Yahoo shares rise after co-founder Yang resigns

Jerry Yang says it's time to pursue new interests. Stocks move higher as China's economic growth beats expectations. Oil and gold move higher. Carnival shares slump after cruise accident. Will Sears go private?

By Charley Blaine Jan 17, 2012 2:12PM

Charley BlaineUpdated: 11:37 p.m. ET

Yahoo (YHOO) shares rose 2.7% to $15.85 after hours today as the company announced that co-founder Jerry Yang has resigned all of his positions with the company.

The market reaction -- the shares had jumped as much as 5% before settling back -- reflects speculation that the Internet search company is nearing some sort of deal that would sell all or parts of the company. Yang was a big defender of Yahoo's independence and resisted Microsoft's (MSFT) bid for the company in 2008.

The Yahoo announcement came after stocks moved higher  today as China reported better-than-expected growth that was still low enough to raise hopes that banking regulators would trim interest rates. The China news set off a rally in crude oil (-CL) and gold (-GC) as well as commodity stocks.

Shares of Carnival Cruise Lines (CCL), which owns the Costa Concordia that capsized off the coast of Italy on Friday, were down $4.68 to $29.60 as investors worried the incident would hurt cruise-line bookings. Shares of rival Royal Caribbean (RCL) were down $1.78 to $26.97.

The Standard & Poor's 500 Index ($INX) hit 1,303, its highest intraday level since Aug. 1, before falling back to 1,294, a gain of 5 points. The Dow Jones industrials ($INDU) jumped as many as 151 points before selling set in, especially in financial stocks. The blue chips closed up 60 points to 12,482. The Nasdaq Composite Index ($COMPX) added 17 points to 2,728. The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was up 21 points to 2,393.

Article continues below.

Yang also resigned from the boards of Yahoo Japan and Alibaba Group, the Chinese Internet company. Yahoo owns 35% of Yahoo Japan and 40% owned by Yahoo. (An earlier version of this post incorrectly listed Yahoo's ownership as 20%.) 


His departure is just another chapter in years of tumult at Yahoo, the pioneering site started by Yang and fellow Stanford classmate David Filo in 1995.

The company was unable to keep pace with Google (GOOG) and became vulnerable enough that Microsoft bid $44.6 billion for the company in 2008. Yang led the charge to reject the offer as inadequate. Microsoft ultimate walked away from the offer. Yahoo's market capitalization today is $19.1 billion. Microsoft is the publisher of MSN Money.

Yang was succeeded as CEO by Carol Bartz, ousted last fall after the company was unable to grow much, if at all. Scott Thompson, former CEO of PayPal, became CEO in January.

Talk has swirled around Yahoo for months that it would be taken over by a private-equity firms and/or Microsoft. Other potential buyers include Alibaba.


Yang leaves Yahoo still a wealthy a man. In September, Forbes estimated his net worth at $1.1 billion. His Yahoo stake alone is worth some $323.9 million, based on Tuesday's closing price.


China gives the market a boost
Traders around the world were embracing China's economic growth story as a way to boost the January rally and take everyone's minds off Europe. European stocks were higher as were stocks in Japan, Hong Kong, India and Brazil. China's Shanghai Composite Index jumped 4.2%.

Adding to the cheer were decent bond auctions in Spain and a gain in German investor confidence.

Right at the close, Bloomberg News reported that Greece is nearing a deal with private creditors that would give them cash and securities with a market value of about 32 cents per euro of government debt.


January gains hold
In the United States, the Dow is up 2.2% this month after rising 2.5% in all of 2011. The S&P 500 is up 2.9% (after no change in 2011) and the Nasdaq is up 4.7% after 2011's 1.8% decline. The Nasdaq-100 is up 5.1%. 


Futures trading suggests a modestly higher open for U.S. stocks. Investment banking giant Goldman Sachs (GS) reports fourth-quarter earnings before the open. Also reporting are such companies as: US Bancorp (USB), Northern Trust (NTRS), eBay (EBAY), F5 Networks (FFIV) and specialty semiconductor maker Xilinx (XLNX).

