Santa Cruz Sentinel from Santa Cruz, California • Page 37

Friday, May 18, 2001 SANTA CRU? SENTINEL BUSINESS market PLACE Key economic gauge shows improvement; May 17, 2001 32.66 Dow Jones Industrials Standard Poor's 500 economy is headed into recession. In an attempt to stave off a recession, the Fed has slashed interest rates five times this year, on each occasion by a half-percentage point. The most recent rate cut came Tuesday. In a separate report Thursday, the Labor Department said initial applications for jobless benefits fell by 8,000 to a seasonally adjusted 380,000 for the week ending May 12. Stocks, which began the day higher, broad: ened their advance after the release of the lead-i ing indicators report.

The Dow Jones industrial average finished Thursday up 32.66 at 11,248.58. The Nasdaq index advanced 27.24 to 2,193.68. chief economist at Wells Fargo Co. "Perhaps we can see the light of economic recovery at the end of the tunnel." But they also were cautious. Mark Vitner, of First Union said, "It really doesn't make me optimistic about the near-term outlook." "I still think we're in for a few more months of pain," he said.

The April increase was only the second in the last seven months. The cumulative change in the index over the past six months was a 1.3 percent decline. Three consecutive declines in the index traditionally have been considered a sign that the campaign since the start of the year, said Ken Goldstein, economist for the New York-based Conference Board. "If you decrease the cost of capital then you make it easier for people to borrow to expand or to fix things up," Goldstein said. The index is closely watched because it indicates where the overall U.S.

economy is headed in the next three to six months. It stood at 100 in 1996, its base year. Economists said the April increase, though small, is a sign that the economy is beginning to stabilize after months of decline. "This is a glimmer of hope that the economy is beginning to stabilize," said Sung Won Sohn, By LISI DE BOURBON THE ASSOCIATED I'RIiSS NEW YORK A key gauge of future economic activity rose in April, following two straight monthly declines, as the effects of the Federal Reserve's aggressive rate-cutting campaign began seeping into the economy. The Conference Board said its Index of Leading Economic Indicators rose 0.1 percent to 108.7 in April after slipping a revised 0.2 percent in March and 0.2 percent in February.

The improvement, which matched economists' forecasts, reflects the positive effect of the Federal Reserve's aggressive interest-rate-cutting 11,248.58 jr3.50?" 1,288.49 2,193.68 "504.76"' Nasdaq Russell 2000 Agilent earnings fall short rv Bnijtkt nrDAr-mu Till; ASSOCIATED PRESS SAN FRANCISCO Agilent Technologies' second-quarter net earnings plunged 69 percent and fell short of Wall Street's lowered expectations, as the test and measurement equipment maker suffered dramatically from the economic slowdown, Adding to the bad news pouring out of the hightech world, Agilent said Thursday that conditions in the current quarter probably will not improve. A net loss is likely, with revenue expected to drop from the second quarter. "Frankly, the speed and severity of the downturn are unlike anything I've seen in 34 years in the business," CEO and President Ned Barnholt said. In the three months ended April 30, Agilent oqi-t-inrl Cl millmn nf II polite nor clinni rinum Stock investors extend Wednesday's rally NEW YORK Investors maintained their enthusiasm over lower interest rates Thursday, extending the big rally that allowed the Dow industrials to close above 11,000 for the first time since September. The Dow Jones industrial average finished Thursday's session up 32.66 at 11,248.58.

The Dow's moderate gain followed the 342-point climb it made Wednesday, when the blue chip average closed above 11,000 for the first time since Sept. 14. The broader market also ended higher. The Nasdaq composite index advanced 27.24 to 2,193.68, and the Standard Poor's 500 index moved up 3.50 to 1,288.49. Banks tighten standards for credit card loans WASHINGTON The number of banks that have tightened standards for credit card loans surged in the spring amid worries consumers would have difficulty paying debts in a slowing economy.

The Federal Reserve survey released Thursday also said that banks continue to be a somewhat tightfisted with business borrowers for similar reasons. The survey said that 20 percent of banks reported that they put stricter standards on credit cards loans over the past three months, compared with 12 percent that reported doing so in the final three months of 2000. "The recent run-up, or expected future increases, in consumer delinquency rates were most often cited as a reason for changing consumer-lending policies," the survey said. KB Toys pounces on e-tailer Web site BOSTON KB Toys, which operates 1,300 mostly mall-based stores nationwide, scooped up the rights to the name and well-known Web site of defunct e-tailer eToys at a bankruptcy auction Thursday. KB successfully bid nearly $3.4 million for eToys' intellectual assets during eToys bankruptcy proceedings Thursday in Delaware, company officials said.

"That's a great deal. My goodness," said independent toy analyst Chris Byrne when he heard the price. "Their TV advertising alone made eToys a household name, even though the households didn't necessarily have Internet access. For KB to acquire that is a rip-off." Visitors to the eToys.com Web site will be kicked to KB's own KBkids.com site. "It proves our point about how successful 'clicks-and-mortar' can be," chief executive Michael Glazer told The Associated Press.

