Microsoft, Yahoo Accord Gets Backing From Ad Agencies

Microsoft Corp. and Yahoo! Inc., whose Internet-search agreement is under antitrust review by the U.S. Justice Department, received backing from the biggest advertising agencies and a trade group that represents them.

Chief executive officers from WPP Plc, Interpublic Group of Cos., Publicis SA and Omnicom Group Inc. signed a letter to the Justice Department saying the combination “is good for advertisers, marketing services agencies, Web site publishers and consumers.” The group asked regulators to bring their review to “a speedy conclusion.”

The companies need to convince the agency, which last year scuttled a search agreement between Yahoo and market leader Google Inc., that the deal doesn’t constrain competition. Microsoft said last month that the Justice Department had expanded its review of the deal, in which Yahoo agreed to use Microsoft’s Bing search engine on its Web sites.

The letter came from Nancy Hill, CEO of the American Association of Advertising Agencies, and was posted on the group’s Internet site.

The 10-year agreement also would have Yahoo selling ads next to search results from both companies. Microsoft and Yahoo are arguing their combination is needed to create a viable competitor to Google.

Market Shares

Microsoft, based in Redmond, Washington, fell 14 cents to $26.36 at 4 p.m. New York time on the Nasdaq Stock Market. Yahoo, based in Sunnyvale, California, added 41 cents to $17.22. Google, in Mountain View, California, rose $2.24 to $552.09.

Google had 64.9 percent of U.S. Internet search traffic in September, according to research firm ComScore Inc. in Reston, Virginia. Yahoo and Microsoft had 28.2 percent combined. Outside the U.S., Google has an even bigger lead.

In November 2008, Google walked away from a planned search deal with Yahoo after the Justice Department said it would sue to stop the alliance. That agreement was opposed by the Association of National Advertisers, a trade group that represented companies like Wal-Mart Stores Inc. and General Motors Corp.

Activists snare media with Chamber of Commerce hoax

An activist group seeking to draw attention to the debate over climate change policy staged a hoax on Monday, posing as representatives of the U.S. Chamber of Commerce.

The Yes Men group issued a press release and held a news conference at the National Press Club, purporting that the business group had decided to support climate change legislation currently before the U.S. Congress.

A spokesman for the Chamber of Commerce broke into the news conference, alerting media to the hoax, but Reuters and other outlets had already issued reports.

The Chamber said it would ask police to investigate.

"Public relations hoaxes undermine the genuine effort to find solutions on the challenge of climate change," Thomas Collamore, a spokesman for the Chamber of Commerce, said in a statement.

"These irresponsible tactics are a foolish distraction from the serious effort by our nation to reduce greenhouse gases."

Reuters issued a correction to its report as soon as it confirmed the hoax and subsequently withdrew the story and sent an advisory to readers.

Apple Profit Surges on iPhone Sales

Apple Inc. continued to power through the recession as it posted a 47% quarterly profit jump as consumers continued to snap up its iPhones and Macintosh computers.

The company also sounded an upbeat note for the holiday season, despite new competition in the smart-phone and PC markets. Shares of Apple surged more than 6% after the results were released, eclipsing $200.

Apple sold 7.4 million iPhones in the quarter ended Sept. 26, up 7% from a year ago and 41% more than the previous quarter, bucking concerns of a supply constraint. Demand was fed by a price drop and a faster iPhone model announced in June, which it has been gradually rolling out in overseas markets.

"We feel very, very good about suiting up and competing against anyone," Tim Cook, Apple's operating chief, said on a conference call. "Frankly, I think that people are really just trying to catch up with the first iPhone that was announced two years ago, and we've long since moved beyond that."

Apple also sold 3.1 million Macintosh computers in the quarter, up 17% from a year earlier, as it continued to gain ground on Windows-based machines. In the quarter, Apple released Snow Leopard, a major upgrade to its Mac operating system, and it said initial sales have been double that of the previous upgrade two years ago. Microsoft Corp. will release a new version of its rival software, Windows 7, this week.

While Wall Street had feared that expectations for Apple's earnings could be too high, the results exceeded even the most optimistic expectations. "I'm shocked," said Kaufman Brothers analyst Shaw Wu.

Overall, Apple reported a fiscal fourth-quarter profit of $1.67 billion, or $1.82 a share, compared with $1.14 billion, or $1.26 a share, a year earlier. Its gross profit margin rose to 36.6% from 34.7% a year ago. Revenue increased 24% to $9.87 billion from $7.9 billion a year earlier.

Apple's strong results appear to indicate that overall consumer spending is recovering. Other technology companies have also recently posted positive earnings, including Intel Corp. and Google Inc.

"This quarter really signals that we're coming out of the trough," said Gene Munster, an analyst for Piper Jaffray. "You don't see too many blow-out quarters like that, especially when you're the size of Apple."

