The G8 summit
A world of troubles to tackle
The G8 leaders, meeting in Japan, have many challenges but few tools
THE leaders of the G8 group of rich countries kicked off three days of annual summitry hosted by Japan in Toyako on the northern island of Hokkaido on Monday July 7th. The remoteness of the venue—a bubble-era resort hotel overlooking Lake Toya—and an overwhelming police presence around the summit and Japan’s main cities appear to have prevented the scale of anti-globalisation protests and street violence that have disrupted recent gatherings of the world’s self-appointed steering group, including last year’s summit at Heiligendamm in Germany. But even without the protests, the leaders of Britain, France, Germany, Italy, Canada, the United States, Japan and Russia, half of them new to their job, will be aware of how much the world has changed since Heiligendamm.
At last year’s summit the price of oil was at less than half today’s $140 a barrel. The world price of rice and other grains gave few signs of doubling, threatening political stability in Africa and Asia and mocking earlier G8 commitments to reducing global poverty. Meanwhile, mention then of structured investment vehicles or Northern Rock to a G8 leader would have been met with a blank stare.
Pricey oil, the food crisis and the credit crunch: the new challenges either have their roots beyond the G8, or have quickly raced across borders. Either way, they highlight how the G8’s supposed goals work increasingly at cross-purposes. The call for lower fuel prices stands at odds with energy efficiency, cutting carbon dependence and tackling climate change—as does the drive against nuclear proliferation. Emphasising biofuels means less land for food production, leading to higher prices and hungry bellies. The desire of rich countries to avoid recession raises questions about their resolve to nip inflation. The rich-country club (plus Russia), representing a minority of the world’s population, appears ill-equipped for the challenges.
As host, Japan’s prime minister, Yasuo Fukuda, is determined to make the best of the contradictions. The summit’s opening day addresses poverty and higher food prices in Africa, with seven African national leaders invited. Japanese officials, among others, have floated the idea of a grain stockpile that might act as a buffer against volatile prices. Britain’s prime minister, Gordon Brown, proposes a doubling of food production in Africa. But talk is cheap: non-government organisations give warning that even development goals agreed by the G8 just three years ago at Gleneagles in Scotland appear to be slipping. The head of the Asian Development Bank points out that food is not solely an African challenge: over 1 billion Asians spend some three-fifths of their income on food.
On the summit’s second day, the G8 leaders huddle informally, but on the third the “outreach” championed by Japan continues with China, India, Brazil, Mexico, Indonesia, Australia South Africa and South Korea all invited to discuss carbon emissions and global warming. That brings together the world’s biggest emitters, but few concrete decisions are likely: after all, a deal to replace the Kyoto protocol, which expires in 2012, is not due until a UN conference in Copenhagen at the end of 2009. Still, China and India might agree to make bigger verbal commitments to cutting emissions—provided the West makes money and technology available.
Until now, these two giants have argued that big cuts were an inequitable way to deal with a carbon-dioxide concentration in the atmosphere that was not of their making, but because of earlier industrialisation. Yet the United States is reluctant to adopt emissions targets without commitments from the newest industrialisers. Ahead of the summit George Bush promised to be “constructive” on climate change. If there is any sign of progress on this matter, some G8 leaders may push for something firmer than the Heiligendamm promise to “consider seriously” cutting emissions by half by 2050.
These, then, are the global challenges that the G8’s leaders will attempt to address (while also finding time to condemn Zimbabwe’s Robert Mugabe and gauge progress on North Korea’s denuclearisation). If only electorates were behind them. President Nicolas Sarkozy of France has yet to regain the popularity and authority that propelled him to office. Mr Bush, unpopular at home, is nearing the end of his term. Mr Fukuda will probably not be around in a year’s time, with Mr Brown’s future only a little less assured. Popular restiveness against national leaders, even if it is not allowed to show itself in Toyako, puts the G8’s goals in even greater question.
July 7 (Bloomberg) -- The prerequisites for John McCain's running mate are clear: a Washington outsider with solid economic credentials who isn't associated with President George W. Bush, can fill the vice-presidential attack-dog role, help win Western and Midwestern states and cut into Democrat Barack Obama's fundraising advantage.
One candidate fits the bill: former Massachusetts Governor Mitt Romney.
The challenge would be in overcoming the animus that set in between Romney and the presumptive Republican nominee during the party's primaries.
Romney, 61, has ``no shortage of strengths,'' said Dan Schnur, who was McCain's communications director in 2000.
