Santa Cruz Sentinel from Santa Cruz, California • Page 14

Business editor: Jennifer Plttman 429-2447 B-4 Thursday, July 29, 1999 Sentinel Business CompettBtiiioirii spioirs ynnexpected DPOs July 28, 1999 DOW (Industrials) 500 By DUNSTAN PRIAL The Associated Press NEW YORK The New York Stock Exchange is considered by many as something of an exclusive club where the rich get richer. Soon, however, investors of all stripes may get a chance to become owners of the hallowed Wall Street institution. An increasingly competitive business environment especially in the financial services industry has led a number of well-known privately owned companies and organizations to consider public stock offerings as a way of fending off potential rivals. The market for initial public offerings, or IPOs, has traditionally been the home of startup companies looking to raise cash for future Co. said last month it plans to become the first NYSE specialist firm to go public.

Specialist firms provide orderly trading markets for NYSE-listed shares. They ensure all transactions are filled by matching buyers and sellers. The NYSE said last week that it is considering an IPO by the end of the year, ending over 200 years of private ownership. And NASD board members are expected to vote on Thursday whether to spin off the NASD's Nasdaq Stock Market operations into a separate, for-profit company, with an IPO expected to follow some time next year. Officials at privately owned companies are increasingly concerned that their internal growth rates can't be sustained at the rates seen over the last decade or so, Menlow said.

development. But recent announcements by the NYSE and the National Association of Securities Dealers that both are considering selling stock has signaled a sea change in the types of entities that might consider an IPO, as well as in how those organizations will conduct business in the future. Cynics might suggest that greed is the primary motive for an IPO in the midst of the longest bull market in U.S. history. But market observers say otherwise.

No one denies that the market's heights serve as a strong incentive for companies to go public. "But the major, overriding factor is that the landscape is changing," said Scott Marcouiller, a vice president at St. Louis brokerage firm A.G. Edwards Sons Inc. Specifically, competition is emerging from areas that didn't even exist just a few short years ago, Marcouiller said.

For example, the proliferation of electronic stock trading systems, which allow investors to bypass the cumbersome and frequently costly exchange systems, have forced the traditional stock exchanges to consider alternative trading methods. Furthermore, a handful of longtime privately held companies have also either completed IPOs or plan to go public. Wall Street investment bank Goldman Sachs for example, completed an IPO in May. And household name United Parcel Service the largest package delivery company in the world, filed last week to sell shares to the public. In addition, New York-based LaBranche NASDAQ RUSSELL 2000 Dly YTD Name Dlv PE Last Chfl Chg i vmj i Comsrie 1.44 16 58 DsanFd .88 12 43V 6 5 DowJns .96 35 50' 5.7 Gotchk 18 B'V -'A 13.9 GranitoC .28 15 2516 -V LockhdMs .88 20 35' Psnney 2.18 21 48V Plantrn 22 70 -Wk SBC Com .98 29 577 7.1 Safeway 33 53 Seagate 6 274k 1V -9 5 Texaslnst .34 66 148 5V 73.5 WatkJn .48 35 24 71.8 WolteFrgo .80 29 40 -'A 2.2 Wrigley .88 32 81 'V -1V AppteC- 16 54 32.8 Cisco 63V 36.5 CoastBcps .32 17 21 -1 29.2 Inprise 3 4 Intels .12 33 70V 2 18.7 MetaCreat 6 25.6 MontBB .16 19 15 4.8 Novell 69 26 47.6 Odwalla 7Va -Vi 14.3 SantCrz 17 7'A 60.6 WstMar 12V -V 22.2 Compaq plans 12-percent cut in work force $184 million loss drives cost-cutting attempts By MARK BABI NECK The Associated Press HOUSTON Compaq Computer Corp.

plans to slash up to 8,000 jobs, or 12 percent of its work force, as it struggles to cut costs amid a $184 million loss in the second quarter brought on by computer price wars and slowing sales. The cuts unveiled Wednesday are the first major move by chief executive and president Michael D. Capellas, promoted to the post just last week to turn around the No. 1 PC maker's flagging business. The work force reduction, ranging from 6,000 to 8,000 jobs, comes on top of 17,000 jobs that Compaq already is axing after Compaq acquired Digital Equipment last year.

Compaq said its second-quarter loss came to 10 cents a share, slightly less than the 11 cents-a-share forecast by analysts polled by First Call. Compaq had warned last month it would lose up to 15 cents a share, compared to initial predictions of a 20-cents profit. The loss compared to a profit of $32 million, or 2 cents a share, in the April-June quarter a year ago, not counting a $3.63 billion charge related to Compaq's acquisition of Digital Equipment and other one-time costs. Big banks hike credit card rates By MARCY GORDON The Associated Press WASHINGTON Some big banks have raised the credit card interest rates they charge, deeply indebted consumers who are working with credit counselors to try to avoid bankruptcy, the Consumer Federation of America said Wednesday. A banking industry group maintained that some consumers have been abusing the services of credit counseling agencies to get reduced interest rates when they can afford to pay more.

