Finance and Economic

Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) is continuing to fund research and development of new military aircraft, but its technological base may erode if the U.S. Air Force does not move soon to begin a competition for a new bomber and a new fighter, a top executive said on Monday,

“The technology base is eroding for Boeing as we move late into the next decade,” Darryl Davis, president of Boeing’s Advanced Systems unit, told reporters at the annual Air Force Association meeting.

In recent years, Boeing has lost several key military aircraft competitions, including the $200 billion Joint Strike Fighter project, won by Lockheed Martin Corp (LMT.N: Quote, Profile, Research, Stock Buzz); an unmanned combat airplane competition won by Northrop Grumman Corp (NOC.N: Quote, Profile, Research, Stock Buzz); and an unmanned Navy patrol plane, also won by Northrop.

Given that Boeing’s production line for the C-17 transport plane and F-18 fighter jet are beginning to wind down, defense analysts have raised concerns about Boeing’s ability to compete for more military aircraft contracts in the future.

Davis agreed it was a concern, especially if the Air Force’s program to build a new bomber and possibly start work on a sixth-generation fighter were delayed.

Overall, U.S pay day loan. defense spending was likely to level off and possibly decline in coming years, and much would depend on the priorities of the new administration, Davis said.

He said Boeing expected research and development programs to continue being funded, but those programs might not move into design, development and production “as soon as we hoped.”

“It’s going to be a difficult environment,” Davis said. 

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U.S. securities regulators plan to take action on abusive short selling of stock before the end of the week, a source briefed on the matter said on Monday.

The measures came as Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research, Stock Buzz) filed for bankruptcy protection, intensifying concerns that other major financial stocks would accelerate their losses.

The Securities and Exchange Commission will likely adopt proposals to strengthen its short-selling rule, including one that deems it fraudulent for customers to deceive broker-dealers about their intention or ability to deliver securities in time for settlement.

The SEC will also move forward with a plan that would shorten the time in which traders must buy back stock if they fail to deliver a security by the settlement date.

But the SEC will not reinstate and broaden a temporary emergency rule that required traders to preborrow stock before executing a short sale online payday loan.

Two months ago, regulators were faced with similar market turmoil when IndyMac bank was seized by regulators and investors were concerned that Lehman and mortgage finance giants Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) were veering towards insolvency.

At the time, the SEC announced plans to crack down on rumor-mongering and issued an emergency rule aimed at curbing illegal naked short selling in 19 major finance stocks, including Lehman, Freddie and Fannie.

A “naked” short sale occurs when an investor sells stock that has not yet been borrowed. 

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Starting Monday, two classes of shares in Reinsurance Group of America Inc. will be traded on the New York Stock Exchange.

For most shareholders, their current RGA shares will be reclassified as RGA Class A shares. Shares formerly held by MetLife Inc. will trade as Class B shares.

At the end of the day Thursday, MetLife completed an exchange offer among its shareholders for the new class of stock. The exchange allows MetLife to shed its majority stake in Reinsurance Group. MetLife still will own about 3 million Class A RGA shares after the exchange.

MetLife Inc. will accept about 23 million or 8.6 percent of the 253 million MetLife shares that were tendered paydayloans. Shareholders whose stock is accepted will receive Class B shares in Reinsurance Group.

Chesterfield-based Reinsurance Group sells reinsurance worldwide. Reinsurance allows life insurance companies to spread their risk.

jerristroud@post-dispatch.com | 314-340-8384

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Stocks ended higher Wednesday as investors scooped up shares battered in the previous session’s selloff and sorted through Lehman Brothers’ steep quarterly loss and restructuring plans.

Strong earnings forecasts from FedEx and Texas Instruments, a firmer dollar, and lower oil and gold prices lent additional support. But continued worries about the financial sector limited gains for the blue chips.

The Dow Jones industrial average (INDU) gained 0.3%. The Nasdaq composite (COMP) rose 0.9% and the Standard & Poor’s 500 (SPX) index advanced 0.6%.

Stocks slumped Tuesday, with the Dow sinking 280 points, as speculation about Lehman’s ability to raise capital and AIG’s mortgage-related losses sparked worries about another Bear Stearns - the bank that the government had to rescue in March.

Lehman sought to manage those fears Wednesday, announcing its third-quarter results early and addressing the liquidity issues.