At the same time, though, ``McCain is a very visceral politician; he has very strong reactions both to people who he personally likes and dislikes,'' Schnur said. ``It was pretty apparent during the primary that he and Governor Romney did not hold each other in very high regard.''
Romney had a successful career as a private-equity executive, has never lived in Washington or held national public office, and his ties to the Mormon community and the business world give him access to donors.
Mormon Support
In addition, he was born in Michigan where his father was governor, and beat McCain by nine percentage points in the state's primary this year. Romney also has strong support in Western states such as Nevada, where his fellow Mormons made up a quarter of the voters in the state's January Republican primary, according to exit polls.
During the primary, Romney proved he was capable of going on the attack, a skill that is required of vice presidential candidates. McCain felt the sting of that aggressive streak before the Jan. 15 Michigan primary, when Romney characterized his comments about the state's job losses as a demonstration of ``pessimism about Michigan's future.''
On substance, Romney is strong in areas where Arizona Senator McCain is weak, in particular the economy. McCain, 71, said in December that he doesn't understand economics ``as well as I should'' and his lack of comfort is apparent on the stump.
Private-Equity Background
When asked in April about reversing his support for a federal home-mortgage bailout, he reached for a sheet of talking points. By contrast, Romney has a master's of business administration from Harvard University, ran the 2002 Salt Lake City Olympics, and made a vast fortune as co-founder of the Boston-based private-equity firm Bain Capital LLC.
A report last week in Politico.com that Romney could raise $50 million in 60 days is also feeding speculation that he is at the top of McCain's list.
Ron Kaufman, a political director in President George H.W. Bush's administration and a Romney campaign adviser, said the former Massachusetts governor is getting a close look as the economy displaces the war in Iraq as the most pressing concern for Americans.
``It's more about gas prices than fundraising and it's more about the economy not doing so well than anything else,'' Kaufman said. ``The most logical person in anyone's mind is Mitt Romney.''
For the moment, however, it is unclear whether these assets would be enough to overcome the residual bad feeling from a bitterly contested primary.
`Didn't Do Good'
``He beat the daylights out of us and certainly out of McCain,'' said Ed Rollins, the campaign chairman for former Arkansas Governor Mike Huckabee, who also ran for the Republican nomination. ``He spent the most money, attacked everybody more and at the end didn't do good.''
Romney also brings negatives, including his Mormon religion, which some of the evangelicals who form a core Republican constituency describe as a cult and a disqualifier for their support. They also have condemned what they regard as his shifting positions on issues such as gay rights and abortion.
``There's a lot of stuff out there that won't stand scrutiny,'' Rollins said.
That weakness plays into one of the biggest vulnerabilities of McCain, who is trying to mend fences with the Christian right after years of frayed relations. Last month, he met with the evangelist Billy Graham and a group of prominent Ohio Christian leaders.
Oversaw Layoffs
Schnur said Romney's apparent advantage on the economy may have a down side. During his unsuccessful 1994 run against incumbent Democrat Ted Kennedy for a Massachusetts Senate seat, Romney was criticized for overseeing layoffs while working at Bain.
``The Democrats could have a heyday talking about downsizing and lay-offs,'' Schnur said. ``It's the type of thing that in a difficult economic climate could be a real problem.''
Still, Romney is battle-tested and well-known, and has support in the fiscal-conservative wing of the Republican Party.
Neither McCain nor Romney have publicly discussed the possibility of a shared ticket. In May, however, the former Massachusetts governor was a guest at McCain's ranch in Sedona, Arizona, along with potential vice presidential nominees such as Florida Governor Charlie Crist and Louisiana Governor Bobby Jindal.
McCain's second-tier advisers have been arguing for Romney ``for a long time,'' said Vin Weber, who was Romney's policy chairman on the campaign. For the moment, though, ``I still don't see any evidence we have anyone'' in McCain's inner circle making the case.
July 7 (Bloomberg) -- Policy makers in emerging economies from Russia to Vietnam may have to start acting less like Ben S. Bernanke and more like Paul Volcker if they want to bring inflation under control.
With currencies tied to the U.S. dollar, officials in many developing countries have had to keep their monetary policies linked to the Federal Reserve's. Now, after chairman Bernanke led the Fed's most aggressive easing in two decades, their central banks find themselves with interest rates too low for their economies and the worst bout of inflation in a generation.
