The wait is over

The first Apple iPhones went on sale Friday, ending months of mounting anticipation. But now comes the hard part: will it live up to the hype?

NEW YORK (CNNMoney.com) -- The Apple iPhone, the most-anticipated gadget debut in years, went on sale Friday in the United States, ending months of waiting for diehard Apple fans and signaling the start of what could be the company's biggest test yet.

In New York City, eager buyers streamed into Apple stores when the doors opened, as planned, at 6 p.m. sharp. Similar openings took place across the country as the clock struck 6 p.m. local time.

The intersection of Prince St. and Greene St. in New York's chic Soho district was completely shut down as hundreds of people crowded around the entrance of the Apple store, photographing and shopping for the first iPhone sales.

In-depth: More iPhone madness

Apple store employees made a line just inside the front door and clapped for customers entering and leaving the store.

The mood was much like a rock concert, with people screaming and pumping their fists, and camera flashes going off.

"The guys inside made me feel like a celebrity," said Antonia Leite. "I've been waiting in line forever."

"This is a liminal experience. Do you know what a liminal experience is?," said Johnny Samson, a video producer, who purchased one of the first iPhones. "I've gotta go. I don't want to get robbed."

At the Apple store in Palo Alto, Calif., Apple CEO Steve Jobs made a surprise visit soon after the cell phone went on sale. Wearing a baseball cap and black t-shirt, he greeted customers before rejoining his wife.

What do you think of the iPhone?

In the five months since Jobs announced Apple's move into the mobile phone business, the iPhone has become the most widely-anticipated product launch in recent memory.

The phones, which retail for $499 for 4 gigabytes of storage or $599 for 8 gigabytes of storage, are being sold at Apple and AT&T Wireless stores.

Apple, which was to begin selling the phone online late Friday, has said shoppers will be limited to two devices apiece. AT&T, the exclusive carrier, plans to sell one iPhone per customer and at company stores only.

iPhone mania was in full bloom Friday as hundreds of people camped out at Apple stores in New York and elsewhere for their shot at the pricey gadgets.

iPhone accessories: sneak preview

The line outside the Soho store snaked for blocks as consumers stood, sat under umbrellas and lounged on folding chairs. The faithful started lining up late Tuesday, weathering fierce thunderstorms and rain, with many pulling out tarps to protect themselves from periodic downpours.

By Friday morning, umbrellas and lawn chairs were scattered on the sidewalk and some people were lying on the ground with jackets over their heads. Apple employees gave away bottles of water early in the day.

"I'm actually supposed to be at work right now," said one would-be buyer, who asked for obvious reasons to remain anonymous.

Top 10 product launch hits and misses

At the Apple Store on Manhattan's tony Fifth Avenue, the man who was fifth in line was planning to propose to his girlfriend with a ring and an iPhone. For lunch Friday, a 44 year-old graphic designer who was No. 88 in line, ordered foie gras and sparkling lemonade delivered.

Earlier in the day Krispy Kreme handed out free donuts and FAO Schwarz, the venerable toy store adjacent to Apple's shop, gave away gift bags to the first 100 people in line.

In San Francisco, eager shoppers who began lining up early Thursday outside the Apple Store near Union Square, spent the night on folding chairs and in sleeping bags - one even brought a mattress. A 54-year-old marketing specialist who was first in line claimed he'd been offered $1,200 for his slot (Live coverage).

Meanwhile, a few dozen miles to the south in Palo Alto - in the heart of Silicon Valley and Jobs' backyard - about 50 iPhone buyers spent Thursday night typing on their laptops, playing Scrabble, and honoring an numbering system so nobody lost their place in line (Live coverage).

Sell Apple, buy Google

The iPhone represents a crucial test for Apple (Charts, Fortune 500) as it evolves from a computer maker into an entertainment device company. While the company's stock has soared on the blowout success of its iPod music player, the response to its more recent foray into Web television, dubbed Apple TV, has been muted.

