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Executive Business Briefing

Here is a look at Thursday's top business stories:


Stocks rise in Asia

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TOKYO, Oct. 17 (UPI) -- Stock prices on the Tokyo Stock Exchange ended higher Thursday as better-than-expected third-quarter results from IBM Corp. helped to offset the negative impact of Wednesday's decline on Wall Street.

But, trading activity was very light and the Nikkei Stock Average was top-heavy throughout the day with the topside capped around the psychologically key 9,000 mark. Analysts said investors were reluctant to chase prices up due to the lack of incentives and uncertainty over the package of anti-deflation measures being drawn up the government.

At the closing bell, the blue-chip Nikkei Average of 225 selective issues, which added 48.14 points Wednesday, gained another 75.01 points, or 0.8 percent, to 8,959.88. The index briefly topped 9,000 for the first time since Oct. 4, rising as high as 9038.43 during the session.

The broader Topix index rose 3.01 points, or 0.3 percent, to 884.46.

Advances outpaced declines 737 to 601, while another 150 issues settled unchanged.

Volume dropped to an estimated 579.35 million shares from the 731.09 million shares changing hands on Wednesday.

Analysts said the market drew support on news that IBM, the world's largest provider of computer hardware and information technology services, reported higher operating income for the quarter ended in September. The company also said it was comfortable with the range of expectations for the current quarter.

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Analysts said the lack of active follow-through buying after the Nikkei 225 topped 9,000 partly reflected market participants' waning hopes for drastic anti-deflation steps from the government.

There has been some delay in the government outlining its measures, which may suggest protracted discussions and possible compromises on any radical steps. The government had been expected to outline its anti-deflation measures late this week, but that has now been put back till early next week.

Trading sentiment in Tokyo was also damped by afternoon news that two bombs exploded Thursday in downtown Zamboanga city in the southern Philippines, killing at least two people.

In trading, among some of the high-tech stocks, Toshiba added 0.9 percent, Sony gained 1.5 percent and NEC rose 1 percent. Chip-making equipment maker Tokyo Electron gained 1.8 percent and Advantest rose 2.5 percent.

Casio Computer jumped 4.6 percent after raising slightly its interim earnings outlooks on better-than-expected sales and cost-cutting efforts.

Major general contractor Taisei jumped 8.5 percent after revising upward its fiscal half forecasts.

Steel stocks ended mixed after a report Japan's six major blast furnace steelmakers plan to cut second-half exports to China by about 40 percent from the first half to avert trade friction with China, which has imposed emergency import curbs. Nippon Steel dropped 4.6 percent, and JFE Holdings, a holding company of NKK and Kawasaki Steel, fell 3.4 percent and Sumitomo Metal rose 4.7 percent.

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The report said Nippon Steel will reduce exports to China by about 30 percent while Kawasaki Steel will trim exports of steel sheet to China and the rest of Asia by 15 percent.

Elsewhere in Asia, prices on the Hong Kong Stock Exchange ended higher, building on their gains for the past several days, mainly due to short-covering in blue chips. The blue-chip Hang Seng Index rose 117.01 points or 1.24 percent, to 9,576.15.

Analysts said local investors appeared to have ignored the Wednesday's decline on Wall Street and the bomb attacks in the southern Philippine city of Zamboanga.

In trading, Sun Hung Kai Properties added 1.8 percent, Hysan Development jumped 4.2 percent, banking giant HSBC Holdings rose 0.9 percent and Cathay Pacific Airways rose 0.9 percent.

Prices also ended higher on the South Korean Stock Exchange, lifted by strength in semiconductor issues. The key Kospi Composite Index rose 1.3 percent to 644.66.

Semiconductor makers drew active buying on reports that the Commerce Ministry expects chip exports to jump 70 percent in the fourth quarter from a year ago.

Hynix Semiconductor soared 14.3 percent on the forecast, while Samsung Electronics added 0.8 percent. Samsung is slated to report third-quarter results Friday.

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Meanwhile, prices ended higher on the Taiwan Stock Exchange for the fourth consecutive session. The Weighted Index rose 1.4 percent to 4,280.81.

Taiwan Semiconductor Manufacturing gained 0.2 percent and AU Optronics rose 3.3 percent.

Elsewhere around the Pacific region, prices ended slightly lower on the Australian Stock Exchange pressured by weakness in banking and healthcare stocks. The blue-chip All Ordinaries Index slipped 0.07 percent to 2,946.60.

In an active banking sector, National Australia Bank fell 1.6 percent, Westpac Banking Corp. lost 0.8 percent and Commonwealth Bank slipped 1.6 percent.

Meanwhile, News Corp. rose 2.2 percent as prospects firmed the media heavyweight may mount another attempt at acquiring DirecTV after the U.S. Federal Communications Commission recently rejected a merger attempt by rival suitor EchoStar Communications Corp.

Blood products major CSL Ltd. tumbled 11 percent after Chief Executive Brian McNamee confirmed speculation the company could suffer a $15 million-$20 million net profit hit because of fluctuations in the CHF/USD exchange rate.

The losses hurt other healthcare stocks, with Mayne Group Ltd. down 1.1 percent and Cochlear Ltd. down 3.9 percent.


Continental Airlines posts loss

HOUSTON, Oct. 17 (UPI) -- Continental Airlines, the nation's fifth-largest airline, said it posted a third-quarter loss, reversing a profit from a year earlier when it benefited from the federal government's airline bailout program following the Sept. 11 attacks.

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Continental said it recorded a third-quarter net loss of $37 million, or 58 cents a share, compared with a net profit of $3 million, or 5 cents a share during the same period last year.

Total revenue fell 2 percent to $2.18 billion. Third-quarter passenger revenue declined 3 percent to $2 billion from the same period last year due to capacity and traffic declines and continued widespread industry discounting.

Analysts on Wall Street had expected the airline to post a loss of 74 cents a share, according to Thomson First Call.

Gordon Bethune, chairman and chief executive officer, said, "Winning is defined as outperforming your competition and we clearly have. Continental Airlines has led all major hub and spoke airlines in every respect. Although our industry's future remains uncertain, our team is best positioned for success."

Continental said it would have made a profit in the third quarter but for burdensome security costs, taxes and revenue opportunity restrictions imposed by the federal government since Sept. 11, which reduced operating income by approximately $65 million in the quarter. In addition, war risk and other insurance costs increased $20 million over third quarter 2001.

Larry Kellner, president, said, "Consistently running a well-scheduled, reliable operation has allowed us to earn yield and load factor premiums to the industry. We continue to outdistance our competitors in both operating and unit revenue performance."

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