WASHINGTON (AP) - U.S. and European antitrust regulators aren t likely to prevent Microsoft from buying Yahoo, analysts said Friday, though scrutiny of the deal could drag on for months.
A major factor weighing in Microsoft Corp. s favor, analysts said, is Google Inc. s dominance in the online search and advertising businesses -- the two areas regulators are likely to focus on when weighing market power issues raised by the nearly $45 billion unsolicited bid.
The Justice Department said it is "interested" in reviewing competition issues raised by Microsoft s surprise offer. The Federal Trade Commission and European Union officials declined to comment. If the deal goes through, analysts expect Congress and European regulators to review the combined company s increased competitive edge.
"I don t see this just sailing through, regulators will look at it," Ted Henneberry of the London law firm Heller Ehrman said. But even after a review that could take up to six months, he said a Microsoft-Yahoo combination isn t likely to be stopped because the new entity s share of the online ad space would still be dwarfed by Google, which already controls nearly 60 percent of the U.S. search market.
"The fact that Google dominates this business will be a big factor in (Microsoft s) favor in trying to get this approved by the regulators," said Keith Hylton, a professor of antitrust law at Boston University.
Alternatively, a combined Yahoo Inc. and Microsoft -- which are the second and third largest U.S. search engines -- could ease concerns about Google s growing power in the ad space. By combining, Microsoft and Yahoo would have a 33 percent share of the U.S. search market, according to the latest data from comScore Media Metrix.
The Federal Trade Commission in December approved Google s $3.1 billion purchase of online advertising company DoubleClick Inc., but European Union regulators are still examining the deal and Google has said it won t go forward without their blessing. (Microsoft lobbied hard against the deal, arguing that it would give Google a dominant position in the online ad market.)
The FTC s OK of the Google-DoubleClick deal surely influenced Microsoft s decision to bid for Yahoo, said Joseph Turow, a professor at the University of Pennsylvania s Annenberg School of Communications who has been critical of the agency and fears that industry consolidation will be bad for consumers.
"Despite the appearance of unlimited choice in the new media environment, people s online activities will be tracked and shaped by a very small number of companies who care far more about surveillance and targeted advertising than the public interest," Turow said.
Marc Rotenberg, executive director of the Electronic Privacy Information Center, agreed and said "the problem of profiling Internet users will become more severe if mergers go forward without appropriate privacy safeguards."
Many Wall Street analysts expect regulators to approve the transaction, which Yahoo said it will "carefully and promptly" study.
Sen. Herb Kohl, D-Wis., chairman of the Senate antitrust subcommittee, said the same issues that prompted lawmakers to review the Google-DoubleClick deal exist in a potential Microsoft-Yahoo combination, including examining how it affects consumers, advertisers and businesses "who increasingly use the Internet for their news, commerce and entertainment."
If Yahoo accepts Microsoft s offer, the subcommittee expects to hold hearings to "explore the competitive and privacy implications of the deal," Kohl said.
A federal judge this week extended by 18 months court oversight of Microsoft s market power, which began in 2002 after a landmark antitrust settlement. Hylton said Justice has been relatively lenient with Microsoft, compared to state attorneys general who pushed for the extension of court oversight of the software giant. Justice officials said the 2002 antitrust settlement had largely served its purpose and should expire.
Shares of Yahoo added $8.84, or 46.1 percent, to $28.02 in afternoon trading, while Microsoft fell $2.15, or 6.6 percent, to $30.45.
AP Writers Christopher S. Rugaber, Michael Liedtke, Jessica Mintz and Aoife White contributed to this report
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Saturday, February 2, 2008
EconoLog
NEW YORK (AP) - Is the U.S. economy slipping into recession? Economists, analysts, company executives and investors are increasingly recognizing the possibility. Following are some comments Friday assessing the state of the economy, and what may happen if it slides into a recession:
-- Analysts from Moody s in a conference call cited heightened fear of a recession as one of the reasons the ratings agency is likely to downgrade some bond insurers financial-strength ratings by the end of the month.
-- Goldman Sachs analyst Tetsufumi Yamakawa said in a client note the economic expansion that began in Japan in January 2002 will soon yield to a recession if it has not already. The turmoil in U.S. markets did not trigger this recession, Yamakawa said, but rather a slump in consumer spending, a slowdown in exports and stricter regulations.
-- The last two times the New York Giants have played in the Super Bowl coincided with recession. The 2001 recession started a few months after the Giants lost to Baltimore in Super Bowl XXXV, while the Giants beat Buffalo in Super Bowl XXV about three-quarters through the 90- 91 recession.
-- Citi Investment Research analyst Chip Dillon said he is favorable on containerboard stocks because they tend to do well during and just after recessions.
-- CVS Caremark Corp., which posted same-store sales growth of 4 percent in January versus 2 percent in December, should mitigate recession fears with the sales report, said Wachovia Capital Markets analyst Matt Perry.
-- In a note titled "In Style: Monthly Review of Style and Strategy Performance," Keith Miller and John Rowe of Citi Investment Research said markets struggled in January because of concerns over recession. Strategies that sought to put money into "growth" stocks, or companies poised to grow, did poorly, while many "value" investors, who try to figure out whether stocks are over- or under-valued by the market, did well.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
-- Analysts from Moody s in a conference call cited heightened fear of a recession as one of the reasons the ratings agency is likely to downgrade some bond insurers financial-strength ratings by the end of the month.
-- Goldman Sachs analyst Tetsufumi Yamakawa said in a client note the economic expansion that began in Japan in January 2002 will soon yield to a recession if it has not already. The turmoil in U.S. markets did not trigger this recession, Yamakawa said, but rather a slump in consumer spending, a slowdown in exports and stricter regulations.
-- The last two times the New York Giants have played in the Super Bowl coincided with recession. The 2001 recession started a few months after the Giants lost to Baltimore in Super Bowl XXXV, while the Giants beat Buffalo in Super Bowl XXV about three-quarters through the 90- 91 recession.
