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?
Updated: 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.
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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 | ||||||||||||
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.
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.
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.
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."
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%!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.
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.
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.
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