inc. in Lexington, Mass. He said the growing deficit with China brought "a risk we'll hear louder protectionist calls" from Washington. The decline in the total September deficit came from a 10.5 percent fall in America's foreign oil bill, which dropped to $26.3 billion. The volume of imports fell, and crude-oil prices had a big decline. They now are about $60 a barrel after hitting $77 a barrel in the summer. Lower costs for imports give U.S. companies reason to hold the line on prices, pointing to lower inflation that will allow Federal Reserve policymakers to keep interest rates unchanged through early 2007. Even with September's improvement in trade, analysts cautioned against expecting any quick fix in a deficit on track to set a record for the fifth straight year. "There is little in this report to tell me that, once we get past the petroleum effect, there are any basic changes in the trade situation," said Joel Naroff, chief economist at Naroff Economic Advisors in Northampton, Bucks County. "With the Congress changing hands, the political pressure on the administration to do something about China is likely to build." The deficit with China set a record of $23 billion in September. It is running at an annual rate of $228 billion this year, on pace to surpass last year's $202 billion; that deficit was the all-time high with any U.S. trading partner. The big increase in September came from higher imports of Chinese apparel, cell phones, stereo equipment, televisions and toys as U.S. retailers stocked up for the holidays. Some Democrats are pushing legislation that would penalize China unless it allows its currency to rise in value against the dollar as a way of making U.S. products more competitive in China. The large decline in oil prices helped push total U.S. imports down by 2.1 percent to $187.5 billion in September. U.S. exports, helped by a big jump in sales of commercial aircraft, chemicals and steel, rose by 0.5 percent to a record $123.2 billion. China Japan Mexico Canada Germany $23.0 6.7 5.8 5.7 3.1 Netherlands 1.4 Hong Kong 1.0 United Arab Emirates 0.9 Australia 0.9 Belgium 0.8 SOURCE: Commerce Department So far this year, the deficit is running at an annual rate of $781.6 billion, far above last year's record of $716.7 billion. Commerce Secretary Carlos Gutierrez will lead a 25-com-pany trade delegation to China next week in hopes of boosting U.S. exports to that country. "While China is more open than before, much progress must still be made to provide fair access to American exporters and businesses," Gutierrez said yesterday. Treasury Secretary Henry Paulson has pledged to pursue currency and other trade issues with China as part of a high-level dialogue with China's government. The initial meeting will take place next month in Beijing. Wall Street's election stumble After a three-day rally, investors began to worry how Democrats would affect business. By Joe Bel Bruno ASSOCIATED PRESS NEW YORK Wall Street's three-day winning streak came to an end yesterday as investors, taking a second look at election results, questioned whether a Democratic Congress would be friendly to business. "The market's been looking for a reason to go to the downside, and a change in Washington is as good an excuse as any," said John O'Donoghue, co-head of equities at Cowen & Co. Meanwhile, U.S. consumers' confidence weakened slightly in early November, but stayed near a 15-month high, according to the University of Michigan. That data overshadowed news from the Commerce Department that the U.S. trade deficit showed a sharp improvement in September, and a report from the Labor Department that said the number of newly laid-off workers had a bigger-than-ex-pected drop last week. The Dow fell 73.24, or 0.60 percent, to 12,103.30. The Standard & Poor's 500 index fell 7.39, or 0.53 percent, to 1,378.33, while the Nasdaq composite index fell 8.93, or 0.37 percent, to 2,376.01. 12,400 -, Oct. 1 2 Crude-oil prices extended their gains after the U.S. government reported that gasoline inventories fell last week. A barrel of light, sweet crude soared $1.33 to $61.16. Cisco Systems Inc. surged $1.61, or 6.4 percent, to $26.71. The maker of networking equipment said its acquisition of Scientific-Atlanta Inc. pushed profit up 28 percent. UBS upgraded the stock based on the results, and predicted strong growth. Hewlett-Packard Co. also helped drive technology stocks after Goldman Sachs lifted the computer- and printer-maker's 12-month price target to $46 from $42.50. Shares rose 68 cents, or 1.8 percent, to $39.56. Merck & Co. Inc. fell $1.46, or 3.3 percent, to $42.88, after the pharmaceutical company said liabilities from four tax disputes in the United States and Canada could total $5.58 billion. The drugmaker faces tens of thousands of lawsuits over its withdrawn painkiller Vioxx. Market Summary Dow Jones industrial average. ,947.70 12,000 11,600 11,200 10,800- 0CT. NOV 10,400 16 