``There's a lack of independent monetary policy; it's been inappropriately stimulative,'' says Nariman Behravesh, chief economist with Global Insight in Lexington, Massachusetts. The answer, he says, may be to ``tighten credit more aggressively,'' the way then-chairman Volcker did in the early 1980s.
Such a policy shift would mean pushing borrowing costs above the level of inflation and keeping them there even at the cost of a steep slowdown that might send commodity prices into a tailspin. Faced with inflation that approached 15 percent in 1980, Volcker pushed interest rates as high as 20 percent and drove the U.S. into its deepest recession since the 1930s.
Prices are now surging across the developing world. China's inflation rate stayed near a 12-year high of 8.7 percent in May; prices in Vietnam jumped 27 percent in June and Indian wholesale prices increased 11.6 percent last month, the fastest in 13 years. Inflation exceeds benchmark lending rates in China, Russia, India and at least a dozen other emerging economies.
Doing Something
``They can't sit on their hands any longer, and need to start reacting in order to be seen to be doing something,'' says Robert Prior-Wandesforde, an economist at HSBC Holdings Plc in Singapore. ``Interest rates do need to go a lot higher.''
Rate increases big enough to slow down some of the world's fastest-growing economies would help Bernanke, 54, and European Central Bank President Jean-Claude Trichet in their own inflation fights by cooling the commodity-price boom.
Trichet, 65, said in an interview last month that there's a risk of inflation ``exploding'' if central banks don't act decisively; the ECB last week raised its benchmark lending rate a quarter point to a seven-year high of 4.25 percent. The price of oil has almost doubled in the past year, touching a record $145.85 on July 3, and wheat and rice prices jumped more than 50 percent in the same period.
Food and Energy
The surge in commodity prices poses a particular problem in emerging economies because food and energy account for a bigger share of overall inflation than in the U.S. or Western Europe -- more than 40 percent in India, Thailand and Turkey, compared with about 25 percent in the U.S., Morgan Stanley says.
Volcker's track record is already being invoked by some officials in Asia. Singapore Finance Minister Tharman Shanmugaratnam on June 27 praised the former Fed chairman, now 80, for ``reversing the psychology of inflation'' and said Asian central bankers must realize they need to tighten credit before it's too late. Volcker wasn't available for comment.
While India, Taiwan, the Philippines, Chile, Mexico, Egypt, Brazil and Russia all raised interest rates last month, the danger is that they've already waited too long, and that measures strong enough to curb inflation now would risk sinking their economies.
`The Sheer Difficulty'
``The sheer difficulty of achieving stability on the growth and inflation fronts will be a shock for Asian assets, equities and currencies,'' says Stephen Jen, chief currency strategist at Morgan Stanley in London. ``It's almost impossible for them to get ahead of inflation.''
Chinese Premier Wen Jiabao said yesterday curbing inflation has a ``preeminent'' position in economic policy. Still, Jen argues the country needs to lift its real interest rate, currently near zero, by about 8 percentage points. JPMorgan Chase & Co. calculates that the average real rate across emerging nations stands at 2.3 percent, compared with 3.7 percent a year ago.
``They're hundreds of basis points away from a restrictive policy,'' says David Hensley, JPMorgan's director of global economic coordination in New York.
The monetary policies of emerging economies, devised in the aftermath of the Asian financial crisis a decade ago, now are part of the global inflation problem. By directly or indirectly tying their currencies to the dollar, many emerging economies suffer the imported inflation that normally accompanies a weakening exchange rate.
Dollar Link
The dollar link, though, also ties their policies to those of the Fed, which cut its key lending rate by 3.25 percentage points in eight months even as the inflation rate doubled.
China still limits trading in the yuan three years after dropping a peg to the dollar. Malaysia continues to ban offshore trading of the ringgit, and Vietnam controls its currency's trading band against the dollar.
Bank of England Governor Mervyn King said June 26 that Asia is contributing to global monetary policy that's ``a little lax.'' A day later, Fed Vice Chairman Donald Kohn urged ``actions to contain inflation'' in the world's fastest growing economies.
Some central banks are also constrained by political pressures that have made them too willing to accommodate growth, says Venkatraman Anantha-Nageswaran at Bank Julius Baer & Co.
China's central bank, which is controlled by the government, has yet to make good on a pledge to raise rates this year. Indonesia's central bank last year caved in to pressure from Vice President Jusuf Kalla to cut rates. Inflation accelerated to a 21- month high of 11 percent, leading the bank to raise the benchmark rate last week for the third month in a row.