Apple's shares, which have nearly doubled over the past year, rose 6.1% to $201.50 in late trading, after closing up about 1% at $189.86 on the Nasdaq Stock Market.

For the current quarter, Apple's forecast for earnings and profit were less conservative than in the past. The company projected per-share earnings of about $1.70 to $1.78 with revenue between $11.3 billion to $11.6 billion.

Cost Cuts Lift Profits But Hinder Economy

U.S. stocks notched new 52-week highs again on Monday, thanks to corporate America showing better-than-expected profits. But that optimism belies deep worries among company executives about the strength of the economic recovery.

Tool maker Black & Decker Corp. said earnings this quarter will be roughly twice its earlier forecast, while Dutch consumer-goods conglomerate Royal Philips Electronics NV also reported an unexpected profit. The Dow Jones Industrial Average rose 20.86 points to 9885.80, its highest since Oct. 6, 2008. The S&P added 4.7 points to 1076.19.

Freight tonnage at YRC was down 35.3% from a year earlier in the second quarter. Mr. Zollars says he hasn't seen his clients, who range from retailers to heavy industry, doing much restocking to prepare for increased business.

In coming weeks, the details of earnings reports -- including items such as capital expenditures, as well as revenues for companies that sell capital goods -- will demonstrate the extent to which executives are turning their relative optimism and cash into actual investment.

Novartis, Vanda in drug deal worth up to $265M

Novartis Pharma AG and Vanda Pharmaceuticals Inc. said Monday that they reached a deal worth up to $265 million that gives Novartis exclusive rights to sell Vanda's schizophrenia drug Fanapt in the U.S. and Canada.

The deal amends an earlier agreement between the companies. Under its terms, East Hanover, N.J.-based Novartis, an affiliate of Novartis AG, will be able to distribute an oral tablet form of the drug in both countries. It will also be responsible for clinical development in both countries, such as developing and selling a long-acting injectable form of Fanapt.

Rockville, Md.-based Vanda will keep the rights to sell Fanapt in an oral and injectable form outside Canada and the U.S.

Bank of America Set to Reveal Merrill Advice

In a stunning reversal, Bank of America’s board has voted to reveal the legal advice that the bank received late last year about its merger with Merrill Lynch, according to three people briefed on the matter.
After six months of digging in its heels, the bank is expected to provide legal documents that could shed light on how its lawyers advised executives to deal with the disclosure of key information about losses and bonuses at Merrill Lynch to the bank’s shareholders.
With a stroke of a pen, the bank’s decision will remove a stumbling block in a wide range of cases. The documents may exonerate bank executives, like its retiring chief, Kenneth D. Lewis, or may provide the evidence that some investigators are seeking to lay blame at individuals’ feet.
The bank has refused to allow its attorneys to answer questions about many aspects of the deal, even as pressure to do so surged from many corners. Some of the pressure came from lawmakers in Congress and regulators who are deciding whether to allow Bank of America to return part of the $45 billion it received in bailout funds — an outcome the bank has been urgently pursuing.

Hong Kong stocks finish lower, ending 5-day rally

Hong Kong stocks reversed opening gains to close down 200.09 points, or 0.93 percent, at 21,299.35 on Monday, tracking losses on the Chinese mainland market and ending a five-day rally of the Hang Seng Index.

The benchmark index opened at the day's high of 21,623.33, but reversed early gains later. It once dipped to as low as 21,262.71 during the day's trading.

Turnover fell to a rather modest 44.18 billion HK dollars (5.71billion U.S. dollars) from Friday's 62.23 billion HK dollars (8.04billion U.S. dollars).

Chinese banks may seek new M&A deals

Chinese banks have a golden opportunity until 2012 to pursue mergers and acquisitions (M&As) to become world-class financial institutions, China Daily reported Monday.

The newspaper said, citing a recent report from management consulting firm Accenture, that most bank executives in Asia-Pacific and Europe believed Chinese banks will play an influential role in changing the global banking landscape.

The report was based on interviews with 35 bank executives, equity firm professionals and experts in developed and emerging markets.

In the wake of the world's financial crisis, the global banking industry will be significantly reshaped by 2012, the report stated.

For banks, bold moves are needed now to pave the way for higher performance in the face of profitability pressure, the report said.

Most bank executives interviewed agreed that there is overcapacity among banks in most markets, and thus more consolidation is needed. Banks will seek new and more flexible operating models to obtain higher performance levels.

China issues 30 bln yuan bond to finance railway expansion

China's Ministry of Railways (MOR) has begun to raise 30 billion yuan (4.41 billion U.S. dollars) to support railway construction through floating the first batch of bonds this year on the inter-bank bond market.

The bond issue comprised 20 billion yuan of 10-year bonds and 10 billion yuan of 15-year bonds, with a bidding yield rate range of 4.8 percent to 5 percent, said the MOR Tuesday.