Meanwhile, AT&T (Charts, Fortune 500), the country's largest wireless carrier by customers, is banking on the iPhone to give its stodgy image a much-needed makeover. The company, which is in the process of integrating Cingular, is also looking to justify generous concessions it made to Jobs & Co to land the iPhone deal.

While the early iPhone reviews have so far been glowing, there are some concerns, namely its lack of common features like GPS and the decision to use AT&T's sluggish broadband instead of a faster 3G network.

Stocks finish flat

Fed's decision to keep rates steady was widely expected, and doesn't do much to rally an inflation weary market.

NEW YORK (CNNMoney.com) -- Stocks bounced around a bit Thursday, ultimately finishing flat, after the Federal Reserve held interest rates steady but indicated it was still concerned about inflation.

The Dow Jones industrial average (down 5.45 to 13,422.28, Charts) and the broader S&P 500 (down 0.63 to 1,505.71, Charts) were both virtually unchanged, according to early tallies. The tech-heavy Nasdaq (up 3.02 to 2,608.37, Charts) gained about 0.1 percent.

In its policy statement, the Fed kept its target for the fed funds rate, an overnight lending rate for banks, steady 5.25 percent, where it has stayed since August 2006.

Fed holds rates steady again

The Fed dropped the word "elevated" from its description of core inflation, but added that "sustained moderation in inflation pressures has yet to be convincingly demonstrated."

"It might be a little less hawkish than last time around," said Peter Cardillo, chief market economist at Avalon Partners. "But is inflation still on the minds of the Fed? Indeed."

Treasury bonds edged lower on the news, pushing the yield on the benchmark 10-year note to 5.10 percent from 5.08 percent late Wednesday. Bond prices and yields move in opposite directions.

Oil closed higher, and the dollar rose against the euro and yen.

Here's what else moved markets Thursday:

The Fed's moves, while not a surprise, were nonetheless closely watched by investors since inflation and rate hike fears have rattled markets in recent weeks, helping to push the 10-year note yield to a 5-year high earlier this month.

Investors dislike rising interest rates since they make borrowing more expensive, eating into corporate profits.

Stocks traded flat for most of the morning, with investors awaiting the Fed's decision and largely ignoring a reading on first-quarter economic growth.

Before the opening bell, the Commerce Department released its final revision of first-quarter economic growth, which showed the nation's economy grew at a slightly faster pace in the first quarter than previous estimates. But the reading missed forecasts and also included showed a slight pickup in a key inflation reading.

In corporate news, troubled U.S. automaker General Motors agreed to sell its Allison transmission unit to private-equity firms Carlyle Group and Onex for $5.6 billion. GM (up $0.74 to $38.15, Charts, Fortune 500) shares jumped over 2 percent.

Builder KB Home (down $0.54 to $39.89, Charts, Fortune 500) reported an unexpected quarterly net loss of $1.93 a share as revenue tumbled due to the weak housing market. KB shares lost about 1 percent.

And Capital One Financial (up $0.87 to $79.67, Charts, Fortune 500), the credit card issuer and banking company, said after the closing bell Wednesday that it plans to cut about 2,000 jobs, or 6 percent of its work force, as it struggles with mortgage banking losses and higher credit costs. Its shares rose over 1 percent.

Oil prices rose. U.S. light crude gained 60 cents to settle at $69.57 a barrel on the New York Mercantile Exchange.

The dollar rose slightly against the euro and yen.

Market breadth was positive. On the New York Stock Exchange, winners beat losers 3 to 2 on volume of 1.12 billion shares. On the Nasdaq, advancers topped decliners by a narrow margin as 1.54 billion shares changed hands.

Stocks snap losing streak ahead of Fed

Major gauges rally late in the session helped by push from tech sector as investors await Fed rate decision.

NEW YORK - A late session push by the tech sector helped major gauges end their three-day losing streak, even amid concerns about the manufacturing sector and higher oil prices.

