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THE MORNING BRIEF
April 20, 2005 -- 6:36 a.m. EDT
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In electing Cardinal Ratzinger as the 265th pope, the college of cardinals seems to have placed the fortification of doctrine over the appeal to straying or potential Catholics, opting to solidify unity within the church rather than address the world without.
Elevation of Benedict XVI
Isn't Universally Welcomed
By JOSEPH SCHUMAN
THE WALL STREET JOURNAL ONLINE
In electing Cardinal Joseph Ratzinger to serve as the 265th pope, the college of cardinals seems to have placed the fortification of doctrine over the appeal to straying or potential Catholics, opting to solidify unity within the church rather than address the world without.
The election of the white-haired, German-born theologian, in the fourth ballot of a conclave attended by 115 cardinal-electors from 52 countries in the Vatican's Sistine Chapel, was the fastest since the choice of Pius XII in 1939, the Financial Times notes. The unusually brief conclave seemed to suggest that the newly named Benedict XVI was a popular choice among the cardinals who elected the man who shared -- if at times went beyond -- John Paul II's conservative theology and seemed ready to take over the job after serving beside him for more than two decades, the New York Times notes. But his popularity beyond the Vatican isn't universal. The applause for the new pope in St. Peter's Square, "while genuine and sustained among many, tapered off decisively in large pockets, which some assembled there said reflected their reservations about his doctrinal rigidity and whether, under Benedict XVI, an already polarized church will now find less to bind it together," the Times reports.
Some of those who know the 78-year-old cleric tell the Times that Benedict knows he may have a short papacy and that he intends to move quickly to put his own stamp on the church and to reverse its decline in the secular West. He is already known for speaking out against what he has called "cafeteria Catholics," who disregard, for example, the ban on artificial birth control. But the choice of Benedict to lead the fight against secularism and "moral relativism" carries risks, The Wall Street Journal says: "While Pope John Paul II's personal warmth smoothed the edges of traditionalist messages -- no birth control, no marriage for priests, no ordaining of women -- the former Cardinal Ratzinger will be pushing the same philosophy without the same deep wellspring of charisma." On the same note, Newsweek contributing editor and practicing Catholic Melinda Henneberger says that while she was overcome with emotion and burst into tears the first time she saw John Paul, as Benedict stepped onto the loggia last night, "I only wanted to cry. The joke already making the rounds in Rome tonight was that while John Paul's first words at his installation were, 'Be not afraid,' the first from Benedict will be, 'Be afraid. Be very afraid.' "
Benedict's election drew mixed reactions across Latin America, Africa and the rest of the developing world, which have often been cited as the most important regions for expanding a church that has weakened in Europe. While political and church leaders offered congratulations, many people expressed disappointment that the new pontiff didn't come from the Third World, the Washington Post reports. The reaction of Europeans reflected generational and social divisions: "Some older and more traditional Catholics hailed the decision, while some younger and more progressive church members expressed concern that Benedict XVI would stall movement toward modernizing reforms in the church," the Post says. And the Paris-based Liberation notes that the "panzer cardinal" is best known for being more vigorous than John Paul in opposing homosexuality, a wider role for women in the church, and the entry of Turkey in the European Union - one of the touchiest East-West issues.
On the other side of the Atlantic, Benedict has already been a subject of dispute for decades among American Catholics, championed by traditionalists and decried by modernizers, the Post observes. But the Times says that despite his wartime membership in the Hitler Youth movement, Benedict "won strong praise from Jewish leaders yesterday for his role in helping Pope John Paul II mend fences between Catholics and Jews." And this morning, addressing the cardinals at the end of the first Mass he celebrated as pope, Benedict pledged to work to unify all Christians, reach out to other religions and continue implementing reforms from the Second Vatican Council.
US Air, America West in Merger Talks
US Airways, still struggling to emerge from bankruptcy protection, is in advanced merger talks with low-fare carrier America West Airlines to create a national low-cost airline rivaling discount king Southwest Airlines in size, people familiar with the matter tell The Wall Street Journal. America West's chief executive, W. Douglas Parker, has been a loud proponent of the need for consolidation within the industry, while US Airways -- the seventh-largest U.S. airline -- has been viewed by many analysts as ripe for a takeover once it emerges from bankruptcy protection, the New York Times says. People close to the talks tell the Times that a conclusion could be reached within a few weeks. The Journal notes that among the obstacles remaining are the complications brought by US Airways being in Chapter 11. A deal would need approval from a host of parties, including the bankruptcy judge; US Airways creditors, including its largest, General Electric; America West shareholders; unions; and the federal government.
But if a deal comes together, it could prove the first step in a long-awaited new wave of consolidation of the embattled airline industry, in which companies are struggling with high oil prices, too many seats, pension costs and brutal ticket-price wars, the Journal says. Though most big airlines currently lack the cash to do deals and share prices are depressed, some industry analysts believe hedge funds and private equity firms, moving into the industry as investors, will eventually force restructuring, especially if more big carriers file for Chapter 11.
GM Posts a $1.1 Billion Loss
Corporate America offered a mixed bag of quarterly results yesterday. The worst news came from General Motors, which posted a net loss of $1.1 billion, its worst quarter in 13 years, blaming disappointing sales in the crucial North American automotive market and soaring health-care costs, the Los Angeles Times reports. That contrasts with a profit a year earlier of $1.28 billion. Revenue fell 4% to $45.8 billion from $47.8 billion. GM, which recently warned its results would be bad, also withdrew its previous forecast for full-year net income, saying a crisis in health-care expenses and uncertainty over auto sales made it too difficult to forecast. But some analysts tell the Times that the company may be trying to make things look as bleak as possible to help it persuade the auto-workers union to pass on some of the company's health-care costs to its hourly workers.
