TRADE

DEFICIT NARROWED IN FEBRUARY AS IMPORTS DROP BY MOST IN A YEAR WASHINGTON – The trade deficit narrowed during February as imports took the biggest drop in nearly a year, but analysts expect the gap to resume widening. The U.S. deficit in international trade of goods and services shrank to $65.74 billion from $68.59 billion in January, the Commerce Department said yesterday. The 4.1% decline carried the deficit lower than the $67.50 billion level Wall Street expected. Economists, however, think the shortfall will continue rising. “I think it’s an aberration,” a Wachovia economist, Jason Schenker, said. “It should bounce back in March.”

– Dow Jones Newswires

IN THE COURTS

SKILLING DEFENDS LAY, SAYS THEY COMMITTED NO CRIMES The ex-CEO of Enron, Jeffrey Skilling, spoke up yesterday for the company’s founder, Kenneth Lay, in his third day on the witness stand in the pair’s fraud and conspiracy trial, saying they were a “good team” that committed no crimes. Even though most counts pending against him and Mr. Lay allege crimes that occurred at different times before Enron crashed in scandal in December 2001,an overarching conspiracy count alleges they participated in a sprawling effort to portray Enron as strong when they knew accounting tricks hid bad news and weak ventures. Mr. Skilling appeared confident, alternating between earnestness and occasional annoyance, and told jurors that neither he nor Mr. Lay perpetuated such a ruse. “Did you and Ken Lay ever discuss doing something you knew to be forbidden by law?” a lawyer for Mr. Skilling, Daniel Petrocelli, asked yesterday. “No,” Mr. Skilling said. Later, he added, “It is completely untrue,” and “I was aware of no illegal activity occurring at Enron Corporation.”

– Associated Press

LAWSUIT CHARGES BROKERAGE FIRMS WITH ‘NAKED SHORT SELLING’ An antitrust lawsuit was filed yesterday against the securities industry’s largest brokerage firms over fees charged as a result of “naked short selling.” The lawsuit filed in federal court in Manhattan by Electronic Trading Group alleges that the major broker-dealers charged unearned fees, commissions, or interest on short sales where those broker-dealers failed to borrow or deliver the stock to back a short position. Naked short selling exists when a stock is sold before an arrangement has been put in place to borrow the shares. It’s illegal for most investors, but legal for firms that make markets in stocks and bring liquidity to the market. The complaint names the broker-dealer units of Bank of America Corporation, Bear Stearns, Citigroup, Credit Suisse Group, Deutsche Bank, Goldman Sachs, Lehman Brothers, Merrill Lynch & Company, Morgan Stanley, and UBS AG.

– Dow Jones Newswires

SEARCH ENGINES

MICROSOFT INTRODUCES SEARCH FOR ACADEMIC WORK Microsoft introduced a search engine to scour articles in scholarly journals to attract university researchers and match a service from Google. Windows LiveAcademic Search will include articles from more than 10 publishers and will be available in seven countries. The initial test site will include 8 million articles, a Microsoft general manager, Danielle Tiedt, said. The site is designed to appeal to academics and students, who conduct six times as many Internet searches as typical users, Ms.Tiedt said. Microsoft, owner of the no. 3 Internet search engine, is sparking a new rivalry with Google as it seeks to expand the documents it makes available to Internet users. “Most people think that everything is on the Web, but the really good stuff, because it costs so much to create, really isn’t,” an analyst at Framingham, Mass.-based researcher IDC, Sue Feldman, said.

– Bloomberg News

TAX PREPARATION

H &R BLOCK SAYS FEES ARE UP 3.7% IN FIRST QUARTER H &R Block said late yesterday that first-quarter fees from tax preparation and related services came in at $2 billion, up 3.7% from the same period a year earlier. The average fee per client climbed 6.5% to $156.18, the company added. H &R Block’s digital business served 17.4% more customers than last year, while total clients served climbed 0.8% to 15.8 million, the company reported.

– Dow Jones Newswires