The Dow Jones industrial average (up 90.07 to 13,427.73, Charts) climbed 90 points, or about 0.7 percent, while the broader S&P 500 (up 13.45 to 1,506.34, Charts) rose 0.9 percent.

The tech-laden Nasdaq (up 31.19 to 2,605.35, Charts) jumped 1.2 percent, while the Russell 2000 (up 12.33 to 838.46, Charts) small cap index rallied 1.5 percent higher.

The tech sector delivered a big push late in the session as shares of software maker Oracle (up $0.53 to $19.69, Charts, Fortune 500) posted higher quarterly profit late Tuesday, beating Wall Street estimates. Shares of the tech bellwether rose nearly 2 percent in Nasdaq trading Wednesday after the company issued an upbeat outlook for the current quarter.

Has the bull market run its course?

Other techs leading the charge included Intel Corp. (up $0.41 to $23.79, Charts, Fortune 500), Salesforce.com Inc. (up $2.89 to $43.92, Charts), Dell Inc. (up $0.40 to $27.96, Charts, Fortune 500) and Internet measurement firm comScore (up $6.97 to $23.47, Charts), whose shares soared 42 percent in its market debut Wednesday.

The financial sector also provided a boost, as shares of Bear Stearns (up $3.96 to $143.31, Charts, Fortune 500), Goldman Sachs (up $5.16 to $219.33, Charts, Fortune 500) both finished over 2 percent higher.

Stocks fell early in the session following a bigger than expected drop in big-ticket item orders, which fell by 2.8 percent in May.

A jump in the price of oil over $1 a barrel also weighed on markets. Oil climbed Wednesday after the latest report on U.S. oil and energy inventories revealed a drop in gasoline inventories. U.S. light crude for August finished up $1.20 to $68.97 a barrel on the New York Mercantile Exchange.

Stock have shown a lot of volatility recently, with the Dow rallying more than 100 points each of the last two days until gains evaporated amid ongoing concerns about the subprime mortgage sector and its impact on the recent buyout boom.

Hugh Johnson, chief strategist for ThomasLloyd Global Asset Management, said the recent erratic erratic behavior of stocks makes sense at a time when second quarter earnings numbers and big economic reports like the June employment report, lay on the horizon.

"It's hard to get portfolio managers to make any big commitments," said Johnson.

Summer vacation for the Fed

While it wasn't the primary focus of Wednesday's trading activity, Wall Street was well aware that the Federal Reserve had begun its two-day policy meeting. But the central bank, which is widely expected to hold interest rates steady at 5.25 percent, will not release its rate decision and its closely watched statement until Thursday afternoon.

Investors will have a few economic reports to sift through Thursday including the final reading on first-quarter gross domestic product and weekly jobless claims, both of which are due out before the market open.

Stocks in focus

On the earnings front, Bed Bath and Beyond Inc. (Charts, Fortune 500) posted higher quarterly results late Wednesday on stronger sales.

Nike (Charts, Fortune 500) shares jumped nearly 9 percent Wednesday after the apparel maker reported better than expected fourth-quarter profits in the previous session.

Shares of the food giant Conagra (up $1.14 to $26.70, Charts, Fortune 500) finished 4.4 percent higher after posting better than expected quarterly earnings Wednesday, citing strength in its energy trading and fertilizer divisions.

In corporate news, Blackstone Group (down $0.83 to $29.92, Charts) shares marked their third straight day of declines by easing 2.7 percent, falling below last week's initial public offering price of $31 a share.

Shares of the musical instrument retailer Guitar Center (up $9.92 to $59.98, Charts) jumped nearly 20 percent after the company said it agreed to a $2.1 billion buyout offer from private equity firm Bain Capital Partners.

Market breadth was positive. Winners beat losers 3 to 1 on volume of 1.76 billion shares on the New York Stock Exchange. On the Nasdaq, advancers topped decliners by 2 to 1 on volume of 2.06 billion shares.