And a spokesman for a major bank disputed the consumer group's figures. The Consumer Federation said the increases in interest charged by the financial institutions come as major banks, which own the biggest credit card networks, have cut their funding for credit counseling agencies. The agencies were created by banks about 50 years ago. That has created a double-wham-my for people trying to work their way out of debt and avoid filing for bankruptcy, officials of the consumer group told a news conference. The banks "are trying to pull the rug out from underneath the last best stop before bankruptcy," said Travis Plunkett, the group's legislative director.

The federation is a consortium of more than 250 consumer groups from around the country. The banking industry has defended the funding cuts as necessary belt-tightening and as a way to force the credit counseling industry to become more efficient. "The industry is doing more than ever to educate consumers about using credit responsibly," Patricia Boerger, a spokeswoman for the American Bankers Association, said Wednesday. She said some consumers have been abusing the credit counseling process to get lower interest rates when they can afford to repay their debts in full. The Associated Press New Compaq CEO Michael D.

Capellas hopes to turn around the company. analyst with Southwest Securities in Dallas said he's optimistic about Compaq's future and that Capellas seems to have a strong vision about modernizing the company. "He (Capellas) has got to find a way to make money," Acree said. "But the demand is still very strong for a Compaq product." Quarterly sales rose 17 percent to $9.42 billion from $8.02 billion of a year ago. The year-ago figure was recalculated as if Compaq had already bought Digital.

The company tied its loss to intense price competition with rival sellers of desktop computers to businesses, which eroded profit margins. Cody Acree, an Hold off on tax cut, Greenspan warns Congress Microsoft's Allen has plans ST. LOUIS Microsoft co-founder Paul Allen plans to sell $3.5 billion worth of stock to finance his new-age communications empire, a patchwork of cable TV systems with the potential to deliver the Internet and telephone calls to the home. The initial public offering, or IPO, is expected to take place in the third quarter and will be coordinated by the investment bank Goldman Sachs Charter said Wednesday. Allen bought St.

Louis-based Charter just last summer. At the time, Charter had 1.2 million subscribers in 19 states. Since then, Charter has bought or announced plans to buy 11 other cable companies for more than $15 billion. new government programs, such as the expansion of Medicare benefits President Clinton has proposed. Greenspan said his "first preference" was to use any surpluses to pay down the national debt.

That would help pull down interest rates and better prepare the nation for the looming baby boom retirements. And a tax cut always could come in handy as an economic stimulus if the now-robust economy should weaken, he said. He renewed last week's warning that the Fed will move "promptly and forcefully" to raise interest rates again to counter inflation if the economy shows signs of mediately, largely because of the fact that it is apparent that the surpluses are doing a great deal of positive good to the economy," Greenspan told the panel. Greenspan's testimony came as the Senate began debating the Republicans' proposed 10-year, $792 billion tax cut. The central bank chairman has said repeatedly that he's not against tax cuts.

Indeed, he has long opposed capital gains taxes. But he expressed concern that given the uncertainty of projecting future government surpluses, all the money needed to finance such a cut may not materialize. "We should be cautious in the be ginning," he said, adding that there's "no problem in delay." Projecting budget surpluses over a long period is dubious because the country's economic boom cannot be entirely explained, Greenspan said. "Things are happening which we call technical factors, which is another way of saying we don't have a clue, and they could just as readily go in the other direction," he said. "And, if you start to simulate a number of these things that could go wrong, those surpluses evaporate fairly rapidly at least the size of them shrinks dramatically." Greenspan said, however, he would prefer a tax cut over using the expected surpluses to pay for By JEANNINE A VERSA The Associated Press WASHINGTON Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to delay any big tax cuts until budget surpluses materialize.

Testifying before the Senate Banking Committee, Greenspan also renewed a warning issued to House lawmakers last week that the Fed was prepared to raise interest rates again if necessary to hold inflation in check. On tax cuts, Greenspan said Congress should proceed slowly and cautiously. "Probably we would be better off holding off on a tax cut im ii. Catholic Healthcare chief resigns World's Hi-Yield Checking Hughes served as vice president at CHW from 1988 to 1993, and was a member of the Board of Directors from 1993 to 1997. She is vice president for Mercy Housing Inc.

in Denver, which develops and manages affordable housing in 13 states for poor people. She is chair-elect of the Catholic Health Association board of directors and currently is a member of the Scripps Health Board of Directors. The hospital hopes to strengthen regional and system operating performance, "positioning CHW to be a leader in each of the markets in which it serves." Catholic Healthcare West is a system of hospitals and healthcare facilities in California, Arizona and Nevada The CHW network includes more than 8,500 physicians, more than 40,000 employees and 48 acute care facilities. Staff and wire report SAN FRANCISCO Richard J. Kramer, president and chief executive officer of Catholic Healthcare West, will leave his post Sept.

