WEEK OF OCT. 28-NOV. 3

Amex, Chevron Among Earnings Reports Due

Although economic data will command much of the attention this week, earnings from a few market heavyweights will exert some pull.

Financial services company American Express Co. and Kellogg Co., the No. 1 U.S. cereal maker, are expected to post quarterly results today, while the earnings of consumer products maker Procter & Gamble Co. are due Tuesday. Wednesday will bring results from computer services company Electronic Data Systems Corp. Report cards from oil and gas companies ChevronTexaco Corp. and Exxon Mobil Corp. are expected Thursday.

Stocks have rallied in recent weeks as surprisingly strong corporate earnings have boosted sentiment. So far, 358 companies in the S&P; 500 have reported quarterly results. Of those, 59% have beaten Wall Street’s lowered expectations by an average of 3.1%, according to market research firm Thomson First Call. About 14% have missed analysts’ forecasts, First Call said.

But investors say the better-than-expected results are largely built into stock prices and they need to see companies forecasting stronger growth.

Reuters

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Vivendi Sues for Time to Bid on Cegetel

Vivendi Universal is seeking more time to consider thwarting Vodafone Group’s bid of $12.8 billion to buy France’s second-largest phone company, Cegetel.

The world’s No. 2 media company is suing Vodafone in Paris’ commercial court to extend the deadline for a potential counteroffer. A hearing at the Tribunal de Commerce de Paris is scheduled for today

Vivendi owns 44% of the French phone business and needs time to raise funds to prepare a counter bid, analysts said. It must choose between raising debt to strengthen the hold on its most profitable unit or cutting debt by severing ties with a business accounting for a third of its operating profit.

Jean-Rene Fourtou, Vivendi’s chief executive, is struggling to reduce the company’s $18 billion of debt. Last week, he agreed to sell Vivendi’s French, Spanish and Latin American publishing assets to Lagardere for $1 billion. Vivendi is still seeking higher bids for its U.S. unit, Houghton Mifflin.

Vivendi is weighing whether to vie for control of Cegetel or cut debt by accepting Vodafone’s $6-billion offer for its stake in Cegetel. To keep control of Cegetel and its mobile-phone unit SFR, Vivendi must at least match Vodafone’s $4-billion bid to BT Group for its 26% share.

Vivendi has until Nov. 10 to bid. It wants the commercial court to extend that deadline and will argue that Vodafone didn’t allow for a 30-day period to conduct due diligence.

Bloomberg News

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Koizumi to Unveil Plan on Japan’s Bad Loans

Japanese Prime Minister Junichiro Koizumi’s government will unveil a package this week focusing on the nation’s nonperforming loan problem, but there are signs that harsh action on the banking sector will be watered down amid fierce political opposition.

Few investors doubt that the package will mark a step forward in Japan’s slow reform efforts.

But questions still hang over the degree to which chief bank regulator Heizo Takenaka will be forced to dilute his radical ideas on attacking bad loans estimated to amount to at least $418.3 billion in the face of stiff opposition from ruling politicians and banks.

Many politicians fear a backlash from voters and their traditional industry supporters if the government goes for a “hard landing” approach that could trigger bankruptcies, job losses and a stock market sell-off.

Banks, too, are staunchly opposed to Takenaka’s apparent plans to impose strict new capital requirements on them that could open the way for a government fund injections and sweeping management changes.

Takenaka met the heads of major banks today for the third time in a week, hoping to patch up differences which on Friday saw the bank chiefs accuse the minister of steering the fragile economy toward a credit crunch.

An official at one of the four banks said Takenaka again failed to outline specifics of his program.

Reuters

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EC to Propose Rules on Music, Film Piracy

The European Commission will propose new legislation next month aimed at strengthening the fight against music and film piracy, a business worth $4.3 billion a year globally for pirated discs alone, EU sources said.

The new rules would create tougher minimum standards for each of the 15 EU member states, filling existing gaps and loopholes allowed by the current legal fragmentation. But it would not go as far as imposing mandatory criminal sanctions for pirates.

The proposal has been eagerly awaited by the industry, which says it faces an increasing flow of illegal copies of CDs, video tapes and DVDs.

“The industry is very pleased that the European Commission is going to address the serious problem of piracy. We look forward to strong measures,” said Thomas Dillon, legal counsel at the Motion Picture Assn.

Rampant piracy has partly accounted for the slowdown in global music sales.

The proposals are expected to include standardized procedures for searching, seizure and proof by national authorities and criteria for calculating damages.

The draft bill also would create tighter cooperation between national authorities to reduce administrative requirements and speed up action, industry sources said.

For the film industry, the Motion Picture Assn. estimates that in the United States alone, $3 billion a year in potential revenues are lost because of piracy.

Reuters

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Also ...

* Tuesday, Senate Governmental Affairs Committee holds recess hearing on oversight of Enron Corp. by federal energy regulators.

Conference Board reports on October consumer confidence.

* Wednesday, Securities and Exchange Commission begins two-day meeting to adopt rules implementing Sarbanes-Oxley reform bill.

* Thursday, Commerce Department reports on third-quarter domestic product.

Labor Department reports on third-quarter employment costs.

* Friday, Labor Department reports on October unemployment rate.

Institute for Supply Management issues its October index.

Commerce Department reports on personal spending and income for September.