The news seemed to give a boost to a variety of stocks, with investors finding some reassurance in the announcement. However, the stock market was also being lifted by technical factors, with investors scooping up recently beaten-down shares, said Robert Loest, portfolio manager at Integrity Funds.

The news coming out of Lehman was "better than nothing, but not enough," Loest said.

"You have institutions like Lehman announcing a writedown or a restructuring and people think they’re getting a handle on the balance sheet, but they’re not," he said. "These solutions are near-term pieces of hope that aren’t going to solve long-term problems."

Lehman Brothers: Lehman reported a nearly $4 billion fiscal third-quarter loss, its biggest quarterly loss since it went public in 1994. The company also said it will spin off part of its commercial real estate assets and slash its dividend. Additionally, Lehman plans to sell a 55% stake in its investment management division, which includes profitable money manager Neuberger Berman.

Wall Street had been betting on Lehman selling all or part of the investment division for weeks. However, investors became nervous Tuesday when reports said Lehman’s talks with the state-run Korea Development Bank had dried up, with no partnership announced. That sent Lehman shares down 45%.

Lehman calmed some of those fears Wednesday when it said it was in advanced talks with a number of potential partners.

"I think there’s relief that they are at least addressing the issues and that there are potential buyers out there," said Joe Arnold, wealth manager at Dawson Wealth Management.

Lehman (LEH, Fortune 500) shares were choppy on the news, ending lower after rising nearly 10% in the morning and almost 30% in pre-market trading.

But other firms that made bad mortgage bets and are potentially in need of capital saw their shares pummeled. They included Washington Mutual (WM, Fortune 500) and Wachovia (WB, Fortune 500). (Full story)

In addition, Arnold said stock investors were continuing to respond to the government bailout of troubled mortgage giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), announced Sunday.

"You look at the buyout of Fannie and Freddie and that has actually sent mortgage rates lower already, which is positive," he said payday loans online.

(However, the lower rates don’t necessarily make getting a loan any easier.)

On the downside, regional banks and insurers continued to struggle in the wake of the government takeover of the two mortgage giants.

Company news. FedEx (FDX, Fortune 500) offered some encouraging news late Tuesday, saying it expects higher fiscal first-quarter earnings of $1.23 per share versus current expectations for a profit of 95 cents, largely because of lower commodity costs. FexEx is often seen as a proxy for the economy. Shares gained 3.7% Wednesday.

Texas Instruments (TXN, Fortune 500) shares inched higher after the chipmaker narrowed its earnings and sales forecast to a range that meets or beats analysts’ forecasts. The announcement was part of its scheduled mid-quarter update late Tuesday.

Research in Motion (RIMM) shares jumped after it introduced a flip phone version of its popular Blackberry Pearl phone.

The Pentagon said it’s delaying its decision on a $35 billion Air Force refueling tanker contest until the next administration takes office. Northrop Grumman was initially awarded the deal, which Boeing contested as unfair. The government agreed, initially reopening bidding, before deciding to end the current contest and have the decision made by the next administration.

Northrop (NOC, Fortune 500) and Boeing (BA, Fortune 500) shares both declined. (Full story)

In other news, ImClone (IMCL) said it has received a $70-per-share buyout offer from a large pharmaceutical company, topping an earlier offer of $60 per share from Bristol-Myers Squibb (BMY, Fortune 500). Bristol already owns a 20% share in the company. ImClone stock gained 6.7%.

Among other movers, a variety of airlines, railroads and truckers bounced on the lower oil prices, lifting the Dow Jones Transportation (DJTA) average up by 2.5%.

Market breadth was positive. On the New York Stock Exchange, winners beat losers on volume of 1.55 billion shares. On the Nasdaq, advancers topped decliners four to three on volume of 2.32 billion shares.

Fuel prices: Oil prices as the government indicated weaker demand for gasoline, even as supplies of crude and gas dipped more than expected last week.

U.S. light crude oil for October delivery fell 68 cents to settle at $102.58 a barrel on the New York Mercantile Exchange, the lowest close since April 1.

Gas prices rose overnight, breaking a nine-day losing streak, according to a national survey of credit-card activity.

Other markets: In global trade, European and Asian markets ended lower.

In the bond market, Treasury prices tumbled, raising the yield on the benchmark 10-year note to 3.63% from 3.57% late Tuesday. Prices and yields move in opposite directions.

