sg.biz.yahoo.com Tuesday January 14, 12:31 AM By Erin Schulte The Wall Street Journal Online

With nothing notable to lure fresh money into the market Monday, major indexes slipped, and falling crude prices hurting a number of oil sectors like drillers.

Stocks had climbed in early trading, but gains were short-lived. By late-morning, the Dow Jones Industrial Average was off 15 points at 8770, while the Nasdaq composite gave back 5.20 to 1442.50.

ADVERTISEMENT "We're in a trading range, and we're at the high end of that right now. The market lacks a catalyst to get us through the 930 level on the S&P, and there's no good reason to buy stocks at this level," said Ryan Smith, managing director of equity trading at Banc One Investment Advisors in Columbus, Ohio. "We have uncertainty regarding earnings coming out, and geopolitical issues overseas."

The biggest news on Wall Street was the AOL Time Warner's chairman, Steve Case, said he would resign from the top job at the huge but troubled media conglomerate he helped create, succumbing to months of pressure from disgruntled shareholders and board members alike. He will remain a director. The company's shares rose about 2% on the news.

Mr. Case's departure from the top job means the company's leadership will be without any of the key architects of the blockbuster merger of America Online and Time Warner in 2001. The company said Sunday that Mr. Case would step down from the chairman post in May.

Falling crude prices hurt several oil-related sectors after the Organization of Petroleum Exporting Countries decided to increase its production ceiling by 1.5 million barrels a day. Prices have soared in recent weeks as a strike in Venezuela has paralyzed its crude exports.

Driller McMoRan was among the biggest losers on the Big Board, giving up 12%. Pipeline companies like Williams and El Paso fell, by 4.2% and 2.2%.

An earnings warning also hurt the market. Duke Energy warned that fourth-quarter and 2003 earnings will disappoint, prompting Merrill Lynch to downgrade the company to "sell" from "neutral." Its shares dropped 12%.

Merrill cut its earnings outlook and said Duke's announcement raised questions about the sustainability of Duke's $1.10 current dividend payout.

Geopolitical concerns were also at the forefront of investors' minds Monday.

"There was a lot of development with North Korea over the weekend... Some of it was good. If nothing else, it seems like they're trying to push issues forward a bit," said Jim Holtzman, a financial planner at Legend Financial Advisors.

Early Monday, a senior Bush administration envoy said the U.S. is willing to consider energy aid to North Korea as a means to end its intensifying nuclear standoff with the communist country.

North Korea withdrew from the landmark Nuclear Nonproliferation Treaty last week and has threatened to resume long-range missile tests and to begin reprocessing spent fuel rods from its nuclear reactor to make atomic bombs.

Fourth-quarter earnings season will give investors something to chew on later in the week, with a flurry of big-name reports from companies such as Intel, General Motors, General Electric and Microsoft. Many analysts have predicted that this earnings season will hold some pleasant surprises, which would be a plus for the market.

Displaying some resiliency, the stock market managed a slim advance Friday despite news that the country lost jobs last month. The Dow industrials climbed 8.77 points to 8784.95. The Nasdaq Composite Index, dominated by technology issues, added 9.26 to 1447.72.

Among stocks to watch Monday, Wal-Mart Stores is expected to make a bid for Safeway, Britain's fourth-largest supermarket group, which has agreed to be acquired by William Morrison Supermarkets. Wal-Mart shares slipped.

Corning said late Friday that its recent cost-cutting moves will save it more than $400 million annually, but the company plans on making additional cuts to bring it to profitability in 2003. The world's largest maker of optical fiber used in communications networks already has cut its work force to 23,500 employees from its high of 42,000 workers in 2000. Its shares rose 1.6%.

In major U.S. market action:

Stocks slipped. On the Big Board, where 504.4 million shares traded, 1,666 stocks advanced and 1,371 declined. On the Nasdaq, where 707 million shares changed hands, 1,570 issues gained while 1,331 fell.

Bonds inched higher. The 10-year Treasury note rose less than 1/8 point, or $1.25 for each $1,000 invested. The yield, which moves inversely to price, fell to 4.13%. The 30-year bond was ahead about 1/4 point to yield 5.03%.

The dollar was mixed. It traded at 118.89 yen, down from 119.22 late Friday in New York, while the euro fell against the dollar to $1.0554 from $1.0572.

For continuously updated news from The Wall Street Journal, see WSJ.com at wsj.com.

www.businesseurope.com London, January 13 2003, (BusinessEurope.com)

The price of manufactured goods edged up in December at a much slower rate than raw material costs, piling more pressure on manufacturers' profit margins.

Margins are tight

Factory gate prices rose just 0.1% last month, while input prices like oil, metals and chemicals, rocketed 2.8% - 1% more than anticipated by analysts - according to the Office of National Statistics (ONS).

The price of oil was the main reason for the surprising figures. This surged 17% in December, the highest monthly increase for two and a half years. Removing food, drink, tobacco and petrol prices, underlying input prices actually fell 0.1%, said ONS.

Oil prices have been rising steadily because of fears of a possible war between the US and Iraq - the world's second biggest oil producer. A general strike in Venezuela - the fifth biggest producer - has added to this.

