Chinese Premier Wen Jiabao
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The former head of Britain’s civil service says Prime Minister David Cameron’s links with the media were too cozy.
Gus O’Donnell retired in December after serving for six years as Britain’s top civil servant and chief adviser to Prime Minister David Cameron.
In evidence Monday to the country’s media ethics inquiry, he acknowledged Cameron had become too close to sections of the press.
O’Donnell told the hearing that Cameron had “felt his relationships had got too close, and I agree with that.”
The inquiry is investigating the work of Britain’s press in the wake of the tabloid phone hacking scandal.
Cameron set up the ethics inquiry amid public revulsion over the revelations that the News of the World had hacked murdered schoolgirl Milly Dowler’s phone when she disappeared in 2002.
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China’s inflation rate slowed slightly to 3.4 percent in April, down from 3.6 percent a month earlier, giving the government greater leeway to ease policy to boost the economy.
The National Bureau of Statistics announced the figure Friday, which comes after China’s economy grew in the first quarter by its slowest pace since 2009.
The figure also comes a day after China announced that its trade surplus widened in April as imports barely budged, sharpening fears that the world’s second-biggest economy is not doing enough to stimulate domestic demand and counter a slowdown.
China grew by a still-robust 8.1 percent in the three months ending in March, down from the previous quarter’s 8.9 percent, but above the government’s 7.5 percent target for the year.
Growth has fallen steadily since 2010 as a slump in global demand battered its exporters and Beijing tightened lending and investment curbs to cool an overheated economy and surging inflation.
Already, there are signs that the slowdown is hurting demand for oil, industrial components and consumer goods at a time when U.S. and European growth are weak.
Last year’s unexpectedly steep plunge in demand for China’s exports due to U.S. and European economic woes prompted communist leaders to reverse course and ease controls on bank lending to help struggling manufacturers.
Further easing measures are expected, especially now that inflation appears to be under control, economists say.
Embattled Yahoo CEO Scott Thompson told company employees late Monday that he is sorry for the distraction his resume padding scandal has caused — without commenting on what role his own actions might have played in creating the drama.
"I want you to know how deeply I regret how this issue has affected the company and all of you," Thompson said in a memo obtained by CNN. "We have all been working very hard to move the company forward, and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you."
The scandal erupted late last week, when activist shareholder group Third Point first alleged that Thompson lied about his college degree. Thompson’s published bios have claimed that he holds a Bachelor’s degree in both accounting and computer science from Stonehill College, but his degree is actually only in accounting.
Yahoo (, Fortune 500) said that it had incorrectly stated Thompson’s academic credentials, claiming the mistake was an "inadvertent error."
On Tuesday, the Yahoo announced that Patti Hart, the director who led the search committee that picked Thompson, will soon leave the board.
First reported by tech blog AllThingsD, the news was later confirmed by Yahoo, which said Hart is stepping down at the behest of her own company, International Game Technology (). Hart, who joined Yahoo’s board in 2010, serves as CEO of IGT.
"The IGT board requested that she not seek reelection as a Yahoo director," Yahoo said in a written statement.
Yahoo’s board said also Tuesday that it has hired an outside counsel to conduct a review of the false statement. It appointed the company’s three independent directors to oversee the investigation.
All three directors were named to Yahoo’s board under Thompson’s watch, after a board shakeup that wiped out most of Yahoo’s previous directors.
Thompson said he would cooperate fully with the board’s review, and the CEO urged a "prompt" conclusion to the probe.
Thompson’s memo to Yahoo’s staff included no explanation for how the mistake happened. His apology was solely for the impact the scandal has had on the company, not for the act itself.
That didn’t impress the troops.
A senior Yahoo executive, who spoke to CNN on the condition that his name not be used, said: "Thompson has quickly lost the confidence of many employees, who think he has to go."
False statements about Thompson’s degree predate his tenure at Yahoo, which began in January. References to a "computer science" degree also appeared in his online biographical information on PayPal’s website when he was president of the eBay (, Fortune 500) subsidiary.
Thompson’s degree information is actually correct in eBay’s regulatory filings to the Securities and Exchange Commission and in the bio featured in filings for F5 (), where he serves as a director quick payday loans. In both cases, the companies state: "Mr. Thompson holds a B.S. in Accounting from Stonehill College," with no reference to a computer science degree.
Related story: Résumé padding: inconsequential or inexcusable?
But the false statement about his degree appeared in Yahoo’s latest annual report filed to the SEC: "Mr. Thompson holds a Bachelor’s degree in accounting and computer science from Stonehill College."
