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EXCLUSIVE-UPDATE 1-Icahn to run board slate for Yahoo-sources

Reuters: [2008-05-15 00:01:00]

NEW YORK, May 14 (Reuters) - Billionaire investor Carl Icahn has elected to move ahead with plans to run a dissident board slate at Yahoo Inc <YHOO.O>, sources familiar with the matter told Reuters on Wednesday.

Icahn, who has amassed a large stake in the Internet company, has lined up at least 12 potential board candidates and could announce the slate as early as Wednesday night, the sources said. The deadline for nominating a dissident slate is Thursday.

Big investors in Yahoo have publicly chastised Yahoo for failing to seal a buyout deal with Microsoft Corp <MSFT.O>, which abruptly ended talks earlier this month after balking at Yahoo's $37 per share asking price. Icahn's move would have the ultimate goal of pressing Yahoo to agree to be sold, assuming Microsoft is still willing to consummate a deal.

Ryan Jacob, portfolio manager of the Jacob Internet Fund, which holds around 150,000 Yahoo shares, said Icahn will probably prevail in his effort to win board seats.

"There's a reasonable chance that Icahn can be successful," said Jacob. "There's a lot of shareholder unhappiness right now, including ours. It's encouraging because there's the chance that they can be more successful in consummating a transaction with Microsoft."

It was unclear if Icahn plans to run a full slate of ten new directors at Yahoo, or a "short slate," for a non-control position. The details have yet to be worked out, sources said.

One industry expert said he would likely have a better chance with a short slate, since it is unlikely that investors would allow a complete takeover of the board and the attendant uncertainty that such a move would have at Yahoo.

"It's handing the company over to an entirely different team," said Bruce Goldfarb, partner in Okapi Partners, a proxy advisory firm. "While a dissident slate would obviously have a mandate to sell the company, investors just don't give up control without a premium. If Microsoft was on board, he'd have a chance."

The move on Yahoo is the latest of a number of proxy battles that Icahn has recently waged. Last month, Motorola Inc <MOT.N> settled a proxy battle with Icahn by agreeing to add two of Icahn's four nominees to its board.

Representatives of Yahoo and Microsoft declined to comment. (Reporting by Dane Hamilton and Kenneth Li; additional reporting by Robert MacMillan, Michelle Gershberg in New York; Dai Wakabayashi in Seattle; Eric Auchard in San Francisco; and Murali Anantharaman in Boston; Editing by Gary Hill) ((Reuters email: dane.hamilton@thomsonreuters.com. 646 223 6161)) Keywords: ICAHN YAHOO/

Ohio attorney general resigns in wake of scandal

Reuters: [2008-05-14 23:56:00]

COLUMBUS, Ohio, May 14 (Reuters) - Ohio Attorney General Marc Dann, who led investigations into companies blamed for the state's subprime mortgage mess, resigned under a cloud on Wednesday after admitting to an affair with a female staff member.

"Unfortunately, it is now clear that the last step I must take to fix these problems is to resign as attorney general effective immediately," Dann told reporters.

In addition to Dann's relationship with a member of his staff, his office was roiled by sexual harassment claims.

Also, local media reported that authorities staged a raid on the attorney general's offices on Wednesday, carting away documents as part of an undisclosed investigation.

Dann said he did not want to be a distraction from "the great work done by this office."

Calls for Dann's resignation had come from Democrats including Gov. Ted Strickland and State Treasurer Richard Cordray as well as the Republican leaders in the state legislature.

Following Dann's resignation, Strickland told reporters the attorney general's top assistant would take over and that he had made no decision on a longer-term replacement for Dann, who was elected in 2006.

Dann had resisted calls for him to quit, but pressure mounted on Tuesday when House Democrats filed articles of impeachment against him. The legislature had authorized the state inspector general to investigate Dann's office.

In resigning, Dann said the state must continue to use bank regulations and consumer protection laws to "aggressively take on predatory lenders and their co-conspirators."

In January, Dann filed a lawsuit on behalf of a state pension fund against Freddie Mac <FRE.N>, accusing the mortgage finance company of securities fraud for failing to disclose risks from its subprime mortgage-related investments.

Dann's office has also sent civil investigative subpoenas to a number of subprime mortgage companies as part of a probe of possible anti-trust and civil rights law violations, and violations of Ohio's consumer sales practices. His office has declined to name the companies.

