IN BRIEF
SAN JOSE, Calif.
Hewlett-Packard will buy 3Com Corp. for $2.7 billion
Hewlett-Packard Co. said Wednesday it is buying the 3Com Corp. networking company for $2.7 billion, the latest move by the world's No. 1 personal computer maker to expand into more profitable areas than PCs.
HP also raised its 2010 guidance and reported preliminary quarterly earnings that topped Wall Street's forecasts. The company didn't provide specific reasons for its better outlook, other than a statement from CEO Mark Hurd that "significant growth in China" and "solid execution" helped HP in the quarter.
3Com is a former Silicon Valley high-flyer whose fortunes faded after the dot-com meltdown a decade ago. Its proposed sale to a private equity firm and a Chinese partner fell apart last year over national security concerns.
HP's acquisition of 3Com is at once a shot at networking leader Cisco Systems Inc. and a reminder of how a flurry of recent maneuvers by technology heavyweights is straining old relationships.
NEW YORK
Price of gold surges to record as dollar takes another beating
The price of gold surged to a fresh high Wednesday as the dollar fell to a 15-month low.
Gold futures for December delivery jumped to as high as $1,119.10 an ounce on the New York Mercantile Exchange in morning trading, then slipped back to settle at $1,114, up $12.90 from Tuesday's close.
Commodities including gold have been rising as the dollar has dropped. Gold's latest advance came as the dollar fell after Federal Reserve officials reiterated that the central bank will keep interest rates low for an extended period to support the economic recovery.
Low rates tend to weaken currencies including the dollar, encouraging investors to put their money in higher-yielding assets like gold. Investors also use gold as a hedge, not only against the falling dollar but also against inflation, which economists don't see as a threat right now.
The market, however, feels otherwise.
"There is this idea that inflation is inevitable," said Richard Sparks, senior equities analyst at Schaeffer's Investment Research.
Gold prices are up 26 percent year-to-date. That compares with a 5.5 percent increase in the gold price in 2008.
NEW YORK
Macy's third-quarter loss slims; holiday season may be shaky
As it heads into the holiday shopping season, Macy's Inc. might be on shakier ground than some thought.
The department store chain said Wednesday that it lost money during the third quarter and predicted that it would earn less during the holidays than Wall Street analysts had expected.
That raised concerns that Christmas spending could be weak and sent Macy's shares tumbling. Retail giants Wal-Mart Stores Inc. and Kohl's Corp. are scheduled to release their earnings today.
Macy's has faced a challenging year as shoppers have scrimped on nonessential purchases. Like many chains, the Cincinnati-based retailer shuttered stores and reduced its work force to cut costs.
The chain lost $35 million during the three months ended Oct. 31, or 8 cents a share. That was a smaller loss compared with the same quarter last year, when the company lost $44 million, or 10 cents a share.
Sales were also down, falling 3.8 percent to $5.3 billion from $5.5 billion in the third quarter of 2008, when retail sales began to fall dramatically.
Sales at stores open at least a year -- known as same-store sales and considered an important barometer of a retailer's health -- declined 3.6 percent.
Those results led Macy's to improve its forecast for the full year, but analysts had expected more. Macy's shares fell $1.57, or 8.1 percent, to $17.86.
NEW YORK
American International Group chief plans to stay on job
American International Group Inc. CEO Robert Benmosche said Wednesday he plans to stay in his job at the embattled insurer.
Benmosche announced his intentions in a letter to employees released by AIG following a report in The Wall Street Journal saying he was threatening to quit. The Journal said Benmosche has been frustrated by heavy government scrutiny and cumbersome restrictions on executive pay.
In the letter, Benmosche said that while he was frustrated by the regulatory oversight, he and the board of directors "remain totally committed to leading AIG through its challenges and to continuing to fight on your behalf."
AIG is trying to sell assets, streamline its operations and improve profitability in an effort to repay the government after being bailed out last fall at the peak of the credit crisis.
