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Show Che Salt Lake Tribune Page D-6 BUSINESS @ CONSUMER CORNER/D-7 @ UTAH BRIEFS/D-7 @ BUSINESS GLANCE/D-8 GONE WEST East bloc economies leave Russia behind/D-7 TUESDAY, DECEMBER1, 1998 Profit-Taking Sends Dow Down 216 Points Market Indicators Dow ; Industrials Computer and Internet stocks take a beating after leading marketto records NYSE BY BRUCE MEYERSON THE The Nasdaq composite index fell 66.90, or 3.3 percent, to 1,949.54 after ASSOCIATED PRESS NEW YORK — The Dowindustrials S&P 500 slid 216 points on Monday, a weekafter returning to record levels, in thefirst real waveofprofit-taking sincethe stock market rebound began almost two NASDAQ monthsago. The selling was heaviest among the computer-related and Internet-related namesthat have led the turnaround, particularlyin the Nasdaq market The Dow Jones industrial Utah’s Top Performers The Bloomberg Utah Index measures the stock performance of thestate's major publicly held companies. average sank 2.3 percent, or 21 9,116.55, recordingits first one-day of 200 points — or even 100 points — since Oct. 1 ‘The drop more than wiped out last week’s 173-point gain andleft the Dow about 257 points below the recordclose | of 9,374.27 set last Monday setting a new high on Friday to join the Dowand S&P 500 in halting a fourmonth drought for new highs. Theselling, which came without any noteworthy dose of bad news, was hardly alarming considering how far and how fast the markethadrallied, analysts said. While most analysts say the fears that dominated the market throughearly au- tumn were exaggerated, somealso worry that Wall Street's recovery will prove too exuberant with a weak global econo- my still pressuring companyprofits. They were due. They were way over- due,” said Charles Pradilla, chief investment strategist at SG Cowen Securities, noting the “rampant speculation” among relatively unknown companies selling the 's on the Internet. “Even the real [Internet] companies Dow Jones Industrial like Yahoo! and Amazon.com were going up 20 points a day.” Yahoo! slid 24 15/16 to 192 to lead the Mon., Nov. 30, 1998 Close: 9,116.55 Nasdaqretreat, but the highest fliers of the past week fell even harder: Books-AMillion fell 9 7/16 to 2912, Egghead.com fell 64 to 2544, and Onsale fell 36% to 61%. Amongthe leading Nasdaq technology names, Microsoft fell 6 1/16 to 122 and Sun Microsystems fell 6 5/16 to 74 1/16. Likewise, on the New York Stock Exchange, IBM fell 4% to 165%asthebig- gest declinerin the Dow Despite Monday’s drop, the Dow re- mains more than 15 percent higher for 1998, andstill stands about 1,700 points above the Aug. 31 low of 7,400. In other trading, the Standard & Poor's 500 fell 28.70 to 1,163.63 after setting a new high on Friday. The NYSE composite index fell 11.50 to 571.50. aa Health Insurance Rates Heading Upward in Utah i If you haven't already started paying more for health insurance, then prepareto do so, because premiums are on the rise in Utah. According to insurance industry experts, premiums for small businesses jumped anaverage of 16 percent between March 1997 and March 1998. Credit Unions, Bankers Push Fight Up Notch Sidesin bitter dispute seek intervention by legislators Theyare expected to rise at an even faster clip in 1999, Large businesses, defined in Utah as those with more than 50 employ- ees, are seeing their rates rise as well, BYLESLI A1TCH. THE SALT LAK) TRIBU though not quiteas rapidly: from 5 percent to 9 percent in 1998 and probably at a higher rate in 1999. Utah’s banks and credit unions are Experts attribute the increase to a variety of factors in the health-care takingtheir nasty battleto the state Legislature. Utah’s 100 state-chartered credit unions hope to persuade legislators to field. New medical technologies and designer drugs aredriving up thecost of treatment And federal and state health-care reforms have forced insurance carri- overturn a recent 3rd District Court rul- ing by Judge William Thorne that prevents them from recruiting new mem- ers to accept morehigh-riskclients and payfor procedures bers from morethan one county. The ruling was decidedly in favor of “We have done lot to give sick the Utah Bankers Association (UBA), which filed the lawsuit to restrict expan- folks access to the system,but that comeswith acost,” said Joan Ogden. sion of credit unionsfive years ago. an insurance industry consultant in