Treasury prices were lower, raising the yield on the benchmark 10-year note to 5.09 percent from 5.08 percent late Tuesday. Bond prices and yields move in opposite directions.

In currency trading, the dollar moved higher versus the euro and eased against the yen.

COMEX gold for August fell 50 cents to $644.80 an ounce.

Woeful on Wall Street

Futures point to lower open as Fed prepares to start two-day meeting; subprime worries plague markets worldwide.

NEW YORK.. Stock futures pointed to another weak session Wednesday as investors remained nervous about subprime concerns and the latest economic readings ahead of the start of a two-day Federal Reserve meeting.

S&P and Nasdaq futures edged higher at about 6:30 a.m. ET but a comparison to fair value pointed to a negative opening for U.S. stocks.

Stocks have had trouble finding their footing this week amid ongoing concerns about the subprime mortgage sector. The Dow has rallied more than 100 points each of the last two days but the gains were thwarted by selloffs late in each of the sessions.

"There's continued worries about subprime and what might happen," said Peter Cardillo, chief market economist , Avalon Partners. "I think that we probably are heading for another nervous day."

After the close Tuesday, Wall Street investment bank Bear Stearns (Charts, Fortune 500) said it does not plan to bail out the second of two struggling hedge funds. The problem in the funds helped start the current slide in U.S. stocks last week. Bear Stearns cited stabilizing markets, but Bill Gross, the manager of the largest bond fund in the world, said the subprime crisis was not isolated and would eventually take a toll on the U.S. economy.

Treasury prices edged higher, trimming the yield on the 10-year note to 5.06 percent from 5.08 percent late Tuesday. Bond prices and yields move in opposite directions.

Oil fell in early trading, ahead of the 10:30 a.m. ET report on U.S. fuel inventories. U.S. light crude lost 41 cents to $67.36 a barrel in electronic trading.

Investors will take in a report on durable goods orders as well as the government's weekly report on crude inventories. The durable goods reading is forecast show a 1 percent decline in demand for big ticket items in May after a 0.8 percent rise in April, according to economists surveyed by Briefing.com.

Fed policymakers also meet today, but their closely watched statement isn't due until Thursday. Economists widely expect the central bank to hold rates steady.

In global trade, European shares fell at the open, and markets in Asia had another losing session. The dollar rose against the euro but fell versus the yen in early trading.

In major corporate news, software maker Oracle (Charts, Fortune 500) reported a jump in quarterly profit late Tuesday. The results beat the consensus forecast of analysts, and the company also issued an upbeat outlook for the current quarter. Shares of the tech bellwether gained 0.6 percent in after-hours trading, but slipped 0.4 percent in early Frankfurt trading.

Nike (Charts, Fortune 500) reported fourth-quarter profit rose by nearly a third on surprisingly strong sales of its shoes and apparel, as it beat forecasts. Shares gained more than 5 percent following the after-hours report.

Underwriters pulled a $1.5 billion bond offering that was to be used to finance the purchase of U.S. Foodservice from Royal Ahold (Charts) by two private equity firms - the latest sign that the trouble in the debt markets could put a crimp in the recent buyout boom.

BAE under probe over Saudi dealings

British defense company under investigation by U.S. regulators; firm denies breaking anti-corruption laws as shares fall in early trading

LONDON (Reuters) -- The U.S. Department of Justice has launched an investigation of Britain's BAE Systems Plc over the defense company's compliance with anti-corruption laws, including its dealings with Saudi Arabia.

Shares in BAE (Charts), Europe's biggest military contractor, fell as much as 10 percent in early Tuesday trading on fears the probe could lead to fines, disrupt the group's extensive interests in the United States, and damage its relations with Saudi Arabia.

Britain's Serious Fraud Office dropped an inquiry into BAE's dealings with Saudi Arabia in December last year after Prime Minister Tony Blair said it would harm national security and relations with the Gulf kingdom.

