| Apple second-quarter outlook spooks investors
SAN JOSE, Calif. (AP) - As investors pummeled Apple Inc.'s stock over a disappointing financial outlook, a key question remained about the results: just how badly will the company be hurt by slowing economic activity in the United States and fears of a recession?Wall Street interpreted the Cupertino-based company's guidance for the current quarter, released after the market closed Tuesday, as a sign that weakening consumer spending will hurt Apple in 2008 and that even a hot company like Apple isn't immune from the broader economic pressures weighing on the stock market.Apple executives noted, however, that its forecast for the fiscal second quarter calls for sales growth of 29 percent, which is faster than in previous years, even if it is slower than Wall Street was expecting. The company said that because of booming holiday sales, Apple notched the highest quarterly revenue and earnings in its history."Our business performed very well in the December quarter, and we remain very confident in our products and our strategy," said Apple Chief Financial Officer Peter Oppenheimer.At the open of trading Wednesday, Apple shares tumbled nearly 12 percent, or $18.30, to $137.34.Apple's stock, seen as a refuge from the market's turmoil during the second half of 2007, has declined sharply, wiping out more than $40 billion in shareholder wealth since the end of December, when shares hit their 52-week high of $202.96.Shareholders had hoped Apple's first-quarter results, which cover the last three months of the year, would be a high point in a market otherwise marred by bad news.
Ex-CEO Agrees To Give Back $620 Million
In one of the largest executive-pay givebacks in history, former UnitedHealth Group Inc. Chief Executive William McGuire has agreed to forfeit about $620 million in stock-option gains and retirement pay to settle civil and federal-government claims related to stock-option backdating. The settlement comes a year after the options-backdating scandal led to Dr. McGuire's ouster from the Minnetonka, Minn., company, one of the largest U.S. health insurers. Dr. McGuire had been among the most successful and highest-paid executives in the U.S. Stock options allow executives to buy stock at a fixed price, generally the market price on the day the options were granted. In the scandal, dozens of companies pretended that options were granted at an earlier date than they actually were.
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At Societe Generale's giant glass tower in the Parisian business district of La Defense, where Kerviel worked, the normally sedate corridors Thursday thronged with people in crisis management. The trader, who joined the bank in 2000, aged 23, was extraordinarily sophisticated and technically proficient. In his first job, he started out developing the intricate computer systems used to control the positions that traders across the bank could take out in markets around the world. To try to control risks, it is now commonplace for each trader to be given a limit on the positions they can take. The Societe Generale computer was regarded as a hi-tech piece of kit, the best in the business for the best derivatives house around. Yet Kerviel knew how to manipulate it.
Another nervous week as the ‘carry trade' unwinds
Another nervous week as the ‘carry trade' unwinds Mon, Jan 21 2008, 06:45 GMTby Nicole Elliott Mizuho Corporate Bank Overview Another nervous week as the ‘carry trade' unwinds. Many equity indices and Yen crosses are poised at key support levels: ‘necklines' of ‘head-and-shoulders' patterns or the lower edge of the big trading band of the last year or so. Leading the pack South are GBP/JPY and Sweden's OMX Index, closely followed by the Dow Jones Industrial Average and FTSE 100. These have already seen weekly closes below these key levels and should, one by one, topple all the other ones over too. An unseemly scramble is likely if not next week then in February; at-the-money implied volatility could soar. Energy products and most metals eased, many thinking if not talking recession, and Baltic Dry and Capesize Freight Indices have halved since their peak at the end of last year.
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