Over the weekend, the oil producing nations' cartel OPEC agreed to step up its production of oil by about 5% to compensate for this, although prices have remained unchanged since.

Economists said that the rise in overall input prices should not worry monetary policy makers at the Bank of England because they would be unlikely to have have much of an impact for consumers.

George Buckley, UK economist at Deutsche Bank, said: "It is the negative impact on growth from higher oil prices rather than the positive effect on inflation that we should be focusing on, especially given the fragile state of global demand."

UK producer prices have remained largely unchanged for seven months as manufacturers struggle to balance their costs with an overall lack of demand from customers.

An economic slowdown in the EU, where the UK sends most of its exports, threatens to drag the area into a recession in the first half of this year. The European Union has predicted that its economy will shrink between January and March.

www.wisinfo.com Mon, Jan 13, 2003

Gannett Wisconsin Newspapers and The Associated Press Wisconsin motorists are paying an average of 18 cents more per gallon for gasoline than they did in December, and prices are expected to climb steadily over the next three months.

"This is a time of year when typically gas prices are down, but obviously that's not happening," said Mike Bie, a spokesman for the Wisconsin AAA.

Local gas prices per gallon

Location Unleaded Premium Marshfield The Store $1.51 $1.67 Baltus Bread & Butter Shop $1.51 $1.67 Weiler Convenience Store $1.51 $1.66 Abbotsford Abbotsford Oil $1.52 $1.72 Stratford Central Wisconsin Co-op $1.52 $1.59

Wisconsin motorists on average paid $1.53 per gallon of unleaded gasoline this week, compared with last month's average state price of $1.35 per gallon.

Jim Maurer, a salesman from Spencer, said the climbing prices will not affect how much he'll drive his GMC Yukon. Every week, Maurer spends $60 to $90 on gas.

"Gas prices vary from 10 cents to 20 cents over or under what they are right here. I'll use the gas wherever I go," Maurer said, as he waited for his car to get washed at Baltus Bread & Butter Shop, 539 S. Central Ave.

Even if war is averted in Iraq, motorists should be ready to pay at least a dime a gallon more for gasoline this spring, the Energy Depart-ment says. Turmoil in Venezuela - including an oil workers' strike - has shut down oil production. Imports from Venezuela probably won't return to normal before summer - if then.

Last year, Venezuela shipped about 1.5 million barrels a day of crude and refined gasoline into the United States, about 13 percent of U.S. imports.

Only five states - Rhode Island, New York, Connec-ticut, Alaska and Hawaii - and Washington, D.C., had gas prices this week that on average were higher than Wisconsin, according to the AAA. Part of that has to do with the state's gasoline tax, Bie said. The current state tax is 31.1 cents per gallon, with 18.4 cents per gallon taxed by the federal government.

An impending war with Iraq could send those prices even higher. Economists and energy experts have said serious worldwide crude shortages could develop if war erupts in Iraq and the country's imports disappear while Venezuela's oil fields remain crippled.

"We were paying higher prices in September with speculation that we were going to war with Iraq," Bie said.

A warm, snow-free winter even has hurt gas company sales, too. "Lack of snow has been more of a factor than prices," said Jim Cooper, of Cooper Oil, 2172 Prairie St. "We're not getting the snowmobile traffic we would normally get this time of year." Amy E. Bowen contributed to this story.

www.fortwayne.com Posted on Mon, Jan. 13, 2003 By CHRISTINA HOAG Miami Herald

SLOW TRADE: Xiomara Castillo decided to temporarily shutter her export firm, which sends machinery and parts to Venezuela. ANGELA GAUL/For The Herald

From airlines to oil refineries, traders to soft-drink bottlers, U.S. companies that do business with Venezuela are reeling from the effects of the South American nation's unrelenting 42-day-old national strike.

''We're all in pain,'' said Francisco González, president of the Venezuelan American Chamber of Commerce of the United States, which represents some 300 Venezuelan-linked businesses. ``It's worrisome. Some businesses have had to close, others are desperately looking for new clients.''

The strike, called Dec. 2 by opposition leaders to pressure leftist President Hugo Chávez out of power, has virtually shuttered Venezuela's commercial sector and paralyzed its vital oil exports.

Losses are now spilling over into South Florida, which has traditionally counted Venezuela as one of its top three international trading partners as well as a key source of shopping-loving tourists.

Under normal conditions, 50,000 Venezuelans come to Miami per month, typically spending $1,200 to $1,500 each. Visitors double over the December holidays, according to the Venezuelan Chamber.

But November witnessed the arrival of only 7,000 Venezuelans in Miami, González said. ''Do the math and you can see the loss in revenue for Miami-Dade County,'' he said.

New visa restrictions will choke that tourist market even further. Fearing an influx of visitors who don't want to return to a nation careening toward civil war, the State Department announced last month that the Caracas embassy will not renew or issue new visas to Venezuelan nationals as of Jan. 20.

Airlines have trimmed their operations accordingly. United Airlines shut down its office in the Venezuelan capital and canceled its daily Miami-Caracas flight, while American Airlines has suspended its routes to Caracas from Dallas/Fort Worth and San Juan, Puerto Rico, until Jan. 31.