Crude oil tops $100; gold rises
Crude oil settled up $2.01 to $100.71 a barrel, its highest price since Wednesday. That reflected a decline of the dollar against major currencies.

Brent crude, however, was off 39 cents to $110.95 a barrel.

And natural gas (-NG) settled down 18.2 cents to $2.488 per million British thermal units because of the glut of gas that's hit the national market from new wells in shale formations. Gas is down 16.7% this year after falling 32% in 2011.

Gold settled up $26.10 to $1,656.90 an ounce, with silver (-SI) up 61.3 cents to $30.135 an ounce and copper (-HG)  up 9.25 cents to $1,655.60 a pound.

Interest rates were lower, with the 10-year Treasury yield falling to 1.87% from Friday's 1.853%.

Energy and materials stocks were mostly higher. Exxon Mobil (XOM) added 81 cents to $85.69.  But oil services stocks were lower. Schlumberger (SLB), which reports earnings Friday, fell 35 cents to $67.64.

Freeport-McMoRan Copper & Gold (FCX), whose giant copper and gold mine in Indonesia sends much of its production to China, was up $1.07 to $43.07. But steel stocks dropped. U.S. Steel (X) fell 10 cents to $27.33.

Energy prices -- New York close



Tues.

Fri.

Month chg.

YTD chg.
Crude oil (-CL)

$100.71

$98.70

1.90%

1.90%
(per barrel)











Heating oil (-HO)

$3.0372

$3.0272

4.22%

4.22%
(per gallon)











Natural gas (-NG)

$2.4880

$2.6700

-16.76%

-16.76%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.7713

$2.7342

4.29%

4.29%
(per gallon)











Brent crude 

$111.53

$111.34

3.86%

3.86%
(per barrel)











Retail gasoline

$3.3810

$3.3870

3.43%

3.43%
(per gallon; AAA)











U.S. financial markets were closed Monday for the Martin Luther King, Jr., holiday.



The good news and the hopes from China
Chinese gross domestic product growth slowed to a rate of 8.9% in the fourth quarter, its slowest growth in 10 quarters but better than the 8.7% expected by economists, according to a survey by Thomson Reuters.


The Chinese statistics bureau also reported that industrial production increased 12.8% in December from a year earlier, a sign that China may yet avoid a hard landing provoked by declining demand from Europe.


Investors were hoping that the lower (though still impressive) growth rate would let Chinese authorities ease on interest rates to maintain high levels of expansion through 2012.


How much will the Costa Condordia sinking hurt cruise business?

The plunge in Carnival and Royal Caribbean shares came as Italian authorities continued their probe of the sinking of the Costa Concordia. The timing of the disaster could not have been worse.

As Bloomberg News notes, about one-third of all cruise vacations are booked between January and March. Moreover, Europe accounts for about 38% of the revenue of Carnival, the corporate parent of Costa Concordia.

Early estimates peg the disaster's cost at $95 million, though insurers may be on the hook for as much as $800 million, according to Numis Securities.


Wells Fargo results cheer; Citigroup earnings disappoint

This is a big week in earnings, with big banks and big tech companies predominating.


Wells Fargo (WFC) shares closed up 22 cents to $29.83, its highest price since April 19, after fourth-quarter earnings beat estimates.


The banking company focused on lending in the second half of the year more than it did on capital markets. It saw a gain in commercial loans and a 35% surge in mortgage originations in the last three months of the year.


Citigroup (C) shares tumbled $2.53 to $28.22 as its earnings fell 11% from a year ago. Poor performance in its investment banking and trading businesses overshadowed gains in its traditional banking businesses.


The bank blamed a continued weak economic recovery in developed countries and skittish investors scared by the European debt crisis. The company sees European problems reducing U.S. economic growth by 0.5% to 1.5%.


Citigroup earned 38 cents a share, down from 43 cents a share a year earlier. The Street had expected 48 cents a share in earnings on $18.57 billion in revenue.


Goldman Sachs was off $1.28 to $97.68, although it is up 8% this month (after a 46.2% decline in 20121). Bank of America (BAC) dropped 13 cents to $6.48. JPMorgan Chase (JPM) dropped $1.01 to $34.91.