-- Citi Investment Research analyst Chip Dillon said he is favorable on containerboard stocks because they tend to do well during and just after recessions.
-- CVS Caremark Corp., which posted same-store sales growth of 4 percent in January versus 2 percent in December, should mitigate recession fears with the sales report, said Wachovia Capital Markets analyst Matt Perry.
-- In a note titled "In Style: Monthly Review of Style and Strategy Performance," Keith Miller and John Rowe of Citi Investment Research said markets struggled in January because of concerns over recession. Strategies that sought to put money into "growth" stocks, or companies poised to grow, did poorly, while many "value" investors, who try to figure out whether stocks are over- or under-valued by the market, did well.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Business Highlights
SAN FRANCISCO (AP) - Microsoft Corp. has pounced on slumping Internet icon Yahoo Inc. with an unsolicited takeover offer of $44.6 billion in its boldest bid yet to challenge Google Inc. s dominance of the lucrative online search and advertising markets.
The surprise offer of $31 per share, made late Thursday and announced Friday, seizes on Yahoo s weakness while Microsoft tries to muscle up in a high-stakes battle with Google likely to define the technology landscape for years to come.
In a statement Friday, Yahoo said it will "carefully and promptly" study Microsoft s bid.
With its profits steadily sliding, Yahoo s stock slipped to a four-year low earlier this week and a new management team has been trying to steer a turnaround but sees more turbulence through 2008.
NEW YORK (AP) -- Wall Street capped a week of big gains with another sizable advance Friday after investors set aside anxiety over news that the economy lost jobs last month and focused on Microsoft Corp. s bid for Internet company Yahoo Inc. and a possible rescue plan for the troubled bond insurance sector.
The Dow Jones industrial average and the Standard & Poor s 500 index each rose more than 4 percent for the week, their steepest gains since March 2003.
Stocks fluctuated at times Friday, however, as investors weighed seemingly contradictory readings on the economy. Wall Street was pleased by Microsoft s $44.6 billion bid for Yahoo. Merger news, which often energizes stocks, has been in short supply for months. But the mix of economic news reminded investors of the continuing fallout from the housing and mortgage crisis.
WASHINGTON (AP) -- In a shower of pink slips, U.S. employers cut jobs last month for the first time in more than four years, the starkest signal yet that the economy is grinding to a halt if it hasn t already toppled into recession.
Conditions are deteriorating, according to the latest employment snapshot by the Labor Department, which showed nervous employers slicing payrolls by 17,000. The country hadn t seen such a nationwide job loss since 2003, when employers were still struggling to recover from the last previous recession.
Job losses were widespread in January. Factories, construction companies, mortgage brokers and real-estate firms were among those eliminating jobs -- casualties of the housing bust and credit crunch. The government cut jobs for the first time since last July.
HOUSTON (AP) -- Beating its own record to rack up the largest annual corporate profit in American history, Exxon Mobil Corp. said Friday it earned $40.6 billion for the year, reaping the benefits of crude-oil prices around $100 a barrel.
Exxon Mobil also topped its own record for profit in a single quarter, posting net income of $11.7 billion for the final three months of the year -- about $1 billion more than the same period in 2005, the previous quarterly record.
Chevron Corp., No. 2 behind Exxon Mobil among U.S. oil companies, also had its best year ever in 2007, saying Friday that it banked a profit of $18.7 billion.
KANSAS CITY, Mo. (AP) -- President Bush pressed Congress to pass an economic rescue package, saying Friday s labor report marking the end of a 52-month streak of national job growth was another "troubling" sign that the economy is sputtering.
Bush toured Hallmark Cards Inc. in the nation s heartland to push a plan of tax rebates for millions of people and tax breaks for companies. The stimulus package, passed by the House, has hit roadblocks in the Senate.
The president spoke just hours after the Labor Department reported that employers cut 17,000 jobs in January -- the first such reduction in more than four years.
NEW YORK (AP) -- Oil prices fell sharply Friday, closing well under $90 a barrel after a string of dismal economic reports renewed worries that a possible U.S. recession could stunt oil demand.
Responding to recent price declines, OPEC said Friday it will maintain current oil output levels.
The week ended with the Labor Department reporting that employers cut 17,000 jobs last month, the first reduction in more than four years and a sign that the economy continues to weaken. Construction spending also fell by a record amount, according to the Commerce Department, reflecting a sharp pullback in residential building.
VIENNA, Austria (AP) -- OPEC decided Friday to keep pumping oil at present levels -- a rebuff to Washington and a possible prelude to cutting production as early as next month if the shaky U.S. economy puts a dent in demand.
The decision was taken despite U.S. urging -- backed by other major consumers -- for more oil on the market to cool prices and relieve inflationary pressures that have contributed to fears of a global economic downturn.
But the 13-nation Organization of Petroleum Exporting Countries would not be swayed from arguments that supplies were adequate and that speculators and geopolitical jitters, not oil availability, were driving the market.
WASHINGTON (AP) -- Government regulators said Friday the connection between Pfizer s anti-smoking drug Chantix and serious psychiatric problems is "increasingly likely."
The Food and Drug Administration said it has received reports of 37 suicides and more than 400 of suicidal behavior in connection with the drug. In November, the agency began investigating reports of depression, agitation and suicidal behavior among patients taking the popular twice-daily pill.
The agency s announcement comes two weeks after Pfizer added stronger warnings to the drug. In doing so, the company stressed that a direct link between Chantix and the reported psychiatric problems has not been established, but could not be ruled out.
DETROIT (AP) -- All major automakers except for General Motors Corp. saw their U.S. sales drop in January to start what industry analysts have predicted will be the worst auto sales year in the United States in more than a decade.
GM, led by strong crossover vehicle sales, reported an increase of 2.6 percent in January when compared with the same month last year.
But Toyota Motor Corp., which had seen strong growth last year, said Friday its January light vehicle sales dropped 2.3 percent, to 171,849 in January from 175,850 in January 2006. Its performance still was strong enough to beat Ford for the No. 2 U.S. sales spot.