Ohio has been hit hard by the subprime-mortgage crisis, ranking eighth among states in foreclosure rates in the first quarter of 2008, according to RealtyTrac.

(Reporting by Jim Leckrone, additional reporting by Karen Pierog in Chicago; Editing by Eric Walsh)

((karen.pierog@thomsonreuters.com; 1 312 408 8647; Reuters Messaging: karen.pierog.reuters.com@reuters.net)) Keywords: OHIO ATTORNEYGENERAL/RESIGNATION

REFILE-US STOCKS-Benign inflation, strong results lift Wall St

Reuters: [2008-05-14 23:33:00]

(Refiles to fix typo in paragraph 14)

* Modest rise in CPI supports stocks

* Freddie Mac smaller than expected loss reassures

* Strong Macy's results lift retailers

By Caroline Valetkevitch

NEW YORK, May 14 (Reuters) - U.S. stocks rose on Wednesday in light trading after a modest rise in consumer prices in April cooled inflation fears while Macy's Inc <M.N> and Freddie Mac <FRE.N> posted reassuring quarterly results.

A milder-than-expected gain in the Consumer Price Index took the edge off fears of an inflationary spurt triggered by soaring energy prices. That could allow the Federal Reserve more time to hold interest rates steady, analysts said.

Shares of retailers and home builders, which benefit from steady to lower borrowing costs, advanced. The S&P retail index <.RLX> rose 1.6 percent, as Macy's stood by the profit forecast for its department stores despite expectations of an economic slowdown.

Freddie Mac, seen as a housing market barometer, brightened the mood on Wall Street by raising its growth outlook and unveiling a plan to raise new capital to support the beleaguered home loan market.

"People were nervous about the inflation number. When it was somewhat better than expected, that triggered the rally," said Eric Kuby, chief investment officer at North Star Investment Management Corp., in Chicago.

Stocks pared gains late in the session, leaving the Nasdaq just barely higher. Shares of Apple Inc <AAPL.O> slid as investors took profits after two days of gains in the stock.

The market's sharp climb "ran out of steam without another leg of news to keep the rally going," Kuby said.

The Dow Jones industrial average <.DJI> rose 66.20 points, or 0.52 percent, to end at 12,898.38. The Standard & Poor's 500 Index <.SPX> added 5.62 points, or 0.40 percent, to 1,408.66. The Nasdaq Composite Index <.IXIC> inched up 1.58 points, or 0.06 percent, to 2,496.70.

Trading was extremely light on the New York Stock Exchange, with about 1.19 billion shares changing hands, well below last year's estimated daily average of roughly 1.90 billion, and the second-lowest level of volume so far this year. NYSE trading volume hit its low for the year on Monday, when 1.05 billion shares traded hands.

However, the Chicago Board Options Exchange Volatility Index <.VIX>, or VIX, which is Wall Street's fear barometer, slid at one point to its lowest level since October 2007 as stocks rallied. The VIX was down 1.8 percent at the close.

Shares of Macy's rose 3.6 percent to $24.93.

Freddie Mac, the No. 2 provider of funding for U.S. residential mortgages, shot up 9.2 percent to $27.25.

The Dow Jones home construction Index <.DJUSHB> climbed 2.7 percent. The stock of D.R. Horton Inc <DHI.N>, the largest U.S. home builder, jumped 2.9 percent to $15.36.

APPLE FALLS, ENERGY SLIPS

On the Nasdaq, shares of Apple declined 2 percent to $186.26. And the stock of top video game publisher Electronic Arts Inc <ERTS.O> dropped 3.3 percent to $52.78. Late Tuesday, the company issued an annual profit outlook that fell short of Wall Street forecasts.

Energy companies' stocks also fell after U.S. crude <CLc1> slid $1.58 to settle at $124.22 per barrel, a day after it approached a record just 2 cents shy of $127. The S&P energy index <.GSPE> ended down 0.9 percent.

Shares of Deere & Co <DE.N> tumbled 9.9 percent to $81.25 and ranked among the top drags on the S&P 500 after the farm and construction machinery company warned that higher material costs and possible shortages of components will affect results

Among other drags on Nasdaq: Whole Foods Market Inc <WFMI.O> sank 13.9 percent to $28.96 after it posted a lower quarterly net profit that missed analysts' estimates. For details, see [ID:nN13428622]

Before the opening bell, the Labor Department said the overall CPI for April rose 0.2 percent -- less than economists expected. Core CPI, excluding volatile food and energy costs, gained 0.1 percent in April -- also below forecast.

