The Sun News, Myrtle Beach, S.C., David Aguilar Column: Today’s Business

By David Aguilar, The Sun News, Myrtle Beach, S.C.

Apr. 4–UNITED STATES

LENDING

Fannie Mae to drop several hundred jobs

Washington — Mortgage giant Fannie Mae, remaking itself as it recovers from a multibillion-dollar accounting scandal, is cutting its 6,500-person work force by several hundred employees by year’s end.

The planned job cuts, the company said Tuesday, are among cost-cutting measures that Fannie Mae has undertaken to reduce its operating expenses by $200 million this year compared with 2006.

Fannie Mae, which is the second-largest U.S. financial institution after Citigroup Inc., spent about $1 billion last year on the massive review of its accounting and preparing financial statements. The government-sponsored company finances one of every five home loans in the United States and is one of the largest private employers in the Washington area.

AIRLINES

Continental shares rise along with revenue

Houston — Shares of Continental Airlines Inc. jumped Tuesday after the carrier said an important measure of revenue rose in March and oil prices fell.

Analysts gave more bullish forecasts for the carrier’s first-quarter results.

Continental shares gained $3.07 to reach $39.12 at the close of trading on the New York Stock Exchange.

AMR Corp., the parent of American Airlines, said Tuesday that its traffic declined 1.4 percent in March. Domestic travel accounted for the drop; it was off 2.5 percent while international traffic rose 0.8 percent.

While traffic was down, American’s planes were more full. Occupancy averaged 82.4 percent, up 1.3 percentage points from March 2006, because the nation’s largest carrier cut capacity by 2.9 percent.

AMR shares rose $1.60 to $31.93 Tuesday.

HEALTH INSURANCE

Higher Medicare payments drive stock up

Washington — Shares of some of the largest health insurers rose Tuesday after the government announced higher-than-expected payment increases for companies that operate private Medicare plans.

The Centers for Medicare and Medicaid Services said late Monday that preliminary payments to companies that run Medicare Advantage programs, serving 8 million enrollees, will rise 3.5 percent for 2008. The payment boost, made to insurers for each Medicare participant they cover, is less than last year’s 3.9 percent update, but above Wall Street estimates of a 2 percent to 3 percent increase.

STEEL

Mittal whittles away at list of bidders

Hagerstown, Md. — Mittal Steel Co. said Tuesday it has narrowed the list of bidders for its Sparrows Point steel mill near Baltimore, which the Justice Department has ordered the Dutch company to sell to settle antitrust issues.

“The work around the sale is progressing, and a narrowed list of bidders has been invited to proceed with the analysis and diligence,” said Mittal spokesman Dave Allen in Chicago.

Allen wouldn’t identify the bidders or say how many are on the list.

MARKETS

NYSE to close Euronext purchase today

New York — NYSE Group Inc. will take its biggest step today toward becoming a truly global financial player when it closes a deal to create the first trans-Atlantic stock market. The New York Stock Exchange consummates its $11 billion takeover of Paris-based exchange operator Euronext NV at ceremonies in the U.S. and Europe.

IN THE COURTS

U.S. prosecutors target “Tax Termination” firm

Syracuse, N.Y. — U.S. prosecutors asked a federal court Tuesday to stop “We the People” and its founder Robert Schulz from falsely telling customers they can legally stop their income tax withholdings by purchasing the organization’s Tax Termination Package.

The enterprise has already cost the U.S Treasury more than $21 million in unpaid taxes, government lawyers said in a 14-page complaint filed in U.S. District Court.

“People who sell tax scams are asking for trouble for themselves and their customers who participate in them,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “They and their customers temporarily enrich themselves at the expense of law-abiding taxpayers.”

From wire reports

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Copyright (c) 2007, The Sun News, Myrtle Beach, S.C.

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