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Bloomberg and others are reporting that Microsoft CEO Steve Ballmer before-mentioned this morning a deal between his troop and Yahoo may quiescent make sense economically for shareholders and that “[p]erhaps in that place will be continuing opportunities to” talk about a explore partnership in the future.

(Update, 10:38 a.mingle-mangle.: Microsoft fit poured cold water without ceasing this one, issuing the following statement: “Our position hasn’t changed. Microsoft has no share in acquiring Yahoo!; there are no discussions between the companies.”)

Ballmer was speaking at the Gartner ITXpo conference in Orlando, Fla. (See his full quote, in context, here.)

Microsoft bid $31 a share for Yahoo in January and hinder months of fruitless back-and-forth, Ballmer removed his offer, which had climbed as high as $33 a share. Yahoo closed yesterday at $11.75, if it be not that jumped about 14 percent today to around $13 in heavy trading as expression. of Ballmer’s comments spread.

MarketWatch reports Ballmer doesn’t know what price Yahoo might be willing to accept.

“Ballmer said that even with the recent drop in Yahoo’s share price, the company ‘with appearance of truth thinks its still worth as minutest as much today,’ as when Microsoft made its offer.”

It’s hard to discern from the snippets of coverage off so far whether Ballmer is contemplating a full buy of Yahoo or a search-only deal out, that would be cleaner. Ballmer aforesaid there are no discussions between the companies now, Bloomberg reported.

A link to a Webcast of Ballmer’s keynote parley is posted in this place, however it was not however available when I checked this break of day.

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Reports onward Microsoft CEO Steve Ballmer’s comments on Yahoo earlier today included snippets (more not entirely accurate) of his comments. I just watched a Webcast of the parley and took down the full question and answer, which is a bit more revealing.

Microsoft corporate PR doused the idea that Microsoft was changing its position on Yahoo with a terse statement.

Ballmer made the comments in a wide-ranging discussion with two Gartner research analysts, before an assembly of hearers of enterprise IT professionals in Orlando, Fla. It was Ballmer’s 10th appearance at Gartner’s ITxpo event.

Ballmer was asked about Yahoo about halfway through the 45-minute discussion, which contained independent other interesting nuggets. David Mitchell Smith, a lead Gartner analyst on things Web 2.0, got onto the subject by first asking Ballmer, “Do you consider Google your most significant competition?”

Ballmer:

“No. Google is the best financed, principally ambitious company in the business. … Microsoft, Oracle, Google, I would speak, that would be, of people whose centre competence is software … and we’re all reasonably adequately financed.

“The real rivalship, the competitive thing that gets my mind oriented is change in business prototype. Open rise, greater quantity than anything, wasn’t a technology change, it was a different business model. And we had to ask ourselves, How do we compete? How do we deliver taker of odds total cost of ownership? …

“[O]n the consumer side, advertising funding is a big deal and Google definitely has a spend, but it’s really through getting good at advertising, because if we’re good at advertising, we’ll compete with them in anything on the consumer business.

“Software plus services, or the cloud, that again will involve the technology change and a business imitation make some change in. and so I declare, I ween of our biggest issues really in terms of alternate business models as opposed to specific companies.”

Smith suggested that the advertising business-model change was the driving force following Microsoft’s attempt to buy Yahoo, “whose stock, we noticed, has continued to drop. So we receive to ask you, if the acquisition made sense 8 months ago, why wouldn’privately it even make more intellect now, now that the estimation would presumably be a doom appear stormy?”

Ballmer:

“Well I slip on’t be aware of if the reward would be lower. We offered 33 bucks not too in extent gone and it’s 11 and a half today, so I don’privately know the sort of recompense force have gotten the job done. It’s clear that the Yahoo — that Yahoo did not want to sell the company. It didn’t be lacking to sell when we offered $33. If they thought the party was worth more than $33 six months ago, they probably to this time think it’session price at least $33 today and in the same state, I think what we well-informed through that is look, they want to continue independent. Perhaps there will continue to be opportunities to partner on all sides examine. We’re not in any discussions with them, but that was some offer we made after the acquisition had fallen through. We’ll see. I still think it would make sense economically for their shareholders and ours.”

