Tyco resignation hits US shares
THE Enron effect undermined US markets and the dollar as the boss of the massive Tyco conglomerate stepped down after reports of a criminal investigation into his personal dealings.
Dennis Kozlowski built Tyco into an £80bn group. That had slumped to £24bn on Monday night and its bonds traded at 84p in the pound amid post-Enron jitters about US accounting and governance.
Manhattan's district attorney-is probing Kozlowski's possible use of family trusts to evade sales taxes. Tyco was recently tipped to bid for Chubb security. It took over Tory peer Lord Ashcroft's ADT business. He became a big shareholder, but sold £110m worth opf shares last year.
Enron has rocked confidence in the US. The apparent suicide of Charles Rice, treasurer of energy trader El Paso Corp, shook it further.
Wall Street was down 215 points at the close on Monday night. This swamped the good news from US manufacturing, which grew in May at its fastest for over two years.
That was much better than news from Europe, but it made no difference. The dollar weakened again The euro rose to 93.8 U.S. cents. Sterling rose to $1.4620.
The 18.5% surge in UK house prices adds to pressure for higher interest rates. Gold touched $329 an ounce. Weak tech stocks dragged German and French shares lower.