Critics like Third Point seized on that line and are demanding answers about how it made its way into Yahoo’s regulatory filings. CEOs are required to personally certify that their company’s statements are accurate.
The annual report Yahoo filed last month includes this line, directly above Scott Thompson’s signature: "This report does not contain any untrue statement of a material fact."
A spokeswoman from Third Point declined to comment on Thompson’s apology.
The investment group said earlier on Monday that it wasn’t satisfied with Yahoo’s review process. It sent Yahoo’s board a letter demanding that it be allowed to inspect books and records relating to Thompson’s hiring, and it urged the company to make details of the review public.
Yahoo’s board "will make an appropriate disclosure to shareholders" upon conclusion of its review, Yahoo said in a statement e-mailed statement to CNNMoney.
Yahoo typically uses the headhunting firm Heidrick & Struggles for its executive searches. But AllThingsD says the firm wasn’t involved in the search for Thompson — he reportedly reached out directly to company directors to pitch himself for the CEO job.
CNNMoney has reached out to Heidrick & Struggles to find out if the firm was involved in vetting Thompson’s background. The firm declined to comment, but a source close to the company said Heidrick & Struggles was not involved in Thompson’s appointment in any way.
Meanwhile, Thompson said he would continue pushing forward on the company’s latest attempt to rebuild.
"I feel I owe it to all of you to make sure that nothing disrupts the progress we’ve made in just a few short months due to all of your focus, commitment, and hard work," he said. "We have a lot of work to do. We need to continue to act as one team to fulfill the potential of this great company and keep moving forward. You have my word that all my energy and attention will be on that mission."
– CNN’s Dan Simon and Katy Byron contributed reporting to this article.
Clayton-based Furniture Brands has named Vance Johnston as its new chief financial officer.
He is currently the company’s senior vice president for growth and transformation. He will begin the new position on May 18.
He will replace Steven Rolls, who is resigning business card.
Treasury Secretary Timothy F. Geithner said the U.S. faces risks from the crisis in Europe while the confrontation with Iran has helped drive up oil prices.
Oil prices hovered above $104 a barrel Wednesday in Asia after a report showed U.S. crude supplies jumped more than expected for a fourth week, suggesting demand remains weak.
Benchmark oil for May delivery was up 17 cents to $104.37 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.27 to settle at $104.20 in New York on Tuesday.
Brent crude for June delivery was down 34 cents at $118.44 per barrel in London.
The American Petroleum Institute said late Tuesday that crude inventories rose 3.4 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 400,000 barrels.
Inventories of gasoline fell 2.6 million barrels last week while distillates tumbled 2.4 million barrels, the API said.
The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.
Crude has traded above $100 most of this year as an improving U.S. economy has bolstered investor confidence. However, crude demand has remained tepid.
“We look for a sizable U.S. crude supply surplus during the coming months to take some steam out of crude strength,” energy trader and consultant Ritterbusch and Associates said in a report guaranteed fast personal loans. “We still see fresh lows to below the $100 mark by next week.”
On Tuesday, President Barack Obama urged Congress to give oil market regulators more muscle to deter price manipulation by speculators amid rising gasoline prices.
Obama called on Congress to strengthen federal supervision of oil markets, increase penalties for market manipulation and empower regulators to increase the amount of money energy traders are required to put behind their transactions.
“Although President Obama’s comments on oil price regulation will occupy much headline space, it shouldn’t have much impact on oil pricing over the near term,” Ritterbusch said.
In other energy trading, heating oil was down 0.1 cents at $3.13 per gallon and gasoline futures slid 0.5 cents at $3.17 per gallon. Natural gas rose 0.2 cents at $1.95 per 1,000 cubic feet.
China is slowing, inflation is sleeping, bank stocks are slipping and Google is splitting. Got all that?
There’s a lot of economic and market news to digest on this frenetic Friday the 13th. Stocks were lower after a big move up Thursday.
Here’s why.
China’s gross domestic product grew at an 8.1% annualized pace in the first quarter. While that’s obviously a fantastic level of growth, it’s down from the 8.9% pace in the fourth quarter. And it’s disappointing, considering that Thursday’s market rally was partly due to whispers that China’s growth may not slow after all. Oops.
The China GDP number may not be a cause for alarm yet. But it will not silence the chorus of China critics who think that nation’s economy is destined for a hard landing.
The slowdown may also put more pressure on China’s central bank to lower its reserve requirement ratio for banks again — or even cut interest rates.
"It is important for global sentiment that China’s growth remains strong," said John Derrick, director of research for U.S. Global Investors. "If China were to be more aggressive with easing, that would be good for stocks."
