Filed under: Before the bell, International markets, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX), Motorola (MOT), Walt Disney (DIS), Countrywide Financial (CFC), Nortel Networks (NT), Recession
U.S. stock futures were mixed this morning to start the week, but now seem somewhere higher. As several economists think the U.S. is already in a recession, might also believe it will a short and shallow recession. According to Treasuries, the economy may recover within 6-9 months. Meanwhile, however, the euro region has been experiencing slowing growth, with many economists thinking that a euro region slowing will be harder to get out of. High inflation will make it difficult to implement an easing monetary policy. With all that in the background and ahead of a week full of economic data coming out, this morning investors will likely focus on a number of major corporate deals, and for now look for direction.
Last week, U.S. stocks closed with heavy losses following worries about the economy and credit crisis. Overseas, stocks have declined in Asia and Europe Monday.
Without any economic data due out today, investors will analyze Yahoo! Inc. (NASDAQ: YHOO)’s reaction to Microsoft Corp. (NASDAQ: MSFT)’s unsolicited bid to buy the portal giant for $31 a share or $44.6 billion. According to reports, Yahoo’s board is set to reject Microsoft’s offer with speculations about that Google Inc. (NASDAQ: GOOG) is somehow working behind the scene. Still, Microsoft could try and take its offer to shareholder. If the board claims Microsoft’s current bid undervalues the company, some analysts believe Microsoft is prepared to offer as much as $35 per share for Yahoo.
Other reports, specifically from The Times of London, recommend that as Yahoo! is looking to defend itself, it may look to hold merger talks with Time Warner (NYSE: TWX)’s AOL. Other possibilities include the afforementioned Google and Disney (NYSE: DIS).
Meanwhile, the Wall Street Journal is reporting that as the wireless industry has experienced slow growth, Motorola Inc. (NYSE: MOT) and Nortel Networks Corp. (NYSE: NT) are in talks to join their wireless-infrastructure units to create a venture with sales of about $10 billion. This is unrelated to Motorola’s separate evaluation about its handset division.
Also, Countrywide Financial Corp. (NYSE: CFC) states it will “expand programs to help borrowers manage their mortgage payments regardless of the type of subprime loan they’ve or whether they have already fallen behind on payments.”
Finally, oil prices were volatile Monday, pushed higher by Venezuelan President Hugo Chavez’s threat to cut off sales to the United Says, but weighed down by continued worries about a U.S. recession.
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