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By Emily Church, CBS.MarketWatch.com Last Update: 8:42 AM ET Feb. 24, 2003

Bulls were largely sidelined in early trading with market tracker stocks unchanged as implosion in Royal Ahold (AHO: news, chart, profile) on earnings overstatement brought down European stocks. Against the grain, General Electric (GE: news, chart, profile) rose on positive mention in Barron's over the weekend and home retailer Lowe's Companies (LOW: news, chart, profile) rose on a bullish outlook for growth. The dollar held the euro below $1.08. Market expectations are growing for an interest rate cut in Europe in March to prompt flagging growth in the eurozone following comments from the European Central Bank chief in an otherwise disappointing meeting of the G7 nations in Paris. Brent crude rose 20 cents to $32.54 in London.

European markets were lower after the Ahold warning. U.K. stocks were flat as advertising giant WPP (WPPGY: news, chart, profile) stuck to its cautious outlook for 2003 and buyout firm KKR pulled out of the running for supermarket Safeway (UK:SFW: news, chart, profile). Tokyo stocks rose on expectations for a new head of the Bank of Japan.

SG Cowen raised Finnish handset maker Nokia (NOK: news, chart, profile) to outperform from market perform. Bear Stearns downgraded the truckload sector to "market weight" from "market overweight," citing short-term fuel, war and weather concerns.

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• AOL Time Warner (AOL: news, chart, profile) is in preliminary talks to sell a majority stake in its Warner Music unit to Britain's EMI (UK:EMI: news, chart, profile) Group in a deal that could bring in $3-$4 billion to the media and entertainment giant, the Wall Street Journal reported, citing people familiar with the matter.
• Devon Energy (DVN: news, chart, profile) announced an agreement to buy Ocean Energy (OEI: news, chart, profile) for $3.5 billion in stock, or $5.3 billion including assumed debt and other obligations. Under terms of the agreement, each Ocean Energy share will be exchanged for 0.414 shares of Devon. Based on Friday's closing prices, the deal values Ocean shares at $19.97 each, representing a 3.6 percent premium. Devon's stock closed Friday up $1.75 at $48.23
• Lowe's Companies reported fiscal fourth-quarter net earnings of $319.4 million, or 40 cents a share, up from 28 cents a share in the year-earlier period, and well-above the average analyst estimate compiled by Multex of 33 cents a share. Revenue increased 17 percent to $6.1 billion, in line with analyst expectations. "In 2002, amidst a backdrop of economic uncertainty, Americans continued to invest in their largest asset, their homes," said Robert Tillman, the home improvement retailer's chairman. Looking ahead, the company expects to report earnings of $2.16 to $2.20 for the current fiscal year, above analyst projections of $2.11.
• Global semiconductor sales are expected to grow 8.9 percent in 2003 to $167 billion, estimates Gartner Dataquest, as a return of information technology spending in the second half of the year is expected to offset the slowdown that began at the end of 2002. The market research firm said the cell phone handset segment will continue to be the major driver for chip sales, but added that a healthier PC market was needed to ensure growth.
• U.K.-listed metals-mining group Bhp Billiton (BHP: news, chart, profile) said that prices continued to show some improvement in the opening weeks of calendar 2003. "Prices for oil have risen as a result of the ongoing uncertainty in the Middle East and Venezuela, while steel making raw materials are well positioned to benefit from strong North East Asian and, in particular, Chinese demand."
• American Tower (AMT: news, chart, profile) reported a fourth quarter net loss of $52.4 million, or 27 cents a share, less than the 77 cents a share it lost in the year-earlier period. Excluding non-recurring items and the effect of a change in accounting, losses were 24 cents a share.
• United Rentals (URI: news, chart, profile) reported fourth-quarter net income of $8.2 million, or 9 cents per share, compared to $32.2 million, or 34 cents per share, in the year-ago period. The latest EPS figure fell short of the forecast of 11 cents per share in a survey of analysts by Thomson First Call. The company cited a 2.7 percent drop in same-store rental revenue.
• U.K. Internet online bank Egg (UK:EGG: news, chart, profile) posted a 16.6 million pound loss before tax in 2002, driven by a loss in France, but results show that its U.K. operations swung to profits for the year. It said it added 610,000 net new customers in the year. Looking ahead, it said: "We have been exploring potential entry strategies for the U.S. market and have embarked on some qualitative and quantitative consumer research in the first quarter of 2003 to establish the scale of the opportunity available."
• Buyout firm Kohlberg Kravis Roberts & Co has withdrawn from the race to buy U.K. grocer Safeway. "KKR has decided for the time being not to progress its potential offer for Safeway any further, but will continue to monitor the situation and keep its position under review," KKR said in a statement. Safeway shares fell 1.9 percent, and rival suitors Wm Morrison, Tesco and Sainsbury were also trading lower