Salt Lake City. “We have induced a Some of Utah's credit unions, set up years ago to serve only one employer. lowerincidence of coveragein the have grown dramatically by adding new healthy. There are a number of employers for whomthecosts have got- membersandoffices in several counties. Bankers argue credit unions ten so high that they're terminating should coverage.” retaintheir original purpose — to serve Raytheon Purchase Complete one employer, group or area — or pay federal and state income taxes like banks do. MoogInc. of East Aurora, N.Y., has completedits acquisition of RaytheonAircraft Montek Co., a Salt LakeCity subsidiary of Raytheon Air- craft Corp., for $160 million. Moog, a maker of precision-control components and systems, said Mon- tek’s principal products mesh well with fourof its product lines About 80 percent of Montek’s $90 million in annual revenues comes t Sullivan/The Associated Press A Mobil workerwalks to the Beaumont,Texas,refinery Monday. Talks are under wayfor an Exxon-Mobil merger. Exxon-Mobil Merger Raises Antitrust Questions Gasstations, refineries could besold, thousands ofjobs maybe sacrificed from commercial and military aircraft hardwareand a ted aftermarket sales. The rest is split between tactical missiles and industrial hydraulics. Moogestimates the acquisition will increase its annual revenues to more than $630 million Fyve*Star Wins Award Fyve*Star Inc. was namedthe THE ASSOCIATED PRESS NEW YORK — A merger between Exxon and Mobil could prompt governmentantitrust watchdogs to forcethe sale of numerousgas stations and refineries, putting thousands of jobsin jeopardy But even though the merger would form the said world's largest oil company, most an Mondaythey don't expect worries about ndustry dominance to be strong enough to kill the deal When thefinal analysis is made, it will be deter- eral hundredsmall and minority minedthat theindustry remains highly fragmented and highly competitive,” said Michael Young, an analyst with Deutsche Bank Securities in Boston. Exxon Corp. and Mobil Corp., the nation’s two largest oil companies, announcedlast week they werein merger negotiations. A deal, which would probably structured as an Exxon purchase, would likely bein the $60billion-plus range, potentially making it therichest of all time : owned businesses in Utahthat areinterested in doing business with just 4 percent of global oil production capacity Woman-Owned Business of the Year at the Sixth annual Utah Supplier Development Conferenceheld at the Salt Palacein early November ‘The conference, sponsoredbythe Utah Department of Community and Economic Development, attracts sev governmententities and major corporations. Fyve*Star, ownedby Celeste Gleave, was foundedin 1991. It pro: duces several magazine Still, a combined Exxon-Mobil would represent Utah Stocks Also Tumble Utahstocks fell Monday, lead by Midvale-based Data Broadcasting Corp., whose shares dropped $2.38 to close at $10.63. Securities analyst Daniel King of LaSalle St. Securities said Data Broadcasting’s shares fell after rising rapidly on interest from short-term investors. Those investors were focusing on a possible high valuation for the up- coming public offering of CBS.MarketWatch.com financial news Internet site, which is 50 percent owned by the Utah company. “Someinvestors who have already doubled their money sold today,” he said. The Tribune/Bloomberg Index, whichtracks the performance of Utah’s major publicly held companies, declined 1.88 points Monday to 184.19. « See MERGER, PageD-11 vertisements characterize banksas staging a wholesale war oncredit unions. “That just t the case,” he said. Credit unions argue they should be al- lowed to continueoperating as non-prof. its and expand becausethey offer consumersa lower-cost alternative to banks. “We want to bring the two sides together and look at what is in the best interest of the residents of Utah,” said Sen. David Steele, R-West Point. Steele and other legislators plan to meet with representatives of banks and credit Big and Bigger An Exxon Corp. and Mobil Corp. merger wouldcreate the world's largest energy company. Hereis a closer lookatthe scopeof the companiesfromtheiroil rigs to their service stations EXON Mobil Oil output unions in coming weeks. Utah's 100 state-chartered credit Refining capacity Millionsof barrels per day MB ic Millionsof barrels per day unions hope the Legislature will do for