SHANGHAI, China (AP) -- Alcoa Inc. and Aluminum Corp. of China jointly acquired 12 percent of the shares of global mining company Rio Tinto PLC in a deal believed to be worth $14.05 billion, the companies said Friday.
It is the largest overseas investment ever by a Chinese company, Aluminum Corp. of China said, and could very well obstruct a bid from Anglo-Australian mining giant BHP Billiton for Rio Tinto.
Alcoa said it contributed $1.2 billion (810 million euros) to the total investment.
WASHINGTON (AP) -- The Federal Reserve said Friday it will provide $60 billion in fresh cash to commercial banks in two auctions in February and will keep holding auctions every other week for as long as needed to ease the credit crisis.
The new auctions, to be held on Feb. 11 and Feb. 25, will mark the fifth and sixth times the Fed has used a new auction process announced in December to provide cash-strapped banks with extra reserves.
LOS ANGELES (AP) -- The Walt Disney Co. said on Friday it signed Chief Executive Robert Iger to a new five-year deal that will pay him a base salary of at least $2 million a year through 2013.
He could also receive $10 million or more each year in bonuses.
In a statement Friday, the Burbank, Calif.-based company s board of directors praised Iger s job performance, noting the executive presided over record revenues, net income and earnings per share.
Iger s previous contract was set to expire Sept. 30, 2010. His new contract runs through Jan. 31, 2013.
By The Associated Press
The Dow Jones industrial average rose 92.83, or 0.73 percent, to 12,743.19 after climbing more than 200 points Thursday.
Broader stock indicators also moved higher. The Standard & Poor s 500 index rose 16.87, or 1.22 percent, to 1,395.42, and the Nasdaq composite index advanced 23.50, or 0.98 percent, to 2,413.36.
Light, sweet crude for March delivery dropped $2.79 to settle at $88.96 a barrel on the New York Mercantile Exchange. In London, Brent crude futures settled $2.77 lower at $89.44 a barrel on the ICE Futures exchange.
Heating oil futures decreased 8.02 cents to settle at $2.4489 a gallon a gallon, while gasoline prices lost 7.38 cents to $2.2834 a gallon.
Natural gas futures declined 33.4 cents to settle at $7.740 per 1,000 cubic feet.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
The surprise offer of $31 per share, made late Thursday and announced Friday, seizes on Yahoo s weakness while Microsoft tries to muscle up in a high-stakes battle with Google likely to define the technology landscape for years to come.
In a statement Friday, Yahoo said it will "carefully and promptly" study Microsoft s bid.
With its profits steadily sliding, Yahoo s stock slipped to a four-year low earlier this week and a new management team has been trying to steer a turnaround but sees more turbulence through 2008.
NEW YORK (AP) -- Wall Street capped a week of big gains with another sizable advance Friday after investors set aside anxiety over news that the economy lost jobs last month and focused on Microsoft Corp. s bid for Internet company Yahoo Inc. and a possible rescue plan for the troubled bond insurance sector.
The Dow Jones industrial average and the Standard & Poor s 500 index each rose more than 4 percent for the week, their steepest gains since March 2003.
Stocks fluctuated at times Friday, however, as investors weighed seemingly contradictory readings on the economy. Wall Street was pleased by Microsoft s $44.6 billion bid for Yahoo. Merger news, which often energizes stocks, has been in short supply for months. But the mix of economic news reminded investors of the continuing fallout from the housing and mortgage crisis.
WASHINGTON (AP) -- In a shower of pink slips, U.S. employers cut jobs last month for the first time in more than four years, the starkest signal yet that the economy is grinding to a halt if it hasn t already toppled into recession.
Conditions are deteriorating, according to the latest employment snapshot by the Labor Department, which showed nervous employers slicing payrolls by 17,000. The country hadn t seen such a nationwide job loss since 2003, when employers were still struggling to recover from the last previous recession.
Job losses were widespread in January. Factories, construction companies, mortgage brokers and real-estate firms were among those eliminating jobs -- casualties of the housing bust and credit crunch. The government cut jobs for the first time since last July.
HOUSTON (AP) -- Beating its own record to rack up the largest annual corporate profit in American history, Exxon Mobil Corp. said Friday it earned $40.6 billion for the year, reaping the benefits of crude-oil prices around $100 a barrel.
Exxon Mobil also topped its own record for profit in a single quarter, posting net income of $11.7 billion for the final three months of the year -- about $1 billion more than the same period in 2005, the previous quarterly record.
Chevron Corp., No. 2 behind Exxon Mobil among U.S. oil companies, also had its best year ever in 2007, saying Friday that it banked a profit of $18.7 billion.
KANSAS CITY, Mo. (AP) -- President Bush pressed Congress to pass an economic rescue package, saying Friday s labor report marking the end of a 52-month streak of national job growth was another "troubling" sign that the economy is sputtering.
Bush toured Hallmark Cards Inc. in the nation s heartland to push a plan of tax rebates for millions of people and tax breaks for companies. The stimulus package, passed by the House, has hit roadblocks in the Senate.
The president spoke just hours after the Labor Department reported that employers cut 17,000 jobs in January -- the first such reduction in more than four years.
NEW YORK (AP) -- Oil prices fell sharply Friday, closing well under $90 a barrel after a string of dismal economic reports renewed worries that a possible U.S. recession could stunt oil demand.
Responding to recent price declines, OPEC said Friday it will maintain current oil output levels.
The week ended with the Labor Department reporting that employers cut 17,000 jobs last month, the first reduction in more than four years and a sign that the economy continues to weaken. Construction spending also fell by a record amount, according to the Commerce Department, reflecting a sharp pullback in residential building.
VIENNA, Austria (AP) -- OPEC decided Friday to keep pumping oil at present levels -- a rebuff to Washington and a possible prelude to cutting production as early as next month if the shaky U.S. economy puts a dent in demand.
The decision was taken despite U.S. urging -- backed by other major consumers -- for more oil on the market to cool prices and relieve inflationary pressures that have contributed to fears of a global economic downturn.