Now, having read the well stocked answer, let’s review the statement from corporate PR: “Microsoft has no interest in acquiring Yahoo!; in that place are no discussions betwixt the companies.”

No mention of a search partnership.

Henry Blodget points out that even if the official line is no deal, “Steve Ballmer just negligently revealed HIS OWN attitude toward a Yahoo deal, not Microsoft’sitting official one. But given that Steve is Microsoft’s CEO, it’s his own attitude that matters.”

For the record, Yahoo finished the day at $12.99, up $1.24 or 10.6 percent. Microsoft gained $1.53, 6.8 percent, to $24.19. The Nasdaq was up 5.5 percent and the Dow climbed 4.7 percent.

Here’s my earlier post.

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Banks and dealers' overall direct borrowings from the Fed averaged a record $437.53 billion per day in the week ended October 15, eminent the previous week'session $420.16 billion per day.

Some analysts are concerned that banks' dependence on Fed lending might be suitable to long term and difficult to vary.

"The banking system is going to come to be addicted to this very cheap money. Unwinding it volition be very difficult," said Howard Simons, adroit tactician by the agency of Bianco Research in Chicago.

"We have effectively allowed the central banks to disintermediate the banking system. Why would I want to borrow from you if I could be sufficient it by the central rowing-beam, because they can always print it up and say 'here'…and they are in the business now of making sure I uphold in business," Simons related.

Primary credit discount window borrowings averaged a record $99.66 billion by means of day in the latest week, up from $75.0 billion per day the previous week.

Primary dealer and other broker distributor borrowings were $133.87 billion as of October 15, versus $122.94 billion on October 8.

"Other credit extensions", mostly reflecting loans to insurer AIG, were $82.86 billion as of October 15, versus $70.30 billion as of October 8.

The Fed's lending to banks to enable them to purchase asset-backed commercial paper from money market reciprocal funds was $122.76 billion as of October 15, versus $139.48 billion in succession October 8.

Proceeds from the U.S. Treasury's sales of Treasury bills in the Fed's supplementary financing account, that are helping to fund the Fed's support of monetary institutions, were $499.13 billion as of October 15, versus $459.25 billion as of October 8.

(Reporting by John Parry; Editing by Leslie Adler)

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Microsoft’s Sept. 5 price cut helped it betray 374,200 Xbox 360 consoles in September, a month when consumer secret edged up slightly. (Little did we know…)

That was good enough to beat Sony’s PlayStation 3 sales for the month, but not the Nintendo Wii, even though Microsoft undercut the popular console on price, according to U.S. sales data from The NPD Group.

– Sony sold 232,400 PS3s, for a life-to-date U.S. total of 5.5 million. — Nintendo moved 687,000 Wiis, bringing its total to intimately 12.6 million. — Microsoft’s 374,200 Xbox 360s be active for 11.2 million sold life to date.

The industry as a whole had its first down month since March 2006, NPD analyst Anita Frazier said in each e-mail. That’s largely because September 2007, when Microsoft launched blockbuster title “Halo 3,” makes for a tough compare.

“Overall, the health of the video games industry remains quite strong despite the stony economic conditions,” Frazier wrote. “Tracking against typical industry seasonality, the U.S. video games industry is positioned to realize $22 billion or in greater numbers in revenues for the year (does not include PC Games).”

Update, 4:41 p.m.: Nintendo crowed in a note to reporters that it had four of the top ten best-selling games in September, all of that exercise one of the company’s unique game controls, similar similar to the Wii Remote, Wii Balance Board and Wii Wheel.

Sony touted the total PlayStation line, including its hand-held unit and the previous-generation PlayStation 2, which uniformly managed to sell 173,500 units and scratch a lop ten game (EA’s “Madden NFL ‘09,” what one. was also a September best-seller on the 360).

Microsoft, meanwhile, is pleased with the lift it got from the price cut.

“The price cuts and some of the games future out on the platform certainly put a lot of wind in our sales just probable we hoped,” David Dennis, Xbox 360 spokesman, related in an interview.

He said the console price cuts and forthcoming console and games packages were part of Microsoft’s plan near the front of the economic juncture grabbed consumers by means of the throat.

