www.hoosiertimes.com January 28, 2003 Associated Press

DAVOS, Switzerland — Corporate leaders at the World Economic Forum turned their attention Monday to the official theme of the conference — how to restore public confidence in business.

"We are dealing with this issue head on," J.T. Battenberg III, chief executive of U.S. auto supplier Delphi, told the forum, an annual meeting of 2,300 government and business leaders.

The crisis of confidence was brought on by scandals like the collapse of U.S. energy trader Enron. Several at the forum called for a new commitment to old-fashioned business ethics instead of relying completely on the laws and rules affecting corporate governance.

"We no longer live in a world where business can say, 'Trust us. We'll do it right,' but one where the public will say, 'Show me you'll do it right,"' said Jaap Winter, former legal adviser to Unilever.

The official of this year's forum was "building trust," but the meetings have been overshadowed by the U.S. threat of war against Iraq.

Business and government leaders at the forum also showed signs that they have moved closer to solving a problem that has threatened to bring global trade negotiations to a halt.

Intensive talks among the heads of pharmaceutical companies, South African trade minister Alec Erwin and other trade officials made progress in finding ways to ensure poor countries can afford vital medicines, said Supachai Panitchpakdi, director-general of the World Trade Organization.

"In the last few days I thought (drug companies) have shown the kind of understanding that really we aren't that far apart and we should still be looking for a possible solution," Supachai, who also participated in the talks, told reporters. "What we heard at the meeting was encouraging."

Negotiations on the issue collapsed late last year after the United States refused to agree to a plan that would have let poor countries in certain circumstances override patents and order cheap, generic drugs from foreign companies to treat diseases such as HIV/AIDS, malaria and tuberculosis.

Discussions are due to restart today at the WTO's headquarters in Geneva.

The forum, in the posh Alpine resort of Davos, has been criticized by some activists as putting corporate profit ahead of improvements for the world's poorest people.

But on Sunday, the new leftist president of Brazil, Luiz Inacio Lula da Silva, expressed hope that the forum can be brought closer to the opposition World Social Forum, where Silva also spoke before coming to Davos.

"This is like a simple negotiation between a labor unionist and an employer," he said. "Once they sit at the bargaining table, we can see there are many topics that can be improved so we can reach an agreement."

On Sunday, U.S. Secretary of State Colin Powell called to the nations of the world to back the Bush administration in a potential war with Iraq.

"History will judge us whether we have the strength, the fortitude and the willingness to take that next step," he said.

Jordan's King Abdullah told the leaders in the next session that there was little chance of avoiding war in Iraq. "We're a bit too little too late," he said. "Today I think the mechanisms are in place ... It would take a miracle to find dialogue and a peaceful solution."

www.bayarea.com Posted on Tue, Jan. 28, 2003 Associated Press NEW YORK (Dow Jones News) - Via The Associated Press

Crude oil futures fell sharply Monday, weighed down by growing calls for continued inspections of Iraq's suspected weapons of mass destruction and signs of a breakdown in the strike in Venezuela.

On the New York Mercantile Exchange, nearby March crude oil dropped 99 cents to close at $32.29 a barrel, surrendering most of Friday's gains.

February heating oil shed 1.59 cent to close at 93.43 cents a gallon, while February gasoline was off 2.10 cents at 90.15 cents a gallon.

On London's International Petroleum Exchange, March crude fell 63 cents to close at $29.86 a barrel.

"I think the market is not looking for a Groundhog Day launch date," Tim Evans, an energy analyst at IFR Pegasus, said of a possible attack on Iraq. "I think the background concern is there, but the market is indicating a release of tensions regarding an attack on Iraq."

That release of tensions deepened as Chief U.N. weapons inspector Hans Blix delivered a mixed report to the Security Council that failed to provide an automatic trigger for action against Iraq, as many had speculated.

Blix said that while Iraq wasn't fully complying with disarmament demands, it was providing access to his team of inspectors now working in the country. On the question of how long inspectors need, Blix said he shared "the sense of urgency" to verify disarmament within "a reasonable period of time."

He didn't request more time, but Mohamed ElBaradei, the head of the U.N. nuclear agency, said the weapons search needed an extra few months.

Secretary of State Colin Powell said the inspectors' conclusion wasn't surprising and added that time is running out for Iraq.

"We cannot allow the process of inspections to string us out forever," Powell said.

The State Department has reportedly begun drafting a second resolution calling for authorizing force against Iraq, Cable News Network reported.

But Powell said America will decide on the next step once he consults other members of the Security Council and President Bush has conferred with foreign leaders.

Nevertheless, there was a chorus of calls that inspectors should be given more time to complete their work. The calls came from Russia and China as well as traditional U.S. allies France, Germany and Canada.

