Google's Stock Tops $600 for First Time

Google Inc.'s stock price sailed past $600 for the first time Monday, extending a monthlong rally propelled by the lofty expectations surrounding the Internet search leader's upcoming third-quarter earnings report.The Mountain View-based company's shares traded as high as $610.26 before slipping back to $609.62, a gain of $15.57, or 2.6 percent. It marked the sixth time in the past 12 trading sessions that the stock has reached a new peak, indicating investors are confident Google's third-quarter profit will be impressive. The results are scheduled to be released Oct. 18.The latest milestone served as yet another reminder of the immense wealth created since Google went public in August 2004.The shares have increased more than sevenfold from their initial public offering price of $85, bringing the nine-year-old company's market value to $190 billion eclipsing bigger, more mature businesses like Wal-Mart Stores Inc., Coca-Cola Co., Hewlett-Packard Co. and IBM Corp.It took 10 1/2 months for Google's stock to leap from $500 to $600 and more than a year for the journey from $400 to $500. The shares hurdled $300 in June 2005 after passing the $100 and $200 thresholds in 2004.Analysts began predicting Google's stock would reach $600 at the start of 2006 when the shares were still hovering around $420. Some analysts already are predicting Google's stock will hit $700 within the next year, but the average target price for the stock is $614.64 among analysts polled by Thomson Financial.The biggest beneficiaries of the stock's ascension have been Larry Page and Sergey Brin, who began developing their search engine, then called "BackRub," in a Stanford University dorm room in 1996. Page and Brin, both 34, now rank among the world's wealthiest people, with fortunes approaching $20 billion apiece.Google's chief executive, Eric Schmidt, and top sales executive Omid Kordestani also have accumulated enough stock in the company to become multibillionaires.

As the Dollar Falls, New Doors Open to Currency Bets

THE dollar’s recent swoon is a textbook example of just how volatile foreign exchange markets can be. The new lows for the dollar brought quick profits to many investors, but the “easy money” has already been made, said Ed Yardeni, the president of Yardeni Research.“Trading in currencies is a dangerous game,” he said. Whether the dollar weakens further or begins to rise will largely depend on what the Federal Reserve does next, he said, and that is very difficult to handicap.This month, the central bank cut its benchmark interest rate by half a percentage point, to 4.75 percent; the cut was bigger than Wall Street had expected. The Fed also reduced the rate it charges banks for emergency short-term loans by half a point.“There is some expectation that there will be more rate cuts,” Mr. Yardeni said. “But I think the Fed was aggressive enough in its recent action that it might not have to cut rates again any time soon.” If the Fed keeps rates as they are, the dollar may stabilize and start trading in a narrow range against some major currencies, like the euro and the Japanese yen, in Mr. Yardeni’s view. That could change the fortunes of investors who have been using a spate of new exchange-traded funds to bet that the dollar will keep falling. These E.T.F.’s have made it much easier for individuals to buy and sell the British pound, the Swiss franc or even the Mexican peso. And some E.T.F.’s allow investors to bet that the dollar will rise or fall against a basket of currencies.Many individual investors have been drawn to these funds. Tim Meyer, the E.T.F. business manager at Rydex Investments, estimated that only about 30 percent of the roughly $1.1 billion that has flowed into the company’s eight currency E.T.F.’s this year was from institutional investors, like pension plans and hedge funds. He said 50 percent probably came through financial planners and the other 20 percent from online brokerage accounts.Rydex Investments, based in Rockville, Md., has created many of the new E.T.F.’s. Each holds currency in a bank account at JPMorgan Chase in London. The funds pay interest, which is based on the overnight money market rate in each