BUSINESS BRIEFS
Treasury prices rally, yield falls amid new fears
Associated Press
NEW YORK — Treasury prices rallied dramatically yesterday on more credit concerns, pushing the benchmark 10-year note's yield down to its lowest level in 2 1/2 years.
Trading was dominated by a fresh set of worries about the impact of deteriorating below-prime home loans on the credit and housing sectors. Those concerns led investors away from risk and to again seek the safety of government bonds.
HSBC Holdings PLC yesterday said it will move two of its structured investment vehicles, which contain some asset pools with exposure to sour home loans, onto its balance sheet. In the past, many banks have kept structured investment vehicles off their balance sheets, obscuring their subprime problems.
BROCADE BACKDATE TRIAL UNDER WAY
SAN FRANCISCO — Prosecutors argued yesterday that a former Brocade Communications Systems Inc. executive was a key enforcer in an illegal accounting scheme, while her attorney said she was just following instructions when she backdated stock options.
Stephanie Jensen, Brocade's former vice president of human resources, is on trial in U.S. District Court on felony charges of conspiracy and falsifying corporate records. If convicted, she faces up to 25 years in prison.
Assistant U.S. Attorney Adam Reeves said Jensen instructed her staff to choose favorable dates in the past for stock options awards and warned them never to communicate by e-mail about the company's stock option activities.
NORTHERN ROCK IN TAKEOVER TALKS
LONDON — Northern Rock PLC will hold accelerated takeover discussions with a consortium led by Virgin Group, the battered mortgage lender said yesterday.
Virgin, which wants to re-brand Northern Rock as part of Virgin Money business, says its consortium would repay $22.7 billion of the $50 billion the Bank of England has loaned to Northern Rock on the completion of the transaction.
The remainder of the money would be paid "in due course," Northern Rock said in an announcement to the London Stock Exchange.
OIL PRICES FALL TO $97.70 A BARREL
NEW YORK — Oil futures retreated 40 cents to $97.70 a barrel yesterday on a widening belief that OPEC ministers will agree to raise crude production during a meeting next week. The falling dollar helped limit crude's decline.
At the pump, meanwhile, gas prices fell further from their recent highs now that Thanksgiving travel demand has faded. The average national price of a gallon of gas slipped 0.1 cent overnight to $3.085 a gallon, according to AAA and the Oil Price Information Service, and is off 2.7 cents in less than two weeks.
ROYAL PHILIPS TO BUY OUT GENLYTE
AMSTERDAM, Netherlands — Royal Philips Electronics NV will buy Genlyte Group Inc. for $2.7 billion, the world's largest lighting maker said yesterday.
Philips agreed to pay $95.50 — a 52 percent premium over Friday's close — in a deal supported by management that values Genlyte at $1.23 billion.
Louisville, Ky.-based Genlyte makes fixtures for lights used mostly by companies.
RIO TINTO TO HIKE IRON ORE OUTPUT
MELBOURNE, Australia — Rio Tinto Ltd. yesterday outlined a conceptual plan to boost annual iron ore output to 600 million metric tons and committed $2.4 billion to develop iron ore deposits, ahead of an investor briefing in London.
Rio Tinto is laying out new justifications for rejecting a $150 billion takeover bid from rival BHP Billiton Ltd. that would create a global mining behemoth.
Chief Executive Tom Albanese said the full value of the company's assets was yet to be reflected in the market.