"There wasn't enough to make the U.S. change its position, and there wasn't enough new information to make France or Russia or China or Germany or the rest of the world change their view of the situation," Evans said.

The oil market had anticipated that a U.S. attack could come as soon as early- to mid-February, said Tom Bentz, an analyst at BNP Paribas Futures in New York. But with growing calls for more inspections, that may be several weeks away, Bentz added.

"It doesn't look like anything is going to happen immediately," Bentz said. "It's going to take time."

Meanwhile in Venezuela, there were signs that the general strike is crumbling, allowing oil production to recover from a sharp slump in December and January.

Output has risen to about 1 million barrels a day, according to dissident workers at state-owned Petroleos de Venezuela SA. A PdVSA spokesman said about 90 percent of workers at PdVSA have returned to work.

Before the strike, Venezuela produced about 3 million barrels a day of oil, sending about 2.5 million barrels a day to world markets, including 1.5 million barrels a day to the United States.

"It's going to take a while to get exports back to full capacity, but there are signs that the worst is behind us," said Ed Silliere, an analyst at Energy Merchant in New York.

Reuters, 01.28.03, 5:45 PM ET

NEWARK, Del., Jan 28 (Reuters) - Octel Corp. (nyse: OTL - news - people), a maker of fuel additives, said on Tuesday it expects full-year 2002 earnings below Wall Street expectations and its initial outlook as a result of restructuring charges and disruptions in Venezuela.

Octel said it expects full-year 2002 earnings per share at$4.10 to $4.20 after identifying around $20 million in additional restructuring costs, of which $13 million is noncash.

The company said Venezuela's troubles, which include labor turmoil, had hurt deliveries in the fourth-quarter while softness in the overall specialty chemicals markets has also contributed to operating results below expectations.

www.canada.com MALCOLM MORRISON Canadian Press Tuesday, January 28, 2003 CREDIT: (AP/Stephen J. Carrera)

Traders negotiate a deal in the Euro Currency Futures pit at the Chicago Mercantile Exchange. (AP/Stephen J. Carrera)

TORONTO (CP) - Cautious buying of beaten-down stocks lifted markets Tuesday ahead of the U.S. president's state of the union address in the evening.

Some positive economic news and corporate earnings reports sent the Dow Jones industrial average 99.35 points higher to 8,088.91, after it had lost 141? points Monday to close under 8,000 for the first time since Oct. 14. Toronto's S&P/TSX composite index was held back by weakness in technology and energy stocks but managed a gain of 13.57 points to 6,570.09. Nortel lost 13 cents to $3.50.

Mining giant Noranda sank 41 cents to $14.55 after saying it is taking a $630-million writedown as it shuts down its new Magnola magnesium plant in Danville, Que., for at least a year. Brascan, which owns 40 per cent of Noranda, slipped 23 cents to $31.40.

The Canadian dollar continued to drop as investors took some profits from the dollar's runup of about 2.5 cents from Dec. 31 to a six-year high last Friday on the prospect of higher interest rates and U.S. dollar weakness. The loonie finished down 0.16 cent at 65.43 cents US, after losing as much as 0.51 cent at midday.

"It's nothing sinister," said Steve Butler, director of foreign exchange trading at Scotia Capital Markets.

"We've seen a variety of sort of bigger players, more along the lines of fund managers, taking profits on some long Canada positions."

The TSX Venture Exchange lost 3.54 points to 1,114.42.

The Nasdaq composite was up 16.92 points at 1,342.19 and the S&P 500 gained 11.03 at 858.50.

The market's gains were modest compared with the steep declines in recent sessions, a sign that investors were wary of big commitments ahead of President George W. Bush's speech on the state of the world.

Investors are hoping for a clearer indication of what action the U.S. intends to take against Iraq and what plans Bush has to fix an ailing economy.

"The overall environment is still very risky one to hold stocks and I think people are just jobbing the market, getting in and out quickly and not taking on long-term views," said Jeff Cheah, market strategist at MMS in Toronto.

"The prospects for war are very real and the outcome ranges from the most optimistic to the most pessimistic, but in between, until we get to that event, there's a lot of question marks regarding what kind of outcome the current tension would bring to the financial markets."

On the economic front, new data showed that U.S. consumer confidence continued to take a hit because of war fears and pessimism over the job market.

The Conference Board consumer confidence index dropped to 79 from a revised 80.7 in December. Analysts had been expecting a bigger decline.

That report was counterbalanced by another showing new home sales in the U.S. hit a record high in December to close out the best year ever as the lowest interest rates in four decades enticed home buyers.