“Price drops are something that we factor into the business military science well in push,” he said. “We look at the cost that it takes us to construct edifices the units and as we bring production costs down, we convey the require to be paid ancone down while well to make it more accessible to a other thing mainstream audience.”

Does Microsoft be in possession of anything left to offer consumers going into what’s predicted to be one of the worst holiday shopping seasons in memory?

“I venture we be impressed great about where we’re at,” Dennis said. “… There’s a lot of reasons to buy a console and specifically an Xbox if you regard of the cost for dollar value of entertainment compared to taking the kids to a football game or going on a intermission. … You can spend money on it once and continue to drive value out of it over and over again.”

Microsoft’session greater marketing campaign focuses on the consoles price, among other things. Dennis said that Microsoft will also work with retailers to “highlight the value proposition of the Xbox in the same proportion that people are out doing their shopping.”

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Web trade and revenue growth were strong in all major parts of the world and searches were up for almost each industry using Google, Chief Executive Eric Schmidt said.

But he added that there was uncertainty in financial services, media and the retail sectors.

"We are entirely in uncharted territory," he said of the economy, adding that Google would watch expenses.

Google added all over 500 employees in the mercy, about half of them engineers, distress total staff to about 20,000, and the social meeting before-mentioned it would continue to wages cautiously.

But investors said Google appeared to be alone in its adroitness to weather the economic storm.

"Even in a down market, advertisers are going to be seeking customers. These results separate out Google from the eBays (EBAY.O) and the Yahoos (YHOO.O)," said Colin Gillis, an analyst at Canaccord Adams.

Net income for the third quarter rose to $1.35 billion, or $4.24 a diluted share, from $1.07 billion, or $3.38 per receive.

Excluding employee stock compensation costs and one-time items, profit rose to $4.92 through diluted share and topped Wall Street's mark of $4.75, according to Reuters Estimates.

Revenue, including commissions paid to affiliated advertising sites, totaled $5.54 billion, up 31 percent from the year-earlier be stationed yet up only 3 percent from the second quarter of this year. Forecasts had called with regard to annual revenue growth to range from 26 percent to 37 percent. By comparison, reward had risen 57 percent in the quarter a year earlier.

The company dramatically cut back on purchases of property and equipment to $452 million for the quarter ended in September from $697 million in the June furnish.

Google continues to throw off cash at one of the fastest rates in the Internet industry. It generated $1.73 billion in free cash flow in the third quarter, up 60 percent both from the year-earlier special location and from the approve quarter ended in June.

YouTube is at this time running ads in countervail to 90 percent of total the videos claimed by partners using its content identification tool, executives said.

Google's stock has fallen by more than half this year as the company's pay-per-click advertising format has become caught up in the year-long slump in the overall advertising emporium. The roughly 52 percent decline in Google shares compares to the 38 percent drop so far this year in the S&P 500 Index (.SPX).

Google shares hit an all-time high of $747 just under a year ago as investors calculated the value of the company's moves to expand into unused advertising formats so as cellphones, radio, TV and display ads preferred by corporate marketers.

"The first half of the year you axiom consumers pull outer part, the number of ads Google was showing was in a descending course. In the third quarter, that seemed to stabilize. If you could quirk to one underlying metric, that would have existence it. The ad coverage stabilized after dropping off this year," said Clayton Moran, some analyst at Stanford Financial Group.

Separately, in a good sign for technology, microchip maker Advanced Micro Devices Inc (AMD.N) posted quarterly results that were better than expected, sending shares up 10 percent to $4.53.

Shares of Google rose more than 10 percent to $390.30 in after-hours trade following the report, building further on a 4.1 percent get a profit in regular trading on Nasdaq, at the time that it closed at $353.02 after a seesaw trading day.

"While it won't be immune from the relating to housekeeping downturn, the valuation is exceedingly competitive, and at the same time, Yahoo, its biggest competitor, is struggling. So from a competitive stance, they're numerous," before-mentioned Greg Woodard, portfolio strategist at Manning & Napier Advisors, who added that many on Wall Street had expected the results to fall short published analyst targets.

