Historical Newspapers of South Carolina

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Fed cuts interest rate by half-point by Jeannine Aversa Associated Press WASHINGTON — The Federal Reserve slashed a key interest rate by a half-point Tuesday, hoping to encourage Americans to spend and invest to revive a sluggish economy. It marked the third time this year that the central bank has cut interest rates, a move that lowers borrowing costs and aims to stimulate demand, which eventually should boost economic growth. All three reductions were by one-half point. The Fed cut its taiget for the federal funds rate from 5.5 percent to 5 percent. That’s the lowest since June 30,1999, when the funds rate also stood at 5 percent. The half-point cut disappointed Wall Street, which this past week suffered through a huge sell-off as Investors grew more pessimistic about economic prospects in the United States and its major trading partners. They were hoping for a three-quarter-point cut. On Wall Street, stocks initially dropped after news of the Fed’s rate cut, rebounded a bit and then fell again. The Dow Jones industrial average was down 36 points and the Nasdaq 18 points 75 minutes before the closing bell. The Fed attributed the economy’s weakness in part to production cutbacks at factories in the face of flagging demand. “Excess productive capacity has emeiged recently. The possibility that this excess could continue for some time and the potential for weakness in global economic conditions suggest substantial risks that demand and production could remain soft,” the Fed said in a statement, explaining its decision to cut rates again Tuesday. The decision came after a closed door meeting of the Fed’s chief policy-making group, the Federal Open Market Committee. The panel includes Fed Chairman Alan Greenspan, Fed governors and five of the 12 presidents of Federal Reserve banks. The White House declined to comment on the Fed’s decision to cut rates by a half point, rather than a bolder three-quarter point. Spokesman Ari Fleischer said, “The White House does not engage in any such speculation on the action of the Fed.” Sen. Charles Grassley, R-Iowa, who chairs the Senate Finance Committee, was disappointed. “It should have been more,” he said. The Fed’s half-point decrease in the funds rate was quickly followed by an announcement from Bank of America that it was reducing its prime lending rate by a half-point to 8 percent, effective Wednesday. Other commercial banks were expected to do the same. The prime rate is the key benchmark for millions of loans, from home equity and unpaid credit cards balances to short term loans for small businesses. The central bank also reduced its symbolic discount rate, the interest that the Fed charges to make direct loans to banks, by a half-point to 4.5 percent. Oil rig sinks off Brazilian coast ■ Attempt to save crippled rig fails after sudden shift by Peter Muello Associated Press RIO DE JANEIRO, Brazil — One of the world’s biggest oil rigs sank in the South Atlantic on Tuesday, and the state oil company Petrobras warned that more than 300,000 gallons of diesel fuel on board was likely to spill. The 40-story-tall rig, crippled and tilting after an explosion this past week, “shifted suddenly” in heavy seas 75 miles off the coast early Tuesday morning, the company said. Wbrkers who had been trying to save it gave up and fled. At about 10:30 a.m., the rig tipped over and went down in about 10 minutes. Film footage showed the platform descending until only the green heliport was visible above the waves. Then it went under, as oil workers, many sobbing, looked on from a nearby ship. “It’s at the bottom of the sea,” said Carlos Aurelio Miranda, a Petrobras spokesman. Petrobras Chief Executive Henri Philippe said there was a “fine film of oil” on the spot where the rig went down but that the company was ready to contain it. He said containers holding 312,000 gallons of diesel fuel would collapse under water pressure on the sea bottom at a depth of 4,455 feet. The rig had 78,000 gallons of crude — most of it in hoses between the wells and the rig. Those hoses were attached when the rig went down and could break, he said. Reichstul said the oil and gas wells were sealed before the rig was evacuated and couldn’t leak. “There is a plan in place to protect the environment,” Reichstul said “We are not terribly worried about the environmental question.” Petrobras had 11 ships on the spot to combat a spill, said Irani Varela, the company’s safety and environment chief. Four were to skim oil off the surface, four others carried 20 miles of floating oil barriers and three had chemicals to break down the oil. Varela said the barriers would have little effect in high seas, where swells Tuesday were 6 feet high. He said the cleanup would take up to four days, but that winds and tide suggested the oil would be carried out to sea. Navy divers, engineers and foreign consultants had been working for days, trying to salvage the gigantic rig after Thursday’s explosion and fire. The accident killed at least