them whatCongress did this summerfor 4.0 93 federally chartered credit unions — those regulated by the federal govern- 22 . Oil and gas products sold Millionsof barrels per day 5.4 es ment instead ofthestate. Service stations Congress in July overturned a pro Retail outlets worldwide bank U.S. Supreme Court decision by 32,000 passing the Credit Union Membership Access Act. The act, which applies to resem about Americas 13.4% 45 federally chartered credit unionsin Utah, gives these organizations Market share Shareof the oll and gas market that a combined Exxon and Mobil would control ‘TheFederal Trade Commission could, howe r, be troubledby the companies’ tc share of U.S. gasoline sales, which was about 0 percent last y accordingto the trade publication ational Pe TO: es directories for the s\ and several chambers of commerce. “We aren't againstcredit unions,” said Howard Headlee of the Utah Bankers Association, who contends negative ad. Europe Middle East/Far East >» 7.5% World y 11.9% oa the right to recruit and retain members from more than one group or county “It really was an overwhelmingvictory on the federal level,” said Lisa Howell, a spokeswoman for the Utah League of Credit Unions. Credit unionsthis week began running “As of 196 Associated Press newspaperadssoliciting registered voters to sign a petition asking the Legislature to “fix the law and allow citizens in our greatstate the freedom to choose.’” Alliance M. Y Boost 3Com Corp.’s Utah Manufacturing Operations BY LISA CARRICABURL THE SALT LAKE TRIBUNE Analliance between 3ComCorp. and the world’s leading notebook computer vendorcould bring a significant boost in sales and a possible increase in Utah employment The partnership announced Monday “The market has shown a preference for 3Com’s technology and so have we,” said Steve Ross, general manager of TAIS's Computer Systems Division The deal is significant because Toshiba holds 20.1 percent of the worldwide market for notebook computers, according to International Data Corp., a Framingham, Mass.-based computer means already-high manufacturing rates in Salt Lake Citywill rise. If everything goes as planned, 3Com will add to its 1,100-person Utah workforce. “We couldn't be morebullish on the future for our manufacturing opera- tions,” he said Stephen Dube, a marketanalyst with calls for Toshiba America Information SystemsIne. (TAIS) to install 3Com PC Card modemsin most of its notebook the world’s leading notebook-computer vendor. New York City, agreed the dealis good newsfor 3Com munications manager for 3Com’s Mobile Communications Division. The punchits exclusive endorsement packs couldsignificantly boost sales by of positive alliances the company is computers, said Mark Bingham, com Toshiba also will encourage distribu- tion partnersto install 3Com products, he said. It will include the products in its accessories guide, marketing materials and on its site on the Internet's World Wide We, industry research firm. As such,it is 3Com’'s Mobile Communications Division, Bingham said Increased demand spawned by the deal, coupled with generally higher de- mand for modems as more people buy lower-pricéd notebook computers, Wasserstein Perella Securities Inc. in He characterized it as one in a series forging to boostsales of its products. A week ago, 3Com announceda part- nership with Hewlett-Packard Co. under which the two companies will work with distributors to make it easier for them to offer Hewlett-Packard com- puters with 3Com modems. “You may have heard that credit unions in Utah recently lost a 5-ye: court battle with the Utah Bankers Association,” the ad reads. “The UBA sued credit unions over their right to serve members in more than one county. The court decision could affect Utahns’freedom to choose a credit union as their financial-service provider.” Bothsides have spent plenty arguing their case Utahns for Fair Taxation, funded in great part by the Utah Bankers Association, has run advertisements suggesting a few “big-dollar credit unions” are bigger than most banksand are responsible for the death of smaller credit unions. “While they hide behind a credit union label, they're hardly a credit union anymore,” the ad reads. “And their growth has been fueled byusing their non-profit status to avoid paying taxes,” Thereis one thing banks and credit unions agree on: Thebattle has become so nasty thatlegislative efforts may not go anywhere. |