Speaking of interest rates, the Federal Reserve has more justification to leave rates near zero for awhile thanks to the March consumer price report. Consumer prices rose 2.7% year-over-year through March, down from a 2.9% pace a month earlier.
The Fed can continue to keep monetary policy loose as long as inflation remains low. But while the latest round of job market data — a pullback in hiring in March and a pickup in weekly unemployment claims — is disheartening, those numbers are probably not weak enough to give the Fed good reason for further bond buying.
Correction? Perhaps. But investors shouldn’t panic
What’s more, even though inflation is low, the price of consumer goods is still rising at a higher clip than wages. So the Fed can’t completely write off concerns about inflation just yet. The market seems to sense that, and that may be another reason why stocks are down Friday.
"The Fed can keep current policy in place, but there is nothing hinting at deflation. So there is no ammunition for more easing right now," Derrick said.
Finally, there’s earnings. Profits at JPMorgan Chase (, Fortune 500) and Wells Fargo (, Fortune 500) did both top estimates. That’s the good news. But both stocks were lower Friday, as were shares of Citigroup (, Fortune 500) and Bank of America (, Fortune 500), which are each set to report results next week.
Investors may be looking beyond the first-quarter results and worrying about whether credit quality is deteriorating once again. The level of so-called non-performing assets at JPMorgan and Wells rose slightly from the fourth quarter. That could be an ominous sign, especially if the job market loses more momentum in the coming months.
"Earnings quality is poor and non-performing assets are up, which will scare people. Charge-offs and credit costs could go up," said Christopher Whalen, senior managing director with Tangent Capital Partners, a New York firm that focuses on banks.
And then there’s Google (, Fortune 500). The company’s sort-of evil stock "split" is overshadowing its latest earnings. When you look at those numbers closely, there is cause for concern.
Sure, earnings topped estimates. But sales narrowly missed forecasts. And a key gauge of how much advertisers are paying Google, the cost per click, fell from both the end of the fourth quarter and the first quarter of last year.
Sell in April and hide under the table?
Shares of Google slipped nearly 3% Friday. Combine Google’s lackluster numbers with the banks’ and it is reasonable to wonder if first-quarter earnings won’t be as strong as some people thought they might be after Alcoa (, Fortune 500) reported a surprise profit and much better sales Tuesday.
"Profit levels are already at record highs. So Corporate America has to start showing sustainable revenue growth to justify current stock valuations. That is key. And there are considerable headwinds for companies to digest," said Adrian Cronje, chief investment officer at Balentine in Atlanta.
Add this all up — slowing growth in China, worries about the U.S. economy and concerns that earnings can’t get that much better — and it’s clear that investors still have plenty to worry about this year. And we didn’t even tackle the fact that Europe’s debt crisis is rearing its ugly head again.
The recent slump may still turn out to be a correction as opposed to a major market rout. But anyone that still thinks there’s nothing but blue skies ahead for stocks and the economy is kidding themselves.
"There was too much enthusiasm about the economy at the beginning of the year," said Milton Ezrati, senior economist and market strategist with Lord Abbett in Jersey City, N.J. "This is a plodding recovery and earnings should reflect that. This is a wake-up call."
Best of StockTwits and reader comment of the week: The Google stock split has made some investors angry while others don’t seem to care too much about it.
bradloncar: $GOOG supposedly worrying about shareholder activism is such a red herring. It’s a $200B company!
The new C class of non-voting shares is strange. As I said in today’s Buzz video, it may not be "evil" but it is "devious." Google’s co-founders and chairman Eric Schmidt already have voting control of the company through the B shares — which is why there is virtually no way the plan to split the stock will be defeated.
And with a $200 billion market cap, who could really buy up enough of the A shares — with limited voting power by the way — to make a difference? This isn’t Yahoo (, Fortune 500).
OptionsHawk: $GOOG trades like 8X earnings ex-cash - that is about all u need to know…
JoshPritchard: $GOOG saw 34% growth in FCFO, but no one’s talked about it. Great Fundamentals. At 12% discount rate, current mkt cap implies <5% LT growth
That is true. As I wrote in my Google earnings preview piece Wednesday, the stock is cheap and the company is still growing rapidly. But the latest results show some cracks. Anyone who’s worried about competition from Facebook and Apple still has reasons to be doubtful.
Nokia launched its new Lumia smartphone in the United States on Easter. A few days later, it warned that it would report a bigger quarterly loss. Shares plunged, leading some to wonder if CEO Stephen Elop, who joined the company from Microsoft (, Fortune 500) last year, can really turn the ship around.
Douglas Blake gets the reader comment of the week award for referencing a blunt term that Elop used in a memo to Nokia () employees last year.
"$NOK forgot to jump off the burning platform!," he tweeted.