Before the Bell is a daily e-mailed newsletter. You can subscribe to this free email service here. Emily Church is London bureau chief of CBS.MarketWatch.com.

www.forbes.com Reuters, 02.24.03, 8:50 AM ET

CARACAS, Venezuela, Feb 24 (Reuters) - Venezuela's strike-hit, extra-heavy oil project Sincor is in the process of restarting major processing units but short-term output will be determined by natural supplies, a project official said on Monday. Sincor, which upgrades ultra-heavy oil from Venezuela's Orinoco region into refineable synthetic crude, was shut when state oil firm Petroleos de Venezuela (PDVSA) cut supplies of natural gas needed to run processing units during an oil strike started on Dec. 2 by foes of President Hugo Chavez. "We are in the process of restarting. We sent out about 2 million barrels of finished crude (from storage) over the weekend," General Manager Joris De Smett told Reuters. Last week project officials said they hoped to restore production over the weekend, after storage levels built up before the stoppage were drawn down. De Smett said start-up volumes would be determined by the amount of natural gas provided by PDVSA for the project, which partners French TotalFinaElf <TOTF.PA> and Norway's Statoil <STAT.OL> with PDVSA. Full production could be reached by the end of the week if gas supplies are sufficient, he said. Sincor has the capacity to process 200,000 barrels per day (bpd) of the Orinoco region's tar-like crude into 180,000 bpd of syncrude. The strike, which had wide support from PDVSA employees, cut Venezuela's oil production from 3.1 million bpd to under 150,000 bpd at the lowest point. The government has fired over 12,000 of the the striking employees and used replacement workers to restart the industry. PDVSA says oil production is now over 2 million bpd, while the rebel oil employees say it is closer to 1.5 million bpd. The return of all four of the Orinoco ultra-heavy projects would add about 400,000 bpd to the OPEC nation's oil output.

reuters.com Mon February 24, 2003 08:40 AM ET By Duncan Shiels

LONDON (Reuters) - Oil prices sizzled near two-year highs on Monday and looked set to stay there well into March after Britain set the U.N. a two-week deadline to decide on a new resolution to be tabled this week.

Benchmark Brent crude climbed 29 cents to $32.56 a barrel while U.S. light crude was 34 cents up at $35.92 after touching two-year highs of more than $37 last week.

Traders were looking ahead to the March 1 U.N. deadline for Iraq to begin destroying banned al-Samoud missiles and show it is cooperating with demands to disarm, and March 7, the next report by the head of U.N. weapons inspections Hans Blix.

They see mid-March as the earliest date for any attack, a timescale seemingly confirmed on Monday by UK Foreign Secretary Jack Straw, who said the U.S. and Britain want a U.N. decision on Iraq within about two weeks of submitting a new resolution to the Security Council early this week.

"Because we want international consensus...we will be allowing a good period of up to two weeks, maybe a little more, before we ask for a decision," he said.

Washington and London want a U.N. resolution that could trigger war to end Iraq's suspected efforts to development weapons of mass destruction.

On Sunday, Secretary of State Colin Powell told reporters in Tokyo he expected the Security Council to make a judgment soon after the March 7 inspectors' report on the new resolution being presented by the United States and close ally Britain paving the way for war.

The U.S. military is anxious to act before April, when temperatures in Iraq begin to soar, and could make fighting tough for soldiers if they have to wear stifling protective suits and masks against the threat of chemical or biological weapons.

"Mid-March is already beyond the ideal time for the U.S.," said Adam Sieminski of Deutsche Bank, adding that prices would stay at current steamy levels as traders sit tight until war is triggered.

He said that with output from the world's largest fifth largest oil exporter Venezuela still stifled by an ongoing opposition strike, pressure was building for a release of oil from the United States' Strategic Petroleum Reserve to prevent prices reaching the $40s.

"The most important thing is that inventories globally are at very low levels," Sieminski said.

"If there's any kind of military action by the U.S. I see a fairly substantial Strategic Petroleum Release... but there's ample justification for doing something before then, given the outages from Venezuela."

The prospects for any U.S./British Security Council resolution being passed should become clearer late on Monday as the leaders of France, a veto-wielding member, and Germany, both leading efforts for a peaceful solution to the Iraq crisis, are due to meet on Monday.

Gerhard Schroeder and Jacques Chirac, will meet at a 17th century Berlin tavern for dinner and are expected to make a statement afterwards.

A top adviser to President Saddam Hussein said on Monday Iraq would decide "quite soon" about whether to abide by a U.N. order to destroy its al-Samoud 2 missiles and their components.