But the 13-nation Organization of Petroleum Exporting Countries would not be swayed from arguments that supplies were adequate and that speculators and geopolitical jitters, not oil availability, were driving the market.
WASHINGTON (AP) -- Government regulators said Friday the connection between Pfizer s anti-smoking drug Chantix and serious psychiatric problems is "increasingly likely."
The Food and Drug Administration said it has received reports of 37 suicides and more than 400 of suicidal behavior in connection with the drug. In November, the agency began investigating reports of depression, agitation and suicidal behavior among patients taking the popular twice-daily pill.
The agency s announcement comes two weeks after Pfizer added stronger warnings to the drug. In doing so, the company stressed that a direct link between Chantix and the reported psychiatric problems has not been established, but could not be ruled out.
DETROIT (AP) -- All major automakers except for General Motors Corp. saw their U.S. sales drop in January to start what industry analysts have predicted will be the worst auto sales year in the United States in more than a decade.
GM, led by strong crossover vehicle sales, reported an increase of 2.6 percent in January when compared with the same month last year.
But Toyota Motor Corp., which had seen strong growth last year, said Friday its January light vehicle sales dropped 2.3 percent, to 171,849 in January from 175,850 in January 2006. Its performance still was strong enough to beat Ford for the No. 2 U.S. sales spot.
SHANGHAI, China (AP) -- Alcoa Inc. and Aluminum Corp. of China jointly acquired 12 percent of the shares of global mining company Rio Tinto PLC in a deal believed to be worth $14.05 billion, the companies said Friday.
It is the largest overseas investment ever by a Chinese company, Aluminum Corp. of China said, and could very well obstruct a bid from Anglo-Australian mining giant BHP Billiton for Rio Tinto.
Alcoa said it contributed $1.2 billion (810 million euros) to the total investment.
WASHINGTON (AP) -- The Federal Reserve said Friday it will provide $60 billion in fresh cash to commercial banks in two auctions in February and will keep holding auctions every other week for as long as needed to ease the credit crisis.
The new auctions, to be held on Feb. 11 and Feb. 25, will mark the fifth and sixth times the Fed has used a new auction process announced in December to provide cash-strapped banks with extra reserves.
LOS ANGELES (AP) -- The Walt Disney Co. said on Friday it signed Chief Executive Robert Iger to a new five-year deal that will pay him a base salary of at least $2 million a year through 2013.
He could also receive $10 million or more each year in bonuses.
In a statement Friday, the Burbank, Calif.-based company s board of directors praised Iger s job performance, noting the executive presided over record revenues, net income and earnings per share.
Iger s previous contract was set to expire Sept. 30, 2010. His new contract runs through Jan. 31, 2013.
By The Associated Press
The Dow Jones industrial average rose 92.83, or 0.73 percent, to 12,743.19 after climbing more than 200 points Thursday.
Broader stock indicators also moved higher. The Standard & Poor s 500 index rose 16.87, or 1.22 percent, to 1,395.42, and the Nasdaq composite index advanced 23.50, or 0.98 percent, to 2,413.36.
Light, sweet crude for March delivery dropped $2.79 to settle at $88.96 a barrel on the New York Mercantile Exchange. In London, Brent crude futures settled $2.77 lower at $89.44 a barrel on the ICE Futures exchange.
Heating oil futures decreased 8.02 cents to settle at $2.4489 a gallon a gallon, while gasoline prices lost 7.38 cents to $2.2834 a gallon.
Natural gas futures declined 33.4 cents to settle at $7.740 per 1,000 cubic feet.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
US, EU unlikely to stop Microsoft deal
WASHINGTON (AP) - U.S. and European antitrust regulators aren t likely to prevent Microsoft from buying Yahoo, analysts said Friday, though scrutiny of the deal could drag on for months.
A major factor weighing in Microsoft Corp. s favor, analysts said, is Google Inc. s dominance in the online search and advertising businesses -- the two areas regulators are likely to focus on when weighing market power issues raised by the nearly $45 billion unsolicited bid.
The Justice Department said it is "interested" in reviewing competition issues raised by Microsoft s surprise offer. The Federal Trade Commission and European Union officials declined to comment. If the deal goes through, analysts expect Congress and European regulators to review the combined company s increased competitive edge.
"I don t see this just sailing through, regulators will look at it," Ted Henneberry of the London law firm Heller Ehrman said. But even after a review that could take up to six months, he said a Microsoft-Yahoo combination isn t likely to be stopped because the new entity s share of the online ad space would still be dwarfed by Google, which already controls nearly 60 percent of the U.S. search market.
"The fact that Google dominates this business will be a big factor in (Microsoft s) favor in trying to get this approved by the regulators," said Keith Hylton, a professor of antitrust law at Boston University.
Alternatively, a combined Yahoo Inc. and Microsoft -- which are the second and third largest U.S. search engines -- could ease concerns about Google s growing power in the ad space. By combining, Microsoft and Yahoo would have a 33 percent share of the U.S. search market, according to the latest data from comScore Media Metrix.
The Federal Trade Commission in December approved Google s $3.1 billion purchase of online advertising company DoubleClick Inc., but European Union regulators are still examining the deal and Google has said it won t go forward without their blessing. (Microsoft lobbied hard against the deal, arguing that it would give Google a dominant position in the online ad market.)
The FTC s OK of the Google-DoubleClick deal surely influenced Microsoft s decision to bid for Yahoo, said Joseph Turow, a professor at the University of Pennsylvania s Annenberg School of Communications who has been critical of the agency and fears that industry consolidation will be bad for consumers.
"Despite the appearance of unlimited choice in the new media environment, people s online activities will be tracked and shaped by a very small number of companies who care far more about surveillance and targeted advertising than the public interest," Turow said.
Marc Rotenberg, executive director of the Electronic Privacy Information Center, agreed and said "the problem of profiling Internet users will become more severe if mergers go forward without appropriate privacy safeguards."
Many Wall Street analysts expect regulators to approve the transaction, which Yahoo said it will "carefully and promptly" study.
