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Markets News Afternoon: Yahoo! and Microsoft in link-up; Oil price dips $4; Some Element Six jobs may be saved
By Finfacts Team
Jul 29, 2009 - 5:32:52 PM
Yahoo! and Microsoft today announced a partnership agreement on internet search which will challenge market leader Google.
Yahoo! will use Microsoft's new Bing search engine on its own sites, while Yahoo! will act as the exclusive global sales force for the companies' search advertisers.
Last year, Yahoo! rejected a $47.5 billion takeover bid from Microsoft. It said today it expected to gain about $500m a year in income and $200m in capital spending savings through the agreement.
Yahoo! also estimated the deal would provide it with a $275m benefit to annual operating cash flow.
Some of the 370 job cuts at the Element Six industrial diamond plant at Shannon, may be saved.
Management at industrial diamond firm Element Six is looking at a new initiative to save the company’s manufacturing and distribution unit.
The initiative, agreed after discussions between the Shannon management team and the chief executive of the Element Six group in London on Tuesday, is an alternative to the plan to wind down the Shannon operations.
The company has today advised all Shannon-based staff of the plan and has requested the full co-operation of all employees to sustain the Shannon operation.
General Manager Ken Sullivan said he was convinced the company could develop a sustainable operation in Shannon and save a substantial number of the 370 jobs.
“We need to think in new ways to create a truly cost competitive and long-term sustainable operation in Shannon.”
“The Group management now expects a comprehensive plan from us for their consideration next week. If this secures their support, we expect to be in a position to meet with employee representatives very shortly thereafter,” Sullivan said.
German consumer inflation
The German statistics office Destatis today reported that the consumer price index for Germany is expected to decline 0.6% in July 2009 compared with July 2008 (June 2009 on June 2008: +0.1%), according to results available from six Länder (States). Compared with the previous month, the index will be down by 0.1%.
In Germany, a negative inflation rate was last recorded in March 1987 (–0.3%). Between April 1986 and April 1987, the inflation rate ranged continuously between +/–0% and – 1.0%. Then as now, the reason for that development was a strong year-on-year decline in liquid fuel and motor fuel prices, which reached a peak in July 2008.
Carroll gets stay of execution
Property developer Liam Carroll who will be told on Friday if his Zoe group will be given the protection of examinership for 100 days, was today given a reprieve in the High Court against an attempt by Irish Nationwide Building Society to sue him personally for €60 million over loans made to his company Aifca Ltd.
Mr Justice Peter Kelly ruled that Carroll had demonstrated that he had an arguable case against Irish Nationwide's application, and he sent the case forward for a full hearing next November.
In September 2006, Carroll gave a personal guarantee to Irish Nationwide of liabilities of one of his companies, Aifca Ltd, up to €60 million.
One of the conditions of the guarantee was a life insurance policy, which was not provided.
Carroll argues that Irish Nationwide effectively waived the requirement for a life insurance policy, and that because all the other securities required were put in place, he is under no obligation to Irish Nationwide.
The building society claims it did not waive the requirement for a life insurance policy, so Carroll's personal guarantee is valid.
Mr Justice Kelly said Carroll had demonstrated a fair and reasonable probability of having a real and bona fide defence - - which was not to say that his defence would succeed.
US
Demand for US durable goods, expected to last at least three years, took the largest fall in five months during June as orders dipped for cars and planes, but bookings other than transportation rose strongly and a measure of capital spending climbed. Orders for commercial planes dropped, down 38.5%. Aircraft manufacturer Boeing suffered production delays of its new mid-range 787 Dreamliner.
Investors also reacted to comments from New York Federal Reserve Bank President William Dudley, who said that the US economy is likely to see moderate growth in the second half of 2009, but at a muted pace.
The Dow is down 41 points or 0.46%.
The Nasdaq is down 0.62% and the S&P 500 is off 0.65%.
On the New York Mercantile Exchange, oil for September delivery is trading at $63.37 down $3.36 from Monday's close. In London, Brent crude for September delivery is trading at $66.60 a barrel.
The oil price fell Wednesday after the US Energy Department's oil inventory data showed a sharp and unexpected crude supply build last week.
The government report came after the American Petroleum Institute's data on Tuesday also showed crude supplies rose last week. A stronger dollar and the disappointing economic data weighing on US stocks added to the pressure on oil.
Currencies
The euro is trading at $1.4031 and at £0.8572.
For live currency updates, check the right-hand column of the Finfacts home page.
The dollar traded at a record low $1.6038 per euro on July 15, 2008.
