Wall Street report: Monday close

THE bankruptcy of another once high-flying telecoms company weighed on Wall Street with major indices posting modest gains. The Dow Jones Industrial Average rose 25.67 points or 0.3% to 9865.75. The Nasdaq Index finished ahead 6.21 points or 0.3% to 1943.92.

Global Crossing, which boasted a market value of $47bn (£31bn) two years ago, applied for bankruptcy protection and said it was selling majority control to interests associated with Hong Kong billionaire Li Ka-shing for $750m.

The telco, founded by financier Gary Winnick, went public in 1998, at the peak of the internet and telecoms boom. With GC's shares soaring, Winnick, a former associate of junk bond king Michael Milken, paid what was then thought to be a record $60m for an estate in the Bel Air neighborhood of Los Angeles.

GC shares, down 98% in the past year, were halted after plunging 21 cents or 41% to 30 cents in pre-market trading.

Telecoms bankruptcies do not have the bang they once had on Wall Street and analysts moved on to recommending a slew of companies they said were undervalued. Morgan Stanley waxed eloquent about the outlook for General Motors and Ford based on what it said were low vehicle inventories and low interest rates. GM shares rose $1.86 or 3.8% to $50.34 and Ford gained 55 cents or 3.8% to $15.06.

Texas Instruments benefited from an upgrade, with its shares jumping 95 cents or 3.5% to $28.40. TI, the biggest supplier of chips for cellphones, rose another 7% in extended hours trading after its numbers came in better than expected. Cisco Systems was boosted 57 cents or 3% to $19.70 as analysts tipped that its quarterly results could be above par.

American Express retreated 70 cents or 1.9% to $36.29 in anticipation of its latest report, out after the close. The financial services company said fourth-quarter profits plunged 56% as travel dried up in the days following the 11 September terrorist attacks. The shares came off another 2.4% after the report was released.

Toys R Us, the biggest speciality toy retailing chain in the world, leapt $1.15 or 6.1% to $19.90 after it said it would cut 1,900 jobs and close 64 stores.

Conglomerate Tyco International, which has been pressured by doubts about its accounting despite denials by its executives, slid another $3 or 6.7% to $42. Xerox, the copier company, jumped $1.34 cents or 14% to $11.24 as its quarterly report came in better than anticipated. Irish pharmaceuticals company Elan said it knew of no reason for the sharp movemement in its shares as they tumbled $2.35 or 6.4% to $34.50.

Among Dow components Walt Disney recovered another 36 cents or 1.7% to $22.14, Eastman Kodak gained 21 cents or 0.7% to $28.77 and Wal-Mart added 23 cents or 0.4% to $58.63 after it said store sales were running at the high end of expectations.

In the economic background, new home sales rose 5.7% to an annual rate of 946,000, the fastest pace since March. The market focus will shift to the Federal Reserve Board which meets on Tuesday and Wednesday to consider interest rate levels.

Economists are split on whether the Fed, headed by Alan Greenspan, will cut rates for the twelfth time in the past 13 months or stand pat to see if the economy is recovering. A decision is expected to be announced on Wednesday at about 7.15 pm London time.