Bear Stearns's Cayne to give up CEO post: report

(Reuters) - Bear Stearns Cos Inc (BSC.N: Quote, Profile, Research) leader James Cayne will relinquish his title as chief executive, but remain chairman, the Wall Street Journal reported on Monday, citing people familiar with the matter.

Reached by phone at his residence in Manhattan, Cayne declined to comment.

"I can't talk. I'm on the other line," Cayne told Reuters.

The 74-year-old Cayne has been under fire since two Bear-run hedge funds collapsed last summer. The fifth-largest U.S. investment bank also lost money in the fourth quarter -- its first loss ever -- on bad bets on risky subprime mortgages.

Cayne has been the subject of unflattering articles about his time playing golf and bridge while the company's key fixed-income business stumbled amid a meltdown in the subprime mortgage industry. The company took a $1.9 billion write-down in the quarter that ended November 30, reflecting the reduced value of subprime mortgage-related securities. Its quarterly net loss was $854 million.

 

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Schultz back as Starbucks CEO

(Reuters) - Starbucks Corp (SBUX.O: Quote, Profile, Research) replaced CEO Jim Donald with founder and Chairman Howard Schultz and said it would slow an aggressive U.S. expansion in a shake-up that sent its battered shares up nearly 9 percent.

The move marks a return to daily management for Schultz, who is seen as the conscience of the company and warned executives a year ago that Starbucks was losing its way. Schultz, who was chief executive from 1987 to 2000, said Starbucks would close underperforming U.S. outlets and speed up international growth.

Investors have nearly halved the value of the world's biggest coffee chain to $13 billion in the last year in the midst of weakened U.S. sales growth.

"The most serious challenge we face is of our own doing," Schultz said on a conference call. "I am not going to use the economy, with you or our people, as an excuse."

 

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Rand poses 'real risk'

(Fin24) - The deterioration in SA's growth/inflation trade-off should stay limited unless the rand weakens sharply, says chief economist for Citigroup in SA, Jean Mercier.

He adds that he does view the threat to the rand as "a real risk".

"Despite being sheltered from the subprime crisis, growth in SA is suffering from an inflation-induced tightening of monetary policy," says Mercier.

Reuters reports that the rand weakened one percent against the dollar on Monday, tracking weaker global markets as investors fled risky assets.

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Electronics makers keep eye on U.S. economy

(Reuters) - Electronics makers considering the strain on the U.S. economy are hoping consumers will cut other expenses first, but many see some worrying signs ahead.

Gathered in Las Vegas this week for the Consumer Electronics Show, gadget, cell phone and television makers are placing their bets on whether U.S. economic troubles from rising unemployment to mortgage market problems will stop consumer spending.

"We need to watch just how cold sentiment is getting," Toshihiko Fujimoto, chief executive of Sharp Corp's (6753.T: Quote, Profile, Research) Sharp Electronics, said on Sunday. "We can't say business is especially good."

Sony Corp's (6758.T: Quote, Profile, Research) Sony Electronics President Stan Glasgow, who oversees the U.S. electronics business, told Reuters the company had strong sales in recent months, boosted by demand for its Bravia line of televisions.

 

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Wal-Mart May Appeal $33.5 Million North Carolina Court Decision

(Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer, may appeal a judge's dismissal of its attempt to get a $33.5 million refund from North Carolina's tax authorities.

The retailer contends it's entitled to the return of taxes and penalties it paid after the state said it couldn't deduct store rents to Wal-Mart real estate units.

The decision threatens tax deductions Bentonville, Arkansas-based Wal-Mart and other companies can get by paying rent to real-estate investment trust units that transfer tax- free income to their owners. The Wall Street Journal reported that Wal-Mart may have saved $230 million in state taxes across the U.S. over four years through similar arrangements.

 

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Trade Deficit Probably Widened on Oil: U.S. Economy Preview

(Bloomberg) -- The U.S. trade deficit probably widened in November as Americans spent a record amount on imported oil, economists said a report this week may show.

The gap between imports and exports expanded to $59.5 billion, a five-month high, according to the median estimate of economists surveyed by Bloomberg News ahead of the Commerce Department's Jan. 11 report. Earlier in the week, a private report may show a decline in contracts to buy existing homes.

The trade report is also likely to show exports continued to increase, preventing a steeper decline in manufacturing. Sales to customers overseas are even more important now that rising fuel prices, a deepening housing slump and rising unemployment threaten to stall economic growth.

 

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US STOCKS-Market sinks as jobs data stirs recession fears

(Reuters) - U.S. stocks tumbled on Friday, dragging the Dow to its worst three-day start to a year since the Great Depression, as a sharp rise in the unemployment rate heightened fears the economy is heading into a recession.

Technology shares were the worst performer in a broad-based decline after chip maker Intel Corp skidded 8.1 percent on concerns that businesses are unlikely to upgrade computer equipment in the face of a slowdown.

The Nasdaq fell 3.77 percent, bringing the index to its worst three-day kick-off to a new year since it was created in 1971.

The U.S. Labor Department reported job creation nearly ground to a halt in December and unemployment rose to a two-year high of 5 percent.

"The payroll numbers are showing that we don't have the jobs, and if you don't have job income you don't have consumers doing any spending," said Gary Shilling, president of A. Gary Shilling & Co. of Springfield, New Jersey. "I don't think there's much question we're in a recession now."

 

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