Sen. Herb Kohl, D-Wis., chairman of the Senate antitrust subcommittee, said the same issues that prompted lawmakers to review the Google-DoubleClick deal exist in a potential Microsoft-Yahoo combination, including examining how it affects consumers, advertisers and businesses "who increasingly use the Internet for their news, commerce and entertainment."
If Yahoo accepts Microsoft s offer, the subcommittee expects to hold hearings to "explore the competitive and privacy implications of the deal," Kohl said.
A federal judge this week extended by 18 months court oversight of Microsoft s market power, which began in 2002 after a landmark antitrust settlement. Hylton said Justice has been relatively lenient with Microsoft, compared to state attorneys general who pushed for the extension of court oversight of the software giant. Justice officials said the 2002 antitrust settlement had largely served its purpose and should expire.
Shares of Yahoo added $9.20, or 48 percent, to $28.38 Friday, while Microsoft fell $2.15, or 6.6 percent, to $30.45.
AP Writers Christopher S. Rugaber, Michael Liedtke, Jessica Mintz and Aoife White contributed to this report
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
A major factor weighing in Microsoft Corp. s favor, analysts said, is Google Inc. s dominance in the online search and advertising businesses -- the two areas regulators are likely to focus on when weighing market power issues raised by the nearly $45 billion unsolicited bid.
The Justice Department said it is "interested" in reviewing competition issues raised by Microsoft s surprise offer. The Federal Trade Commission and European Union officials declined to comment. If the deal goes through, analysts expect Congress and European regulators to review the combined company s increased competitive edge.
"I don t see this just sailing through, regulators will look at it," Ted Henneberry of the London law firm Heller Ehrman said. But even after a review that could take up to six months, he said a Microsoft-Yahoo combination isn t likely to be stopped because the new entity s share of the online ad space would still be dwarfed by Google, which already controls nearly 60 percent of the U.S. search market.
"The fact that Google dominates this business will be a big factor in (Microsoft s) favor in trying to get this approved by the regulators," said Keith Hylton, a professor of antitrust law at Boston University.
Alternatively, a combined Yahoo Inc. and Microsoft -- which are the second and third largest U.S. search engines -- could ease concerns about Google s growing power in the ad space. By combining, Microsoft and Yahoo would have a 33 percent share of the U.S. search market, according to the latest data from comScore Media Metrix.
The Federal Trade Commission in December approved Google s $3.1 billion purchase of online advertising company DoubleClick Inc., but European Union regulators are still examining the deal and Google has said it won t go forward without their blessing. (Microsoft lobbied hard against the deal, arguing that it would give Google a dominant position in the online ad market.)
The FTC s OK of the Google-DoubleClick deal surely influenced Microsoft s decision to bid for Yahoo, said Joseph Turow, a professor at the University of Pennsylvania s Annenberg School of Communications who has been critical of the agency and fears that industry consolidation will be bad for consumers.
"Despite the appearance of unlimited choice in the new media environment, people s online activities will be tracked and shaped by a very small number of companies who care far more about surveillance and targeted advertising than the public interest," Turow said.
Marc Rotenberg, executive director of the Electronic Privacy Information Center, agreed and said "the problem of profiling Internet users will become more severe if mergers go forward without appropriate privacy safeguards."
Many Wall Street analysts expect regulators to approve the transaction, which Yahoo said it will "carefully and promptly" study.
Sen. Herb Kohl, D-Wis., chairman of the Senate antitrust subcommittee, said the same issues that prompted lawmakers to review the Google-DoubleClick deal exist in a potential Microsoft-Yahoo combination, including examining how it affects consumers, advertisers and businesses "who increasingly use the Internet for their news, commerce and entertainment."
If Yahoo accepts Microsoft s offer, the subcommittee expects to hold hearings to "explore the competitive and privacy implications of the deal," Kohl said.
A federal judge this week extended by 18 months court oversight of Microsoft s market power, which began in 2002 after a landmark antitrust settlement. Hylton said Justice has been relatively lenient with Microsoft, compared to state attorneys general who pushed for the extension of court oversight of the software giant. Justice officials said the 2002 antitrust settlement had largely served its purpose and should expire.
Shares of Yahoo added $9.20, or 48 percent, to $28.38 Friday, while Microsoft fell $2.15, or 6.6 percent, to $30.45.
AP Writers Christopher S. Rugaber, Michael Liedtke, Jessica Mintz and Aoife White contributed to this report
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Metals at a glance
NEW YORK (AP) - The following are key metals settlement prices Friday, compared with late Thursday, on the New York Mercantile Exchange:
April gold $913.50, down $14.50 an ounce
March silver $16.870, down 12.5 cents an ounce
March copper $3.2730, down 2.5 cents a pound
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
April gold $913.50, down $14.50 an ounce
March silver $16.870, down 12.5 cents an ounce
March copper $3.2730, down 2.5 cents a pound
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Business Events for the Coming Week
(AP) - Major business events and economic events scheduled for the coming week (some dates are tentative):
MONDAY, Feb. 4
WASHINGTON -- Commerce Department reports on factory orders for December, 10 a.m.; Treasury bill auction; President Bush s 2009 budget proposal expected to be released.
THE WOODLANDS, Texas -- Anadarko Petroleum Corp. releases fourth-quarter financial results.
DECATUR, Ill. -- Archer Daniels Midland Co. releases second-quarter financial results.
LOUISVILLE, Ky. -- Humana Inc. releases fourth-quarter financial results.
NEW YORK -- News Corp. releases second-quarter financial results.
DUBLIN, Ohio -- Wendy s International Inc. releases fourth-quarter financial results.
LOUISVILLE, Ky. -- Yum Brands Inc. releases fourth-quarter financial results.
PARIS -- French Finance Ministry submits a report on the Societe Generale trading scandal in which more than $73 billion was bet by rogue trader Jerome Kerviel. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
TUESDAY, Feb. 5
NEW YORK -- The Institute for Supply Management releases its service sector index, 10 a.m.