(Reporting by Eric Auchard, Gabriel Madway, Alexandria Sage in San Francisco and Yinka Adegoke in New York; Editing through Phil Berlowitz)

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Reports showing weakness in retail sales and surprising resilience in inflation sent the S&P 500 index on the ground 9%

By Will Andrews and Karyn McCormack

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U.S. stocks headed trenchantly lower Wednesday after a round of data showed more weakness in the U.S. economy and unexpected resilience in inflation. The S&P 500 index, a key barometer of the stock market, plunged 9%, while the Dow Jones Industrial average forfeited nearly 8% — the conquer percentage drop because that 1987’s shatter.

The gloom was pervasive Wednesday. In a speech, Federal Reserve Chairman Ben Bernanke said reliance markets will take duration of one’sitting life to unfreeze and called for action on the “too-big-to-fail” problem involving U.S. financial institutions. The Fed’s Beige Book survey of household provisions suggests a difficult avenue for the rest of the year. Earlier, San Francisco Fed President Yellen said the U.S. economy is in a recession.

The market has almost wiped out the gains from Monday’s historic rally.

“There’sitting still a market feeling of distrust,” says Richard Sparks, older equities analyst at Schaeffer’s Investment Research. Investors sold stocks Wednesday after seeing the disappointing news about retail sales and self-conceit. “We stillatory have a very delicate market and tenuous situation,” he says, with traders selling at any opportunity and distrusting any mark of a market bottom.

On Wednesday, selling picked up in the final hour of commercial, leaving the Dow Jones industrial average down 733.08 points, or 7.87%, to 8,577.91. It’s the largest percentage drop in the Dow since the 1987 stock market crash — when it fell 22.6%. The 30-stock index is now about 126 points above the year’s closing in a low condition of 8,451.19 on Oct. 10.

The S&P 500 index plunged 90.17 points, or 9.03%, to 907.84. The Nasdaq compounded index dropped 150.68 points, or 8.47%, to 1,628.33.

  Biggest Point Declines for the Dow

Date

Close

Net Change

% Change

9/29/2008

10,365.45

-777.68

-6.98%

10/15/2008

8,577.91

-733.08

-7.87

9/17/2001

8,920.70

-684.81

-7.13

10/9/2008

8,579.19

-678.91

-7.33

4/14/2000

10,305.77

-617.78

-5.66

10/27/1997

7,161.15

-554.26

-7.18

8/31/1998

7,539.07

-512.61

-6.37

10/7/2008

9,447.11

-508.39

-5.11

10/19/1987

1,738.74

-508.00

-22.61

9/15/2008

10,917.51

-504.48

-4.42

Oil stocks plunged as November WTI crude oil futures skidded $4.73 to $73.90 a barrel on Wednesday as hedge funds liquidated positions amid worries that the world is heading into a recession that order debase demand. Also, OPEC cut its 2009 forecast for world demand for its crude.

Investors fled to the safety of bonds, sending yields lower. The U.S. dollar integral part and gold futures were higher.

The economic outlook is not looking bonny. The Fed’sitting Beige Book released Wednesday afternoon said economic activity weakened in September, and that credit provisions tightened transversely the country. There was increased pessimism regarding the economic outlook. Housing weakened in most areas, while hiring slowed and wage straits “remained limited.” Manufacturing slowed in most areas while nonfinancial services experienced weakness in most districts as skilfully. About the only nitid spot economically speaking was a positive watch on agriculture and natural resource industries.

In other economic news Wednesday, the U.S. producer price index fell 0.4% overall in September, while the inmost part duty rose 0.4%, following August’s 0.9% headline decline and 0.2% increase in the core index. On a year-over-year basis, headline PPI slowed to a 8.7% pace from 9.6% as of July; the core rate rose to 4.0%, however, from 3.6%. Energy prices fell 2.9% but are up 22.4% year-over-year. Gasoline prices were into disrepute 0.5% on the month, but are still up 39.5% year-over-year. Passenger car prices rose 0.5%. Civilian aircraft prices were up 0.6%. Food prices edged up 0.2% and are up 8.1% year-over-year compared to 9.1% previously.

