The Daily Times from Salisbury, Maryland • 21

NASDAQ A 4.03 Close: 2,043.33 500 0.81 Close: 1,164.08 NYSE AMEX 3.66 Close: 6,886.34 A 6.90 Close: 1,326.65 Wednesday, November 10 THE DAILY TIMES www.DelmarvaNow.coin 21 DOW JONES 4.94 Close: 10,386.37 Market Glance Greeispai ejected to nudge rate As economy emerges from 'soft patch' the Fed will likely keep upward momentum By Martin Crutsinger Aiuodatad Pru Writar the biggest one-month gain in seven months and more than double what had been forecast The big surge in hiring was taken as the strongest signal yet that the economy is starting to regain steam after slowing Alan Greenspan said where the neutral level is for the funds rate, many economists believe it is around 4 percent That would take nine more quarter-point moves to get from 1.75 percent to 4 percent on the funds rate. After the final two meetings this year, that would translate into seven more quarter-point moves next year. The Fed panel that sets interest rates meets only eight times a year. Many analysts believe that timetable, virtually to the end of 2005, is exactly what Federal Reserve Chairman Alan Greenspan has in mind, given that his long tenure at the Fed ends in early 2006. But David Jones, author of several books on the Greenspan Fed, did not rule out a pause at some point in the tightening cycle, saying the Fed will be very focused on how the economy is performing.

The major factor that is allowing the Fed to take what it has been calling a "measured" pace in raising Interest rates is the absence of significant inflationary pressures. funds rate to 1.75 percent Banks' prime lending rate, the benchmark for millions of consumer and business loans, has risen from 4 percent in June, the lowest level since 1958, to 4.75 percent currently A move today would put the prime rate at 5 percent, still well below the 9.5 percent level for the prime rate in early 2001 shortly before the Fed began an aggressive easing campaign to deal with the shocks of a bursting stock market bubble and the 2001 recession. The federal funds rate stood at 6.5 percent before the Fed's first rate cut in January of 2001, but analysts doubt that the Fed is aiming for rates that high in its current credit tightening campaign. Rather, the central bank is trying simply to get back to a neutral level for the funds rate, a level where the Fed's policies are not acting to stimulate economic growth or to restrain growth. While the Fed has not WASHINGTON The Federal Reserve is expected to nudge interest rates up for a fourth time this year today, acting on the belief that the economy has finally emerged from an extended "soft patch." the November rate increase is likely to be followed by another quarter-point move at the Fed's final meeting of the year on Dec.

14 with more rate hikes to come in 2005, analysts say. That represents a change in thinking from just a week ago, when many were predicting that the Fed would raise rates this month but then would pause to assess the effect on the economy of its credit-tightening campaign. What changed the forecast was the far better-than-expected employment report for October that showed the nation's businesses adding 337,000 workers last month, dramatically during the summer largely because of surging energy prices. "We are certainly out of the soft patch, and I think the economy is getting on firmer ground," said Sung Won Sohn, chief economist at Wells Fargo in Minneapolis. The Fed started raising interest rates last June with the federal funds rate, the interest that banks charge on overnight loans, at a 46-year low of 1 percent.

The three quarter-point rate hikes in June, August and September have pushed the Bassett Furniture Direct breaks ground Bassett Delaware Witness: Ovitz wanted signing bonus as Disney president GEORGETOWN Michael Ovitz initially wanted a signing bonus of $50 million to join Walt Disney Co. as its president in 1995, a compensation expert who advised Disney during negotiations with Ovitz testified Tuesday Graef "Bud" Crystal, who now works as a columnist for Bloomberg News, said Irwin Russell and Raymond Watson, two members of the entertainment giant's compensation committee, were opposed to giving Ovitz a front-end bonus something Disney had never done. Instead, they favored granting Ovitz options on Disney stock and giving him some kind of monetary guarantee if those options failed to gam in value. 7 Ovitz, Disney Chief IS i Web update For Associated Press news around the clock, gotowww. DelmarvaNow.com and click on The Wire." tfalmarvaNoJcom Executive Michael Eisner and several current and former Disney directors are being sued in Delaware Court of Chancery over a $140 million severance package paid to Ovitz, the former top talent agent, when he left Burbank, Calif-based Disney after 14 months as the entertainment giant's WHAT DROVE THE DAY'S TRADING.

Stocks barely budged Tuesday while investors awaited the Federal Reserve's decision on interest rates and while they digested troubling developments at insurance broker Marsh McLennan Cos. and drugmaker Merck Co. The market's unease was tempered by a strong drop in crude oil futures, which continued their abrupt downward trend of recent weeks. A barrel of light crude settled at $47.37, down $1.72, on the New York Mercantile Exchange. LOOKING AHEAD.