The strange doings at Sears

There has been speculation today  that Sears Holdings (SHLD) might go private; shares jumped to as high as $38.80 before dropping back to $36.75, up $3.19.


Who would take Sears private was one question. The obvious choice is hedge-fund manager Edward Lampert, who controls 60% of the shares. But the next question is who would finance a buyout. Sears' financial performance has been so weak that the company has said it will close 100 to 120 Sears and Kmart stores.


But there is so much skepticism that The Wall Street Journal advised its readers, "The fact is, no one really knows anything about Sears, and it's becoming very dangerous to read anything into the stock price gyrations."


Intel slips on downgrade

Intel (INTC) shares were off 10 cents to $25.04 after JPMorgan analyst Christopher Danely cut his rating on Intel to "neutral" from "overweight," asserting that "margins are peaking."

The analyst contends that Intel’s gross profit margins will fall to 60.6% in 2012 and 2013 from 62.5% in 2010, according to Forbes' Eric Savitz, due to higher depreciation and weaker pricing. Intel’s stock performance tends to follow its gross margins, Danely argues.

Merck leads the Dow; Sears tops the S&P 500, Nasdaq-100

A total of 23 Dow stocks were higher on the day, led by Merck (MRK), Cisco Systems (CSCO) and United Technologies (UTX). JPMorgan Chase and Bank of America were the laggards.


Meanwhile, 75 Nasdaq-100 stocks and 331 S&P 500 stocks were higher.


Sears and Green Mountain Coffee Roasters (GMCR) were the Nasdaq-100 leaders. Green Mountain Coffee jumped $3.90 $50.87 following the release of NPD data estimating Keurig brewer sales rose 50% in December from a year ago -- well above the 30% growth forecast by SunTrust.


Sears was also the leader among S&P 500 and Nasdaq-100 stocks, followed by Rowan Energy (RDC) and Valero Energy (VLO).


Short hits from the markets -- New York close



Tues.

Fri.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.030%  0.030%

200.00%  200.00%
5-year Treasury note 

0.778%  0.782%

-6.27%  -6.27%
10-year Treasury note

1.850%  1.853%

-1.12%  -1.12%
30-year Treasury bond

2.891%  2.904%

0.07%  0.07%
Currencies











U.S. Dollar Index

81.429  81.791  1.13%  1.13%
British pound

1.5359  1.5316  -1.15%  -1.15%
(in U.S. $)

          
U.S. $ in pounds

£0.651  £0.653  1.17%  1.17%
Euro in dollars

$1.27  $1.27  -1.66%  -1.66%
(in U.S. $)

          
U.S. $ in euros

€ 0.785  € 0.790  1.68%  1.68%
U.S. $ in yen 

76.98  76.80  -0.15%   -0.15%
U.S. $ in Chinese

6.34  6.32  0.22%  0.22%
yuan

            
Canada dollar

$0.986  $0.000  0.49%  0.49%
(in U.S. $)

          
U.S. dollar 

$1.015  $1.018  -0.50%  -0.50%
(in Canadian $)











Commodities

 

 

 

 
Gold (-GC)

$1,655.60

$1,630.80

5.67%

5.67%
(per troy ounce)











Copper (-HG)

$3.730

$3.637

8.54%

8.54%
(per pound)











Silver (-SI)

$30.1350

$29.5220

7.95%

7.95%
(per troy ounce)











Wheat (-ZW)

$6.0475

$6.0225

-7.35%

-7.35%
(per bushel)











Corn (-ZC)

$6.0400

$5.995

-6.57%

-6.57%
(per bushel)











Cotton 

$0.9771

0.9508

6.58%

6.58%
(per pound)











Coffee

$2.2810

2.281

-0.67%

-0.67%
(per pound)











Crude oil (-CL)

$100.71

$98.70

1.90%

1.90%
(per barrel)










 
U.S. financial markets were closed Monday for the Martin Luther King, Jr., holiday

 

72Comments
Jan 17, 2012 3:07PM
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There are people in my own area who cannot afford to heat their homes as heating oil is already touching $4.00 a gallon. This country continues to give away billions of dollars to other countries while at the same time, they cut heating assistance to their own.The Wall street Greed machine continues to roll with oil once again over $100 a barrel. I suppose it is ok for the poor people to freeze as long as the Big Traders get to put a few more million in their bank accounts, As for me, I am tired of their game and have already cut back on spending and I invite you to join me. America is fast becoming Home Of The Greedy and Land Of The Poor.