"It is being studied very carefully and the channels (with U.N. arms inspectors) are still open between us and we will come up with a decision quite soon," General Amer al-Saadi told reporters after talks with a South African disarmament delegation. Chief weapons inspector Hans Blix wrote to Iraq last week giving Baghdad until March 1 to start destroying the missiles which he said were found to exceed the 93-mile range limit set by a 1991 U.N. resolution. Baghdad says they were designed to stay within the permitted 93 miles.

Blix is expected to make his third report on March 7 to the Security Council assessing Iraq's cooperation with inspectors over its alleged activities involving biological, chemical and nuclear weapons.

Oil markets fear an attack in Iraq, the world's eighth biggest exporter shipping roughly two million barrels of crude a day, may spread to other producers in the Middle East, which supplies about 40 percent of globally traded crude.

Turkish Foreign Minister Yasar Yakis said a deal to let U.S. troops use the country as a base for any attack on Iraq was close, but issues such as control of northern Iraqi cities and oil fields needed final agreement.

He said a cabinet meeting on Monday might decide to send the deal to parliament for ratification.

www.cnn.com Monday, February 24, 2003 Posted: 8:02 AM EST (1302 GMT)

CARACAS, Venezuela (AP) -- A leading opponent of President Hugo Chavez who helped lead a two-month national strike was put under house arrest Sunday after a judge struck down a treason charge but left standing two other serious counts.

Carlos Fernandez, president of the Fedecamaras business chamber, was seized Wednesday by federal agents. An arrest order was issued for another strike leader who remains in hiding.

A judge struck down three of the charges against Fernandez, including treason, in a 13-hour closed-door hearing that ended early Sunday. The court upheld charges of rebellion and incitement, said Pedro Berrizbeitia, one of the business leader's defense lawyers.

Separately, gunmen loyal to Chavez ambushed a group of policemen overnight, killing one officer and wounding five others, said Miguel Pinto, chief of the police motorcycle brigade.

The officers were attacked Saturday night as they returned from the funeral for a slain colleague and passed near the headquarters of the state oil monopoly, which has been staked out by Chavez supporters since December.

I declared that all the accusations against me were false.

Chavez's government has seized thousands of weapons from city police on the pretext that Police Chief Henry Vivas has lost control of the 9,000-member department. Critics allege Chavez is disarming police while secretly arming pro-government radicals.

After Fernandez's overnight court hearing, uniformed federal agents rushed the business leader to his home in Valencia, 66 miles west of Caracas.

"I declared that all the accusations against me were false," the 52-year-old Fernandez told Globovision television, adding that he was being "politically persecuted."

Fernandez said he was well-treated in police custody and "they respected all my rights," but he insisted his midnight arrest on Wednesday was irregular.

Fernandez will remain under house arrest while prosecutors formalize the accusations against him.

Co-organizer Ortega still in hiding

Strike co-leader Carlos Ortega remained in hiding after a warrant for his arrest was issued. As president of the Venezuelan Workers Confederation, he and Fernandez spearheaded the work stoppage that paralyzed the vital oil industry and devastated the national economy.

He is a terrorist and a coup-plotter.

Chavez has demanded 20-year jail sentences for Fernandez and Ortega, alleging they sabotaged oil installations, incited civil disobedience and trampled human rights.

"He is a terrorist and a coup-plotter," Chavez said of Fernandez during the president's weekly television address. "Let the decision be obeyed, it is the court's order. If it were up to me he wouldn't be at home, he would be behind bars."

The two-month strike, which ended February 4 in all sectors but the oil industry, caused food and gasoline shortages nationwide and cost Venezuela an estimated $4 billion. Before the strike, Venezuela was the world's fifth-largest petroleum exporter and a major U.S. supplier.

The arrest was ordered by a judge who previously served as a defense attorney for presidential supporters accused of shooting at opposition marchers before an April coup that briefly toppled Chavez.

Chavez to world: Stop meddling

The Organization of American States, the United Nations and the Carter Center, run by former President Jimmy Carter, have sponsored three months of talks to seek an electoral solution to Venezuela's crisis. The future of those talks was in doubt after Fernandez's arrest.

Chavez on Sunday reprimanded OAS Secretary General Cesar Gaviria for speaking out about the detention, saying his comments were "totally out of place."

He also had sharp words for foreign governments critical of Venezuela. State Department spokesman Richard Boucher said Thursday that Washington was concerned Fernandez's arrest could hinder peace talks.

Chavez singled out the United States, Spain and Colombia and warned, "Don't mess with our affairs!

"Gentlemen of Washington ... we don't meddle in your internal affairs. Why does a spokesman have to come out and say they are worried? No, that is Venezuela's business."

Venezuela's opposition wants early elections and staged the national strike to back its demand. It collected more than 4 million signatures demanding an early vote, but the government dismisses the petition drive and accuses the opposition of "coup-plotting."