23 30 6 2006 high: 12,176.54 (Nov. 8) 2006 low: 10,667.39 (Jan. 20) The Philadelphia Inquirer J.C. Penney Co. Inc. posted a profit that surpassed Wall Street's projections, and raised its full-year financial forecast. Shares of the retailer rose $1.35, or 1.7 percent, to $79.55. Viacom Inc. fell after the entertainment conglomerate reported a 16 percent slide in profit for the third quarter. The company also announced that chief financial officer Michael J. Dolan would step down at the end of the year. Shares fell $1.24, or 3.1 percent, to $38.43. Declining issues outnumbered advancers by a ratio of nearly 4 to 3 on the New York Stock Exchange, where consolidated volume came to 3.14 billion shares, compared with 2.88 billion Wednesday. The Russell 2000 index of smaller compa nies fell 7.78, or 1.01 percent, to 762.06. Japan's Nikkei stock average fell by 0.11 percent, Britain's FTSE 100 was down 0.12 percent, Germany's DAX index rose 0.15 percent, and France's CAC-40 was up 0.21 percent. CASSEL from Dl attention from the bloody internecine battles about to take place within both parties. But while it lasts, at least dinner parties and youth-soccer games can be less contentious than they have been recently. Another nice thing about gridlock is, it decreases the chances of either party's unilaterally paddling the ship of state over the fiscal falls. This is encouraging to investors. As you may have noticed, the stock market was mostly up this week, as traders priced in the prospect of Democrats' and Republicans' checking each other for at least the next two years. You also may recall the gridlock of the mid-1990s, when the Republican-controlled Congress and Democratic President Bill Clinton locked horns over virtually all spending and tax measures. One outcome of that was a budget surplus and an actual lowering of the national debt. Imagining the future This only lasted a few years, but while it did, it was possible to imagine a future in which Social Security did not run dry, Medicare's costs didn't break us, and our grandchildren's taxes didn't go mainly to interest payments. It's tempting to hope that the resumption of Washington gridlock might produce a similar fiscal effect. But that's probably overoptimistic for the same reason I think gridlock deserves two cheers and not three. Here's the problem: Washington over the last few years has managed to avoid facing a host of major issues. The backlog runs from energy policy to entitlement reform, agriculture subsidies to the Alternative Minimum Tax. All these issues have two things in common: One, they're complicated, requiring a sophisticated understanding of economics and finance; and two, if they aren't addressed actively in the next few years, they could end up costing Americans dearly. Take the Alternative Minimum Tax. Originally passed to prevent wealthy families from using legal loopholes to avoid paying any income tax at all, the AMT now affects and afflicts millions of middle-class taxpayers each year. A fivefold increase Because of the way it's structured, moreover, the number of families that will pay the AMT is set to multiply fivefold this year or next. Congress could prevent that by repealing the AMT, or restricting it so it affects fewer taxpayers. But there's a cost to that: Without the AMT, the Treasury would collect tens of millions of dollars less, deepening the federal deficit. Each year of delay makes the trade-off tougher, moreover. That is, more people affected by the AMT versus more dollars lost to the Treasury without it. But with government grid-locked, what are the chances that either side will be willing, or able, to push through a workable AMT reform? Your guess is as good as mine, but it sure doesn't look promising. And that's just the beginning. Within five years, the costs of our major entitlement programs Social Security and Medicare are set to explode as baby boomers begin to retire and collect benefits. Without some serious, far-reaching reforms, every reputable economist I know of thinks we're headed for a budget crisis that could crimp, if not cripple, the U.S. economy. We'll need something more than Washington gridlock something like real political leadership if we're going to avoid this. E-mail acasselphillynews.com or phone 215-854-5981. Read his recent work at http:go.philly.comandrewcassel. IP Always the Most Competitive Pricing and Leasing Highest Customer Satisfaction in the-Tri-State area Selling and Servicing Fine Imported Cars for Over Fifty Years! Why Shop Anywhere Else For Your New Audi?

What members have found on this page

Get access to Newspapers.com

  • The largest online newspaper archive
  • 18,300+ newspapers from the 1700s–2000s
  • Millions of additional pages added every month

Publisher Extra Newspapers

  • Exclusive licensed content from premium publishers like the The Philadelphia Inquirer
  • Archives through last month
  • Continually updated

Try it free