Business news in brief

QUOTE OF THE DAY

“The highest demand for loans is from the companies least qualified, the companies that have really struggled because of the economic downturn.”

Eliot Stark,

managing director at Capital Insight Partners Inc.

Article, 1D

T-bill rates mixed at weekly auction

WASHINGTON - Interest rates on short-term Treasury bills were mixed in Monday’s auction, as rates on three-month bills fell and six-month bills rose.

The Treasury Department auctioned $30 billion in three-month bills at a discount rate of 0.150 percent, down from 0.155 percent last week. Another $30 billion in six month bills was auctioned at a discount rate of 0.200 percent, up from 0.195 percent last week.

The three-month rate was the lowest since these bills averaged 0.115 percent on June 21. The six-month rate was the highest since it was 0.205 percent on July 6.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,996.21, while a six-month bill sold for $9,989.89.

That would equal an annualized rate of 0.152 percent for the three-month bills and 0.203 percent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was 0.27 percent last week, down from 0.28 percent the previous week.

Delta begins NYC-Chicago shuttle

For New York business travelers bound for Chicago, there’s a new shuttle in town.

Opening another front in the competition for high-fare corporate passengers, Delta Air Lines is operating hourly flights between New York and Chicago, courting consumers by offering three times the usual number of frequent flier miles.

The jockeying adds a Midwest leg to the East Coast shuttle flights from New York to Boston and Washington.

Delta began its service in June after shifting operations to O’Hare airport from Chicago’s Midway, putting the world’s largest carrier in a head-to-head matchup with American Airlines and United Airlines.

Airlines prize business travelers because last-minute fliers pay the highest fares. On American, a walk-up round-trip ticket from its O’Hare hub to New York’s La-Guardia airport may run $449, according to the carrier’s website. That ticket bought a month in advance is $178.

EU probes IBM over market clout

LONDON - IBM is being investigated by the European Union over claims it abused its dominant position in the market for mainframe computers.

The investigation will review claims that the world’s biggest provider of computer services linked sales of its hardware to its software for mainframe computers and that IBM discriminated against competing sellers of services for the computers, the Brussels-based European Commission said in a statement Monday. IBM said the probe was the result of a campaign by “proxies” of competitors led by Microsoft.

The commission, the antitrust regulator for the 27-nation EU, said the probe is partially in response to a complaint by T3 Technologies, which Microsoft invested in.

T3 makes software that transfers mainframe functions to servers that can run Microsoft’s Windows operating system.

“It’s not surprising that the commission would take seriously allegations of abuse given IBM’s monopoly in the strategically important mainframe market,” said antitrust lawyer Stephen Kinsella. “As an outspoken advocate of openness in others’ markets, it will be interesting to see how IBM seeks to defend its own behavior.”

IBM, based in Armonk, N.Y., said in a statement that “there is no merit to the claims being made by Microsoft and its satellite proxies.”

“Certain IBM competitors which have been unable to win in the marketplace through investments in fundamental innovations now want regulators to create for them a market position that they have not earned,” IBM said.

Dubai: BlackBerrys threaten security

DUBAI, United Arab Emirates - Emirati officials have declared BlackBerry smart phones a potential threat to national security because users’ data is stored overseas, where local laws don’t apply and where analysts say it could be harder for authorities to monitor.

The move renews concerns about efforts by the United Arab Emirates to control the flow of information in the Persian Gulf nation, which includes the business hub Dubai and the oil-rich emirate of Abu Dhabi. The federation of seven hereditary states actively censors websites and other forms of media seen as harming national security and conservative values.

Because BlackBerry maker Research in Motion’s computer servers are located outside the country, “it makes it easier for them to refuse requests from the authorities for users’ personal data,” said Lucie Morillon, head of the new media desk at advocacy group Reporters Without Borders, which monitors efforts to control smart phone use.

“The authorities cannot access BlackBerry information as easily as they can a local operator’s information,” she said.

It is the second major controversy over the BlackBerry in the United Arab Emirates. A year ago, the country’s biggest state-run mobile operator was caught encouraging unwitting BlackBerry users to install software on the devices that could allow outsiders to peer inside. The government has never made fully clear what happened in that case.

Citigroup: Countered iPhone practice

SEATTLE - Citigroup Inc. said Monday that its iPhone banking program has been saving customer account information in hidden files on users’ smart phones and computers.

“We have no reason to believe that our customers’ personal information has been accessed or used inappropriately by anyone,” said spokesman Natalie Riper in a statement. “There has been no data breach.”

The Citi Mobile iPhone banking program let U.S. Citibank customers see their account and credit-card balances, pay bills and transfer money, and helped them locate nearby ATMs. The hidden files were logging account numbers and bill payment information, among other data.

The company said it has updated the program so that it deletes the sensitive information on iPhones and computers that the devices connected to using Apple Inc.’s iTunes program, and so that information isn’t stored in the future. Riper said Citibank is telling people who downloaded the app about the update.

The company said its other apps and mobile services do not have this problem.

Business, Pages 20 on 07/27/2010

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