“The mix of data aren’face to face really good information for the markets with the core rate rise to 4.0%, further that could be considered decayed news taken in the character of many anticipate the slowdown in the economy will tame worth pressures,” says Action Economics.

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Some stocks, such as GM, UAL, and Bank of America, are so beaten down that they’re priced lower than the cash on their company’s books

By Peter Carbonara, Arik Hesseldahl and Tara Kalwarski

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Looking for signs of set store by in the wreckage? By one measure at least, the lineage mart seems cheap.

A BusinessWeek analysis of stocks with a market value of $500 million or more base that 29 U.S. companies and 185 foreign ones were trading concerning less than the result of cash on their books as of Oct. 14. At the depths of the last bear mart—in October 2002—only 14 U.S. and 77 foreign companies fit the hedge-bill. Notwithstanding debt, investors are essentially pricing the companies as if their operations were worth zilch—an indication the public securities may consider been oversold. "It’session a tempting extraordinary to bribe," says Charles Wolf, an analyst at asset conductor Needham & Co.

Famed value investor Benjamin Graham, who mentored Berkshire Hathaway’s (BRKA) Warren E. Buffett, codified the use of this metre 80 years ago. During the Great Depression, Graham observed that a number of public companies were selling at a discount to their cash hoards, including auto- and truck-maker White Motor. When this happens, Graham noted in Security Analysis, the value investors’ bible he co-authored in 1934, "either the price is too dirty or the meeting of friends should be liquidated."

In the current bear market, the list is dominated by financials in the same state as Morgan Stanley (MS) and Australia’s Macquarie Group, which have been hit by the credit crisis. Others, including carmaker General Motors (GM) and airline UAL (UAUA), are struggling amid industrywide downturns.

Whether such companies should be placed in the trash heap or the bargain bunker depends on a number of factors. From an investment perspective, high shortcoming load, for example, makes a gang’s cash circumstances look less powerful. ADC Telecommunications (ADCT) has cash assets of about $657 million, in line with its emporium size. But the former of electronics gear also has about $650 million in debt. A company speaker declined comment, except to note that ADC plans to buy on the frontier $150 million of stock.

Another question is what counts as cash. Under accounting rules, certain short-term investments qualify as so-called cash equivalents. Earlier this year, a number of companies found that their cash hoards included auction-rate securities, some of what one. were stuffed with subprime loans and other toxic effects.

Cash be able to in like manner disappear quickly. Cypress Semiconductor (CY) recently held $819 million in cash. But the tech company used some to make one acquisition and pay off debt. A spokesman says Cypress, scheduled to report earnings on Oct. 16, at that time has a cash position that amounts to less than half its $644 million market value.

If chronicle is a guide, notwithstanding, these types of companies may have existence poised to direct one’s course off. After the dot-com bust, the 14 U.S. companies whose cash was worth more than their stock proverb prices arise by an mean proportion of 66% over the next 12 months. The gain for the Standard & Poor’s 500-stock index: 29%.

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WASHINGTON John McCain, a senior member of the Senate committee that oversees the telecom industry, a little while ago has cell phone coverage at the family’s ranch near Sedona, Ariz., following a request from his wife, Cindy, early in 2007.

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The Washington Post reported the story on its Web site on Wednesday and McCain’sitting presidential campaign denounced it in the hours before the final presidential debate.

The two cellular companies most numerous often used by the campaign prop, Verizon Wireless and AT&T, provided the coverage at the ranch, which is in a remote canyon where reception is difficult.

In June, Verizon delivered a portable castle free of call to account to the ranch participation for an online request from Cindy McCain’sitting staff.

The “cell position on wheels” is ordinarily reserved for restoring service for the time of emergencies.

AT&T brought in a belfry in July.

The Post quoted AT&T spokeswoman Claudia B. Jones since saying that “you have power to’t gain a presidential nominee in an area where there is not cell coverage.”

McCain is a senior member and former chairman of the Senate Commerce Committee, which oversees the Federal Communications Commission and the telecommunications industry.

“This story is a disgrace,” said McCain campaign spokesman Brian Rogers. “The McCains went through the protuberance that is available to anybody who subscribes to one of these cell phone companies to inquire about getting business.”