Prosperity Story
In Malaysia, Second Finance Minister Nor Mohamed Yakcop on June 24 said the central bank is ``not independent of the government'' and that inflation at a nine-year high doesn't pose a ``major challenge.''
``The prosperity story has been built so much on leverage and liquidity and they need growth to keep on rolling,'' says Anantha- Nageswaran, Julius Baer's Singapore-based head of research in Asia. ``They are so afraid that what they've built is not a house of bricks, but a house of cards. There is a lack of institutional maturity in Asia.''
Inflation-targeting systems have also had limited success. Turkey last month abandoned its price goal after missing it for two years; Russia is struggling to hit its own target while managing the ruble. Morgan Stanley says inflation exceeds targets in at least 19 emerging economies.
In the absence of effective strategies, a ``hard landing'' may be the only way to get inflation down, says Morgan Stanley's Jen.
``There does not seem to be another way out,'' Jen says. ``Until recently, the emerging markets were seen as a safe haven from the financial crisis. The tables have turned.''
July 7 (Bloomberg) -- President George W. Bush and Russian President Dmitry Medvedev said they will keep working jointly to block Iran's uranium enrichment efforts while indicating they made no progress on bridging differences over U.S. plans to deploy a missile defense system in Europe.
``While there are some areas of disagreement I know there are other areas where we can work together,'' Bush said following his meeting with the Russian leader at the Group of Eight industrial nations summit in Toyako, Japan.
Medvedev said he and Bush will ``build on the relationship'' between the two nations in the remaining months of the U.S. president's term.
The meeting, which lasted more than an hour, was the first between the two since Medvedev took over from Vladimir Putin in May. They met previously when Bush traveled to Russia in April for talks with Putin on U.S. plans to install a missile-defense system in Eastern Europe.
Relations between the two countries have strained over the anti-missile system and expansion of the North Atlantic Treaty Organization to include former Soviet bloc nations.
Medvedev, like Putin, opposes U.S. plans to build a missile-defense system in the Czech Republic and Poland, saying it would threaten Russia. Bush says it is intended to defend against a missile attack by a ``rogue'' nation such as Iran.
New Approach
Medvedev, Putin's handpicked successor, has avoided the former president's aggressive tone since his May 7 inauguration and is looking to repair frayed relations with Western governments at his inaugural G-8 meeting. Still, he has echoed Putin's objections to the anti-missile system.
Sergei Prikhodko, Medvedev's foreign policy adviser, said afterwards that while consultations on the missile defense plan are continuing, ``There is no real progress.''
Both men mentioned Iran as an area of common interest where they would continue cooperating, though they gave no details. The U.S. and Russia also are part of the six-party negotiating the dismantling of North Korea's nuclear program.
``We had a good discussion about Iran,'' Bush, 62, said.
The two nations have a general agreement on their approach on Iran, Medvedev, 42, said through a translator. ``Then certainly there are others with respect to European affairs and this missile defense where we have differences,'' he said.
Pressure on Iran
The U.S. and Russia, joined by the European Union and China have been working to persuade Iran to give up uranium enrichment. Iran is being offered economic incentives to suspend its nuclear work, which could lead to production of material for an atomic bomb. While welcoming negotiations, Iran's leaders have signaled that intend to proceed with their nuclear development work.
German Chancellor Angela Merkel today warned Iran that the offer of negotiations isn't open-ended.
``I hope we will make clear that, on the one hand, offers to Iran are on the table and that, on the other hand, further sanctions must be taken into account in the event of non- cooperation,'' she said in an interview with German television networks in Toyako.
French President Nicolas Sarkozy urged Medvedev to take a more active role in pressuring Iran during their meeting today.
``It's in the interests of global stability for Russia to play a full role in resolving major crises,'' Sarkozy said.
Reluctance on Sanctions
Russia has been reluctant to apply tougher sanctions against Iran and Medvedev last week criticized the European Union decision June 23 to shut down the EU offices of Bank Melli Iran and deny travel visas to more Iranian officials.
The standoff has raised tensions in the region and prompted speculation that Israel may preemptively strike Iran's nuclear facilities. Concern that a conflict would threaten oil supplies has helped pushed oil prices to record highs.
Oil's 50 percent gain this year is producing a drag on the global economy and is among the top subjects of discussion at the G-8 summit.
Bush arrived in Japan yesterday for his final G-8 meeting. He will also hold talks with leaders of Germany, India, China and South Korea during his five-day trip.