Proceeds would be used to construct 32 new rail lines including a passenger line linking the two northeastern cities of Dalian and Harbin, which will boast a speed of 350 kilometers an hour, said the MOR.

Six securities brokerages, including Citics Securities, will underwrite the bonds sale.

Last year, State planner National Development and Reform Commission gave the green light to the MOR to issue 100 billion yuan of bonds, mainly to facilitate construction of 43 railway construction projects and locomotive purchases.

China plans to extend its rail network to 100,000 km by 2020 from 76,600 km in 2006, at an estimated 2 trillion yuan cost.

China's largest oil producer vows to maintain prominence for 50 more years

Daqing Oilfield, China's largest oil producer, wants to retain its prominence in the country's petroleum industry for another 50 years.

Wang Yongchun, general manager of Daqing Oilfield Co. Ltd, said Tuesday the oilfield would remain an important energy base and continue to contribute a large proportion of China's energy supplies up to 2060.

Wang said factors such as adequate underground fossil resources, scientific progress and well-trained personnel would help achieve this end.

In accordance with the overall sustainable development plan for the oilfield, it will be capable of producing crude and gas equivalent to between 20 million tonnes and 25 million tonnes from its wells annually by 2060.

Dollar rises against pound but falls against other major currencies

The dollar rose against the British pound on Monday after Britain announced plans to sell government assets, but fell against other major currencies.
Around 16 billion pounds of assets will be sold within the next two years as part of moves to reduce national debt, British Prime Minister Gordon Brown said.
The British Treasury expects its deficit to touch 175 billion pounds this year, about 12 percent of national income and the most in the Group of 20 nations.
The Center for Economics and Business Research, a British research group, said benchmark interest rate of Britain would be held at a historic low of 0.5 percent until mid 2001 at least.
This would lead to a continued weak exchange rate, with the pound falling to 1.40 dollars and could temporarily be reaching parity with the euro, the research group said.
Currency trade volume was light on Monday in New York because of the Columbus Day holiday. No economic report was released. Investors are waiting for quarterly profit reports from more major U.S. companies, expecting to see further signs of recovery.
The euro bought 1.4776 dollars in late New York trading compared with 1.4709 dollars it bought late Friday. The pound fell to 1.5786 dollars from 1.5835 dollars.
The dollar fell to 1.0357 Canadian dollars from 1.0441 Canadian dollars, and fell to 1.0271 Swiss francs from 1.0322 Swiss francs. It was unchanged at 89.84 Japanese yen.

Gold gains on weak dollar, strong oil

Gold futures on the COMEX Division of the New York Mercantile Exchange rose on Monday, heading for the all-time high as dollar weakened and oil rallied. Silver and platinum both ended higher.
The most active gold contract for December delivery climbed 8.90 U.S. dollars, or 0.9 percent, to finish at 1057.50 dollars an ounce. It touched as high as 1060.50 earlier in the session, nearing the record high 1062.70 set last Tuesday.
Buoyed by rising stock markets, investors' risk appetite forced dollar to go down. By the end of gold floor trading time, the dollar index, a gauge measuring the greenback's value against a basket of major currencies, tumbled 0.385 to 76.235 from 76.620 on late Friday. The precious metal's appeal of hedge strengthened.
The jumping oil also helped gold close higher. The benchmark contract for November delivery gained 1.55 dollars to settle at 73.32 a barrel when gold pit trading closed.
December silver was up 13 cents to at 17.82 dollars per ounce. January platinum rose 7.90 dollars to 1347.30 dollars an ounce.

Wall Street trades mixed as dollar slips

Wall Street traded mixed on Monday as the weak dollar uplifted commodities.

The U.S. dollar fell against a basket of major currencies and boosted equity market by lifting commodity prices. Crude oil climbed above 73 U.S. dollars a barrel on the New York Mercantile Exchange.

Chevron's stock rose 1.3 percent to 73.67 dollars while shares of Exxon were up 1.2 percent to 70.13 dollars.

Investors are closely watching a series of blue-chip earnings reports this week, beginning on Tuesday with Intel Corp and Johnson & Johnson.

And many big banks, from the worst hit sector during the recession, are scheduled to release earnings late this week. JPMorgan Chase reports on Wednesday, to be followed by Citigroup, Bank of America and Goldman Sachs.

Google rose 1.5 percent to 524.04 after several analysts raised their price targets on the shares ahead of its third-quarter results due on Thursday.

The Dow Jones industrial average was up 20.86 points, or 0.21 percent, to 9,885.80. The Standard & Poor's 500 index rose 4.70 points, or 0.44 percent, to 1,076.19. The Nasdaq composite was down 0.14 point, or 0.01 percent, to 2,139.14.