Consumer giant Procter and Gamble exceeded expectations in posting net income of $1.49 billion US in its second quarter, compared with $1.3 billion US a year ago. Its shares rose $1.95 to $85 US.

Xerox jumped $1.40, or more than 15 per cent, to $9.45 US after the business machines maker reported it earned $19 million US in the fourth quarter, much better than expected.

Pharmaceutical giant Merck & Co. was also a favourite after fourth-quarter profits rose two per cent to $1.89 billion, matching expectations. Its shares finished $2.64 higher to $54.50 US.

In Canada, TransCanada PipeLines had lower revenues but higher profits for 2002, and raised its dividend to by two cents to 27 cents. Its shares gained 14 cents to $22.82.

Quebec-based grocery store chain Metro Inc. posted a 16 per cent increase in quarterly earnings to $35.3 million as sales climbed to $1.3 billion. Its shares were marked up 22 cents to $18.27.

CGI Group rose 14 cents to $7.27 after the technology services company said quarterly earnings surged 21 per cent to $37 million. Revenue was up almost 15 per cent.

Ballard Power surged $1.70 to $16 on indications Bush would propose a significant increase in spending on research into fuel-cell cars.

Aside from Bush's speech, investors were looking ahead to a U.S. Federal Reserve Board monetary policy announcement Wednesday afternoon. While any interest-rate move is regarded as unlikely, the Fed may provide clues to the direction of the economy.

On the TSX, declines beat advances 609 to 488, with 210 issues unchanged.

The gold sector rose as the bullion price picked up 60 cents to $370 US an ounce. Placer Dome was ahead 40 cents to $17.80.

The energy sector was down, although the price of crude oil rose 38 cents to $32.67 US a barrel in New York on Iraq war fears and Venezuela's continuing disorder. Shell Canada lost 92 cents to $46.06.

The financial sector finished higher with National Bank adding 58 cents to $31.83.

Canadian National Railway gained $1.10 to $61.93.

Toronto market volume was 202.8 million shares worth $2.35 billion.

The Nasdaq Canada index gained 1.02 points at 225.26.

www.quicken.com Tuesday, January 28, 2003 03:00 PM ET  Printer-friendly version   NEW YORK (Dow Jones)--Valero Energy Corp. (VLO, news) said Tuesday that despite its improved sour crude oil discount in fourth quarter 2002, crude oil throughput at its 12 refineries was down by approximately 10% of capacity, and could be reduced by another 5% if crude oil and other feedstock costs remain high.

Valero's chariman and chief executive officer Bill Greehey said that while refining margins in the Northeast and Gulf Coast were at seasonally average levels, sweet crude oil and intermediate processing economics remained unfavorable and resulted in the 10% to 15% reduction in throughput rates.

The company's fourth-quarter sour crude oil discount increased by 25% from weak third-quarter levels, mostly due to increased production by members of the Organization of Petroleum Exporting Countries (OPEC, news) throughout the quarter, and contributed approximately $25 million in additional operating income versus the third quarter.

The company expects the increased availability of sour crudes to further widen the discount in February and March.

Valero's non-West Coast refining margins improved from third-quarter levels mostly due to lower refined product inventories, strong refined product demand and market concerns over supply disruptions related to the oil workers' strike in Venezuela.

The company expects refined product margins to continue to improve through 2003.

Greehey said the strike resulted in increased demand for U.S. products from Latin American countries and Venezuela. He said Valero sold eight product cargos to Latin American countries since the strike began.

West Coast refining margins remained weak throughout the fourth quarter on high inventory and production levels, Greehey said.

"Looking forward," Greehey said "we expect the combination of extremely low crude oil inventories, high feedstock costs and the upcoming heavy turnaround season to result in lower refined product output leading to significant declines in refined product inventories and higher refined product margins."

Valero has a relatively light schedule of maintenance turnarounds planned for 2003, compared with a heavy schedule in 2002.

"We will be up and running when a lot of other capacity will be down," Greehey said.

In first quarter 2003, approximately 800,000 barrels-a-day of crude processing capacity and 900,000 b/d of conversion unit capacity will be down for maintenance, he added.

Valero has planned plant-wide turnaround maintenance at its 85,000 b/d Ardmore, Okla., refinery beginning in late-March and ending by mid-April.

West Coast refining margins will also improve in 2003 due to reduced CARB gasoline production by some refiners as a result of the mandatory switch to ethanol blending from MTBE blending.

Valero said its switch to CARB Phase III ethanol blending and the completion of the alkylation unit expansion at the Benicia, Calif., refinery were on schedule for the end of the year.

"We see no (CARB gasoline) production reductions. Our production will stay flat," Greehey said.

By Rose Marton, Dow Jones Newswires; 201-938-2059, rose.marton@dowjones.com