The main topics for the summit include aid to Africa, the rising cost of energy and food and climate change. Bush is pressing the other leaders to fulfill their commitments to assist African nations deal with AIDS, malaria and other disease.
Increasing Aid
The G-8 nations in 2005 pledged to increase overall aid to $130 billion from $80 billion and double assistance for Africa to $50 billion. ONE, a nonpartisan group that works to end extreme poverty around the globe, with a focus on Africa, predicts that the U.S. and the U.K. will meet their commitments, while other nations, including France, Italy, Germany and Canada, are off track.
Bush, on numerous occasions during the past month leading up to the summit, has said he will push his counterparts to fulfill their obligations.
On climate change, summit host Japanese Prime Minister Yasuo Fukuda yesterday downplayed expectation that the G-8 will emerge from the meetings having fixed a target for cutting greenhouse gas pollution within the next five decades. Bush is insisting that any agreement on a goal must include India and China.
``This is a sad day, that the discussion is whether there may or may not be a 2050 target,'' said Daniel Mittler, a political adviser to the activist group Greenpeace International. James Connaughton, chairman of Bush's White House Council on Environmental Quality, said the U.S. is ``prepared'' to commit to binding targets as part of a new international agreement to replace the Kyoto Protocol, which expires in 2012.
July 7 (Bloomberg) -- The dollar rose to the highest level against the euro in more than a week as leaders of the Group of Eight nations convened in Japan.
The 15-nation euro and the pound dropped against the dollar as German and British industrial production fell in May. The yen weakened against the euro and the dollar as global stocks advanced, reviving demand for higher-yielding assets funded by loans in Japan. President George W. Bush, in Japan for the summit, reiterated support yesterday for a ``strong'' dollar.
``With the G-8 meeting in the background, the near-term sentiment of the dollar is improving,'' said Benedikt Germanier, a currency strategist at UBS AG in Stamford, Connecticut. ``They prefer a strong dollar.''
The dollar increased 0.5 percent to $1.5624 per euro at 9:52 a.m. in New York, from $1.5706 on July 4. It touched $1.5611, the strongest level since June 25. The yen dropped 0.8 percent to 107.70 per U.S. dollar, from 106.80. Japan's currency fell 0.3 percent to 168.29 versus the euro, from 167.73.
South Korea's won rose against all of its major counterparts after the government pledged ``stern action'' to stabilize the local currency. The won climbed 0.7 percent to 1,042.90 per dollar, from 1,050.35 on July 4.
The dollar strengthened versus the euro on speculation U.S. officials will say the currency has fallen too far and try to stem gains in oil prices as the G-8 summit gets under way in Japan. Leaders from Canada, France, Germany, Italy, Japan, Russia, the U.K. and the U.S. are meeting for three days.
Bush on Dollar
Bush said yesterday on the first day of his five-day trip to Japan that the U.S. will continue to pursue a strong dollar.
``The U.S. believes in a strong-dollar policy,'' he said at a news conference with Japanese Prime Minister Yasuo Fukuda in Tokyo. The U.S. economy remains fundamentally strong even as growth has slowed, Bush said.
The Dollar Index traded on ICE futures in New York, which tracks the greenback against the currencies of six U.S. trading partners, rose as much as 0.6 percent to 73.151, the highest level since June 24.
The U.S. currency also appreciated as crude oil fell after Iran's Foreign Minister Manouchehr Mottaki expressed confidence in talks with Western governments on the country's nuclear program. Organization of Petroleum Exporting Countries President Chakib Khelil said yesterday record oil prices are more related to the dollar exchange rate than supply.
Crude Oil Falls
Crude oil for August delivery fell 1.6 percent to $143.02 a barrel on the New York Mercantile Exchange. Oil reached a record $145.85 a barrel on July 3.
The euro fell against the dollar as German industrial production unexpectedly dropped 2.4 percent in May, its third straight decline, prompting traders to pare bets the European Central Bank will raise the main refinancing rate for a second time this year.
``We do see the euro weaker,'' said Stuart Bennett, a senior European strategist at Calyon, the investment-banking unit of Credit Agricole SA, France's second-biggest lender. ``We are not relaxed about the growth outlook, and it's weaker than the ECB is accepting. Even though we suspect inflation means that they might have to hike again, the growth dynamics for Europe are pointing toward a weaker euro.''
The euro will fall to a range of $1.43 to $1.45 by the end of the year, Bennett predicted.
