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UPI NewsTrack Business

  |   March 25, 2013 at 11:59 AM
Market upswing crumbles Monday

NEW YORK, March 25 (UPI) -- U.S. stock indexes dropped Monday morning after investors took a second glance at a bailout deal for Cyprus.

Stocks followed European markets higher in early trading. But the deal hamstrings Cyprus with tough provisions, including a levy on bank deposits of $130,000 or higher, temporary controls on money transfers and the closure of the country's second largest bank.

Wall Street quickly soured on the deal, as the details became known.

On Wall Street in late morning trading, the Dow Jones industrial average shed 71.26 points, or 0.49 percent, to 14,440.77. The Nasdaq gave up 11.48 points, or 0.35 percent, to 3,233.52. The Standard and Poor's 500 dropped 4.40 points, or 0.28 percent, to 1,552.49.

Ten-year U.S. treasury bonds rose 5/32 to yield 1.914 percent.

Against the dollar, the euro was at $1.288 from Friday's $1.2948. Against the yen, the dollar was higher at 94.45 yen from 94.41 yen.

In Tokyo, the Nikkei 225 index added 207.93 points, 1.69 percent, 297.16 points, to 12,546.46.


Dell says it has new purchase offers

ROUND ROCK, Texas, March 25 (UPI) -- U.S. computer giant Dell says it has received bids from Blackstone Group LP and billionaire investor Carl Icahn that could best an earlier offer.

In February, Dell founder Michael Dell and an investment group offered to take Dell private for $24.4 billion, about $13.65 per share.

The deal prompted Dell's board to open up bidding for 30 days to see if they could stir up a better offer for shareholders.

The Wall Street Journal said Icahn's proposal includes a $5 billion equity commitment, which means he would spend $2 billion for outstanding shares -- a $15 per share offer. He would also provide $2 billion in equity financing.

The rival bid lead by Blackstone Management Associates values the company at $14.25 per share.

That falls between the offer made by Dell and Icahn in value, but it includes the caveat that Dell's current shareholders would be granted an option of staying with the company.

Dell's argument included his claim the computer maker, once the world's largest, would have an easier time turning itself around if it were a private company.

The company has been struggling to keep up with the market, where consumers once devoted to personal computers are now spreading their technology spending across a wide range or mobile devices, including phones, portable tablets, laptop computers, game platforms and hand-held computers, like the iPod touch.

Personal computers now make up half of the company's revenue, but that is expected to decline. From the fourth quarter of 2011 to the same period of 2012, shipments of PCs dropped 4.9 percent.

PCs made up 19 percent less of the company's revenue in the fourth quarter than it did in the October to December period of 2011 and the impact of the shift pushed profits down 47 percent from the same period of 2011, the Journal said.


H&M releases supplier list

PHNOM PEHN, Cambodia, March 25 (UPI) -- Mass faintings and strikes took place at eight of 33 Cambodian factories that have supplied Swedish clothing brand H&M since 2010, a company release indicates.

The company, which operates 2,800 stores around the world, released a list of its suppliers last week in an effort to boost its standing as a responsible corporation through transparency.

"H&M wants to contribute to a more transparent and ultimately more sustainable fashion industry," the company statement said.

The Phnom Penh Post reported Monday that some of the suppliers have had rocky management-employee relations in recent years and two have been the site of mass fainting incidents.

Hundreds of workers fainted in 2011 on two separate occasions at one supplier's plant in Kampong Chhang province, the Post said.

In 2012, at the same plant, 3,000 workers went on strike demanding improved work conditions.

At a second supplier in Phnom Penh, 100 workers fainted in a 2011 incident and 50 more fainted in a separate incident this past February.

A 2011 strike at a plant in the capital city that was prompted by the firing of union members turned violent, the Post said.

The head of the Cambodian Legal Education Center said the H&M list would be "very helpful."

"Now it will be clear. If we find a factory producing for a vendor, we will know if they are [working] as a subcontractor for H&M," said Moeun Tola, the head of the center.


FCC rule is a sticky wicket for Murdoch

LOS ANGELES, March 25 (UPI) -- A Washington lobbyist for News Corp. said declining newspaper sales should prompt a rule change to allow Rupert Murdoch to buy the Los Angeles Times.

News Corp. is interested in buying the Los Angeles newspaper from Tribune Corp. However, a Federal Communication Commission rule prohibits one company from owning television and newspaper businesses in the same market. News Corp. owns two television stations in Los Angeles and is also the owner of Fox News, which reports on the entertainment industry based in Los Angeles, The New York Times reported Monday..

But the newspaper industry is struggling to keep up sales in the digital age as readers flock to the Internet for news. While combining newspaper and television outlets in the same market will eliminate diversity, allowing a newspaper to go bankrupt could eliminate diversity, as well.

"There can be little debate today that the newspaper industry faces existential threats. We urged the FCC to eliminate the cross-ownership rule as a relic from a bygone era," wrote News Corp. lobbyist Maureen O'Connell in one of a series of recent letters to the FCC.

"In an era of profound distress for the newspaper industry, the commission should embrace the ways in which television stations and newspapers can share resources and realize economic efficiencies," O'Connell wrote.

Murdoch, who is chairman of News Corp., is said to be a long-time reader of the Los Angeles Times. An unidentified person described by The New York Times as familiar with Murdoch's thinking simply said, "he wants it."

"They're working on getting a waiver now," to the cross-over rule, said this source, who spoke on the condition of anonymity.

The resignation of FCC Chairman Julius Genachowski last week threw another wrinkle into the possibility of News Corp.'s pursuit of a waiver.

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