While the Fed's policy committee is expected to boost interest rates again at today's meeting as another preemptive strike against inflation, questions remain over what signals the central bank might issue on the overall economy in its policy statement. Robert Christian, chief investment officer at Wilmington Trust said the market had already factored in a rate increase but was anxious about what the Fed might say about the economy, including the inflationary impact of the dollar's recent decline. A weaker dollar makes imports more expensive. WHAT ANALYSTS SAY. "The issue is going to be the rhetoric they use around the rate increase," Christian said.

Some investors, he said, are worried that the dollar's fall might prompt the Fed to move more aggressively than it would otherwise. Higher rates would make 1 US. investments more attractive, helping boost demand for the dollar versus other currencies. HOW STOCKS REACTED. Marsh McLennan was down 56 cents at $26.80 after the company posted disappointing quarterly results and said it would cut 3,000 jobs, or about 5 percent of its work force, amid the continuing fallout over charges of insurance bid-rigging by New York Attorney General Eliot Spitzer.

Merck was down 57 cents at $26 as the Dow's biggest decliner after disclosing late Monday that the Securities and Exchange Commission and the Justice Department were examining the company's handling of Vioxx. Merck recently pulled the leading arthritis drug off the market after studies showed it increased the risk of heart attacks. Elsewhere in the Dow, Caterpillar Inc. was up $1.30 at $08.31 as the measure's biggest gainer, followed by Boeing up 64 cents at $52.51. FCROCN MARKETS.

Overseas, Japan's Nikkei stock average fell 0.2 percent, Britain's FTSE 100 rose 0.02 percent, Germany's DAX Index fell 0.09 percent, and France's CAC-40fell 0.19 percent ON THE NET. New Yo Stock Exchange www.nyse.com Natdsq Stock Market www.nasdaq.com Bassett Furniture Direct President John Harris, left, with shovel, Wilmington Trust Vice President Bob Lore, Salisbury Rug Co. owners Charlie and Gil Thornton and Bassett Furniture Direct Vice President Tom St Clair are shown breaking ground for the new Bassett Furniture Direct store In Delmar on Tuesday afternoon. The new store, located at the intersection of Route 13 and State Line Road, is expected to open in winter 2005. second In command.

The shareholder lawsuit, which has been In progress for more than seven years, claims Disney's board failed in its fiscal responsibilities by not properly scrutinizing Ovitz's employment contract when he Joined the company in 1995 and then granting him a nonfault termination that entitled him to the massive severance package when he left in December 1996. Nation California insurance commissioner OKs Anlhem-WeEPcint merger LOS ANGELES The state's Insurance commissioner gave his blessing Tuesday to a $16.4 billion merger that would create the nation's largest health Insurance company after wringing hundreds of millions of dollars out of the companies. Federal regulators gave approval to the proposed merger of Anthem Inc. and WellPoint Health Networks Inc. In February but Insurance Commissioner John Garamendi had blocked it for months by rejecting Anthem's acquisition of a WellPoint subsidiarx Blue Cross Life Health Insurance Co.

Garamendi had said the deal would reduce the quality of health care for policyholders, pull $400 million a year out of California in the form of dividends that would go to Indiana-based Anthem, and give an excessive buyout package to WellPoint's chief executive. The Associated Press iq under consideration Carvel ss Manufacturing groups eyes move to Somerset By UzHolland the site. However, the 6ale fell through and the county did not pursue it any fur-then Hanna said any environmental problems at Carvel Hall would not be particularly unusual "Most Industrial sites have some issues," he said. The building on Route 413 north of Crisfield has been empty for the last four years after Syratech officials said they could no longer compete with overseas manufacturers. Syratech the Boston-based manufacturer of Farberware pots and pans bought Carvel Hall in 1908 after leasing it from Somerset County for several years.

The company closed the plant In 2000, although the factory outlet store remained open until last year Reach Uz Holland at 410-6511600 or somersethera Id verizon.net the building's current owner, Syratech, to transfer an indemnification to a new owner. The commissioners voted against transferring the indemnification on the advice of county attorney Kirk Simpkins. The indemnification agreement meant that the county would not hold Syratech responsible for any environmental problems at the site that existed before Syratech owned it although it would not have protected the company from the federal Environmental Protection Agency which frequently puts the responsibility for cleanups on both current and previous owners of properties, said County Administrator Charles Massey. A year ago, the county considered participating in the Maryland Brown-fields Revitalization Incentive Program at the request of another potential buyer who needed help cleaning up years worth of metal shavings at Futures CRISFIELD The former Carvel Hall cutlery factory could soon be owned by a manufacturing group considering a move to Somerset County "It would be nice to see someone come in there," said Daniel Thompson, director of the Somerset County Economic Development Commission. "We may know something soon." Henry Hanna, the real estate agent for the property, said no one has signed a contract yet but an announcement could be made as early as this week.

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