Archive for Thursday, April 1, 2004

Briefcase

April 1, 2004

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Fed denies rumors of Greenspan illness

The Federal Reserve knocked down a rumor swirling in financial markets Wednesday that chairman Alan Greenspan had suffered a heart attack.

"There is no truth to the rumor. The chairman is fine," said Michelle Smith, spokeswoman for the Federal Reserve.

Greenspan, who recently turned 78, has been chief of the Federal Reserve since August 1987. He is often described as the second-most important person in Washington because his comments can move financial markets and because of his lead role in setting interest rate policy in the United States, the world's largest economy.

Rumors that Greenspan was having health problems were circulating on Wall Street even before the market opened, but the gossip did not appear to have an affect on trading.

Kansas City, Mo.

H&R Block wins ruling in class-action lawsuit

H&R Block Inc. on Wednesday claimed a "significant victory," after a federal judge tossed all but one count against it in a 6-year-old class-action lawsuit regarding tax refund-anticipation loans.

The Kansas City, Mo.-based tax preparer said U.S. District Court Judge Elaine E. Bucklo in Chicago threw out every claim in the lawsuit except one racketeering count.

In addition, H&R Block said Bucklo eliminated a large portion of the 17 million-person class "by ruling that arbitration clauses contained in many of the loan contracts signed by clients are enforceable."

The plaintiffs allege H&R Block and co-defendant Beneficial National Bank deceived customers seeking tax refunds into obtaining high-interest loans in advance of their income-tax refund checks.

Earnings

Regulators push change in stock option reporting

Corporate America's accounting rule maker moved closer Wednesday to forcing companies to deduct employee stock options from their profits, setting the stage for a congressional showdown pitting Silicon Valley against Wall Street.

Heeding the call for accurate income statements, the Financial Accounting Standards Board proposed a reform that would force publicly held businesses to treat all stock-based compensation as an expense -- a change that would dramatically reduce the earnings of many well-known companies.

Retail

Best Buy, Circuit City post year-end numbers

The country's two largest electronics retailers reported strong quarterly earnings on Wednesday.

A 51 percent earnings jump in the fourth quarter capped a "banner year," according to Best Buy Co. Inc. president Allen Lenzmeier. But at Circuit City Stores Inc., chief executive W. Alan McCollough said he was dissatisfied with his company's full-year loss of $89.3 million, despite a 26-percent fourth quarter profit increase that exceeded Wall Street expectations.

Best Buy earned $469 million, or $1.42 per share, for the fourth quarter ending Feb. 28, up from $311 million, or 96 cents per share, for the same period last year. Circuit City earned $89.6 million, or 44 cents per share, in the quarter ended Feb. 29, compared to $70.9 million, or 34 cents a share, in the year-ago period.

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