Weekly Wrap

I'm embarrassed to be heading up the market wrap in such a way, but it's hard for me to think about anything else. 3, 9, 11, 20, 29 and 1. Those are my numbers and I'm sticking to them. I can't talk about anything else this weekend. The Powerball has reached a whopping 280 million as nobody has won the darn thing since the Minnesota Twins started their losing streak.

I can hardly wait until 11 PM EST. Cross your fingers!! I'm going to join all those Forbes billionaires soon!!! (I compound my interest very fast in my head.)

But, who's to say that whole thing isn't fixed?

I wouldn't put it past anyone these days. Did you hear about the McDonald's (MCD) million-dollar Monopoly game? Well, word has it that there was a little ring of employees from the marketing firm promoting the game that have been the only winners. Yep, seems the winning game tickets, like Park Place, were only given to a select few. The FBI pegged the latest winner even before he claimed his winnings. They watched him for a couple of weeks, and then, sure enough, like landing on GO and collecting $200, the man showed up to claim his prize. Instead, he got cuffs. No one is sure if there were ever any legitimate winners of the big prizes. The FBI figures the ring has won more than 13 million dollars in the past six years. Those accused will not be getting any "Get Out Of Jail Free" cards in this game called life. Take that, you cheaters.

On a disappointing note, the marketing firm suffers because of the corrupt security employee in charge of the winning games pieces. McDonalds immediately dropped the firm, Simon Marketing, as their promotions company, but also this week, Philip Morris (MO) dumped them. That's what you get if don't play fair. Now, does anyone know how to put magnets on the guy's fingers that is pulling the Powerball numbers? 3, 9, 11, 20, 29. 1. Thank you. I'll give you half.

Okay, onto more business news.

The Federal Reserve cut the interest rate again this past week by another quarter percentage point. It's the seventh rate cut this year. The rate charged between banks is now at 3.5%, the lowest it has been in seven years. The Fed said the weak corporate profits and a global economic slowdown continues to weigh heavily on the U.S. They also signaled that they would cut them again in October if needed.

Just how weak does it get? Blue Light special, baby. On Thursday, Kmart (KM) posted a net loss of $95 million for the quarter ended Aug.1, but this was still better than last year's same time period loss of $448 million. The discount retailer has been spending a ton of money over the past year sprucing up their stores and changing some of their inefficient operating procedures. Sales took a bit of dip compared to the same quarter last year, but in their stores that have been open at least a year sales grew by 1%. (Must be all the Mary Kate and Ashley Olsen clothing, or Martha Stewart towels flying off the shelves.)

Maybe Ames Department Stores (AMES) should have signed on a high profile name to help peddle some of their products. The retailer announced this past week that they will be closing 47 of their 452 stores and filing for Chapter 11. They need to reorganize for the second time in eleven years.

Also reorganizing this week is Chick-held Cisco (CSCO).  Gone is Kevin Kennedy, the senior vice president of the telecommunication carrier department. Sales in their telecom carries have decreased more than any other area of the company so they decided to eliminate the whole telecom unit. The company is using the workforce in these divisions to focus more on the wireless networks and also the technologies involved in moving telephone calls across computer networks. CEO John Chambers waited awhile to make this announcement, as he wanted to wait until things in his company stabilized a bit. (By the way, investors took this word "stabilize" as good news, and the stock price shot up. Go figure.)

I wrote yesterday about my Forbes billionaire neighbor, Mr. Stanley S. Hubbard, and about his many companies. Well, one of them that he is a huge private shareholder in, Hughes Electronics (GMH), a division of General Motors (GM), is still in negotiations with EchoStar Communications Corp. (DISH). But news has it that Hughes, the maker of DirecTV , the television satellite, is also being courted by News Corp. (NCP). Other news out of DirecTV camp this week is that they plan to cut some jobs in the near future to stay on track for their 2001 earnings expectations of $250 to $300 million.

Earnings from San Francisco based home furnishing retailer, Williams-Sonoma Inc. (WSM) tumbled a bit for their second quarter. Well, more than a bit. like a whole set of dishes came down.  Due to volatile retail trends and higher costs, their net income came in at $1.4 million, down from $5.1 a year ago. And the dish ran away with the spoon.

I must follow the eating utensils and head to my nearest Powerball retailer. Lord knows it's the only place making money these days.

Breaking a Leg.
Karin

Closing Market Numbers