7, to make way for new leadership, the hospital announced Wednesday. Phyllis Hughes, a Catholic nun with 30 years of health administration experience, will serve as interim president while a search for a permanent replacement is under way. Under Kramer's 10-year tenure, CHW grew from 12 hospitals into one of the largest healthcare systems in the country. Domincan Hospital Santa Cruz is a CHW hospital. The hospital cited "significant challenges to CHW's mission" in the new managed care environment and said it was time to make a change.

46K Farm export talk set Export promotion strategies for local agriculture and wine companies will be discussed at a Monterey Bay International Trade Association meeting Friday. The trade group discussion will focus on business opportunities in Japan for the Monterey Food Beverage Industry. Al Oliveira of Go Farms! will give a special presentation on creating a new global market for the Monterey County Wine Industry. The discussion will be held at noon during a luncheon at the Elks Lodge in Salinas. MBITA is a non-profit publicprivate partnership that promotes small to mid-sized businesses in the global marketplace.

For more information, contact Tony Livoti or Cristina Polesel at (831) 469-0148. West Marine earnings up WATSONVILLE West Marine Inc. announced second quarter earnings increased to $10.5 million for the quarter ending July 3. The Watsonville-based boat and supply company earned $9.1 million for the same quarter last year. Share holdings increased to 60 cents per share, compared to last 52 cents last year.

Net sales for the quarter jumped to $176.9 million, from $159.5 million last year. An $8.2 million increase was due to new stores, $5.5 million was due to comparable stores sales growth, and $3.7 million7 was the result of increased non-store business. Enjoy High Yields, Total Liquidity And Insured Safety! HP names spin-off 'Agilent' versity graduates Bill Hewlett and Dave Packard, first gaining notoriety as a maker of electronic testing gear. It is now the 22nd largest com; pany in the United States. Compare for yourself.

World's Hi-Yield Checking offers you superior returns at every balance level, unlimited check writing, no monthly service fees, convenient ATM access and, of course, FDIC insurance; Balance World Bank of Wells Washington Cal Level Savings America Fargo Mutual Fed $50,000 4.61 0.40 0.40 1.00 1.01 25,000 4.51 0.40 0.40 1.00 1.01 10,000 4.01 0.40 0.40 1.00 1.01 5,000 3.83 0.40 0.40 1.00 1.01 MORTGAGE AHOGAIEt Shopping for WORLD SAVINGS9 vbt-' How may we help you?" a home loanf Check today's rates www.taylorco.com Local mortgage pros serving Santa Cruz County for a decade! 831-462-9220 fal EjMKRmlccr.CADqitofRnl hmrc Lk. imb22m DRK 91f The Associated Press PALO ALTO Hewlett-Packard Co. unveiled a name for its new technology spin-off on Wednesday that reflects the parent company's goal to create a more agile competitor Agilent Technologies. Hewlett-Packard plans to split off its high-tech measurement business into a separate entity, with its own publicly traded stock, from its core computer and imaging operations. The move will create a computer and imaging company with roughly $40 billion in annual revenue, and a smaller Agilent that includes testing and measuring, components, chemical analysis and medical components, with about $7 billion in revenue.

The computer and imaging businesses will retain the Hewlett-Packard Co. name. The split gives investors a clearer choice when deciding which stock to purchase. The Agilent symbol a series of circles that form an eight-point star-burst represents a "spark of insight." The company color is the blue HP used before it entered the computer and printing businesses. HP was founded 60 years ago in a Palo Alto garage by Stanford Uni nwr Member $40 Billion-Strong Golden West Financial Corporation "America's Most Admired Savings Institution" Fortvne MEMBER FDIC Santa Cruz Aptos Capitola Scorts Valley Hours: 1551 Pacific Ave.

Aplos Village Sq. 1830 41st Ave. Kings Village Ctr. Mon-Thurs At Mission St. 7970 Soquel Dr.

0pp. Capitola Mall 100 Kings Village Rd. Fri 9-6 (831 423-1060 831)688-1987 (831)476-5300 (831)438-3700 Sat 9-1 Markets mixed Federal Reserve Chairman Alan Greenspan left financial markets unscathed and unimpressed Wednesday as he reasserted the Fed's willingness to raise interest rates iat any sign of a rebound in inflation. Broader stock indicators, however, were modestly higher. The Standard Poor's 500 rose 2.56 to 1,365.40, and the Nasdaq composite index rose 26.51 to 2,705.84.

The Dow Jones industrial average fell 6.97 points to close at 10,972.07. I Sentinel wire services INSURED TO LEGAL MAXIMUM Newsline World Savings Bank rates: 1-800-HOT-RATE 1-800-468-7283) 24 HOUR INFORMATION SERVICE 'World's Annual Percentage Yields (APYs) are effective as of date of publication, and may change thereafter; APY on balances below $5,000 is 1.01. APY comparisons based on independent shopping survey of other institutions' FDIC-insured checking accounts on720TO Accurate as of date of survey, other terms and conditions may apply. "$5,000 minimum to open account and maintain service charge waiver. $250,000 maximum per household.

Fees could reduce earnings. Personal checking only. 423-NEWS.