Trichet's `No Bias'
The 15-nation currency declined last week after ECB President Jean-Claude Trichet said he had ``no bias'' on borrowing costs following the decision to raise the main refinancing rate by a quarter-percentage point to 4.25 percent.
The British pound weakened to the lowest level against the dollar in almost two weeks after U.K. factory output fell 0.5 percent in May. The median forecast of analysts surveyed by Bloomberg News was for no change.
JPMorgan Chase & Co., the third-largest U.S. bank, predicted the Bank of England will keep the target lending rate at 5 percent ``for the time being,'' a change from its previous estimate for higher rates in August.
The pound slid as much as 0.9 percent to $1.9649 against the dollar, the lowest since June 24, from $1.9823 on July 4.
Japan's currency dropped 1.1 percent to 13.97 versus the South African rand and 1 percent to 10.44 against the Mexican peso as a rally in stocks encouraged investors to add to holdings of higher-yielding assets funded in Japan.
The MSCI Asia-Pacific Index gained 0.4 percent, while Europe's Dow Jones Stoxx 600 Index strengthened 1.7 percent. The Standard & Poor's 500 Index climbed 0.9 percent.
In the carry trade, investors get funds in a country with low borrowing costs and invest in one with higher interest rates. Japan's target lending rate of 0.5 percent is the lowest among major economies and compares with 12 percent in South Africa and 7.75 percent in Mexico.
By Eric Martin
July 7 (Bloomberg) -- U.S. stocks rose, led by consumer and transportation shares, as a drop in oil boosted the outlook for profits and a five-week retreat left the Standard & Poor's 500 Index at the cheapest relative to earnings since April.
General Motors Corp., the largest U.S. automaker, gained after crude slid and the Wall Street Journal said the company is considering cutting jobs and dropping some of its eight brands. General Electric Co. advanced after its NBC Universal unit agreed to buy the Weather Channel with two buyout firms. Stocks climbed in Europe and Asia following a rout that left global equities at the cheapest valuations in at least 13 years.
The S&P 500 added 8.35 points, or 0.7 percent, to 1,271.25 at 9:37 a.m. in New York. The Dow Jones Industrial Average increased 96.89, or 0.9 percent, to 11,385.43. The Nasdaq Composite Index rose 25.36, or 1.1 percent, to 2,270.74. More than three stocks climbed for each that fell on the New York Stock Exchange.
``There are going to be corrections in the crude price which can benefit some sectors short-term,'' said David Hart, a senior equity analyst at London-based investment adviser Fat Prophets U.K. Ltd. ``It's fair to say we are slightly more optimistic as I don't anticipate anything getting any worse.''
The S&P 500, which last week completed the longest streak of weekly declines in four years, was valued at 20.84 times earnings before the start of trading, the lowest since April 11, according to Bloomberg data.
July 7 (Bloomberg) -- Microsoft Corp. said it may renew talks for a transaction with Yahoo! Inc. if Carl Icahn succeeds in replacing the board, throwing its weight behind the billionaire investor's fight for control of the Internet company.
Microsoft said it might try to buy the search business or the whole company, pushing Yahoo's shares up as much as 12 percent. Microsoft has been in talks over the past week with Icahn, who controls about 69 million Yahoo shares, or about 5 percent.
The software maker's support lends Icahn ammunition in his bid to unseat the directors and replace Yahoo Chief Executive Jerry Yang after they rejected earlier overtures from Microsoft. Investors including T. Boone Pickens, chairman of BP Capital LLC, and Third Point LLC, led by activist investor Daniel Loeb, have said they will back Icahn's slate.
Yahoo rose $1.97 to $23.32 at 9:34 a.m. New York time in Nasdaq Stock Market trading. Earlier the stock rose as high as $23.85, the most since Feb. 1, when Microsoft initially disclosed an offer for the Internet company. Microsoft, based in Redmond, Washington, climbed 36 cents to $26.34.
There can be no assurance of a transaction, Microsoft said in an e-mailed statement today. Yahoo spokeswoman Tracy Schmaler didn't immediately return a call seeking comment.
Microsoft dropped a $47.5 billion takeover bid for Sunnyvale, California-based Yahoo in May after Yang demanded more money. The software maker later began talks on an alternative transaction, which collapsed last month. Combining with Yahoo would help Microsoft triple its share of U.S. Internet searches, narrowing the gap with market leader Google Inc.
Yahoo ``is now moving toward a precipice,'' Icahn said in a separate statement today. ``It is time for a change.''
No comments:
Post a Comment