Friday, Aug. 27, 1999 - TheStreet

Friday, Aug. 27, 1999

Major stock indices close lower; Martin Ruby resigns from ARM Financial top posts; Island ECN may extend trading hours; Hurricane Dennis to hit northern Bahamas early tomorrow.
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Markets

The downturn in stocks picked up some serious speed in the last hour of trading. The

Dow Jones Industrial Average

got socked, falling 108.28, to close at 11,090.17. Other proxies managed to weather the storm a bit better, with the

Nasdaq Composite Index

down 15.72 to 2758.90, and the broader

S&P 500

shutting off for the weekend with a 13.74 loss to 1348.27.

The big European indices ended mixed, with France's

CAC

up 0.3%, while Germany's

Xetra Dax

rose 0.6%, and London's

FTSE

was down 0.1%

Asian markets slumped as Hong Kong's

Hang Seng

fell 225.25, or 1.7%, to 13,383 and Tokyo's

Nikkei

dropped 66.92 to 17,599.

More markets news and commentary are available in

TSC's

Markets section.

Companies

ARM Financial Group

(ARM)

said Martin Ruby has resigned from his positions as CEO, chairman and a member of the board of directors. Following Ruby's resignation the board established a 3-member office of the president consisting of John R. Lindholm, John R. McGeeney and William H. Panning.

Talks between

Boeing

(BA) - Get Report

officials and the

International Association of Machinists and Aerospace Workers

ended late last night with no agreement, leaving open the possibility of a strike. Boeing is to present its offer today, but a company spokesman acknowledged that lines for picketers have already been painted around its plants.

Holding company

Crown Group

(CNGR)

agreed to buy a major stake in used-car dealership operator

Smart Choice Automotive Group

. The deal includes the merger of Crown's 85%-owned

Paaco Automotive Group

into Smart Choice, which will remain a public company.

Brown Brothers Harriman

cut its rating on

Dow Chemical

(DOW) - Get Report

and

Union Carbide

(UK)

to neutral from buy, following Dow's early August announcement that it would buy Union Carbide.

General Motors

(GM) - Get Report

took the 93-year-old birds and coronet off the

Cadillac

logo and checked them into a nursing home. The company plans to redefine the aging brand and focus on a new concept of art and science.

ICO Global Communications

(ICOGF)

filed for Chapter 11 bankruptcy protection according to

Hughes Electronics

(GMH)

, which owns a stake in the company.

Island ECN

, a large private stock trading system, is considering extending its trading hours in the wake of

Nasdaq's

announcement that its Automated Confirmation Transaction and SelectNet services will now be open until 6:30 p.m. EDT. The changes should allow Island, which operates from 8 a.m. to 5:15 p.m., to extend its hours to 6:30 p.m., though some of its competitors have already gotten in on the game. TheStreet.com wrote about after hours trading in a

Wednesday story.

Lockheed Martin

(LMT) - Get Report

, which is seeking to buy

Comsat

(CQ)

in a $2.2 billion deal, said it is extending its offer for Comsat shares to Sept. 18 from the original date of Aug. 23. Lockheed said certain regulatory approvals have yet to be obtained.

Medtronic

(MDT) - Get Report

offered $800 million in stock for

Xomed Surgical Products

(XOMD)

in an effort to become the leading maker of products used by ear, nose and throat surgeons. Medtronic offered $60 a share for Xomed, a 17% premium to its 51 1/4 closing price Thursday.

Merrill Lynch's

(MER)

chief investment strategist Charles Clough is leaving the firm at end of the year,

The Wall Street Journal

reported. Both Clough and Merrill told the paper he wasn't being forced out. But Clough's bearish calls and his recommendation that investors heavily weight their portfolios with bonds have raised eyebrows on Wall Street as the stock market continued to hit records. Clough told the paper that he would like to launch an investment boutique and that he would like to spend more time with his family and his church.

More news on companies and stocks is available in

TSC's

Stock News section.

Tech

CompUSA

(CPU)

set a retail marketing alliance with

America Online

(AOL)

, where it will distribute AOL and CompuServe 2000 software.

Credit Suisse First Boston

raised its rating on personal finance software maker

Intuit

(INTU) - Get Report

to strong buy from buy. Credit Suisse said, given the strength of the business, Intuit could increase its marketing budget by $25 million without hurting profits.

Netrix

(NTRX)

said it would acquire

OpenRoute Networks

for about $64 million in stock. Netrix provides voice and data networking products while OpenRoute makes Internet connection products.

Viatel

(VYTL)

agreed to buy

Destia Communications

(DEST) - Get Report

in a stock swap worth about $600 million. Viatel is investing more than $700 million to develop a fiber-optic network linking 40 Western European cities.

More tech news and commentary are available in

TSC's

Tech Stocks section.

General News

Federal Reserve Chairman

Alan Greenspan

said central banks must watch asset prices in determining monetary policy, but avoided the question of whether or not U.S. stocks are overvalued. Speaking to a group of top bankers, Greenspan said policymakers could no longer afford to simply look at the flow of goods and services when they decide on the future course of interest rates.

Hurricane Dennis will hit the northern Bahamas tomorrow morning, predicted the

U.S. National Weather Center

. The storm has been kicking up waves off the Outer Banks of North Carolina from hundreds of miles away, prompting the governor to put state troopers on alert.

Amid pervasive anti-Serb violence in Kosovo,

Slobodan Milosevic

lashed out at the U.S., suggesting it was linked to opposition leaders demanding his resignation.

The U.S. is under increasing pressure from Baghdad, as well as top

United Nations

officials and

Security Council

members, to allow more goods into Iraq. Some officials have expressed frustration with the U.S. for putting millions of dollars of aid contracts on hold, but the U.S. is worried that Iraq will somehow use equipment from the contracts to help rebuild its weapons programs.

A federal judge allowed the family of actor David McLean to proceed with their wrongful death lawsuit against

Philip Morris

(MO) - Get Report

. McLean starred in print and television ads as the original

Marlboro Man

, the rugged cowboy who promoted the top-selling brand. McLean who began smoking at the age of 12, died in 1995 at 73 of lung cancer. His widow and son filed a lawsuit alleging he became addicted to tobacco and developed terminal lung cancer from smoking.

A federal judge has ordered lawyers for

Latrell Sprewell

to pay $153,000 for challenging in a lawsuit Sprewell's 68-game suspension for choking his coach. U.S. District Judge Vaughn Walker called the case a misuse of the court system.

International

Russia launched its own money-laundering investigation to determine whether businessmen, mobsters and other officials funneled billions of dollars out of the country through

Bank of New York

(BK) - Get Report

.

More international news and commentary are available in

TSC's

International section.

Elsewhere

Party on, kids! Under the headlines "Noteworthy Back to School Specials" and "Smart A+ Savings,"

Longs

drugstore tossed in

Michelob Premium

beer ($3.49 for a six-pack) and

Carlo Rossi

wines ($5.99 for a four-liter jug) in a recent ad mailing, provoking the ire of the Santa Clara, Calif., parents who received it. Walnut Creek-based Longs said the ad was a goof and called the incident unfortunate.

The Shoreline School District in Washington state gave on-campus Army recruiters the boot after deciding it didn't like their enrollment tactics. According to a sheriff's report, a 16-year-old girl on her way to school was stopped by a 29-year-old sergeant who asked her if she had ever thought about joining the Army and offered her a ride. After he bought her a pack of cigarettes and suggested they go to her house, the girl refused his advances and told him to ship out.