CITYWIDE

TIME WARNER SAYS EMPLOYEES’ PERSONAL INFORMATION LOST

Time Warner said computer tapes containing personal information on 600,000 current and former employees have been lost. The Secret Service is investigating the disappearance of a container holding 40 backup tapes, New York-based Time Warner spokeswoman Kathy McKiernan said yesterday. Data-storage company Iron Mountain discovered the loss after a driver who picked up the tapes in New York performed a scan after his delivery in New Jersey, a company spokeswoman, Melissa Burman, said. The probe hasn’t found evidence that the tapes have been accessed or misused, Time Warner said. The case is the second-largest loss of personal data after an incident involving Bank of America, which in February said it lost information on about 1.2 million federal government charge-card accounts. Iron Mountain, the largest seller of record-management services with 200,000 customers worldwide, makes 5 million pickups and deliveries a year with a 99.99% accuracy rating, Ms. Burman said. This year, the company has lost four shipments of tapes, she said. “There are humans in the process and incidents happen,” she said.

– Bloomberg News

WALL STREET

MORGAN STANLEY SHARES FALL AS PURCELL KEEPS HIS JOB

Shares of Morgan Stanley, the world’s biggest securities firm by market value, dropped by the most in more than seven months after the board said it would keep Philip Purcell as CEO, rejecting demands from former executives and some shareholders to fire him.

The stock fell 6.8% a day after directors meeting in Chicago issued a statement in support of Mr. Purcell. The decline reversed a 4.3% gain Friday, the most in 14 months, which followed a CNBC report that directors would meet over the weekend.

The board eased rules that would allow Mr. Purcell to be ejected in the future in an attempt to appease investors disappointed with a 31% drop in the stock price in the past five years.

Eight former Morgan Stanley executives who want Mr. Purcell fired said the changes don’t go far enough. The group has been calling publicly for Purcell’s ouster since March 29. The New York-based company’s shares closed at $49.39, down $3.23, in composite trading on the New York Stock Exchange.

– Bloomberg News

ECONOMY

APRIL FACTORY INDEX EXPANDS MORE SLOWLY

Domestic manufacturing expanded in April at the slowest pace since July 2003 as factories cut orders and inventories, suggesting companies may be losing confidence in the strength of the economy. The Institute for Supply Management yesterday said its factory index fell to 53.3 from 55.2 in March. Readings higher than 50 indicate growth. A gauge of new orders fell to the lowest level since May 2003, the month before the overall index started what has been its longest expansion in 16 years. Factories pared inventories in April at the fastest pace in a year as a safeguard against slowing demand, yesterday’s report showed. Higher energy costs may force businesses to control other spending, slowing the economy this year. The Federal Reserve, which is trying to contain inflation, is forecast to raise its target interest rate today for the eighth time since June. “There’s been a slowdown in demand that’s caused inventories to build up more than companies wanted, so companies cut back on orders,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Incorporated in New York, who had predicted the index would fall to 53. Unless business spending picks up, “it’s hard to make a case for a real strong second half.”

– Bloomberg News