two workers and left eight others missing and presumed dead. A supporting pillar was knocked out, and the platform tilted and began sinking slowly off the coast of Macae, 120 miles northeast of Rio. Workers tried to keep it afloat with nitrogen and compressed air. After partly righting, the platform began to sink again on Monday, when high winds and rough seas hindered rescue efforts. Albanian rebels request peace talks with Macedonia BY Katarina Kratovac Associated Press TETOVO, Macedonia — Ethnic Albanian rebels said Tuesday they were willing to negotiate a peaceful settlement to end their week old insurgency, but warned Macedonia’s government to respond or the fighting would continue. Government forces resumed heavy artillery shelling late in the afternoon, and plumes of smoke rose from the wooded hills above Tetovo. Earlier in the day, rebels apparently drew back to defensive positions deeper in the hills. Government tanks moved into the city Monday, and government spokesman Antonio Milosovski had pledged “definite action,” saying field commanders would give the order soon. NATO pledged to “starve” the rebels by cutting supply lines from neighboring Kosovo. Tetovo, with an ethnic Albanian majority, is Macedonia’s second largest city and has been the focus of fighting in recent days near the border with Kosovo. The rebels said in a statement Tuesday that they were “determined to realize our demands” and they urged Macedonian leaders “to make public as soon as possible if they want this to be resolved peacefully or not.” If talks are rejected, “we will bear no responsibility for the future chain of events,” said the statement, obtained by The Associated Press. The statement, signed by the “National Liberation Army — Tetovo branch,” urged the “international community to recognize our demands, which are for peace, not for war.”' The Slav-led Macedonian government didn’t immediately react to the communique. Earlier Tuesday, Macedonian President Boris Trajkovski said, “There will be no negotiations,” and accused the rebels of “ethnic extremism” that threatened to undermine the stability of the entire Balkans. “Ethnic extremism is the beginning of the end of peace in the entire region,” he said in a somber appearance in the Macedonian capital, Skopje, declaring his forces “strong enough and determined to halt the terrorists and defend the country.” The rebels say they’re a homegrown movement fighting for greater ethnic Albanian rights in Macedonia. The government claims they’re linked to fighters across the border and aim to break off northern Macedonia to form a “greater” Kosovo as an independent ethnic Albanian state. News Briefs ■ Campaign finance ' debate begins with close vote in Senate * WASHINGTON (AP) — Senate supporters of limiting political donations narrowly overcame their first challenge in their drive to bring about the most significant change in campaign spending law in a quarter century. The Senate, by a 51 -48 vote Monday, defeated a proposal to effectually eliminate direct party contribution limits for candidates running against wealthy opponents who put at least $1 million of their own money into a campaign. The vote opened two weeks of debate on legislation offered by Sens. John McCain, R-Ariz., and Russell Feingold, D-Wis., that would ban loosely regulated “soft money” donations that corporations, unions and wealthy individuals give political parties. ■ Submarine officer apologizes for crash as hearing nears end PEARL HARBOR, Hawaii (AP) — His voice brimming with emotion, an officer of the Navy submarine that rammed a Japanese trawler apologized as an inquiry into the deadly accident neared its end. “To the families of those who perished and to the crew of the Ehime Maru ... I humbly apologize,” Lt. j.g. Michael Coen said Monday. Coen, 26, is one of three officers of the USS Greeneville under investigation over the Feb. 9 sinking of the Ehime Maru. The Greeneville smashed into the Japanese fishing vessel while demonstrating a rapid-surfacing drill for 16 civilians. Nine people, including four teen-age boys, were killed. London.$364 Paris.$426 Amsterdam.$467 Tokyo.$855 Poetry Events Book Signing Thursday, March 22,2001 5-7pm The Happy Bookseller 4525 Forest Drive Meet Kay Day, author of Perfect Words. She'll be signing this collection of award-winning poetry, and essays on crafting and publishing poetry. Day will answer questions on freelancing, Internet writing opportunities, and publishing. Visit kayday.freeservers.com Poetry Reading Sunday, March 25,2001 3-5 pm Richland County Public Library Main Branch on Assembly Dialogue Among Civilizations Through Poetry is a United Nations Exhibit in which over 200 poetry readings will occur in cities around the world during the last week in March. Rize Cole, Kay Day, and Dinah Johnson will read selected works. Wasn’tspring breajp^ fun? RemJmber all the sun tan lotion, < beachballs, towels, | s s&nglas^s and pens? f Pen&you ask? You’ll I nfjed oneio pre-lease an apartment from University Commons. 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