currency, minus fund expenses.Although the dollar has fallen against a broad range of currencies this year, Mr. Yardeni said the picture might soon become more complex. The dollar could rise against some major currencies over the next six months, while falling against others, he said, depending on economic conditions and interest rates in each country.For example, the Japanese yen, which has been floundering for years, has surprised investors by rallying against the dollar recently. But Mr. Yardeni said the yen could level off — or even reverse course — unless Japan’s central bank raised the country’s razor-thin interest rates. With fresh signs of deflation in Japan, he said, that may not happen soon.As for the euro, which traded above $1.40 for the first time this month, Mr. Yardeni said he could imagine it going as high as $1.45 but not $1.50. And he predicted that the British pound, now trading at more than twice the value of the dollar, could fall to around $1.85 over the next six months.“We might see a little divergence, where the dollar weakens against the euro and strengthens relative to the pound,” Mr. Yardeni said, because Britain’s economy has a lot of the same risk factors that the American economy does now — including a shaky mortgage market.The currencies with the best outlook are the Australian and Canadian dollars, he said, “because they have what the world wants now, which is raw materials.”Earlier this month, the Canadian dollar reached parity with the American dollar for the first time in more than 30 years. But Mr. Yardeni said he thought both the Canadian and Australian dollars might rise an additional 5 percent or so against the American dollar.Michael Metz, the chief investment strategist at Oppenheimer & Company, said it was too late to buy the British pound or the euro, calling both currencies “grossly overvalued.” He said the Japanese yen was still attractive but not as much as it was in February, when Rydex introduced the CurrencyShares Japanese Yen Trust.“When that E.T.F. was created, the yen was the cheapest currency around,” Mr. Metz said. “But if you want an alternative to the dollar now, I think it’s the Swiss franc.” He said that the Swiss currency had not appreciated in tandem with the euro, largely because Switzerland has lower interest rates.Many investors do not want to pick and choose among foreign currencies, said Bruce Bond, the president and chief executive of PowerShares Capital Management in Wheaton, Ill. PowerShares offers two E.T.F.’s that use futures contracts to make bets on the dollar versus a basket of six currencies: the yen, euro, British pound, Canadian dollar, Swedish krona and Swiss franc. If the dollar rises against these currencies, investors in one of the E.T.F.’s, the PowerShares DB U.S. Dollar Bullish fund, would make money. If the dollar falls, the PowerShares DB U.S. Dollar Bearish fund would come out ahead. Neither fund uses leverage.The company has also created an E.T.F., PowerShares DB G10 Currency Harvest, intended to allow investors to bet against currencies in countries with low interest rates and to take long positions in those with higher rates. Currently, the fund has long positions in the Australian dollar, the New Zealand dollar and the British pound, and short positions in the Japanese yen, the Swiss franc and the Swedish krona.THERE are special tax consequences associated with the three PowerShares funds. Investors who own E.T.F.’s that use derivatives, like futures contracts, have to declare capital gains each year — even if they still own the funds — and 40 percent of the gains will be taxed at the higher rate for short-term capital gains. So experts recommend holding such E.T.F.’s in a tax-advantaged account like an Individual Retirement Account.Alternatively, Mr. Metz said that it might be simpler for investors who are worried about a further decline in the dollar to put a small portion of their portfolios into gold. He recommended one of the E.T.F.’s that invest in actual bars of gold, like the StreetTracks Gold Shares fund or iShares Comex Gold Trust.“I think there will be a big move by central banks to build up their gold reserves, which they have really sold off in recent years,” Mr. Metz said.