Sentinel wire services The Associated Press from S165 million, or 35 cents per share, in the same period of 2000. Revenue increased 10 percent, however, to $2.74 billion from $2.48 billion. Excluding one-time gains and charges including $100 million the company spent increasing its inventory reserves because of weak demand Agilent would have earned 26 cents per share. Analysts surveyed by Thomson Finan- cial First Call were expecting 27 cents per share. Agilent shares rose 22 cents to $38.72 on the New York Stock Exchange before the earnings, report was released.

Early in the after-hours session, shares fell $4.46 to $34.26. Palo Alto-based Agilent which was spun off from Hewlett-Packard Co. in 1999 saw a sharp Ford.Chairman William Clay Ford Jr. introduces the P2000 Prodigy hybrid at January's North American International Auto Show in Detroit. Automakers said Thursday that Bush's tax-credit plan could speed the technology for fuel-efficient cars.

Automakers say Bush's energy plan will speed production of efficient cars decline orders in the quarter, especially in the communications and semiconductor markets. About $500 million worth of orders were canceled altogether. Agilent had warned April 5 that earnings utnulH hp Imirnr than pynnrtpH nnH nnnniinrprl it was cutting all 48,000 employees' pay by 10 pei cent. Barnholt said Thursday that Agilent also has temporarily halted manufacturing at times. Stalled sales grip Palm By MAY WONG ill; ASSOCIATED PRESS ortlN 1 rt ruumnciu luiiifjuiin er Palm Inc.

warned Thursday it expects its oper-' ating loss for the current quarter to be twice as much as previously projected, blaming shipment problems that resulted in stalled sales. The Santa Clara-based company, the world's leading provider of personal digital assistants, said it expects its operating loss to range between $170 million and $190 million for the fourth quarter ending June 1. The company previously projected a loss of $80 million to $83 million. Revenues now are expected to range between $140 million and $160 million, compared to pre-, vious estimates of $300 million to $315 million, "I call the CAFE proposal weak and the tax credits vague," said Jason Mark of the Union of Concerned Scientists. Mark said the administration should commit to a CAFE increase and support a tax credit that rewards vehicles that have significant energy savings.

CAFE standards are loathed by the auto industry. Automakers insist government mandates could force them to make vehicles that Americans will not buy. "CAFE standards should not be increased until it's feasible, which means that the technology is ready, affordable to customers and meets consumer expectations," Bergquist said. The task force suggested that Transportation Secretary Norman Mineta review the CAFE standards created in the midst of the oil crisis of the 1970s and make suggestions for an increase. CAFE standards require that each automaker's fleet of new cars average 27.5 miles per gallon.

Light trucks, including pickups, mini-vans and sport-utility vehicles, must average 20.7 mpg. Hybrids use less fuel than traditional engines because they run on both gas and electricity, but a limited number are available in the United States. Much of the industry excitement is for fuel cells, a technology developed to power space vehicles that makes energy from a chemical reaction with no harmful emissions. Most automakers envision fuel cells to run on hydrogen, a renewable source that's only byproduct is water. But there are only a handful of refueling stations in the world where drivers can get hydrogen, and it is expensive to produce, store and transport.

Toyota and Honda began selling a limited number of hybrid cars this year, and Ford Motor General Motors Corp. and Daimler-Chrysler AG plan to mass market SUVs and pickups with the technology for the 2003 model year. On the Net: Alliance of Automobile Manufacturers: http:Avww.autoalliance.org Department of Energy: http:Avww.energy.gov. By NEDRA PICKLER ill-ASSOC'IAITilJ I'Rl-SS WASHINGTON U.S. automakers say President Bush's energy plan, by lowering the cost of exotic fuel-cell engines, would help bring new, fuel-efficient vehicles to highways sooner.

The plan calls for $-1 million in tax credits to spur the sale of hybrid gas-electric vehicles and fuel cells but did not provide specifics of which vehicles would be eligible and how much each credit would be worth. The administration also proposed the government study whether to raise fuel-efficiency requirements on cars and trucks, prompting a warning from the auto industry that the administration should not make demands that outrun what technology can provide. "Americans are already driving hybrid cars that can convert to battery power to reduce emissions and get up to 70 miles a gallon of gas," Bush said Thursday. "These are our early glimpses of a future in which Americans will meet our energy needs in ways that are efficient, clean, convenient and affordable." The automakers said the tax credits would help offset the high cost of manufacturing cars that run on new technologies rarely seen on the road today. "We're thrilled that the report is drawing so much attention to these alternative technology vehicles because consumers need to become familiar with them before they buy them," said Gloria Bergquist, spokeswoman for the Alliance of Automobile Manufacturers.