Jan 17, 2012 5:01PM
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It seems we only read about how great China is doing...well guess what??  This is a country that can't be trusted and is not a friend of the USA.  Low wages, horrific working conditions, violation of child labor, no regard for the environment etc.  So if you "investors" want to "cheer" on China's success...go right ahead.  Personally, I would like to see a ban on Chinese products unless they adhered to the same laws etc. as companies here in the USA have to.   

Jan 17, 2012 3:49PM
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Brent011 could not agree more with you... This country has become full of peeps with no common since, no moral values and no respect for there elders or themselves. I talk to people who parrot what the news tells them and when you press them on A subject they have no thought for  themselves. Laid out A world map to A young man that thought war with Iran was what this country needed " he could not pick out where the country was" Just how is this country going to make it with no education, no values, with only the "me attitude" Well its time to put my tinfoil hat back on stock some more guns, ammo, food and water.....
Jan 17, 2012 4:57PM
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More than four years after the United States fell into recession, many Americans have resorted to raiding their savings to get them through the stop-start economic recovery.
 

In an ominous sign for America's economic growth prospects, workers are paring back contributions to college funds and growing numbers are borrowing from their retirement accounts.

 

The above is being reported which indicates to me that things aren't as great as some of the "cheerleaders" would like you to believe.  They will tell you how Americans are spending again which according to the "experts" reflects optimism that the economy is getting better but what they don't tell you is that these purchases are being financed and money taken from other sources such as kids education funds, retirement etc.  So don't always believe what you read...just consider the source and what message they are trying to put forth which will be in their best self-serving needs. 

avatar

NEW YORK (CNNMoney) -- A record 44.7 million people -- or 1 in 7 Americans -- were on food stamps last year. But does that make Barack Obama the "food stamp president?"

Newt Gingrich once again slapped that label on Obama during a South Carolina debate Monday night, saying: "The fact is that more people have been put on food stamps by Barack Obama than any president in American history."

Don't think I need to say more.
Jan 17, 2012 3:37PM
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brent011, I am in total agrement with you as I see nothing but desperation in my State which is already @ 48% welfare of one sort or the other.  Nothing is being done about this travesty it manipulation as we are basically cowardly to overcome the obvious in voting this administration out. The welfare types need the money to exist as that is what they are used to.  It is what it is and those with regulatory capabilities do nothing.  It is a never-ending song with the idealogues on both sides and it is sickening. 
Jan 17, 2012 3:49PM
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Price of oil, gold, silver, stocks, bonds, homes cannot be sustained when the money supply deflates. Google for "DEFLATIONARY CRASH" to understand why US dollar becomes more valuable during financial crisis. We are spending borrowed money. Time to pay it with interest will come soon.
Jan 17, 2012 2:53PM
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The good news and the hopes from China
Chinese gross domestic product growth slowed to a rate of 8.9% in the fourth quarter, its slowest growth in 10 quarters but better than the 8.7% expected by economists, according to a survey by Thomson Reuters.
Why didn't they just lower expectations to like 8.0%.....this way the market would have rallied about 300 points on the "good news" of 8.9%!

Jan 17, 2012 5:02PM
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Well if the economy sux here and gas and everything else is killing the consumer, Wall street better look overseas to make a fast buck. Sooner or later the well runs dry. If they like making easy money on China well then I'm sure theres a cruise ship headed that way, feel free to jump on it one way.
Jan 17, 2012 7:40PM
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Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."    Matthew 19:24
Jan 17, 2012 5:16PM
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truthseekerin/VT.

 

China is doing...well guess what??  This is a country that can't be trusted and is not a friend of the USA.  Low wages, horrific working conditions, violation of child labor, no regard for the environment etc. 

 

I think that China is just about where the US was several decades ago with their low

wages, working conditions, labor laws, and environmental controls. 