Euro bursts to fresh dollar high

The US dollar was dragged down further against the euro in Asian trade as dealers bet that further poor US economic data could lead to a rate cut.In early Tokyo trade, the euro climbed to $1.4283 after breaching the $1.42 level for the first time last week.Traders are now looking ahead to US jobless data out on Friday for a better idea of how the housing slump and credit woes are hurting the economy.Depressed numbers could strengthen the Fed's hand in cutting rates further.The dollar has been sliding since the Federal Reserve cut rates from 5.25% to 4.75% in September to help rejuvenate confidence in the world's largest economy.This followed a summer of turmoil in the world's credit markets, sparked by record loan defaults in the US sub-prime mortgage sector.Since then, a raft of mostly disappointing economic news and soft inflation figures has prompted anticipation of further rate cuts. Eurozone ratesMeanwhile, the European Central Bank's rate-setting committee is due to meet this week.No change is expected in the 13-member eurozone's key interest rate, which is currently 4%.Analysts say the ECB will want to exercise caution in the face of fragile stock markets, although Mr Trichet has maintained recently that Europe's economy remains strong.Investors will listen carefully to the words used by ECB President Jean-Claude Trichet in the news conference after the meeting for any indication of where eurozone rates will be headed next.

Wall Street Awaits Key Economic Reports

Wall Street is on surer footing than it was a month ago, but it enters the fourth quarter with many questions still unanswered about the health of the nation's economy and corporations.At this point, the credit markets have loosened up some, the Dow Jones industrial average is only about 100 points below its record, and investors appear to be more confident the Federal Reserve will do what it can to keep the economy from slipping into recession.The third quarter, after all the tumult in the housing and credit markets this summer, ended with the Dow up 3.6 percent after the Federal Reserve lowered key interest rates.However, not everything that keeps the stock market afloat is under the Fed's control. The housing market is the weakest it's been in years, and some homebuilders have said recently that they see conditions deteriorating through next year. Credit has improved, but the financial markets remain unsure how problems with spiking mortgage defaults and excessively leveraged debt will shake out."Everybody's nervous. This housing thing is big, and it's going to continue," said Kim Caughey, equity research analyst at Fort Pitt Capital Group in Pittsburgh, Pa.This week will bring data not only on August's pending home sales, but also on three major pillars of the nation's economy: manufacturing activity, service sector activity, and employment.Third-quarter earnings don't arrive in earnest until mid-October, and the Federal Reserve isn't scheduled to discuss interest rates until Oct. 30-31, so this week's reports could help investors figure out where the economy is headed, if rates will keep falling, and whether corporate America is weathering the uncertainty.The Institute for Supply Management is expected to report Monday that manufacturing rose at a similar rate in September as in August, according to the median estimate of economists surveyed by Thomson Financial. An ISM report Wednesday, however, is expected to show that growth slowed in the service sector, which makes up a larger portion of the economy than manufacturing does.

The price of existing homes in the 10 largest US cities fell by 0.6% in July - the steepest drop in 16 years - a survey has found.
The data, from S&P/Case-Shiller home price index, put the annual price fall in those cities at 4.5%.
A broader survey of 20 cities found that prices fell in 15 of them, dropping an average of 0.4% from June to July, and down 3.9% on July 2006.
Large numbers of unsold existing and new homes have hit prices.
"The further deceleration in prices is still apparent across the majority of regions," said Robert Shiller, chief economist at MacroMarkets LLC.
Recession risk
The cities where prices are still rising are Atlanta, Charlotte, North Carolina, Dallas, Portland and Seattle.
However, these have reported that growth is slowing, the index compilers said, with Atlanta and Dallas moving closer to negative territory.
Analysts say that tight credit conditions - making it harder for people to get mortgages - are continuing to dent the market for house sales, which is already weak.
The housing slowdown and decline in credit availability have triggered worries that the economy could go into a recession - prompting the US Federal Reserve to slash interest rates earlier this month from 5.25% to 4.75%.
Last week, Mr Shiller told politicians that the loss of a boom mentality among consumers posed a "significant risk" of a recession within the next year.

In una Borsa fiacca balzano Tiscali e Tod's

Chiusura di seduta in lieve calo per la Borsa, che ha confermato nel pomeriggio l'andamento fiacco già visto in mattinata. L'indice Mibtel registra così un -0,17%, a 31.620 punti, mentre l'S&P/Mib cede lo 0,29% e l'All Stars sale dello 0,74%. Scambi vicino ai 5 miliardi di euro.Con Wall Street a mezza forza per la festività del Columbus Day, Piazza Affari ha preferito rallentare il ritmo ed evitare di prendere posizioni chiare. Il Mibtel ha oscillato tutta la seduta tra il -0,2% e il +0,2%. In evidenza pochi titoli, tra cui Atlantia dopo l'accordo sulla convenzione unica e l'annuncio di un acconto sul dividendo, Lottomatica, Parmalat e Tiscali, galvanizzata dall'operazione avvenuta nel weekend nel settore tlc, con cui Vodafone ha acquisito Tele2 Italia e Spagna. Tiene le posizioni Eni, dopo gli incontri di Prodi e Scaroni in Kazakistan, che hanno portato ottimismo sulla conclusione della vicenda Kashagan.Tiscali registra un rialzo del 4,93%, frutto anche della valutazione data a Tele2 da Vodafone, secondo multipli che riporterebbero in alto la quotazione del provider sardo. Gli operatori inoltre scommettono su una acquisizione di cui potrebbe essere oggetto la stessa Tiscali; infine si pensa che Tiscali diminuisca l'importo dell'aumento di capitale in programma, non essendo riuscita ad acquisire Tele2 per cui era in gara. Ancora nelle tlc Telecom chiude con un -0,43%.Bene Atlantia (+1,79%) dopo che venerdì sera la società ha annunciato l'ok all'accordo con il governo sulla convenzione unica, con un programma di investimenti per 7 miliardi; deliberato anche un acconto di 0,31 euro sul dividendo. Sale Autogrill (+1,26%). Si è mossa anche Alitalia (+0,39%) in attesa delle novità sulla short list dal cda di oggi.Tra le altre blue chip, si riprende Lottomatica (+2,23%), bene Parmalat (+2,68%), Fiat oscilla poi chiude con un -0,32%. Salgono ancora i cementieri, la ripresa del dollaro favorisce Bulgari (+1,79%) e alcuni titoli del lusso-abbigliamento, come Safilo (+1,94%), Tod's (+5,24%) e Geox (+1,71%). Fermi i titoli energetici, con Eni -0,12% dopo i colloqui in Kazakistan. In calo i bancari, con Intesa Sanpaolo -1,01%, Unicredit -0,55%, Bpm -1,21%. Giù anche gli assicurativi, con Unipol -2,03% e Mediolanum -1,12%.

