Opening Bell: 3.4.06

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Board Still Has Faith In Wagoner (WSJ)
It's not clear, exactly, what GM CEO Rick Wagoner has done to earn the continued support of the board, but he claims to have it. Perhaps it's not so much faith in him, but a skeptical outlook on whether anyone else would be any better, and whether the upheaval of a CEO change is a good thing right now -- probably not. Interestingly, some big GM dealerships are coming to his defense as well. The dealerships may be a wild card in this whole affair; did you know that Michael Dell has been investing in this area? If he could shake this area up, do something to it like he did computers, it could be worth watching. Perhaps the Henry Ford of computers could become the Henry Ford of car dealerships, too.
Mittal-Arcelor, Oracle-Peoplesoft II? (Reuters)
Arcelor continues to gird itself against the increasingly aggressive Mittal, raising their dividend, and adopting other poison pill measures to ward of the suitor. None of this is deterring Mittal, which is holding the line on its offer, while deriding Arcelor management as being shareholder unfriendly.
NTL to buy Virgin Mobile in $1.7 bln deal (Reuters)
While the American telecom operators are talking about the triple play, Europe has long moved onto the quadruple play (TV, Data, Voice, Mobile Voice), and this is yet another example. Word of the deal originally floated last December, but only now went through, which should suggest very little remaining opposition to it. It's not clear what kind of synergies or cost-savings the new company can expect. Perhaps there will be some convenience to customers in being able to pay for all of these things on one bill, but often customers have seen the opposite -- operators use the bill as a way to tack on a bunch of hidden charges and fees, alienating the users.


Long-Term Rates Creep Higher (WSJ)
Is this the beginning of the end? Will the rise in long-term rates finally quash housing, consumer spending and the economy? Does this mean that foreign lenders are becoming wary of loans to Americans? Does this mean we don't have to worry about the inverted yield curve anymore? Will we see a round of defaults on ARMs? Questions questions questions.
Chinese Official: Don't Buy U.S. Bonds (NYT)
Maybe the rise in long-term rates is in anticipation of a change in Chinese strategy. A leader there has called for the country to diversify away from US cash holdings, and to find a way to increase imports from us. This must be music to Chuck Schumer's ears -- dollar declines, exporters sell a few more goods, and banks start foreclosing on the minimansions; hope you're happy!
McClatchy Doing The Internet Thing (Marketwatch)
While some newspaper executives claim that search traffic is destroying their business model (yes, you read that right), McClatchy is aggressively getting into search itself, as it rolls out a series of local search engines (Craigslist meets CitySearch?). Check out Triangle.com for the Carolinas region. It looks impressively clean and unburdened by the flashy irrelevant ads that one expects from a newspaper offering. Besides, it's 2006, seems like after 10 years or so of the web, newspapers ought to give it a try.
Mexican Billionaire Expands Telecom Holdings (Forbes)
Carlos Slim Helu, head of wireless giant America Movil, is adding to his telecom empire with the purchase of Verizon's Caribbean and Latin American operations. The $3.7 bln dollar deal gives him 15 mln more customers across the region, and comes on the heels of other local telecom purchases. It's a pretty impressive show of confidence in the region. One might expect someone of his wealth to be diversifying out of Latin American telecom, and while he does have some major holdings in the US, 75% of his wealth is now in the region. As attempts to consolidate this market further, he risks alienating insurgent leftist politicians with his monopoly. Looking at it from the opposite perspective, why is Verizon getting out of Latin America? Is it pessimism for that market, or a simply a desire to shore up the cash, focus on their core market, and maybe prepare to make a bid for some domestic assets -- like the other half of Verizon Wireless owned by the shrinking Vodafone.
Web Weaklings Flex Muscle (TheStreet)
2006 is shaping up to be the year of the ugly sisters, probably a bad omen for things ahead. The Amex announced an IPO, reminding everyone that there's a lot of junk out there in the stock exchange world. Google's been a loser this year (hmm, is it too early start talking about whether Bill Miller will beat the S&P this year? If he's still holding a large position in Google, he could be way behind). Meanwhile, the lesser web stocks have been on a tear. WebMD, Stamps.com, TheKnot, DrKoop (just kidding on that one) have all been up strong signaling a taste for the small and speculative. Granted, one could have said the same a couple years ago when Travelzoo.com was the hottest company on the planet. Still, Stamps.com?
Tide Is Turning For Intel (Forbes)
Mork Mowrey, giving his personal stock opinions at Forbes, argues that Intel is back, is closing the performance gap, and will regain lost marketshare from AMD. This seems obvious in some way. Intel towers over their rival in every way, and in the capital intensive chip business, such a size advantage can make up for a lot of missteps. On the other hand, the company is trumpeting a renewed focus on power consumption and heat, which is all good, but also sounds a refuge. Markets find power and heat sexy; consumers like GHz. Until Intel can pull away in that measure again, AMD should do pretty well.

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