 

Then along came unions, labor laws,  environmental controls,  and many other

government regulations and tax burdens and look where we are today.  Driving our manufacturing and money overseas. 

 

Given enough time China will probably do the same, but I doubt we have enough time

to wait for that to happen.

 

We need to take a serious look at our two biggest obstacles to growth.  Well 3 actually.

Our tax system, our regulatory systems, and our political system.  I think we need

to resolve our politcal issues before we can solve the other two.

 

And if the past 3 decades is any indication where we are going with that the future

doesn't look to promising.

Jan 17, 2012 4:44PM
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Taking their minds off of Europe won't make the problem go away.
Jan 17, 2012 8:44PM
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The Wall Street Greed machine rolls on with crude oil on its way to $101 dollars a barrel. How much longer are the traders going to use the Iran BS to inflate prices? I look for consumer spending to be stagnant in January as a result of higher fuel and heating oil prices. Already paying $3.70 a gallon for gas and $4.00 a gallon for heating oil in my area. Wall Street must be stupid if they think that they are going to get away with screwing us once again with high gas prices. I have already made the choice to cut back on spending and I ask you to join me. These people need to be sent a message that we are sick of their Greed. Low consumer spending will result in no growth which will in turn equal a stock market that sucks like our current economy which cannot support high fuel prices and survive.
Jan 17, 2012 7:48PM
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China fixes their currency.  They fix their news and information.  How can we say they don't fix their GDP numbers to look a bit better than they really are?  I take their numbers as a grain of salt.  As I do the numbers from our own government on inflation and unemployment-- mostly for the reason for the margin of error for our numbers (US) because of the public awareness of how they compute price index with hedonistic and substitution effect-- which is a distortion that can be big as it is subjective-- substitution and hedonistic effect should be done after the raw data not before the raw data and by specific businesses for their purposes-- not for the governments purpose to try to make things look better than what they are.  And unemployment, we all know people stop counting if they no longer receive unemployment or if they quit and start their own business, they're not added to the pool of employed or unemployed-- the numbers are fuzzy.  But China, well we just don't know if they're even honest at all.

My conclusions from here about China by people in the know (have or had business trips there) tell about lots of empty real-estate and factories-- negative.  But I get mixed info from friends here that China's economy stinks so they came here for work, and others that are here for education say its red hot doing well, and that I should consider going there-- of course that's industrial specific for those Chinese saying its great-- usually a skilled industry.  So its hard saying.  We just know its declining over all right now.  Hardly positive. Especially considering their economy is still based on exports to US or Europe by 80%.  And Europe is on slippery slopes and so is the US.  

Jan 17, 2012 4:00PM
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Well the balloon is being deflated right on schedule.  The market was holding nicely until just after noon time.  Watch the bait and switch action.
Jan 17, 2012 4:13PM
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PUMP AND DUMP

 

PUMP AND DUMP

 

'VESTORS NOTHIN' BUT SUCKERS AND CHUMPS

 

Keep feedin this and you get what you deserve!

Jan 17, 2012 4:15PM
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Hey Brent it's land of the Fee and Home of the Slave.

You can't even be a debt slave in this country without being fee'd to death first.



Jan 17, 2012 4:22PM
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Like we said this morning, be cautious; being up 100, 150, 200, 300 points do not mean a whole lot anymore.  We told you there were (are) plenty of scumbags down here today so most of the gains have been given back now. We will see if we can keep things in the green, a long way to go still...Manipulators​ made the call at about 1425 and down we went...Oh well, more after the close.
Jan 17, 2012 5:32PM
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TruthseekerVT.

You're absolutely right about China , but corporate America doesn't give a damn about Chinese social or working conditions. Bottom line is the sole motivator for American mfg'rs. Corporate America is not interested in social issues whether it be Chinese employees or American employees.Until such time that there is an attitudinal change by big business not much will change.and that change is dependent upon the middle class which the 1 percenters have been strangling.

Jan 17, 2012 7:31PM
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Raiding saving accounts ?  Thats funny,Tapping into 401K'S  more funny!
That has been done already ,investment brokers finished off the 401's.

Many people I have spoken to  not paying there mortgages to keep up with the Jones who are also not paying their mortgages.
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