Originally created 06/28/01

Business briefs

NEW YORK - Blue chips fell again Wednesday, registering their fourth consecutive losing session, after the Federal Reserve delivered a smaller interest rate cut than Wall Street wanted.

The Fed announced in midafternoon it was lowering short-term rates by 0.25 percent, half of what the market believed was necessary to restart the economy. It was the sixth cut this year.

The Dow Jones industrial average ended Wednesday down 37.64 at 10,434.84, after being up about 25 before the Fed announcement. The Dow fell more than 100 points on both Friday and Monday, and gave up 31 points Tuesday.

The broader market finished mixed. The Nasdaq composite index eked out a modest gain, up 10.12 at 2,074.74, essentially unchanged from where it stood prior to the Fed's move. The Standard & Poor's 500 index fell 5.69 to 1,211.07.

Investors have been anxiously awaiting signs that the five prior reductions - each 0.5 percentage point - have helped business pick up. But so far, corporate profit warnings, topping 600 so far this quarter, have indicated business remains weak in many sectors.

Analysts did not expect a rally to follow this latest rate cut, regardless of its size.

"We think that the second quarter will prove to be the slowest quarter, and the third quarter will be the rebound, and by the fourth quarter growth will have resumed quite nicely," said Ronald J. Hill, investment strategist at Brown Brothers Harriman & Co.

Advancing issues outnumbered decliners more than 3-to-2 on the New York Stock Exchange, where consolidated volume was 1.39 billion shares, compared with 1.40 billion on Tuesday.

Firms agree to chicken-beef merger

LITTLE ROCK, Ark. - Tyson Foods agreed to acquire IBP Inc. under the original Jan. 1 terms of a deal Tyson had tried to abandon, starting in March, citing problems with IBP's books.

The cash and stock offer values IBP, the nation's largest beef producer, at $2.7 billion. The companies announced the agreement after its approval by a Delaware judge late Wednesday.

"Today's step moves us down the road to our vision, creating the world's leading protein provider," Tyson Chairman John Tyson said.

The Tyson purchase will create a meat processing company with 28 percent of the beef market, 25 percent of the chicken market and 18 percent of the pork market.

Talks fizzle in GE bid for Honeywell

BRUSSELS, Belgium - General Electric Co. representatives held low-level talks Wednesday with European Union antitrust officials about the company's $41 billion bid for Honeywell International Inc., though there was little optimism the deal could be saved.

"There is one last prod to see if there is anything there, then GE will walk away," a source close to the deal said on condition of anonymity. "I'm not very hopeful."

An EU Commission source confirmed that GE is holding technical talks, but declined to elaborate. A final EU ruling on the deal is expected next week.


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