Apple shares gained more than a dollar to $18 in after-hour trading
Apple shares gained more than a dollar to $18 in after-hour trading.Shares generally were helped by a second consecutive rise in the US bond market, which shrugged off unexpectedly strong house building statistics in June. Good figures from Intel were backed up by better-than-expected results from Ford and GE. Concerns about earnings drove Nasdaq, the secondary market on which many technology stocks are listed, down 4.5 per cent in the first two days of the week but it recovered ground yesterday, as did the Dow Jones index of 30 leading stocks, which rose 71 points in the first 10 minutes of trading yesterday before settling to more modest gains, ending the day 18.12 ahead at 5,376.88.After the market had closed, Apple Computer reported a $39m third-quarter loss, better than industry analysts expected, and said its turnaround was on schedule.The loss, equivalent to 26 cents a share, compared with analysts' forecast of a $1.07 loss per share. If consumer demand started growing too strongly, and put the inflation target at risk, then rates could be raised when this became evident."One City view was that the surprise fall in the underlying rate of average earnings growth to 3.5 per cent in May from 3.75 per cent in April could help justify another cut.Unemployment also fell by 14,300 in June but the jobless rate was unchanged at 7.7 per cent of the workforce.Comment, page 21. London shares took their lead from Wall Street again yesterday, with the FT-SE 100 index closing 25.9 points higher as Tuesday's frayed nerves were soothed in New York by better-than-expected earnings figures from Intel, the microchip manufacturer. Much of the volatility earlier in the week had been put down to worries over the health of the technology sector, which has been such a strong driving force behind the bull run of the past two years in America.
The Chancellor maintained that "the further evidence of a lack of cost pressures had improved the outlook for inflation; and he was content that a quarter per cent cut was sufficiently small not to cause any significant inflationary risk, while reducing the downside risks to the recovery. A number of analysts said yesterday they now believed Mr Clarke would shave at least another quarter point off the current base rate of 5.75 per cent.The June meeting was the first at which the Governor had opposed a cut in interest rates by Mr Clarke, though they have had an argument about the direction of rates before.In May 1995 Mr George urged Mr Clarke to raise rates a half point but was ignored, and by September he conceded that an increase was no longer required.Mr George came into line with Mr Clarke in December, January and March when he agreed with the Chancellor's three small cuts in base rates.But since March, Mr George's concerns about the pace of growth and the risk to inflation have been rising, which he has made clear in public both in his quarterly Inflation Report and in evidence earlier this week to the commons Treasury committee.The minutes spell this argument out in more detail. The Governor agrees that by any standards it is a narrow debate."The minutes of the monetary meeting on 5 June say Mr George took the view that if "rates were reduced now, in order to guard against the risk to activity in the short term which then failed to materialise, then this would simply exacerbate the potential inflation pressure further ahead by adding to domestic demand which already - on the evidence currently available - looked set to accelerate.''The Bank's advice was to leave interest rates unchanged for the time being, and that was what financial markets expected, the minutes added. As a fall in earnings inflation appeared to back the decision to cut rates, Kenneth Clarke, the Chancellor, played down differences with Mr George, saying both of them were "extremely strongly committed" to curbing inflation. "I think the inflation record that I quoted, our best for 50 years, shows that the Ken and Eddie Show is a very successful team performance," Mr Clarke said in a parliamentary debate yesterday.He added: "Six weeks ago the Governor and I differed by just one-quarter per cent. He has ensured where possible that the towns and cities affected by the loss of regiments and military establishments retain at least one of their existing military institutions, so limiting the economic damage.. Eddie George, the Governor of the Bank of England, opposed the quarter- point cut in interest rates last month, minutes of his meeting with the Chancellor showed yesterday. Up to 40 military training establishments - including academies at Strasbourg, Clermont Ferrand and Metz - are to be closed by 1998.Units stationed in Germany will be subjected to particularly sweeping cuts, as 11 of 14 regiments - 17,000 out of 20,000 servicemen and civilians - are due to be disbanded or transferred by the end of the century.As the chairman of the Socialist group on the parliamentary defence committee, Jean-Michel Boucheron, grudgingly admitted, however, the cuts had a certain "logic".The Defence Minister has wielded a scalpel rather than an axe.
Without this national and highly emotive aspect that always dogs comparable military cuts in Britain, the restructuring is likely to proceed very much as planned. The cuts include the closure of three air bases and four military hospitals, while the military sports centre is to be transferred and centralised at Fontainebleau. So too will the fact that military units and institutions in France are generally sited with as much of an eye to political as to logistical advantage: their survival is, therefore, seen as a local economic issue, rather than a question of national heritage and glory. The political and economic discretion with which the cuts have been drawn up, however, will weaken the effectiveness of the gathering protests. "He's gone further even than Wellington, who cost us 32 regiments at Waterloo," said an influential Gaullist MP, Jacques Baumel, in response to confirmation that 38 regiments were to be disbanded by 1999.
Howls of anguish and indignation were to be heard the length and breadth of France yesterday, as the Defence Minister, Charles Millon, spelt out details of precisely how the French defence sector is to be slimmed down and restructured. But, over two decades, sympathy for the Vietnamese has withered to less than zero.At the beginning of the month, Ngo Doan Tha, a former South Vietnamese police officer, won a long battle for refugee status in Hong Kong after it had been repeatedly ruled out. That was despite the fact that the authorities knew he had passed security information to both the United States and Hong Kong governments, making him vulnerable to arrest in Vietnam.The Philippines, in contrast, has let its boat people work as farmers and fishermen and kept them in conditions more closely resembling villages than barbed-wire-encrusted prisons.. Since then, hundreds of thousands have fled, usually in small, unseaworthy boats. At first they were welcomed in the countries of first asylum as refugees from a cruel communist regime, and Western nations promised to resettle them. In recent weeks, Filipino charities have provided food and other support.By making the Vietnamese, in effect, permanent residents the government will be able to close down the camps and integrate the remaining 1,500 to 2,000 boat people into the workforce.Other places of first asylum for boat people - most notably Hong Kong, which has taken in by far the largest number - have adamantly refused to allow permanent settlement, fearing a fresh exodus of asylum seekers.Even those who qualify for refugee status, under standard UNHCR criteria, are not allowed to settle outside refugee camps but remain in centres pending entry to countries of asylum.Hong Kong and Malaysia have stepped up forced deportation programmes, aiming to clear the detention centres of boat people by the end of the year, in Malaysia's case, and, in Hong Kong's, before the middle of next year when China resumes sovereignty.The exodus of boat people began following the fall of Saigon to Vietnamese communist forces in 1975. The Philippines' move comes as other east Asian destinations are busily deporting boat people, and the United Nations High Commissioner for Refugees (UNHCR) has stopped sponsoring camps for them. The guiding hand behind the government's action appears to be the influential Roman Catholic Church, which stepped in last February to prevent the authorities from carrying out a programme of forced deportations of boat people who do not qualify for refugee status.The administration of President Fidel Ramos had been taking a hard line, and having limited success in persuading the Vietnamese to return home voluntarily: still, fewer than 2,000 people were in the camps.Meanwhile, the UNHCR, citing more pressing refugee problems elsewhere, has cut off assistance to the Philippines government for maintaining the migrants.