Ouch. I keep waiting for Research in Motion () to come up with a disaster metaphor of its own as well to describe the BlackBerry. Iceberg straight ahead!
The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.
The fear trade picked up steam Tuesday, as investors grew increasingly worried about Europe’s fiscal health. All three indexes closed down more than 1.5%, marking the fifth straight losing day for stocks.
Early in the day investors, traded out of stocks after reading headlines about rising borrowing costs for Spain and Italy. As the day progressed, investors grew increasingly jittery over the health of the global economy, which caused the sell-off to intensify.
"People are starting to get very concerned about the macro picture of both sovereign debt and China’s slowing growth," said Sam Ginzburg, head of trading at First NY. "We’re starting to get very worried about going back to a recession."
The Dow Jones Industrial Average () closed down 214 points, or 1.7%, capping off the worst day since November 2011. The S&P 500 () lost 24 points, or 1.7%. The Nasdaq () fell 56 points, or 1.8%.
The S&P 500 also had the worst day since November 2011, while Nasdaq posted the worst finish since December 2011.
European stocks slumped more than 2%.
First-quarter earnings: They won’t be pretty
Yields on Spain’s 10-year bonds hovered just under 6%, the highest level in more than three months. Borrowing costs have been trending higher as the government struggles to push through budget cuts. In Italy, the yields rose near 5.7%.
Peter Boockvar, chief equity strategist at Miller Tabak, said that while U.S. investors had been largely ignoring sovereign debt questions in Europe, the continent’s problems cannot be ignored now.
As part of a broad retreat from risky assets, investors jumped into U.S. Treasuries, driving the yield on 10-year Treasuries below 2% for the first time in more than a month.
Twenty-nine of the Dow’s 30 components ended in the red, with Bank of America (, Fortune 500) leading the broad retreat. Oil and industrial stocks were also among the biggest decliners. GE (, Fortune 500), Caterpillar (, Fortune 500) and Exxon (, Fortune 500) fell more than 1%.
The so-called fear index, the VIX (), rose nearly 11% Tuesday and is up nearly 33% over the past five days. It’s at 20.5, still far from 30 — a reading that typically signals heightened investor fear.
Investors got one positive surprise after the markets closed. Dow component Alcoa (, Fortune 500) beat earnings estimates when it reported after the closing bell. Alcoa’s earnings unofficially begins the release of first-quarter financial results personal loan for poor credit.
Analysts are forecasting a 0.1% drop in first-quarter earnings for companies in the S&P 500 compared to a year earlier, according to FactSet. While that’s not a major decline, it would mark the end of a nine-quarter winning streak. Stocks were on a tear in the first three months of this year, with the Dow and S&P 500 enjoying their best first quarter in over a decade.
"We’re essentially expecting no growth, but we could see earnings come in worse than that," said Boockvar. "I think we have the potential for some disappointment."
Stocks finished lower Monday, as investors reacted to the disappointing March jobs report released last week.
World markets: European stocks closed down sharply. Britain’s FTSE-100 () slipped 2.2%, the DAX () in Germany dropped 2.5%, and France’s CAC 40 () shed 3.8%.
In Asia, Japan’s Nikkei () slipped 0.1%, while Hong Kong’s Hang Seng () lost 1.2% and the Shanghai Composite () gained 0.9%.
Economy: Wholesale inventories came in higher than expected for February with a 0.9% increase above the 0.5% rise forecast by economists. Inventories rose 0.4% in January.
On Monday, Federal Reserve chairman Ben Bernanke said in a speech in Georgia that banks need to increase their capital buffers in order to ensure stability in the financial system.
Companies: Shares of electronics retailer Best Buy (, Fortune 500) surged then dropped after the company announced that CEO Brian Dunn had resigned and the company would begin a search for a new CEO.
Sony () shares dropped after the electronics maker announced it expects an annual loss of more than double its previous projection. The company said the revision came after recording additional tax expenses, primarily in the United States.
Shares of grocery retailer Supervalu (, Fortune 500) were up 15%, after the company reported earnings that beat expectations and offered strong guidance.
Apple’s (, Fortune 500) shares hit another all-time high Tuesday.
Introducing Wall Street’s new rainmakers
Currencies and commodities: The dollar gained against the euro and the British pound but fell against the Japanese yen.
Oil for May delivery lost $1.32 to $101.14 a barrel.
Gold futures for April delivery gained $16.60 to $1,660.50 an ounce.
With the wow factor conspicuously absent from the latest crop of smartphones and tablet PCs offered by vendors including Apple Inc., some experts are asking whether innovation has hit a wall in the post-Jobs era.