The Fed's seven rate cuts, amounting to 3.25 percentage points, have now taken the Fed's benchmark fed funds rate down to 2 percent. The Fed's most recent rate decision, which analysts speculated could be the last for the near term, was on April 30. (Editing by Jan Paschal) ((caroline.valetkevitch@thomsonreuters.com; +1 646 223 6393; Reuters Messaging:caroline.valetkevitch.reuters.com@reuters.net))

((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com))

Keywords: MARKETS STOCKS

 
============================================================== 
 To access running updates on what's moving U.S. stocks double 
click on [STXNEWS/US] 
============================================================== 
 For other U.S. market data and news, click on codes in 
brackets: 
 U.S. Equities speed guide........................<US/EQUITY> 
 S&P 500 index ........................................<.SPX> 
 Dow Jones industrial average..........................<.DJI> 
 Nasdaq Composite index...............................<.IXIC> 
 Nasdaq 100............................................<.NDX> 
 Russell 2000 small cap................................<.RUT> 
 S&P major sectors..............................<0#.GSPMAJOR> 
 NYSE most active.....................................<.AV.N> 
 Nasdaq most active...................................<.AV.O> 
 Top NYSE pct gainers.................................<.PG.N> 
 Top NYSE pct losers..................................<.PL.N> 
 Top Nasdaq pct gainers...............................<.PG.O> 
 Top Nasdaq pct losers................................<.PL.O> 
 52 week highs: 
    NYSE...............<t.YH.N>  Nasdaq..............<t.YH.O> 
 52 week lows: 
    NYSE...............<t.YL.N>  Nasdaq..............<t.YL.O> 
 
    Main global stock indexes and market reports: 
 FTSE Eurotop 300 .....<.FTEU3>  European report .......[.EU] 
 Nikkei 225.............<.N225>  Tokyo report............[.T] 
 FTSE 100...............<.FTSE>  London report...........[.L] 
 Xetra DAX.............<.GDAXI>  Frankfurt market stories[.F] 
 CAC-40.................<.FCHI>  Paris market stories...[.PA] 
 World Indices.....................................<0#.INDEX> 
 Reuters survey of world bourse outlook.........<EQUITYPOLL1> 
 U.S. IPO diary........................................[IPO/] 
 U.S. Asset Allocation Table.......................[US/ASSET] 
 
 More Reuters News on equities at a glance: 
 Equities ............[E]   US company news.........[TOP/EQU] 
 
    Key non-equities market reports: 
 Foreign exchange......................................[FRX/] 
 Oil....................................................[O/R] 
 US Treasuries.........................................[US/N] 
 International bonds...................................[EUB/] 
 Gold.......................................[GOL/X] or [GOL/] 
 CRB index of commodity futures........................[CRB/] 

US STOCKS-Benign inflation, strong results lift Wall St

Reuters: [2008-05-14 23:20:00]

(Updates close with declines in Apple, energy shares)

* Modest rise in CPI supports stocks

* Freddie Mac smaller than expected loss reassures

* Strong Macy's results lift retailers

By Caroline Valetkevitch

NEW YORK, May 14 (Reuters) - U.S. stocks rose on Wednesday in light trading after a modest rise in consumer prices in April cooled inflation fears while Macy's Inc <M.N> and Freddie Mac <FRE.N> posted reassuring quarterly results.

A milder-than-expected gain in the Consumer Price Index took the edge off fears of an inflationary spurt triggered by soaring energy prices. That could allow the Federal Reserve more time to hold interest rates steady, analysts said.

Shares of retailers and home builders, which benefit from steady to lower borrowing costs, advanced. The S&P retail index <.RLX> rose 1.6 percent, as Macy's stood by the profit forecast for its department stores despite expectations of an economic slowdown.

Freddie Mac, seen as a housing market barometer, brightened the mood on Wall Street by raising its growth outlook and unveiling a plan to raise new capital to support the beleaguered home loan market.

"People were nervous about the inflation number. When it was somewhat better than expected, that triggered the rally," said Eric Kuby, chief investment officer at North Star Investment Management Corp., in Chicago.

Stocks pared gains late in the session, leaving the Nasdaq just barely higher. Shares of Apple Inc <AAPL.O> as investors took profits after two days of gains in the stock.