"BAE Systems has been notified by the U.S. Department of Justice that it has commenced a formal investigation relating to the company's compliance with anti-corruption laws including the company's business concerning the Kingdom of Saudi Arabia," the company said in a brief statement.

Radical new Boeing aircraft takes flight

BAE has denied making wrongful payments in its dealings with Saudi Arabia, which include Britain's biggest arms export deal, known as al-Yamamah, that dates back to the 1980s and was worth an estimated £43 billion ($86 billion).

The firm, which makes Typhoon jet fighters, Nimrod reconnaissance planes and nuclear-powered submarines, also has a new agreement, known as Al-Salam, to supply Saudi Arabia with 72 Eurofighter jets.

"This is bad for sentiment and could delay the signing of the Salam deal," said Panmure Gordon analyst Nick Cunningham. "But it is unlikely to have a material financial impact and could ultimately cauterize the seeping wound of Saudi related allegations."

U.S. force

BAE has become an increasingly powerful force in the lucrative U.S. military market, making two multibillion-dollar acquisitions there in as many years after selling its stake in troubled European plane maker Airbus.

One analyst, who declined to be named, said the Department of Justice (DoJ) investigation followed lobbying by BAE's U.S. rivals seeking to disrupt the latest deal with Saudi Arabia, though he saw little chance of this happening.

He noted that BAE received approval last week from the Committee on Foreign Investment in the United States for its latest deal -- the $4.1 billion purchase of body armor and army truck maker Armor Holdings (Charts) - and said this suggested there was no real threat to BAE's U.S. business from the DoJ inquiry.

"The uncertainty is whether there will be any fines, and what those might be," he said.

Ethics

British media reports have accused BAE of paying £1 billion over a decade to Saudi Prince Bandar bin Sultan in connection with the al-Yamamah deal.

Bandar, former Saudi ambassador to the United States and now Secretary General of the Saudi National Security Council, has strongly denied the sums involved represented secret commissions to him, describing this as "a zenith in fabrication."

Big plane, big problems

Solicitors for Bandar have said the U.S. accounts at Riggs Bank into which the funds were paid were in the name of the Saudi Arabian Ministry of Defense and Aviation. Any monies paid from them were exclusively for ministry purposes.

BAE has said al-Yamamah was a government-to-government agreement and so all payments involved were made with the express approval of both the Saudi and British governments.

A spokesman at Blair's office said: "We can't comment on legal proceedings that haven't started yet, but we will be watching the proceedings with interest." Britain's Ministry of Defense said it had no immediate comment.

BAE said earlier this month it had asked a former top English law official, Lord Woolf, to lead a review of its business ethics, although this will not include its past dealings with Saudi Arabia.

Chemical reaction

From gunpowder to polymers, DuPont has survived by adapting. Now the company is in the midst of its most audacious transformation. The goal: to improve the environment and make a fortune doing it.

(Fortune Magazine) -- Not so long ago the scene inside Room 406 of the U.S. Senate's Dirksen building would have been inconceivable. There, on a mid-February morning, sat top executives of three old-economy behemoths - DuPont, the 205-year-old science company; BP, the oil giant; and PG&E, California's largest utility. The corporate chieftains weren't there to fend off regulation, but to request it.

"Prompt action by Congress is needed" on climate change, DuPont CEO Chad Holliday told the Senate Committee on Environment and Public Works. DuPont (Charts) is part of a new group called the U.S. Climate Action Partnership (USCAP), which has proposed a plan that would force companies to reduce their greenhouse-gas emissions and also implement a market mechanism that would lower the costs of doing so.

USCAP counts GE (Charts), Alcoa (Charts), Caterpillar (Charts), and several power companies as members, as well as groups like the Natural Resources Defense Council and the World Resources Institute, whose president was sitting shoulder to shoulder with Holliday. Some of the Senators seemed dazzled by the union of gray and green. "You've got our attention," said Virginia Republican John Warner.

