UPI NewsTrack Business

U.S. markets slumble Friday

NEW YORK, July 10 (UPI) -- U.S. markets fell Friday as investors feared the second quarter's corporate reporting season would be disappointing.

In late morning trading, the Dow Jones industrial average was off 83.43 points, or 1.02 percent, to 8,099.74. The Standard & Poor's 500 fell 1.0 percent, 8.83 points, to 873.85. The Nasdaq composite index lost 11.84 points, 0.68 percent, to 1,740,71.

The benchmark 10-year U.S. Treasury bond fell 28/32 to yield 3.413 percent.

The euro fell to $1.3922, compared to Thursday's $1.4032. Against the Japanese yen, the dollar fell to 92.33 yen, compared to Thursday's 92.95 yen.

In Tokyo, the Nikkei average lost 0.04 percent, 3.78 points to 9,287.28.

GM emerges from bankruptcy, sells assets

NEW YORK, July 10 (UPI) -- General Motors Corp. completed its race through bankruptcy Friday morning, signing a contract with the U.S. government, a source close to the deal said.

Papers were signed at 6:30 a.m. at the offices of Weil, Gotshal & Manges that give the government 61 percent of the company with lesser portions owned by the Canadian government and the United Auto Workers union. Bondholders will also own a share, The New York Times reported.

The company will be temporarily named the Vehicle Acquisition Co., but soon will be renamed General Motors Co.

The plan for the company includes significant shrinkage. GM will no longer produce Saturn, Hummer, Opel or Pontiac brands. The assets that remain include Chevrolet, Cadillac and GMC.

Plans include closing factories and laying off 21,000 union workers.

Like Chrysler, which sold most of its assets to Fiat, the bankruptcy process was done at speeds that defy logic. GM filed on June 1 and emerged 40 days later.

GM planned a press conference for Friday morning.

Frederick "Fritz" Henderson will keep his post as the chief executive officer, while Edward Whitacre Jr. serves as the new

Sprint transfers management to Ericsson

OVERLAND PARK, Kan., July 10 (UPI) -- U.S. telecommunications giant Sprint Nextel said it would transfer management of its network operations to Sweden's Ericsson to cut costs.

The companies signed a seven-year deal worth about $4.75 billion, that allows Sprint continued ownership of the network, while Ericsson takes over maintenance of service and cell towers, The New York Times reported Friday.

"We own it. We're not selling it," said Steven Elfman, Sprint's president of network operations.

The deal includes the transfer of 6,000 Sprint workers, who will now work out of Ericsson's U.S. offices.

Telecommunications analyst Edward Snyder at Charter Equity Research said Sprint was forced into making a deal as it tries to carry the Palm Pre smart phone into the market.

"Sprint is doing this out of necessity. The Palm Pre they just released is costing them a pretty penny," Snyder said.

Analysts also said Sprint needed to convince its 50 million customers that Ericsson was up to the job of managing the network.

"It's a big deal for Ericsson that they've been trusted," said Roger Entner, an industry analyst at Nielsen IAG.

Ericsson already handles network operations for 275 million customers. The seven-year deal could save Sprint $700 million, Macquarie Securities analyst Philip Cusick said.

Chinese condom plant starts production

BEIJING, July 10 (UPI) -- Production began Thursday at a new condom plant in China's Shandong province with an annual capacity of 864 million pieces and 620 tons of lubricants.

The plant in Qingdao city in the eastern coastal province is owned by Britain's Durex, the world's largest condom maker, China Daily reported. The plant is Durex's largest unit in the world, bigger than the city's first one, which was opened in 1998 with an annual capacity of 250 million pieces.

"We decided to build the new factory much before the (global financial) crisis," Garry Watts, chief executive of Durex's parent SSL International, was quoted as saying. "Compared with other industries, our products are recession resistant."

China, with a huge potential condom market, continues to be one of the major investment destinations for SSL, the report said.

"It is proper to have our business integrated into China through this big plant and commercial base. We would leverage a strong skill base rather than simply looking for a very low-cost producer," Watts said.

The report, quoting Reportlinker, which compiles industry figures, said condom sales in China totaled about 6.3 billion pieces last year with revenues totaling about $530 million. China's condom market is expected to grow about 15 percent annually.

Of the total output from the Qingdao units, 18 percent is targeted for domestic consumption with the rest exported to global markets, including Russia and the United Kingdom, the report said.