The market's sharp climb "ran out of steam without another leg of news to keep the rally going," Kuby said.

The Dow Jones industrial average <.DJI> rose 66.20 points, or 0.52 percent, to end at 12,898.38. The Standard & Poor's 500 Index <.SPX> added 5.62 points, or 0.40 percent, to 1,408.66. The Nasdaq Composite Index <.IXIC> inched up 1.58 points, or 0.06 percent, to 2,496.70.

Trading was extremely light on the New York Stock Exchange, with about 1.19 billion shares changing hands, well below last year's estimated daily average of roughly 1.90 billion, and the second-lowest level of volume so far this year. NYSE trading volume hit its low for the year on Monday, when 1.05 billion shares traded hands.

However, the Chicago Board Options Exchange Volatility Index <.VIX>, or VIX, which is Wall Street's fear barometer, slid at one point to its lowest level since October 2007 as stocks rallied. The VIX was down 1.8 percent at the close.

Shares of Macy's rose 3.6 percent to $24.93.

Freddie Mac, the No. 2 provider of funding for U.S. residential mortgages, shot up 9.2 percent to $27.25.

The Dow Jones home construction Index <.DJUSHB> climbed 2.7 percent. The stock of D.R. Horton Inc <DHI.N>, the largest U.S. home builder, jumped 2.9 percent to $15.36.

APPLE FALLS, ENERGY SLIPS

On the Nasdaq, shares of Apple declined 2 percent to $196.26. Also, top video game publisher Electronic Arts Inc <ERTS.O> dropped 3.3 percent to $52.78. Late Tuesday, the company issued an annual profit outlook that fell short of Wall Street forecasts.

Energy companies' stocks also fell after U.S. crude <CLc1> slid $1.58 to settle at $124.22 per barrel, a day after it approached a record just 2 cents shy of $127. The S&P energy index <.GSPE> ended down 0.9 percent.

Shares of Deere & Co <DE.N> tumbled 9.9 percent to $81.25 and ranked among the top drags on the S&P 500 after the farm and construction machinery company warned that higher material costs and possible shortages of components will affect results

Among other drags on Nasdaq: Whole Foods Market Inc <WFMI.O> sank 13.9 percent to $28.96 after it posted a lower quarterly net profit that missed analysts' estimates. For details, see [ID:nN13428622]

Before the opening bell, the Labor Department said the overall CPI for April rose 0.2 percent -- less than economists expected. Core CPI, excluding volatile food and energy costs, gained 0.1 percent in April -- also below forecast.

The Fed's seven rate cuts, amounting to 3.25 percentage points, have now taken the Fed's benchmark fed funds rate down to 2 percent. The Fed's most recent rate decision, which analysts speculated could be the last for the near term, was on April 30. (Editing by Jan Paschal) ((caroline.valetkevitch@thomsonreuters.com; +1 646 223 6393; Reuters Messaging:caroline.valetkevitch.reuters.com@reuters.net)) ((Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on Top News: http://topnews.reuters.com))

Keywords: MARKETS STOCKS

 
============================================================== 
 To access running updates on what's moving U.S. stocks double 
click on [STXNEWS/US] 
============================================================== 
 For other U.S. market data and news, click on codes in 
brackets: 
 U.S. Equities speed guide........................<US/EQUITY> 
 S&P 500 index ........................................<.SPX> 
 Dow Jones industrial average..........................<.DJI> 
 Nasdaq Composite index...............................<.IXIC> 
 Nasdaq 100............................................<.NDX> 
 Russell 2000 small cap................................<.RUT> 
 S&P major sectors..............................<0#.GSPMAJOR> 
 NYSE most active.....................................<.AV.N> 
 Nasdaq most active...................................<.AV.O> 
 Top NYSE pct gainers.................................<.PG.N> 
 Top NYSE pct losers..................................<.PL.N> 
 Top Nasdaq pct gainers...............................<.PG.O> 
 Top Nasdaq pct losers................................<.PL.O> 
 52 week highs: 
    NYSE...............<t.YH.N>  Nasdaq..............<t.YH.O> 
 52 week lows: 
    NYSE...............<t.YL.N>  Nasdaq..............<t.YL.O> 
 