Yahoo, Intel Cheer Up Tech Sector
Among high-profile technology companies, it was another story. Both Yahoo and Intel reported strong first-quarter earnings, as increases in the money and time that consumers are spending on the Internet and mobile computing fueled solid growth in the sector, the Washington Post reports. At Yahoo, the increases stemmed almost exclusively from a surge in online advertising. Profit doubled to $204.6 million, sales grew by 55% to $1.2 billion and the number of registered users of its e-mail and other services swelled to 176 million. While the stock market broadly has lost ground in recent weeks, as corporate earnings at International Business Machines and elsewhere have disappointed investors, firms with a big stake in the consumer-oriented portion of the tech industry have held up well.
That is clearly helping one of the most important high-tech bellwethers, Intel, which posted a 25% jump in quarterly earnings and raised its profit-margin expectations, a sign of solid demand for the higher-priced chips used in portable computers and other products. Intel also said it will increase its spending on new manufacturing capacity, another signal of confidence in global business conditions, The Wall Street Journal says. Intel's net income came to $2.15 billion, up from $1.73 billion a year earlier, on revenue that rose 17% to $9.43 billion.
Pfizer Profit Tumbles, J&J's Soars
And there was a divergence among major pharmaceutical companies that reported yesterday, showing how strongly industry profits are linked to individual, powerhouse drugs and products, and the effect of more-intense scrutiny from regulators, the Journal reports. Pfizer's results were sapped by a host of charges, causing its net income to tumble 87% to $301 million from $2.33 billion a year earlier, on revenue that climbed 5% to $13.09 billion. Although most of the drop in profit was related to charges for repatriating profits, a big chunk was related to Pfizer's painkiller Bextra, which it pulled from most markets earlier this month. Meanwhile, Johnson & Johnson announced record profit and sales for the first quarter, bolstered by growth in medical devices and diagnostics. The company's net income surged 17% to $2.93 billion from $2.49 billion a year earlier on revenue that was up 11% at $12.83 billion. Sales of J&J's medical devices and diagnostic tests rose 16%, and the strong performance overseas of the company's drug-coated stent, Cypher, helped offset weak demand domestically.
Justices Raise Bar for Shareholder Suits
The Supreme Court made it easier for companies to resist class actions by shareholders who seek compensation for stock-market losses, ruling unanimously that investors must prove a clear connection between a company's misrepresentations and subsequent loss in stock value before they can recover damages in fraud-on-the-market litigation. Justice Stephen Breyer, writing for the Court, rejected a looser standard adopted by the U.S. Court of Appeals for the Ninth Circuit that would have allowed lawsuits to proceed simply by showing that the price of a stock was inflated at the time it was bought because of company misrepresentations, Legal Times reports. Because a "tangle of factors" can cause stocks to go down in price, Justice Breyer said that more than an inflated purchase price is needed to prove a connection between a company's misrepresentation and the stockholder's later losses when the stock is sold at a lower price.
Financial Times: Germany's government suggested it would outlaw short-term investment strategies amid growing signs that blue-chip companies are being targeted by hedge funds and private equity investors.
New York Times: A little-noted provision in energy legislation backed by House Majority Leader Tom DeLay would bypass Congress's normal spending process to funnel up to $2 billion over 10 years to oil companies for exploration research in the Gulf of Mexico, drawing criticism at a time when Congress is trying to tighten its belt and energy-company profits are up.
Deseret News: Utah legislators, after more than a year of debate, study and negotiations, officially challenged No Child Left Behind's federal reach into public schools, passing a bill that makes Utah's education and spending goals a higher priority than NCLB's.
Los Angeles Times: To help stem the American slide into obesity, the U.S. government unveiled a dramatic redesign of its familiar food pyramid, tipping it on its side with vertical color bands, incorporating a staircase and climber to emphasize the need for exercise -- and producing it in 12 versions to reflect the nation's diverse lifestyles.
Journal of the American Medical Association: While being underweight or obese is associated with higher levels of mortality than having a normal weight in a new study, being overweight wasn't associated with excess mortality rates.
Ad Age: A majority of U.S. consumers say they support expanded government pressure to curb indecency in the media but are concerned about federal regulation and have doubts that a hardline approach will have any significant effect, according to a new poll conducted by the Pew Research Center.
Quote of the Day
"I don't know if I've ever seen, in a setting like this, a senator changing his mind as a result of what other senators said. ... The process worked. It's kind of refreshing," Republican Sen. Lincoln Chafee tells the New York Times, after the Republican-led Senate Foreign Relations Committee agreed to postpone a scheduled vote on the nomination of John R. Bolton as ambassador to the United Nations in the wake of new doubts voiced by the panel's Democrats.
TODAY'S MARKETS
The Dow industrials finished up 56.16 points at 10127.41 and the Nasdaq composite surged 1% as Wall Street cheered earnings reports and a tame inflation reading. Oil bounced 3.8% to $52.29 a barrel.
http://online.wsj.com/article/0,,SB1113908...tml?mod=djemTMBThe China-Japan flareup shows the arrival of a long-predicted struggle for regional dominance as much as the war grievances on display.
http://online.wsj.com/article/0,,SB1113942...tml?mod=djemTMBArab Bank is now at the center of a diplomatic dilemma for the U.S., after large sums of money have been traced from suspected terrorist fund-raisers through the bank and into accounts that, in many instances, are controlled by charities affiliated with terrorist groups.
http://online.wsj.com/article/0,,SB1113961...tml?mod=djemTMBBusiness is soaring for high-tech tethered blimps known as aerostats, thanks to the recent boom in high-rise condominiums and homeland-security projects.
http://online.wsj.com/article/0,,SB1113949...tml?mod=djemTMB