Criteria se estrenará en Bolsa mañana a 5,25 euros por título

Criteria, el brazo inversor de La Caixa, empezará a cotizar mañana en Bolsa a 5,25 euros por título. Este precio, que valora el grupo en 17.500 millones de euros, se sitúa en la parte baja de la horquilla prevista, lo que representa un descuento bruto del 27,9% sobre el valor de los activos del pasado viernes y asegura un buen recorrido para la acción. La suscripción es de 3.500 millones, lo que constituye la mayor colocación en una operación de salida a Bolsa en España.
El precio fijado se sitúa en la parte baja de la banda establecida, que iba de cinco a 6,75 euros por acción en el folleto de la oferta pública de suscripción (OPS). La entidad financiera prefirió realizar una ampliación de capital a una mera venta de acciones, lo que habría arrojado plusvalías inmediatas. Al final, el valor fijado supone valorar Criteria en 17.500 millones de euros y permite afrontar "un proyecto de futuro con amplio recorrido" y en beneficio de la masa accionarial, según declaró Criteria, presidida por Ricard Fornesa, en un comunicado oficial.
La oferta de Criteria ha recibido peticiones por importe próximo a los 9.000 millones de euros y ha incorporado más de 500.000 nuevos accionistas (360.000 familias) en todos sus tramos.
Como la demanda de títulos ha superado 2,57 veces la oferta, habrá prorrateo en los tramos minoristas y para los empleados, para los que se ha reservado el 55% y el 5% de los títulos, respectivamente. Las peticiones mínimas, por valor de 1.500 euros cada una, recibirán 285 acciones. Aquellas peticiones que superen dicha cantidad recibirán esos 285 títulos y, además, en torno al 25% o el 30% de las acciones solicitadas por encima de esa cifra.
"Es una apuesta valiente que ayuda a dar tranquilidad a los mercados en un momento muy delicado", subrayó una fuente de La Caixa a este periódico. "Si nos hubiéramos retirado, habríamos generado un enorme nerviosismo", añadió. Según esa fuente, el atractivo de Criteria se demuestra por la alta demanda recibida en toda España.
Recorrido al alza
En ese sentido, quiso salir al paso de algunos informes negativos contra la operación y, en concreto, el de Caja Madrid Bolsa, que la vinculaba con intereses políticos y criticaba falta de información. "No quiero pensar que ha habido mala fe, pero nosotros nos portamos muy bien cuando salió Realia [sociedad participada por Caja Madrid] a cotizar", remachó.
Ahora el empeño se centra en vigilar la cotización y darle recorrido. Tanto las fuentes de La Caixa consultadas como varios analistas de entidades colocadoras que prefieren guardar el anonimato consideran positivo el precio, puesto que abre un recorrido amplio a la acción. Algunos gestores de renta variable vaticinan, incluso, un alza de la acción de dos dígitos para esta misma semana.
Criteria se estrena en el parqué mañana y es la vía elegida por La Caixa para obtener recursos para financiar su expansión internacional, tanto en el área financiera como en el de participaciones industriales, y al mismo tiempo obtener cierto "contraste de mercado" con la gestión de sus participadas.
Principalmente, la caja que preside Isidre Fainé tiene en el punto de mira la compra de bancos y de participaciones bancarias en entidades de Europa, Asia (China e India) y Estados Unidos. Su incursión se ha limitado por ahora a la compra de un 4% del Banco de Hong Kong Bank of East Asia.
El descuento aplicado se ajusta a las exigencias de los inversores institucionales. En bruto, representa el 27,9% con relación al NAV (net asset value), el valor de los activos, que al cierre del pasado viernes era de 20.634 millones de euros, según varios bancos de inversión. Despúes de impuestos, el descuento es de 22,7%.
Analistas Financieros Internacionales (AFI) discrepa. "No vemos que sea una operación muy atractiva", explicaba ayer el analista Daniel Suárez. En primer lugar porque "no hay un descuento diferencial en relación, por ejemplo, al de Corporación Financiera Alba
[el holding de la familia March], que es de un 28". Asimismo, el 80% de la cartera de Criteria está formada por empresas cotizadas, "lo que la hace bastante replicable". "Lo único que podría añadir valor es el 20% restante", insiste AFI. Las empresas más relevantes son CaiFor y Port Aventura.