UPI NewsTrack Business

Aug. 20, 2012 at 1:45 PM
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Stocks stumble

NEW YORK, Aug. 20 (UPI) -- U.S. stock indexes slipped Monday, with investors focused on Europe's financial crisis.

A spokesman for the European Central Bank was quoted as saying rumors of the ECB buying government bonds was "absolutely misleading," The Wall Street Journal reported.

Stocks were flat in most of Europe, although benchmark yields for 10-year government bonds retreated slightly in Spain and Italy, Tradeweb said.

In early afternoon trading on Wall Street, the Dow Jones industrial average lost 33.52 points or 0.1 percent to 13,261.68. The tech-heavy Nasdaq Composite index shed 6.51 points or 0.21 percent to 3,069.56. The Standard and Poor's 500 gave up 2.46 points or 0.17 percent to 1,415.70.

The benchmark 10-year treasury rose 2/32, yielding 1.811 percent.

Against the euro, the dollar fell to $1.2344 from Friday's $1.2335. Against the yen, the dollar fell to 79.38 from 79.57 yen.

In Tokyo, the Nikkei closed at 9,171.16, adding 78.40 points, or 0.86 percent.

In London, the FTSE 100 index lost 0.17 percent, 10.14, to 5,824.37.

Best Buy goes with Joly to fill CEO post

MINNEAPOLIS, Aug. 20 (UPI) -- U.S. retail giant Best Buy Co. said Monday that Carlson Chief Executive Officer Hubert Joly had accepted the position of Best Buy's next CEO.

Joly, who is French, will leave Carlson, the hospitality firm he has led since 2008, and replace interim CEO G. Mike Mikan, who will stay on until Joly comes on board, Best Buy said in a statement.

As Best Buy is struggling to hold onto its substantial presence as a technology seller and facing stiff competition from Internet retailers, the firm touted Joly's track record reviving ailing companies.

"Over the last 15 years, Joly has developed a track record of successful turnarounds and growth in the media, technology and services sectors," the statement said.

Joly's resume includes stints at video game business Vivendi, "which included the development of a massive online presence with Diablo II and World of Warcraft," Best Buy said.

He also helped turnaround troubles at French technology firm EDS and Carlson Wagonlit Travel, which he headed before taking over its parent company Carlson.

Best Buy Chairman Hatim Tyabji said Joly was "an outstanding candidate for this position."

Board member Kathleen Higgins Victor said Joly was "a strategic thinker with deep financial acumen."

Joly said Best Buy "has extraordinary assets --- including its 167,000 employees, its huge customer base, its distribution and service capabilities."

Some early investors bid Groupon adieu

CHICAGO, Aug. 20 (UPI) -- Some early investors are pulling back from Chicago's Internet firm Groupon, which was seen a rising star just before it went public, analysts said.

"Groupon would have never gotten this big without that late-stage money," said Bill Gurley, a general partner at Benchmark Capital, a venture capital investment firm.

But now, some of the big investors who got in early are selling their shares, The Wall Street Journal reported Monday.

Silicon Valley investor Marc Andressen's investment firm Andressen Horowitz is one of those pulling out, selling all 5.1 million of its shares recently.

Andressen Horowitz jumped in before Groupon went public in November, spending $40 million to buy shares at $7.90 apiece.

Despite share values floundering, the firm made $14 million when it cashed out, the Journal said.

In addition, Maverick Capital Ltd. owned 6.3 million shares in Groupon, which it has reduced to less than 2 million shares and Fidelity Management & Research Co., a prominent mutual fund, has unloaded about a third of its Groupon holdings.

Others, such as Kleiner Perkins with 8.2 million shares bought 11 months before Groupon's initial public offering, and T. Rowe Prices are holding onto their shares or increasing their investments.

T.Rowe Price now owns 12 percent of the company and investment bank Morgan Stanley bought 20 million shares in the second quarter of the year.

The bigger pictureincludes Internet giants Facebook and Zynga, where shares are also floundering, sparking concern that Internet firms are doomed to fall short of expectations.

At Groupon, several company directors, including Howard Schultz, the head of Starbucks, have said Groupon went public too soon.

Groupon Chief Executive Andrew Mason thought otherwise.

"Our board unanimously approved engaging investment bankers to explore an IPO, then months later unanimously approved us filing the S1, and then months later unanimously approved us going public," he said in an email.

The S1 is a form used to register a company's securities with the Securities and Exchange Commission. It is also a primary document investors use to research companies prior to an initial public offering.

Oil slides on concerns about demand

NEW YORK, Aug. 20 (UPI) -- Crude oil prices dropped under $96 per barrel Monday morning on concerns that U.S. demand was slowing.

The American Petroleum Institute said Friday U.S. demand dropped to an almost four-year low in July, taking the wind out of last week's modest rally.

West Texas Intermediate crude oil for September delivery, above $96 last week, gave up 25 cents in early trading to $96.76 per barrel on the New York Mercantile Exchange.

Natural gas added 5.1 cents to $2.77 per million British thermal units.

Home heating oil gained 1.4 cents to $3.1066.

Reformulated blendstock gasoline climbed a half cent to reach $3.0325 a gallon.

At the pump, the average price for a gallon of regular unleaded gasoline was unchanged from Sunday at $3.20 per gallon, AAA reported.

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