The news at a glance
Stocks: The Dow climbs back to 10,000; Publishing: Amazon, Wal-Mart launch a price war; Mobile phones: Nokia plots a comeback; Television: Redstone sells more Viacom stock; Newspapers: Times Co. won’t sell Globe
Stocks: The Dow climbs back to 10,000The Dow Jones industrial average last week topped 10,000 for the first time in more than a year, said Chris Isidore in CNNmoney.com. The bellwether index has now roared back from its 12-year low of 6,594 last March, leading some investors and economists to celebrate the recovery’s long-awaited arrival. But naysayers cautioned that “there’s still a significant risk that the economy will take a step backward.” Although the Federal Reserve said business was “picking up,” many “question whether the economy is truly in recovery, given that it continues to lose about a quarter-million jobs a month.”
Third-quarter earnings reports “will tell us whether we’re back on track,” said Frank Ahrens in The Washington Post. So far, the signs are mixed. Google, the Internet search and advertising giant, reported a $1.6 billion quarterly profit—its highest ever—on $6 billion in revenue. But there’s no recovery in sight for manufacturers such as General Electric or “banks that are still choking on abandoned mortgages.” Some of those outfits, like GE, are eking out profits by cutting costs. But the skeptics won’t be convinced until manufacturers start posting sales increases and banks stem their loan losses.
Publishing: Amazon, Wal-Mart launch a price warBook publishers are nervously eyeing the price war pitting Wal-Mart against Amazon, said Jeffrey Trachtenberg and Miguel Bustillo in The Wall Street Journal. Wal-Mart initiated the hostilities last week “when it began selling its 10 most anticipated hardcovers for $10 apiece when preordered on its website.” Amazon immediately followed suit; Wal-Mart then dropped its price to $9, with Amazon quickly matching the cut. Publishers fear the dueling discounts, while sweet for consumers, could hurt both independent booksellers and big retail chains.
Mobile phones: Nokia plots a comebackNokia, the world’s leading mobile phone maker, is undertaking a “sweeping overhaul” to pull its smart phone business out of a nose dive, said Andrew Parker in the Financial Times. Smart phones and traditional cell phones will be split into separate divisions, as Nokia scrambles to regain market share lost to Apple’s iPhone and Research in Motion’s BlackBerry. Nokia veteran Jo Harlow will head up the smart phone division, where “she will try to raise Nokia’s game in making expensive handsets that double as mini computers.”
Television: Redstone sells more Viacom stockMedia mogul Sumner Redstone has sold $945 million of Viacom and CBS stock to pay off debts, said Georg Szalai in The Hollywood Reporter. Redstone, 86, who owns controlling stakes in CBS and Viacom, sold $230 million of nonvoting stock in the two companies last spring to raise cash, and said there would be no need to sell additional shares. But with a $500 million debt payment due in late October, “it seems the stock offerings were his best option at this stage.”
Newspapers: Times Co. won’t sell GlobeThe New York Times Co. has dropped its plan to sell The Boston Globe, “saying the newspaper is headed for a more secure financial future after union concessions,” said Greg Bensinger and Sarah Rabil in Bloomberg.com. In April, Times Co. threatened to close the Globe if it didn’t win $20 million in cost reductions from six unions, including the one representing newsroom staff; in August, management hired Goldman Sachs to auction off the paper. The New York Times Co. still plans to sell its minority stake in the Boston Red Sox.