    Main global stock indexes and market reports: 
 FTSE Eurotop 300 .....<.FTEU3>  European report .......[.EU] 
 Nikkei 225.............<.N225>  Tokyo report............[.T] 
 FTSE 100...............<.FTSE>  London report...........[.L] 
 Xetra DAX.............<.GDAXI>  Frankfurt market stories[.F] 
 CAC-40.................<.FCHI>  Paris market stories...[.PA] 
 World Indices.....................................<0#.INDEX> 
 Reuters survey of world bourse outlook.........<EQUITYPOLL1> 
 U.S. IPO diary........................................[IPO/] 
 U.S. Asset Allocation Table.......................[US/ASSET] 
 
 More Reuters News on equities at a glance: 
 Equities ............[E]   US company news.........[TOP/EQU] 
 
    Key non-equities market reports: 
 Foreign exchange......................................[FRX/] 
 Oil....................................................[O/R] 
 US Treasuries.........................................[US/N] 
 International bonds...................................[EUB/] 
 Gold.......................................[GOL/X] or [GOL/] 
 CRB index of commodity futures........................[CRB/] 

Mexico bonds dive on inflation fears; stocks rally

Reuters: [2008-05-14 23:16:00]

(Recasts; adds details, closing prices, byline)

* Bonds prices fall to 4-month low on tortilla hike fears

* Investors bet interest rates will rise

* Stocks rally after U.S. inflation data

By Michael O'Boyle

MEXICO CITY, May 14 (Reuters) - Mexican bond prices fell to a four-month low on Wednesday amid fears that a possible rise in tortilla prices could push the central bank to raise borrowing costs, while stocks rallied after modest U.S. inflation data.

The benchmark IPC stock index <.MXX> closed 1.45 percent higher at 31,336.57 points, after a slower-than-expected increase in U.S. consumer prices was seen taking pressure off the Federal Reserve to raise borrowing costs in the United States, Mexico's top trading partner.

The peso <MXN=> <MEX01> weakened 0.1 percent at the official central bank close to 10.487 per dollar.

Bond traders said reports that prices could soon rise for corn flour tortillas, a national staple, further stoked worries about accelerating inflation that have been weighing on bonds for a month.

Traders and analysts said they still expected the central bank to hold interest rates steady at a monthly monetary policy meeting this Friday.

"At the very least, there could be a message that indicates a rate hike could come at any minute," said Manuel Galvan, a fixed-income strategist at Metanalisis consultancy.

Yields on Mexican interest rate futures <0#TII:> surged on Wednesday, showing investors had significantly increased bets of a rate hike before the end of the year.

The government's benchmark 10-year peso bond <MX10YT=RR> fell 0.459 of a point in price to bid 97.663, pushing its yield up by 7 basis points to 8.10 percent.

U.S. consumer prices rose a smaller-than-expected 0.2 percent in April as energy prices held steady. If lower inflation can allow the Federal Reserve to hold off on raising interest rates, investors expect lower borrowing costs to help shore up U.S. consumer spending and business investment.

"That would benefit the local market with a greater dynamism in the economy (of the United States)," said Carlos Gonzalez, an analyst at IXE brokerage in Mexico City.

Mexico sends around 80 percent of its exports to its northern neighbor.

In currency trading, traders said investors were being cautious in taking new positions ahead of Friday's central bank policy review.

The peso has gained more than 4 percent since the beginning of the year as the U.S. central bank cut interest rates while Mexico has kept rates on hold.

That has widened the spread between the U.S. target interest rate and Mexico's key rate, making peso-denominated assets more attractive to investors.

In stock trading, shares of America Movil <AMXL.MX>, Latin America's biggest cell phone operator, climbed 3.22 percent to 30.76 pesos, while its New York traded stock <AMX.N> gained 2.81 percent to $58.50.

Top retailer Wal-Mart de Mexico <WALMEXV.MX> rose 1.29 percent to 44.89 pesos.

Cemex <CMXCPO.MX>, the largest cement maker in the United States, rose 1.8 percent to 30.46 pesos. Its New York-traded <CX.N> shares added 1.37 percent to $28.90. (Reporting by Michael O'Boyle and Vanessa Padilla; editing by Gary Crosse) ((michael.oboyle@reuters.com; +5255-5282-7160; Reuters Messaging: jason.lange.reuters.com@reuters.net)) Keywords: MARKETS MEXICO/

Next: Financier Icahn to run board slate for Yahoo-sources