IN THE COURTS

JURY CHOSEN FOR WORLD TRADE CENTER INSURANCE TRIAL

A jury was chosen in Manhattan federal court yesterday for the second World Trade Center insurance trial.

A separate jury ruled earlier this year that the two planes that hit the twin towers on September 11, 2001, constituted one event under contract language that affected 13 insurers.

The decision was a blow to trade center leaseholder Larry Silverstein, who argued that he should receive $7 billion, or twice the $3.5 billion insurance policy on the trade center, because the planes, which flew into the towers 16 minutes apart, represented two events.

If Mr. Silverstein’s lawyers can convince jurors in the second trial that the attack was two occurrences, he will stand to collect $1.1 billion more from nine insurers involved in this phase. Opening statements are scheduled for October 18. The jurors in the second trial, 10 women and two men, include several educators, a science writer, and a personal trainer.

– Associated Press

MEDTRONIC TOLD TO PAY $400 MILLION IN PUNITIVE DAMAGES

A federal jury awarded $400 million in punitive damages yesterday to a doctor who accused a medical technology company of infringing on his patents for a surgical device to treat spinal injuries.

The punitive damages against Medtronic Inc. are in addition to $110 million the Fridley, Minn., company was ordered last month to pay surgeon Gary Michelson.

Medtronic called the award “unjustified and excessive” and said it will appeal.

The jury said a Medtronic subsidiary, Medtronic Sofamor Danek Inc. of Memphis, Tenn., breached agreements with Michelson to produce and sell implants he invented to treat patients suffering from damaged or diseased spinal discs.

The devices are small metal cages that are inserted between vertebrae.

The total damages could be increased by $60 million since the verdict includes a percentage of the income Medtronic continues to receive from selling the devices.

Michelson had sought a total of $1.7 billion in damages.

– Associated Press

EARNINGS

J&J THIRD-QUARTER PROFIT RISES 13%

Profits at Johnson & Johnson rose 13% for the third quarter on a 10.5 percent increase in worldwide sales, the health care giant reported Tuesday.

Johnson & Johnson, which makes contact lenses, surgical products, contraceptives, and baby and skin care products, had a net income of $2.34 billion, or 78 cents per share, for the July-September quarter, compared to $2.07 billion, or 69 cents a share, for the same 2003 period.

That beat, by 2 cents per share, the consensus forecast of analysts surveyed by Thomson First Call.

Worldwide sales grew to $11.55 billion, up from $10.46 billion a year earlier, although 2.8 percentage points of the increase were from favorable currency exchange rates due to the weak dollar. International sales growth was 10.8%, while American sales growth was 5.9%.

Of its three major divisions, only pharmaceutical posted double-digit gains, with worldwide sales of $5.5 billion representing a 13.4% increase. Consumer products sales rose 9.9%, to $2.02 billion, while medical devices and diagnostics rose 7% to $4.04 billion. J &J issued its report before trading opened on the New York Stock Exchange.

– Associated Press

YAHOO 3RD-QUARTER PROFIT MORE THAN TRIPLES ON ADS

Yahoo! Inc., owner of the world’s second-most-used Internet search engine, said third-quarter prof it more than tripled on higher advertising revenue and a gain from selling shares of Google Inc.

Net income rose to $253.3 million, or 17 cents a share, from $65.3 million, or 5 cents, a year earlier, the Sunnyvale, Calif.-based company said in a statement. Revenue more than doubled to $906.7 million from $356.8 million.

Yahoo and Google, owner of the most used search engine, are competing for advertising as companies shift more spending to the Web from older outlets such as television. Yahoo’s chief executive, Terry Semel, is selling to film studios, automakers, and other big advertisers and using a new search engine to attract more users.

Excluding the gain from selling shares in Google’s initial public offering, Yahoo said it would have earned $124 million, or 9 cents a share. That matched the average estimate of 9 cents a share from 26 analysts surveyed by Thomson Financial.

Revenue, excluding sales Yahoo passes to other Web sites that display advertising it sells, was $655 million. That topped the average estimate of $644.2 million from 24 analysts.

– Bloomberg News

ECONOMY

TRUCKERS, RAILROADS SEEK WORKERS AS CARGO RISES

American truckers including J.B. Hunt Transport Services Inc. and railroads such as Union Pacific Corp. are hiring more workers and asking customers to spread out shipments because of record demand for cargo hauling.

Shipping demand is rising as industrial production surges about 6% this year. The American Trucking Associations’ index of truck shipments last month reached a record and has climbed 15% in the past year. The backlog of cargo ships waiting to unload Asian imports was at a high this week, and rail shipments have risen 5.3% from last year’s record.

Truckers need to offer “a substantial pay increase” to get more drivers, Kirk Thompson, chief executive of J.B. Hunt, at a Georgia Tech University forum in Atlanta on truck and rail demand. Hunt has more than 15,000 workers.

American truckers are paid an average of $43,000 a year, said Robert Costello, the trucking group’s chief economist. He said the group hasn’t determined how many more drivers are needed or how much pay will have to rise to attract them.

The trucking industry needs to hire about 36,000 workers a month this quarter to fill growing demand and replace those who leave the business, said Eric Starks, vice president of freight consulting firm FTR Associates Inc. in Nashville, Ind. There are about 2.2 million intercity truck drivers, he said.

– Bloomberg News

ENERGY

OIL FALLS ON SPECULATION DEMAND DOESN’T WARRANT RECORD PRICE

Crude oil fell more than $1 for the first time in a month after reaching a record $54.45 a barrel in New York on speculation that demand doesn’t warrant prices at this level.

Oil has surged 23% since September 8 on concern that lower American production, caused by Hurricane Ivan, would limit available supplies for refiners making heating oil. Distillate fuels, including diesel and heating oil, account for about a quarter of American refinery output. American heating oil supplies fell 2.3% in the week ended October 1, government figures show.

Crude oil for November delivery fell $1.13, or 2.1%, to close at $52.51 a barrel on the New York Mercantile Exchange. Oil reached $54.45, the highest intraday price since futures began trading in 1983. Futures were up 64% from a year earlier.

In London, the November Brent crude-oil futures contract fell $1.06, or 2.1%, to close at $49.60 a barrel on the International Petroleum Exchange. Brent oil reached $51.50, the highest intraday price since the contract began trading in 1988.

– Bloomberg News

RETAIL GASOLINE RISES TO FOUR-MONTH HIGH

The average American retail price for regular-grade gasoline rose 5.5 cents the past week to $1.993 a gallon, the fourth consecutive weekly gain and the highest since the first week of June, the U.S. Energy Department said.

The increase was largest in California and other states on the West Coast, where prices soared 9.5 cents to $2.241 a gallon, the most expensive region in the country, the department said in a weekly report. Gasoline gained 4.4 cents to $1.965 on the East Coast and rose 5.4 cents to $1.948 in the Midwest.

Retail gasoline prices have surged since Hurricane Ivan tore through the Gulf of Mexico in mid-September and sank oil production platforms, delayed tanker shipments, and forced refineries to shut.

– Bloomberg News