"This is a great way to promote the vehicles and help us reach our national energy goals faster." The energy plan, prepared by a task force headed by Vice President Dick Cheney, did not commit to an increase in fuel-efficiency requirements but said responsible gas mileage requirements could be Imposed "without negatively impacting the automotive industry." The report provides the first hint of how the administration may address the federal requirements, called Corporate Average Fuel Economy Standards, or CAFE. stocks OF I 0 A li I NTH RK ST me company saw. "Our new m500 family of handheld computers is shipping in volume later than we had hoped, precluding the opportunity for distributors, retailers and resellers to reorder in our fourth quarter." said Carl Yankowski, Palm's chief executive. "The shipment delay accounts for the bulk of our reduced revenue outlook and is exacerbated by the slowing economy, which we believe has spread beyond the U.S." Palm also announced a mutual agreement with Extended Systems to terminate their proposed merger. NEW YORK STOCK EXCHANGE Krispy Kreme stock hits Big Board with 5 percent increase 1 3 ft jftiiMTjnn The switch to trading on the Big Board Thursday marked the company's rapid growth since going public 13 months ago.

The stock had traded on the Nasdaq market since April 2000. 2 III OIK I Vf KM. I TIO SERVICE Updates every 20 minutes up to stock closing Daily highs lows Volume Period ending ratios To use the Sentinel NcwsLine Stock Quote Service, call 423-NEWS (6397) from a TOUCHTONE phone and enter selection 1100. Instructions: A ticker symbol consists of up to five letters. Each letter corresponds to a two digit number on your telephone keypad.

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To expedite your stock request, please enter the asterisk key after your stock quote. Oly YTO Name Ply PE tail Chg Chg Comeric 1.76 14 56 24 06 DeanFd .90 15 40 65 32.5 DowJns 1.00 88 55.29 -2 4 Gotchk 9 5 20 15 26 1 GraruteCs .32 22 29 66 53 7 IBM .56 25 115 07 .73 35.4 LockhdM .44 38.30 NokiaCp .25 32.96 101 24.2 Penney .50 20 85 39 91.7 Plantrons 16 22 49 29 -52 1 SBC Com 102 19 4370 1 20 3 5 Sa(eay 22 48 15 109 23 0 Tenlnsl .09 24 39 80 1.30 16.0 WellsFrgo .96 19 45.41 .29 Wngleys .76 33 48.28 .8 NASDAQ Dly YTD Name. Dlv PE Iml Chg SChf AppleC 15 23 55 58 3 CnlilCst 193 20 24 24 2 Cisco 19 86 .14 GrtrBays .40 19 26.44 .72 Intel .08 29 28 60 .21 MonIBB 14 1065 -4 NaviSite 2 10 -10 4 Novell 495 52 Odwalla 27 1020 .15 33 PacCap .88 13 27 11 .02 Pumatech 399 -40 Hainmkr 80 Veritas 69.20 1.19 WslMai 18 7.10 .42 72.1 the stock exchange, said a spokesman. Krispy Kreme erected a small store inside complete with a conveyor belt that drops mixed dough into a fryer, carries the round confections through a waterfall of sugar glazing and a short cooling distance until they're served hot. On Wednesday, the company reported a nearly 89 percent gain in first-quarter profits with earnings of $5.7 million, or 20 cents per share.

Krispy Kreme increased its projected earnings for the rest of fiscal 2002 to 77 cents per share from the previous estimate of 69 cents. The company also raised its fiscal 2003 earnings per share to $1, up from 86 cents. TTII; ASSOCIAT El) PRESS NEW YORK Krispy Kreme Doughnuts Inc. opened its first day of trading on the New York Stock Exchange on a sweet note, with its stock gaining more than 5 percent. Trading under the symbol KKD, shares rose $3.10 to $59.50 in afternoon trading after chairman and chief executive Scott Livongood rang the opening bell in front of the company's signature sign announcing "Hot Doughnuts Now." The switch to trading on the Big Board Thursday marked the Winston-Salem, N.C.

based company's rapid growth since going public 13 months ago. The stock had traded on the Nasdaq market since April 2000. The company expected to make and give away 40.000 doughnuts Thursday from a tent set up on the front steps of Translation Chart 'I JOS AJI IUJ CM lU Ml HI Ml 1142 HI HI KSJ 1.V1 MM 0 UM l-l (ill R-2 S7.1 Mil UH2 Vfll VT'll X')2 VM 7M K))' lo wlctt pteM 0 4ml I (lor warrant and djuti) To lelftt prrn (I and I (for preferred funic), q. To lrcr pre" (I and .1 (other special charattrr). 'HI Need news fast? Santa Cruz Sentinel www.santacruzsentinel.com 1 Santa Cruz Sentinel each slock quote, additional information may be requested by pressing the asterisk ghSfcrw 8750-0 Boqual Avt.

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