For security reasons, the carrier has changed the schedules of its remaining four Miami-Caracas flights so crews and planes do not have to stay overnight in Venezuela.

The crisis, which shows no sign of abating, is exacting a particularly heavy toll on South Florida's trade sector.

''We have merchandise sitting in warehouses without possibility of shipping it,'' said Alberto Villegas, president of Pantrade, a Miami importer-exporter who relies on Venezuela for about 40 percent of his business. ``The shipping lines don't want to go there.''

The trade flow has dried up so completely that Xiomara Castillo decided to temporarily shutter her Hialeah export firm, Transoceanic Trade, which sends heavy machinery and parts to the country's state oil company Petróleos de Venezuela and mining firms.

''It's not safe to send the shipments,'' she said. ``The situation is very volatile, you don't know if the ports and customs are working or if there's gasoline for the truckers to deliver the goods.''

Ports are in fact technically open, said Bruce Brecheisen, vice president of Seaboard Marine in Miami, but that did not keep the shipping line from suspending sailings. ''We had to divert Venezuela-bound cargo to Cartagena, Colombia, and Río Haina in the Dominican Republic,'' he said. ``We're waiting for the situation to improve.''

The one item that Venezuelans are sending abroad is money. Coral Gables-based Commerce Bank, owned by Caracas' Mercantil Servicios Financieros, has recently seen a 25 to 50 percent spike in deposits from Venezuelan clients.

''The purchase of dollars by individuals has gone up,'' bank Chairman Guillermo Villar said. ``We're seeing more flow [of money] coming in.''

Oil companies wish that were the case. The strike has slowed the flow of petroleum from the world's fifth-largest oil exporter from 2.5 million barrels per day to 400,000.

The situation is difficult at Tulsa, Okla.-based Citgo Petroleum, which is wholly owned by Petróleos de Venezuela and receives about half of its crude from Venezuela. The company's four U.S. refineries process 865,000 barrels of oil a day to supply 14,000-plus gasoline stations across the United States.

The company has so far managed to keep pipelines flowing thanks to the spot market, but the crude crunch may get so severe that the U.S. government, a favorite target of Chávez's incendiary rhetoric, may have to bail it out as a matter of national security.

''We talked with the Department of Energy early on and told them we may reach a point where we may need to borrow from the Strategic Petroleum Reserve and repay it at a later date,'' spokesman Kent Young said. ``The DOE hasn't made a decision yet.''

Foreign companies operating in Venezuela are in a bind. They don't want to be seen as actively getting involved in domestic politics, but at the same time if they start operating, they run a risk of violent attacks.

Most multinationals are at a standstill simply due to practical reasons. Operations at Venezuela's Coca-Cola bottler, Miami-based Panamco, are involuntarily paralyzed as most employees cannot report to work due to scarce gasoline supplies, Chief Financial Officer Annette Franqui said.

''It's not feasible to operate,'' she said. ``We sold one day during the beginning of the strike, but right now plants are not operating. We don't want to produce because product becomes obsolete as we cannot guarantee delivery.''

With Venezuela's gross domestic product predicted to plummet a stunning 12 percent in the first quarter of 2003, Venezuelan business people -- such as Ariel Acosta-Rubio, president of the Churromanía fast-food franchise -- are looking to the United States for salvation.

Acosta-Rubio is set to open five new churro outlets throughout Florida by April. His 35 Venezuelan stores are under lock and key.

''The losses are gigantic. The franchisees call me every day, they don't know what to do,'' he said from his Brickell Avenue office. ``The business here is going to have to help the businesses there get back on their feet. Thank God for the United States!''

news.ft.com By Jennifer Hughes

Published: January 13 2003 16:10 | Last Updated: January 13 2003 16:10 Venezuela's central bank raised interest rates on Monday in a bid to stem depreciation of its bolivar currency which has been weakened by the strikes that have crippled the country's economy.

The bank raised its key discount rate to 42 per cent from 40 per cent, its first rate hike since October.

The bolivar, which was freely floated in 2002, ended last year down 45 per cent against the dollar and has fallen more than 13 per cent already this year as capital movement was hampered by the strike and Venezuelans sought to transfer bolivar holdings into dollars.

The dollar was worth Bs1,580 on Monday, off an all-time high of Bs1,602 reached last week.

But, as the strike continued, analysts questioned the likely impact of the central bank's move.

"The longer this goes on, the longer Venezuela is missing a major source of export revenues," said Peter West, economist at Poalim Asset Management. "The more dire the situation gets, the more difficult it become to contain those pressures."

Since early December Venezuela has been crippled by a general strike which has severly limited everyday activity and virtually shut down the country's oil industry, the key to both its hard currency income and its tax receipts.

"With very little oil production, the government is in a huge fiscal bind which in turn creates depreciation pressures," added Rafael de la Fuente, emerging markets economist at BNP Paribas.

Even if the strikes were resolved soon, it would be some time before the return to normal levels of oil production fed though to the economy.

"The currency has only one way to go for now - down," added Mr de la Fuente.