Stocks Fall; Yahoo, Microsoft Talks Fail

123jump.com Staff
05 May, 2008
New York City

U.S. stocks fell at the opening after the merger talks between Yahoo and Microsoft fell. Yahoo fell nearly 20% after the two companies could not agree on a price. Sprint Nextel rose on the potential interest from Deutsche Telekom. Arcelor Mittal, the largest steel company and second largest Chinese steel company are in merger talks. Berkshire Hathaway, after reporting sharply lower earnings over the weekend, is expected to make a purchase in Europe.

[R]10:00AM New York – Merger related news dominated the trading. Yahoo fell 20% and Sprint Nextel rose 7%.[/R]

Yahoo fell sharply in the morning trading after its management and Microsoft could not agree on merger price. Yahoo expected a revised offer of $37 a share and Microsoft will not increase its initial offer of $33 per share.

Yahoo plunged 19% ((YHOO)) or $5.40 to $23.30 and Microsoft ((MSFT)) rose 74 cents to $30.

U.S. Airways and UAL, the parent of United Airline are in merger talks after the talks between UAL and Continental fell apart.

Deutsche Telekom is likely to bid for Sprint Nextel. The news first reported in the Wall Street Journal lifted the stock 60 cents to $8.49.

Arcelor Mittal ((MT)) is exploring either tie up or an outright stake in the second largest Chinese steel manufacturing company Angang Steel.

Berkshire Hathaway is speculated to announce a bid involving a financial service company in the UK. Media speculation suggests that several insurance subsidiaries of the troubled banks in the region may be discussing possibilities of sale to Berkshire Hathaway.

Countrywide Financial ((CFC)) fell 72 cents to $5.26 after media speculation suggested that Bank of America may amend its merger terms or abandon the purchase of the independent mortgage lender.

Alpha Natural Resources, Inc reported first quarter revenue rose 17% to $445.7 million from $380.2 million, net income increased to $25.5 million from $8.3 million and earnings per share surged to 39 cents from 13 cents a year ago.

Global supplies of hard coking coals for making steel have tightened considerably due to production and logistics issues in Eastern Europe and Australia. With world steel output climbing an estimated 5% in the first two months of the year, prices for metallurgical coal have risen quickly as has international demand.

Alpha, the largest exporter of metallurgical coal out of the U.S., experienced a surge of 430,000 tons in its first-quarter exports, year-over-year, which boosted metallurgical coal sales to 42% of the company's total sales volumes for the quarter.

Michael Quillen Chairman and CEO said that after the close of the first quarter, the company secured commitments for 2008 delivery on three-quarters of a million tons of planned metallurgical production, at price levels consistent with recently announced settlements with Japanese steelmakers.

'Those prices ranged from $295 to $305 per metric ton at the port, which correlates to a realized price for Alpha of approximately $240-250 per short ton at the mine,' Quillen added.

Alpha Natural ((ANR)) stock rose $4.11 to $54.67.

Asian markets review

In Hong Kong Hang Seng index decreased 57.07 or 0.22% closed to 26,183.95. In Australia ASX 200 index higher 29.90 or 0.52% to close 5,730.30. In Malaysia KL Composite index increased 3.13 or 0.25% closed to 1,274.61.

In Indonesia JSE Index edged increased 45.23 or 1.93% to 2,387.99. Sensex index in India decreased 109.22 or 0.62% to 17,490.90. Market in Japan, South Korea and Thailand were closed today.