Afternoon Roundup: Today's Top Stories
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announced that it would give its Yahoo! (NAS: YHOO) stock to Citigroup as payment for a $1.1 billion loan. The Japanese technology company holds a 4% stake in Yahoo!, but its shares won't be enough to pay off the 2004 loan. Under the original agreement, Softbank pledged to repay the loan either with cash or Yahoo! shares. Since then, Yahoo!'s stock price has been slashed by 50%, leaving Softbank's stake now worth about $660 million.
The sale is the latest step in the deterioration of a once-close relationship between Yahoo! and other Asian Internet companies. Softbank's CEO has been openly critical of the pace of Yahoo!'s innovation (or lack thereof). The Yahoo! portal in Japan, operated by Softbank, now uses Google technology to power its searches. Read more atThe New York Times.
(NYS: RIO) and Mitsubishi have raised their bid for the 14% that they don't yet own of Coal and Allied Industries. The pair now offers $131 per share, valuing the company at $11.3 billion. That represents a 39% premium to Coal and Allied's closing price on Aug. 5, and takes into account an $8 proposed dividend. A Coal and Allied committee recommended that the company take the offer.
The deal would boost Rio Tinto's coal assets to 80% from 75.7%, while Mitsubishi's interest would double to 20%. The agreement would give both companies total control of three thermal and coking coal operations in the now-coveted Australian area. Read more atThe Wall Street Journal.
The U.S. economy grew by 1% during the second quarter, marking the weakest six months since the recovery started in mid-2009. GDP grew 1%, down from the previous estimate of 1.3%. The reduction was attributed to smaller inventories and fewer exports. Political turmoil and financial instability worldwide dampened consumer confidence and spending. Federal Reserve Chairman Ben Bernanke said the Fed still had more tools to reignite the U.S. economy at a conference in Wyoming, but did not hint at whether these tools would be used. At $13.26 trillion, U.S. GDP still hasn't exceeded its pre-recession peak. Read more atBloomberg.
As Hurricane Irene threatens to be a storm to remember, many Americans are worried that they will have to evacuate their homes. But for retailers like Wal-Mart (NYS: WMT) and Home Depot (NYS: HD) , Irene has added wind to their sales. Retailers said supplies in the Carolinas and the Northeast have been flying off the shelves, including generators, water, canned food, and flashlights. Drug retailers such as Walgreen (NYS: WAG) and CVS Caremark (NYS: CVS) are reminding their customers to keep adequate amounts of prescriptions and other medications.
For other retailers, however, Irene comes in the middle of the profitable back-to-school season. Companies like Saks (NYS: SKS) and Tiffany's could be affected as people cancel their vacations and stay inside, rather than doing the average shopping. Read more atReuters.
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At the time this article was published Fool contributor Michelle Zayed doesn't own any stocks mentioned.The Motley Fool owns shares of Wal-Mart Stores and Yahoo.Motley Fool newsletter serviceshave recommended buying shares of Yahoo, Wal-Mart Stores, and The Home Depot.Motley Fool newsletter serviceshave recommended creating a diagonal call position in Wal-Mart Stores. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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