NEW YORK -- Avon Products Inc. releases fourth-quarter financial results.
NATICK, Mass. -- Boston Scientific Corp. releases fourth-quarter financial results.
CHICAGO -- Chicago Mercantile Exchange Holdings Inc. releases fourth-quarter financial results.
CHARLOTTE, N.C. -- Duke Energy Corp. releases fourth-quarter financial results.
NEW YORK -- NYSE Euronext Inc. releases fourth-quarter financial results.
PEMBROKE, Bermuda -- Tyco International Ltd. releases first-quarter financial results.
BURBANK, Calif. -- Walt Disney Co. releases first-quarter financial results.
BENTON HARBOR, Mich. -- Whirlpool Corp. releases fourth-quarter financial results.
WEDNESDAY, Feb. 6
WASHINGTON -- Labor Department reports on productivity and costs, fourth quarter, preliminary, 8:30 a.m.
CAMBRIDGE, Mass. -- Biogen Idec Inc. releases fourth-quarter financial results.
PHILADELPHIA -- Cigna Corp. releases fourth-quarter financial results.
SAN JOSE, Calif. -- Cisco Systems Inc. releases second-quarter financial results.
PLANO, Texas -- Electronic Data Systems Corp. releases fourth-quarter financial results.
NEW YORK -- IAC/InterActiveCorp. releases fourth-quarter financial results.
SACRAMENTO, Calif. -- McClatchy Co. releases fourth-quarter financial results.
NEW YORK -- MetLife Inc. releases fourth-quarter financial results.
LOS ANGELES -- Napster Inc. releases third-quarter financial results.
NEWARK, N.J. -- Prudential Financial Inc. releases fourth-quarter financial results.
CHICAGO -- Sara Lee Corp. releases second-quarter financial results.
WALTHAM, Mass. -- Thermo Fisher Scientific Inc. releases fourth-quarter financial results.
NEW YORK -- Time Warner Inc. releases fourth-quarter financial results.
NEW YORK -- Warner Music Group Corp. releases first-quarter financial results.
THURSDAY, Feb. 7
WASHINGTON -- Labor Department reports on weekly jobless claims, 8:30 a.m.; Federal Reserve reports on consumer credit for December, 3 p.m.; Freddie Mac, the mortgage company, reports on mortgage rates.
The nation s retailers release their sales results for January.
HARTFORD, Conn. -- Aetna Inc. releases fourth-quarter financial results.
CHICAGO -- Aon Corp. releases fourth-quarter financial results.
FORT LAUDERDALE, Fla. -- AutoNation Inc. releases fourth-quarter financial results.
FORT WORTH, Texas -- D.R. Horton Inc. releases first-quarter financial results.
MEMPHIS, Tenn. -- International Paper Co. releases fourth-quarter financial results.
PURCHASE, N.Y. -- PepsiCo Inc. releases fourth-quarter financial results.
WINSTON-SALEM, N.C. -- Reynolds American Inc. releases fourth-quarter financial results.
STAMFORD, Conn. -- Thomson Corp. releases fourth-quarter financial results.
FRIDAY, Feb. 8
FEDERAL WAY, Wash. -- Weyerhaeuser Co. releases fourth-quarter financial results.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
MONDAY, Feb. 4
WASHINGTON -- Commerce Department reports on factory orders for December, 10 a.m.; Treasury bill auction; President Bush s 2009 budget proposal expected to be released.
THE WOODLANDS, Texas -- Anadarko Petroleum Corp. releases fourth-quarter financial results.
DECATUR, Ill. -- Archer Daniels Midland Co. releases second-quarter financial results.
LOUISVILLE, Ky. -- Humana Inc. releases fourth-quarter financial results.
NEW YORK -- News Corp. releases second-quarter financial results.
DUBLIN, Ohio -- Wendy s International Inc. releases fourth-quarter financial results.
LOUISVILLE, Ky. -- Yum Brands Inc. releases fourth-quarter financial results.
PARIS -- French Finance Ministry submits a report on the Societe Generale trading scandal in which more than $73 billion was bet by rogue trader Jerome Kerviel. Investigating judges have filed preliminary charges against Kerviel for forgery, breach of trust and unauthorized computer activity.
TUESDAY, Feb. 5
NEW YORK -- The Institute for Supply Management releases its service sector index, 10 a.m.
NEW YORK -- Avon Products Inc. releases fourth-quarter financial results.
NATICK, Mass. -- Boston Scientific Corp. releases fourth-quarter financial results.
CHICAGO -- Chicago Mercantile Exchange Holdings Inc. releases fourth-quarter financial results.
CHARLOTTE, N.C. -- Duke Energy Corp. releases fourth-quarter financial results.
NEW YORK -- NYSE Euronext Inc. releases fourth-quarter financial results.
PEMBROKE, Bermuda -- Tyco International Ltd. releases first-quarter financial results.
BURBANK, Calif. -- Walt Disney Co. releases first-quarter financial results.
BENTON HARBOR, Mich. -- Whirlpool Corp. releases fourth-quarter financial results.
WEDNESDAY, Feb. 6
WASHINGTON -- Labor Department reports on productivity and costs, fourth quarter, preliminary, 8:30 a.m.
CAMBRIDGE, Mass. -- Biogen Idec Inc. releases fourth-quarter financial results.
PHILADELPHIA -- Cigna Corp. releases fourth-quarter financial results.
SAN JOSE, Calif. -- Cisco Systems Inc. releases second-quarter financial results.
PLANO, Texas -- Electronic Data Systems Corp. releases fourth-quarter financial results.
NEW YORK -- IAC/InterActiveCorp. releases fourth-quarter financial results.
SACRAMENTO, Calif. -- McClatchy Co. releases fourth-quarter financial results.
NEW YORK -- MetLife Inc. releases fourth-quarter financial results.
LOS ANGELES -- Napster Inc. releases third-quarter financial results.
NEWARK, N.J. -- Prudential Financial Inc. releases fourth-quarter financial results.
CHICAGO -- Sara Lee Corp. releases second-quarter financial results.