Faster than you can say "cellulosic ethanol," the idea of greening business has gone from eccentric to mainstream. But DuPont has been at it much longer than most. Since 1990 the company has been working its way through the two stages of sustainability: first, drastically reducing how much it pollutes (an effort that continues), and second, embracing sustainability as a strategic goal. DuPont's journey makes it a good test case to examine the opportunities - and challenges - for big industrial companies that want to make environmentalism both an operational imperative and a core principle.

By DuPont's definition, $5 billion of its $29 billion in revenue comes from sustainable products. These can be pure-green materials, such as bio-PDO, a corn-based substance that can be turned into a fiber for suits or carpets or even made into deicing solutions for airplanes. Or they can be products such as Tyvek - a chemically based material that dates to the 1950s - that can be used in new ways to improve energy efficiency.

What remains unclear is whether this effort will pay off - for DuPont or for any other company that declares its devotion to the planet. "People don't pay for green for green's sake," says Deutsche Bank analyst David Begleiter. "They pay for black, which is earnings. Green is not the new black. Black is still black."

Chad Holliday wouldn't disagree; he likes black too. He has very practical reasons for requesting legislation on greenhouse gases. For starters, he thinks climate-change rules are inevitable, and he'd like to help shape them, in particular to make sure that DuPont gets credit for the massive voluntary emission cuts it has already made - 72 percent since 1990 (with plans for another 15 percent by 2015). No doubt he also wouldn't mind if his competitors faced the same restrictions DuPont has imposed on itself. More important, Holliday, like GE's Jeff Immelt, who is taking a similar tack, believes his company could make a lot of money in a carbon-constrained world on everything from alternative fuels to materials that save energy.

Holliday, 59, is a DuPont lifer. An industrial engineer by training, he landed a summer job at the company while attending the University of Tennessee, in his home state, then signed on full-time after graduation in 1970. Relaxed and chatty, he is quick with self-deprecating comments ("I've never had an original idea - it's always somebody else's idea, okay?"). He has been known to show up for interviews in one of the two suits he had made for himself out of DuPont's corn-based bio-PDO. (For Fortune, he opts for a traditional fiber, in pinstripes.)

Despite his genial demeanor, Holliday is well aware that his company's stock stands about 10 percent below its price when he took over in February 1998. (The Dow rose roughly 17 percent during the same period.) A big reason for the feeble showing has been the struggle to reinvent DuPont. Yes, that $5 billion in revenue from sustainable products is impressive, but it's taken an awful lot of pain - plus the occasional zigzag - to get there.

DuPont's overhaul has required $60 billion in deals. The company sold its Conoco oil unit in 1999 for $11.7 billion - and thus missed out on one of the largest oil booms in history. It used $7.7 billion of the proceeds to acquire the 80 percent of seed maker Pioneer Hi-Bred it didn't own. But it overpaid, and had to write off $2.9 billion in goodwill on the deal a couple of years later. And after years of fretting, in 2004 DuPont sold off its Invista unit, which manufactures materials such as nylon, a core product for more than half a century. By agonizing over the move, DuPont probably missed getting the best price, selling on the wrong end of the commoditization curve. Finally - and this decision seems hard to criticize - it bailed out of a brief foray into the pharmaceutical business.

When all the buying and selling was over, in 2004, what remained was no longer a $40 billion chemical and polymer titan but a $29 billion enterprise that now uses way more chemicals than it produces - and derives a large chunk of its revenues from fertilizers and seeds for corn and soy, while continuing to make well-known DuPont brand names such as Kevlar, Corian, Tyvek and Teflon. The transformation was not DuPont's first; 75 years ago it abandoned the explosives business and reincarnated itself as the haute science inventor of polymer chemistry that would shape our lives with the likes of nylon, Lucite, and Dacron.

"That transition took decades of fundamental research," says Paul Tebo, who retired as DuPont's top sustainability executive in 2004. "And what you are seeing now is the same type of transition."