The U.S. Economy At A Glance

From Main Street to Wall Street, business made news in 2000.

Cereal complemented cookies and cracker when Kellogg Co. announced its plan to buy Keebler Foods Co. for $3.9 billion in cash. The deal, expected to close early next year, will create a company with nearly $10 billion in yearly sales.

Dow Chemical Co. fired 24 employees and reprimanded 235 more at its Freeport, Texas plant after an investigation into reported misuse of the company's email system to send inappropriate material.

Computer related companies took major hits as demand for new equipment dropped.
Wall Street
The high-flying dot-com bubble burst, bringing the raging bull market of the last several years to an abrupt, and in many cases agonizing, halt.

The Nasdaq composite index peaked in March at over 5,1000 and has since lost nearly 50 percent as investors unloaded holdings in Internet retailers, telecommunications and computer equipment makers that only last year were held up as the future of business.

Online retailer Amazon.com was off more than 75 percent, chipmaker Intel by 55 percent and web portal Yahoo! lost more than 85 percent. Even industry staple Microsoft lost ground.

Blue chip stocks also slipped, but not as much. As high tech stocks plummeted, investors came back to utility, food and consumer basics that had been ignored in recent years as too stodgy and slow-growth.

As of mid December, the Dow Jones Industrial Average was down nearly 10 percent from its high of 11,750 set in early March.

"This shift into more stable, less economically sensitive stocks from the tech sector helped keep the Dow from taking the same type of beating that Nasdaq did," said investment consultant Bill Barker.

The downturn wasn't unexpected. The Federal Reserve had been steadily hiking interest rates. Bearish analysts had been warning for quite some that the market was over-valued. Still, many were caught short.

"We had average investors expecting they were going to get 20 percent returns every year, and that wasn't going to happen," said Charles Pradilla, chief investment strategist at SG Cowen Securities.



Software maker Compuware stock took a dive on the heels of three consecutive quarters of disappointing earnings.

Hewlett-Packard is telling employees their raises will be delayed for three months as part of an expense-cutting lan at the high-tech giant, the San Jose Mercury News reported Thursday.

Microsoft is awaiting word on their appeal of the government's case against them.

After only nine months in operation, Christian e-tailer iBelieve.com folded ship after failing to bring in new investors. It was the first e-commerce site catering to Christians, but it was unusual in that its investors were venture capitalist – not evangelists.

Kmart Corp. struggled to meet Wall Street's lowered expectations as the discount retailer sought to rebound after getting a new CEO. There were calls for Kmart to close 72 less-profitable stores in 28 states affecting 5,000 workers.

There was a lot of news in the aviation industry as well.

United Airlines is waiting on a ruling by the Justice Department concerning its planned merger with U.S. Airways. If it goes through, it will be the biggest-ever airline merger.

American, Delta, Northwest and United Airlines are all in the middle of employee contracts. Along with rising fuel prices, the hefty costs in settling bitter negotiations and legal court cases will be a drag against profits.

Discount airline Pro Air was ordered grounded after the FAA found serious maintenance and record keeping problems. It later filed for bankruptcy protection.

And Alaska Airlines is being looked at closely by the FAA in the wake of an earlier crash.

Appliance maker Whirpool Corp. announced a restructuring plan that will slash up to 10 percent of its 60,000-member workforce.

Domino's Pizza Inc. made good with the Justice Department on a nationwide policy that ensures that limits on pizza deliveries are based upon a legitimate safety concern for drivers and not racial discrimination.

Merrill Lynch, the largest U.S. securities firm, is planning to cut jobs at its research department in 2001, according to a report in Friday's edition of the Wall Street Journal, citing people familiar with the matter.

And the Rockefeller family no longer has any financial interest in New York's famed Rockefeller Center. Tishman Speyer Properties and the Crown family of Chicago had only owned a minority stake in the property, but now they're buying it for one-point-85 (b) billion dollars.


© 2000 CBS Worldwide Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press and Reuters Limited and contributed to this report
  • CBSNews.com staff CBSNews.com staff

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