WALTHAM, Mass. -- Thermo Fisher Scientific Inc. releases fourth-quarter financial results.
NEW YORK -- Time Warner Inc. releases fourth-quarter financial results.
NEW YORK -- Warner Music Group Corp. releases first-quarter financial results.
THURSDAY, Feb. 7
WASHINGTON -- Labor Department reports on weekly jobless claims, 8:30 a.m.; Federal Reserve reports on consumer credit for December, 3 p.m.; Freddie Mac, the mortgage company, reports on mortgage rates.
The nation s retailers release their sales results for January.
HARTFORD, Conn. -- Aetna Inc. releases fourth-quarter financial results.
CHICAGO -- Aon Corp. releases fourth-quarter financial results.
FORT LAUDERDALE, Fla. -- AutoNation Inc. releases fourth-quarter financial results.
FORT WORTH, Texas -- D.R. Horton Inc. releases first-quarter financial results.
MEMPHIS, Tenn. -- International Paper Co. releases fourth-quarter financial results.
PURCHASE, N.Y. -- PepsiCo Inc. releases fourth-quarter financial results.
WINSTON-SALEM, N.C. -- Reynolds American Inc. releases fourth-quarter financial results.
STAMFORD, Conn. -- Thomson Corp. releases fourth-quarter financial results.
FRIDAY, Feb. 8
FEDERAL WAY, Wash. -- Weyerhaeuser Co. releases fourth-quarter financial results.
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Employment drops in a pink slip blizzard
WASHINGTON (AP) - In a shower of pink slips, U.S. employers cut jobs last month for the first time in more than four years, the starkest signal yet that the economy is grinding to a halt if it hasn t already toppled into recession.
Conditions are deteriorating, according to the most up-to-date employment snapshot by the Labor Department, which showed nervous employers slicing payrolls by 17,000. The country hasn t seen such a nationwide job loss since 2003, when employers were still struggling to recover from the last previous recession.
"We are certainly on thin ice," said John Silvia, chief economist at Wachovia. And even President Bush, normally a cheerleader for the economy, said there were "serious signs" it was weakening.
Wall Street, however, took the news in stride. Stock prices were up near the close of the trading day.
Job losses were widespread in January. Factories, construction companies, mortgage brokers and real-estate firms were among those eliminating jobs -- casualties of the housing bust and credit crunch. The government cut jobs for the first time since last July.
All those cuts swamped job gains in education, health care, retailing and elsewhere.
The unemployment rate actually dipped slightly to 4.9 percent, from 5 percent in December, as people left the labor force.
"Discouraged by a sluggish job market, many more adults are sitting on the sidelines," said Peter Morici, an economist and business professor at the University of Maryland.
Wage growth also slowed, another indication of belt-tightening. Smaller wage gains could make people who still have jobs -- already squeezed by high energy prices -- reluctant to spend, further hurting the economy.
President Bush prodded Congress anew to quickly pass an economic rescue package.
"There s serious signs that ... the economy is weakening and that we ve got to do something about it," Bush said. On Capitol Hill, Democratic and Republican supporters of a stimulus package -- including tax rebates for people and tax breaks for businesses -- agreed the gloomy employment report underscored a need for urgency. The package is pending in the Senate, where there are disputes over attempts to expand it.
The Democratic presidential contenders, Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois, said the job losses were evidence of failed Bush policies. "We are sliding into a second Bush recession," Clinton said. Obama called the employment figures "troubling news" and urged Congress to extend unemployment benefits "for more time and to more people."
To help ease the credit crisis, the Federal Reserve announced it would provide cash-strapped banks with an additional $60 billion in short-term loans through auctions later this month. The Fed started the auctions in December and has already provided $100 billion in loans to banks.
With fears of recession growing, the Fed has gotten much more aggressive -- ordering two big interest rate reductions in just over a week. A severely depressed housing market, hard-to-get credit, turbulence on Wall Street and "some softening in labor markets" were cited by the Fed when it lowered rates by a bold half-point on Wednesday. The weak employment report would justify additional rate cuts, economists said.
The health of the nation s job market is a critical factor shaping how the overall economy fares. If companies continue to cut back on hiring and put a lid on wages, that will spell more trouble.
People running companies are concerned.
"They are thinking if there is some capital spending I should postpone for a while, I should do that. If there is some hiring I don t necessarily need to do right now, I can put that off for a few months to see what happens," said Joel Naroff, president of Naroff Economic Advisors. "The problem with that thinking is that more economic weakness or a recession can become somewhat of a self-fulfilling prophecy."
Average hourly earnings for jobholders rose to $17.75 in January, a 0.2 percent increase from the previous month. It was half the pace logged in December. Over the past 12 months wages went up by 3.7 percent. With high energy and food prices, though, workers may feel like their paychecks aren t stretching as far.
The unemployment rate had shot up in December to 5 percent, from 4.7 percent in November. The magnitude of that increase -- something not seen since right after the September 2001 terror attacks -- set off alarms. In the past, such a big increase has signaled the economy was starting a recession or already in one.
With economic growth slowing this year, the unemployment rate will climb again. In fact, Mark Zandi, chief economist at Economy.com, predicts the jobless rate will rise to near 6.5 percent in early 2009.
The 17,000 drop was in total payrolls -- both government and private employers -- in January, the first monthly decline since August 2003. The government sliced 18,000 positions, while private employers added just 1,000, the fewest in nearly a year.
The government on Friday also released annual revisions -- based on more complete information -- that showed job creation was even weaker last year than initially thought.
The economy added an average of just 95,000 jobs per month in 2007, versus an earlier estimate of 111,000 a month. In 2006, payroll employment grew by an average of 175,000 a month.
Construction and factory workers have been especially hard hit by the meltdown in housing, which has catapulted home foreclosures to record highs. Construction companies cut 27,000 jobs last month and have lost 284,000 since employment peaked in September 2006. Spending by private builders on housing projects last year plunged by a record 18.3 percent, the Commerce Department said in a separate report.