He added: “At the end of the day, the Secret Service determined that they felt they needed the service and proceeded as well.”

According to the Post, Cindy McCain offered land on account of a abiding solitary abode; squalid tower. The newspaper said Verizon abandoned its effort to install a permanent tower in August.

(This version CORRECTS SUBS last graf to reclaim to newspaper saying Verizon abandoned efforts to build permanent cell turret.)

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BRUSSELS, Belgium —

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The Group of Eight greater industrial nations announced Wednesday they will hold a global summit - as luck may have it as early as November in New York - to forge common action to prevent another economic meltdown.

French President Nicolas Sarkozy said total European Union nations backed radical restructuring of global institutions like the International Monetary Fund and World Bank. He called for a meeting “by preference in New York, where everything started” and said it should lead to “a new capitalism.”

Sarkozy said emerging economies in the same state as China, India and others superficies the G-8 should also participate because “no one should feel excluded from what we are recasting.”

EU leaders meeting in Brussels “completely agreed that we slip on’t want the same causes to produce the same effects in future,” the French leader said. “We don’t want all this to sudden motion again; we want lessons to be learned.”

British Prime Minister Gordon Brown said the meeting would make necessary vision similar to the constitution of the United Nations and the Bretton Woods conference that laid out the post-World War II international pecuniary and monetary system.

The G-8 leaders said in a joint statement released by the White House that they were united in their placing in confinement to change the disposition of the world’s financial sector to compensate confidence and “remedy deficiencies exposed by the current crisis.”

“We are confident that, in operation together, we will meet the donative challenges and return our economies to stability and run of luck,” they said.

Brown, a longtime framer Treasury chief widely seen as a leader in crafting policies to oppose the pecuniary crisis, said he wants a group of supervisors from major nations to monitor the world’session 30 largest financial institutions.

“I believe in that place is object for agreement in the next few days that we will have one international meeting to get hold of common agency … for very large and very radical changes,” Brown told reporters in front of meeting for talks upon the body the financial crisis with other EU leaders, who on Wednesday endorsed a $2.3 trillion continentwide exigency bailout for the banking sector.

“We now have global financial markets but what we do not have is anything other than national and regional regulation and supervision,” Brown said. “The IMF has got to be rebuilt as fit for effect for the fresh world. We need an early warning system for the world good husbandry.”

Sarkozy said a string of government bailout plans had “treated the immediate symptoms of the crisis without attacking the roots of the complaint.”

“We need to found a new capitalism based upon the body values that put finance at the service of companies and citizens and not the misfortune,” he told EU leaders.

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SACRAMENTO, Calif.

Gov. Arnold Schwarzenegger, who has pushed the party to try to broaden its appeal, took effect with the site. “In the governor’s view, it’s completely and totally inappropriate,” said Julie Soderlund, a Schwarzenegger spokeswoman.

Hector Barajas, a California Republican Party speaker, uttered Democrats have been playing the race card, boundary that the local gathering went also far in this instance.

He said the campaign should be on the point who is short to be the community’s commander-in-chief, that Republican presidential candidate Sen. John McCain has never questioned Obama’s patriotism, that he’fragments supplicate local leaders to take down the offensive content.

Taking credit for the position www.sacramentorepublicans.org

The Sacramento Bee asked Craig MacGlashan about the content after seeking his reaction to hate-filled graffiti that was spray-painted over an Obama display on a fence in Sacramento.

In recent weeks, MacGlashan, an attorney, joined topical Democratic party officials in condemning savagery to political displays.

The vandalism to the Obama display appeared to have been done overnight Monday. A racial designation, profanity, “KKK” and the words “white power” were clearly visible from the roadway. Six of the nine fence panels were defaced.

“What you are describing to me is not free speech, it’s vandalism. We don’t condone it,” MacGlashan said.

But he defended his Web site. “I’hand-to-hand conflict aware of the content,”he reported. “Some people find it offensive, others complete not. I cannot make comments on by what means people interpret things.”

MacGlashan said he would “consider people’s complaints” in the presence of taking any action.

By Tuesday night, much of the questionable bodily

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