The dollar rallied versus the euro and yen.

COMEX gold for December delivery fell $29.50 to $762.50 an ounce. 

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William Farber, chairman of the Lannett Co. Inc. since 1991, has taken a temporary leave of absence for health reasons.

The Philadelphia generic drug maker said Wednesday that Jeffrey Farber, William Farber’s son and a non-employee director of Lannett (AMEX:LCI), has been appointed interim chairman.

“I look forward to my father’s speedy recovery and return as chairman,” said Jeffrey Farber fast cash advance. “During his absence, I intend to pursue the policies and direction he has supported.”

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Euro zone economic growth will halve in 2008 from 2007 and inflation will be much higher because of financial turmoil, soaring commodity prices and housing market shocks, the European Commission said on Wednesday.

Updating its economic forecasts, the European Union executive slashed its prediction for gross domestic product growth for the 15 nations using the euro to 1.3 percent from the 1.7 percent predicted in April, as the OECD did on September 2.

In 2007, euro zone gross domestic product (GDP) grew 2.6 percent.

The Commission cautioned that its new forecast for the euro zone could still prove too strong, and its figures showed the bloc’s biggest economy, Germany, in recession, with GDP shrinking 0.2 percent in the July-September period after contracting 0.5 percent in the previous three months.

Spain, whose housing bubble has burst, will also go into recession in the second half of the year, as will Britain, the Commission forecast.

Both France and Italy, whose economies shrank 0.3 percent in the second quarter, would only stagnate in the third.

“The main downside risks identified in the spring forecast have materialized, with the financial turmoil deepening, commodity prices soaring and the shocks to several housing markets spreading more widely,” the Commission said.

The Commission raised its inflation estimate for this year to 3.6 percent from 3.1 percent previously $500 payday loan. That is almost twice the European Central Bank’s target of keeping inflation below, but close to, 2 percent. 

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Allied Healthcare Products Inc. said Thursday its profit dropped 21 percent in the fourth quarter due to slight delays in manufacturing and higher material and labor costs.

It made $690,000, or 9 cents per share, for the quarter ending June 30, down from $870,000, or 11 cents per share, a year earlier.

Sales for the fourth quarter increased by 5 percent to $14.7 million, compared to $14 million last year.

Sales for the entire fiscal year were close to the previous year, totaling about $56.4 million for 2008 and $56.5 million for 2007.

Manufacturing delays meant that some customer orders were not filled and could not be translated into sales revenue in 2008 payday loans. Also, material costs — primarily metals and oil-based resins — increased by about 2 percent and labor costs by about 3.8 percent over last year, the company said.

A “modest” overall price increase by Allied could not offset the year's higher material and labor costs, the company said.

St. Louis-based Allied Healthcare Products Inc. (Nasdaq: AHPI) manufactures respiratory care products, medical gas equipment and emergency medical products.

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After a 25-year career as a cardiologist—and after co-founding the Prime Care Physicians group—John Bennett took over as the head of Capital District Physicians’ Health Plan on July 1.

The 54-year-old former CDPHP chairman replaced Dr. William Cromie who retired after nearly seven years due to health reasons.

The Business Review recently sat down with Bennett to talk universal care, his new job and what role health insurers could play under a universal care system. Here are the highlights.

You initially went to RPI to study chemical engineering. What did you hope to be when you first enrolled?

I entered as a freshman at age 16 [having skipped a grade in elementary school]. … I had it in my mind that I was going to design chemical process plants.

Why chemical process plants?

I was really quite specific in what I wanted, even at 16. I loved chemistry. I loved math. At that time, I was going to the library, doing research, trying to figure out how I would put math and chemistry together. I started to read books about the field and decided it was something I wanted to do. Two years later, I figured out I wanted something else.

The story goes that volunteering in the emergency room at Samaritan Hospital in Troy inspired you to go into medicine. What made you decide to volunteer in the first place?

I had to do it. I was an engineering student but was required to do some humanities courses. And I started taking a medical sociology course. They wanted you to do some work in the community in terms of health care. Samaritan Hospital was right near RPI, so I decided I would go there.

Did you go reluctantly at first?