Factories eliminated 28,000 positions in January, and have cut 269,000 jobs over the past 12 months. Manufacturing activity gained some ground in January, after contracting in December, the Institute for Supply Management said in still another report Friday.
The economy nearly stalled in the final three months of last year, and some economists believe it may actually be shrinking now.
Under one rough rule, the economy would have to contract for six months for the country to be considered in a recession. The likelihood of a recession has risen sharply over the past year, and analysts increasingly believe the U.S. will be in one during the first half of 2008. The worry is that people and businesses will hunker down and pull back their spending, sending the economy into a tailspin.
Bush said, "We re just in a rough patch. And, I m confident we can get through this rough patch."
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
Conditions are deteriorating, according to the most up-to-date employment snapshot by the Labor Department, which showed nervous employers slicing payrolls by 17,000. The country hasn t seen such a nationwide job loss since 2003, when employers were still struggling to recover from the last previous recession.
"We are certainly on thin ice," said John Silvia, chief economist at Wachovia. And even President Bush, normally a cheerleader for the economy, said there were "serious signs" it was weakening.
Wall Street, however, took the news in stride. Stock prices were up near the close of the trading day.
Job losses were widespread in January. Factories, construction companies, mortgage brokers and real-estate firms were among those eliminating jobs -- casualties of the housing bust and credit crunch. The government cut jobs for the first time since last July.
All those cuts swamped job gains in education, health care, retailing and elsewhere.
The unemployment rate actually dipped slightly to 4.9 percent, from 5 percent in December, as people left the labor force.
"Discouraged by a sluggish job market, many more adults are sitting on the sidelines," said Peter Morici, an economist and business professor at the University of Maryland.
Wage growth also slowed, another indication of belt-tightening. Smaller wage gains could make people who still have jobs -- already squeezed by high energy prices -- reluctant to spend, further hurting the economy.
President Bush prodded Congress anew to quickly pass an economic rescue package.
"There s serious signs that ... the economy is weakening and that we ve got to do something about it," Bush said. On Capitol Hill, Democratic and Republican supporters of a stimulus package -- including tax rebates for people and tax breaks for businesses -- agreed the gloomy employment report underscored a need for urgency. The package is pending in the Senate, where there are disputes over attempts to expand it.
The Democratic presidential contenders, Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois, said the job losses were evidence of failed Bush policies. "We are sliding into a second Bush recession," Clinton said. Obama called the employment figures "troubling news" and urged Congress to extend unemployment benefits "for more time and to more people."
To help ease the credit crisis, the Federal Reserve announced it would provide cash-strapped banks with an additional $60 billion in short-term loans through auctions later this month. The Fed started the auctions in December and has already provided $100 billion in loans to banks.
With fears of recession growing, the Fed has gotten much more aggressive -- ordering two big interest rate reductions in just over a week. A severely depressed housing market, hard-to-get credit, turbulence on Wall Street and "some softening in labor markets" were cited by the Fed when it lowered rates by a bold half-point on Wednesday. The weak employment report would justify additional rate cuts, economists said.
The health of the nation s job market is a critical factor shaping how the overall economy fares. If companies continue to cut back on hiring and put a lid on wages, that will spell more trouble.
People running companies are concerned.
"They are thinking if there is some capital spending I should postpone for a while, I should do that. If there is some hiring I don t necessarily need to do right now, I can put that off for a few months to see what happens," said Joel Naroff, president of Naroff Economic Advisors. "The problem with that thinking is that more economic weakness or a recession can become somewhat of a self-fulfilling prophecy."
Average hourly earnings for jobholders rose to $17.75 in January, a 0.2 percent increase from the previous month. It was half the pace logged in December. Over the past 12 months wages went up by 3.7 percent. With high energy and food prices, though, workers may feel like their paychecks aren t stretching as far.
The unemployment rate had shot up in December to 5 percent, from 4.7 percent in November. The magnitude of that increase -- something not seen since right after the September 2001 terror attacks -- set off alarms. In the past, such a big increase has signaled the economy was starting a recession or already in one.
With economic growth slowing this year, the unemployment rate will climb again. In fact, Mark Zandi, chief economist at Economy.com, predicts the jobless rate will rise to near 6.5 percent in early 2009.
The 17,000 drop was in total payrolls -- both government and private employers -- in January, the first monthly decline since August 2003. The government sliced 18,000 positions, while private employers added just 1,000, the fewest in nearly a year.
The government on Friday also released annual revisions -- based on more complete information -- that showed job creation was even weaker last year than initially thought.
The economy added an average of just 95,000 jobs per month in 2007, versus an earlier estimate of 111,000 a month. In 2006, payroll employment grew by an average of 175,000 a month.
Construction and factory workers have been especially hard hit by the meltdown in housing, which has catapulted home foreclosures to record highs. Construction companies cut 27,000 jobs last month and have lost 284,000 since employment peaked in September 2006. Spending by private builders on housing projects last year plunged by a record 18.3 percent, the Commerce Department said in a separate report.
Factories eliminated 28,000 positions in January, and have cut 269,000 jobs over the past 12 months. Manufacturing activity gained some ground in January, after contracting in December, the Institute for Supply Management said in still another report Friday.
The economy nearly stalled in the final three months of last year, and some economists believe it may actually be shrinking now.
Under one rough rule, the economy would have to contract for six months for the country to be considered in a recession. The likelihood of a recession has risen sharply over the past year, and analysts increasingly believe the U.S. will be in one during the first half of 2008. The worry is that people and businesses will hunker down and pull back their spending, sending the economy into a tailspin.
Bush said, "We re just in a rough patch. And, I m confident we can get through this rough patch."
Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. MMMM
*ALERT: CHRYSLER NA-MADE US LT TRUCK SLS 91,629 JAN; 119,803 YR AGO
*ALERT: CHRYSLER NA-MADE US LT TRUCK SLS 91,629 JAN; 119,803 YR AGO
Copyright 2007 MNI. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. n MMMM
Copyright 2007 MNI. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. n MMMM
Subscribe to:
Posts (Atom)