Chavez was elected in 1998 and re-elected in 2000 to a six-year term. He has vowed to distribute Venezuela's oil riches to the poor, but critics accuse him of imposing an authoritarian state and driving the economy into the ground.

www.redding.com Bill Choy Record Searchlight

KEEP ON TRUCKIN'?: Mike Fuller, 58, of Cottonwood, an independent truck driver for about three years and a trucker for more than 30 years, is concerned about the rising cost of diesel. His wife has initiated a letter-writing campaign to legislators to try to curtail the high cost of gas.

February 24, 2003 — 2:17 a.m. When Gerry Hotchkiss stopped to refuel his big rig last week, he was appalled to see the price of diesel 20 cents higher than the previous week.

"It has a tremendous impact," he said about the high cost. "How do they (oil companies) justify it? I'm angry and upset. . . . The little guy is finding it harder to absorb the cost."

An independent trucker since 1968, Hotchkiss, 55, of Cottonwood said the increase is draining his wallet and profits.

People across the country have felt the pinch at the gas pumps in recent months, but trucks drivers are especially hard hit.

On Saturday, the average cost of diesel in Redding was $1.85 a gallon and $1.90 statewide, the AAA Daily Fuel Gauge report said. Last month, diesel averaged $1.62 a gallon in Redding and $1.39 a year ago.

Nationwide, the average cost of diesel was $1.75 on Friday, up from $1.53 a month ago, and $1.22 a year ago, the AAA said.

Patti Fuller is fed up with the high diesel prices truck drivers have to pay. She has initiated a letter-writing campaign to encourage legislation to curtail the cost to truckers like her husband, Mike.

Mike Fuller, 58, an independent trucker for three years and a truck driver for more than 30 years, said he supports his wife's letter-writing campaign.

Since Thursday, Patti Fuller, 45, has called and written to more than 30 truck drivers, urging them to write to their representatives.

"We're trying to get something going," Fuller said. "I'm not hoping for thousands. I'm looking for millions" of people.

While the rising cost of diesel has affected all truckers, the smaller companies and independent truckers are bearing the brunt of the surge in gas prices.

The smaller operators do not have large enough fleets to negotiate a higher freight rate or fuel surcharge, Patti Fuller said.

Mike Fuller, was able to buy his own $150,000 big rig nearly three years ago. He became an independent truck driver delivering produce across the West Coast.

"I'm still busy, but the high fuel price hurts," he said. "Money is a big concern. It's coming out of my pocket," he said.

About 50 percent of his profits now go to his gas bill.

Patti Fuller knows of truckers who retired or sold their trucks as a result of the escalating cost.

"It just breaks my heart to see him sell his truck," she said of a friend who got out of the business. "I'm not going to sit here and do nothing when something needs to be done."

Hotchkiss knows many independent truck drivers who have joined larger truck companies as a way to mitigate the soaring fuel costs.

Hotchkiss, who hauls lumber and gravel, is concerned the annual summer gas price-hike could cripple his business this summer — his busiest time of the year.

He said he travels about 10,000 miles each month during the summer and typically pay between $1,000 and $2,000 per month on fuel.

Hotchkiss said he might consider working less in the summer if gas prices continue to climb.

"It might be cheaper to sit a day," he said. "It's getting to the point where you have to get out your pencil and figure out if you're hauling someone's lumber for nothing."

The high fuel rates have affected some larger truck companies as well.

On Wednesday, Robbie Cattanach Trucking of Anderson went out of business, costing about 160 employees their jobs.

The company said the cost of fuel, soaring worker's compensation, expensive liability insurance and other expenses contributed to its closure.

A factor driving gas rates is the price of crude oil.

The price of Alaskan crude oil is at $36.14 a barrel, compared with $18.22 a year ago, the California Energy Commission reported Friday.

The increase in oil prices is being blamed on fears of an impending conflict with Iraq, an oil strike in Venezuela, fear of an oil strike in Nigeria and cold weather in the East Coast, California Energy Commission spokesman Rob Schlichting said.

"It (gas price hikes) will continue until the price of crude oil falls," Schlichting said. "And that will be dictated by American foreign policy. . . . When there's a resolution, it should stabilize."

The energy commission does not consider the high rates price gouging, Schlichting said.

Despite the high fuel cost, Mike Fuller said he will continue to run his truck routes. He still has mortgage and truck payments.

"I have to try to stick it out as long as I can," he said. "If we don't do it, someone else will."

"We need help now," Patti Fuller said. "Not in a month or two. . . . This is our livelihood. If we don't get this resolved we could lose everything."

Reporter Bill Choy can be reached at 225-8217 or at bchoy@redding.com.

Monday, February 24, 2003