I was probably neutral about it. But I ended up loving it. I met the doctors and the nurses. It is probably the nurses that get you excited about medicine. [He laughs.] I didn’t mean it that way. Really. What I mean by that is, as you work with the nurses, that’s where you work with the patients. That patient contact, especially as a volunteer, comes through the nurses who are showing you around cash advance loan. The doctors are almost like this abstract concept that briefly comes into the room.

When you were a med student, did you foresee your career going in this direction—becoming the head of a health insurer?

No. It was the last thing I was thinking of at that time. When I was a med student, I wanted to be a family doctor. On day one, I signed up for the family medicine program. From day one, I wanted to go to a doctor’s office and see what was going on.

Your predecessor, Bill Cromie, talked about becoming a family doctor and going back to his hometown to practice.

A lot of people start that way. Especially in those days, as a kid, those were the doctors you knew. He would come to the house with his black bag and give you your shot, make you feel better. Those were your heros.

What made you decide on cardiology in the end?

It had to do with that thing inside me that made me want to be an engineer—that tech geek. My techie side came out in cardiology. As I began to study medicine and go through my internship and residency, I gravitated to the more technical side of internal medicine. And cardiology is very technical. The heart is a mechanical pump. The heart has a wiring system and the heart has flow.

So how do you go from practicing medicine to being the head of a health insurer?

That didn’t happen overnight. It was an evolution. I went in practice in 1983, joined a three-man cardiology practice. The ’80s saw a lot of growth in cardiology. And we began to grow the practice and grow it in numbers. … And as we grew, the organization became a business. I evolved as one of the business leaders in the practice.

To some, it might seem incongruous going from being a doctor to a health insurance executive.

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Novolipetsk Steel (NLMKq.L: Quote, Profile, Research, Stock Buzz), the Russian steel maker owned by billionaire Vladimir Lisin, has agreed to pay $400 million in cash to acquire U.S. hot-rolled steel maker Beta Steel and expand its presence in North America.

Novolipetsk, Russia’s fourth-largest steel maker by volume, said on Thursday it would buy the Portage, Indiana-based company from a group of private shareholders to provide feed for another recent U.S. acquisition, steel pipe maker John Maneely Co.

“Novolipetsk is trying its best to make its U.S. acquisitions vertically integrated and therefore less exposed to rising raw material input prices,” UniCredit Aton metals analyst Marat Gabitov said. “It will increase profitability.”

Steel makers in Russia, the world’s fourth-largest producer, have acquired around 10 percent of U.S. steel-making capacity in the last few years as they spend billions of dollars from record profits betting on steel demand in North America.

The latest deal takes Novolipetsk’s spending on U.S paydayloans. assets to nearly $4 billion in the last month, after the $3.5 billion deal to acquire John Maneely Co announced on August 13. Beta Steel will supply hot-rolled steel for John Maneely’s pipe mills.

“This acquisition is fully in line with our commitment to develop a strong footprint in the U.S. high value-added finished steel market,” Novolipetsk Steel’s president and chief executive, Alexei Lapshin, said.

The deal, which Novolipetsk will finance from existing funds and available credit lines, is expected to close in the fourth quarter of 2008.

RUSSIAN PRESENCE 

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Suspected dollar-selling intervention by South Korean authorities lifted the won from a four-year low on Wednesday, but they may not have done enough to stem the slide in Asia’s worst-performing currency this year.

The won has lost more than 18 percent against the dollar in 2008 and analysts polled by Reuters on Wednesday expect it to fall another 4.3 percent before recovering in the fourth quarter.

Investors began dumping the won this week on fear that foreign investors would withdraw cash from about $7 billion in bonds maturing this month. While the withdrawal itself might barely affect the market, the panic it has caused could trigger a capital flight that Korea fears so much, analysts said.

“The bigger worry is that over the last week foreigners’ desire to hold Korean assets has diminished because of the fear that they are not being compensated for risk,” said ING economist Tim Condon.

Talk of capital flight from the bond market stirred memories of the 1997 Asian financial crisis when foreign investors dumped Asian assets.

The timing could not have been worse creditscore. South Korea is about to run its first yearly current account deficit since that crisis and foreign selling of Korean stocks is at a record this year.

Won selling reached fever pitch on Tuesday as authorities stayed on the sidelines instead of stepping in to stop its slide.

But the authorities, which have already sold $30 billion in 2008 to support the struggling currency, were spotted intervening on Wednesday by some dealers after the won hit the four-year low. 

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