Trader said to build up position of $73 billion
Societe Generale SA said trader Jerome Kerviel built up positions in European stock index futures of 50 billion euros ($73 billion) before the French bank discovered the trades and unwound them.
The 31-year-old Kerviel, who is being questioned by France’s financial police for a third day, took advantage of the bank’s practice of checking only net trading positions rather than gross bets to conceal his subterfuge with phony hedges, Paris-based Societe Generale said yesterday. The trading loss of 4.9 billion euros was the biggest in banking history.
December sales finish flat for McDonald’s
McDonald’s Corp. showed its first sign of vulnerability to the U.S. economic slowdown Monday and uneasy investors responded by selling off the fast-food chain’s stock despite its booming international sales and healthy $1.27 billion profit.
The company said sales were flat last month at U.S. restaurants open more than a year, blaming winter storms but also acknowledging “softer consumer spending” as Americans tightened their wallets in a volatile economy.
That snapped a streak of 56 consecutive months of higher year-over-year U.S. comparable sales, and a recession-wary Wall Street pushed McDonald’s stock to a 41/2-month low.
Shares in the Oak Brook, Ill.-based company, already down 7 percent since a hint of a December sales slowdown surfaced two weeks ago, shed another $3.03, or 5.6 percent, to $51.07 in Monday trading after dipping as low as $49.36. They are down 20 percent from last month’s all-time high of $63.69.
U-Haul Co. of Nevada will pay settlement
The U.S. Equal Employment Opportunity Commission says U-Haul Co. of Nevada has agreed to pay $153,000 to settle a race discrimination lawsuit.
The federal agency had charged that the moving company subjected Hispanic, Asian and Filipino employees to a hostile work environment through derogatory comments.
It further charged the workers were denied promotions that were given to less qualified white employees.
Besides monetary compensation for the harassed workers, the EEOC says U-Haul also agreed to provide training to all its Nevada employees and file annual reports with the EEOC on its employment practices.
CME Group in talks to buy Nymex Holdings
CME Group, the world’s largest futures exchange, is in talks to acquire Nymex Holdings for more than $11 billion to gain the biggest energy-trading market.
CME Group, created in July by the merger of the Chicago Mercantile Exchange and the Chicago Board of Trade, would pay about $119.20 in cash and stock for every Nymex share, the companies said in a statement.
Interest rates decline in Treasury auction
Interest rates on short-term Treasury bills fell in Monday’s auction to the lowest levels in three years.
The Treasury Department auctioned $23 billion in three-month bills at a discount rate of 2.335 percent, down from 2.37 percent last week. Another $21 billion in six-month bills was auctioned at a discount rate of 2.31 percent, down from 2.4 percent last week.
Treasury prices slide as investors lay off notes
Treasury prices fell Monday following an auction of 2-year notes that attracted an unusually low level of foreign buyers.
The benchmark 10-year Treasury note fell 0.13 points to 105.44 with a yield of 3.58 percent, up from 3.56 percent in late trade Friday.