NEWS AT A GLANCE
Mixed signals on energy costs
The U.S. Energy Information Administration predicts that electricity prices will climb an average of 9.8 percent in 2009, instead of the 3.6 percent hike it forecast a month ago. The agency said prices should rise 5.2 percent this year. The EIA said rising natural gas prices were responsible for much of the increase. (CNNMoney.com) After the two-day, $9.25-a-barrel slide in crude oil prices, though, some analysts are suggesting that oil and gas might have hit a peak. “I think that we’re in the early stages, and we could see a drop of 20 percent to 30 percent from peaks in energy prices,” said Paul Nolte at Hinsdale’s Associates. (MarketWatch) Oil prices rebounded a bit early today, however, after Iran test-fired long-range rockets. (Bloomberg)
Alcoa beats expectations
Alcoa, the world’s No. 3 aluminum producer, launched the second-quarter earnings season with a 24 percent drop in quarterly profit, to $546 million, due to rising energy and raw material costs. The earnings were better than expected, however, and Alcoa shares rose 3.5 percent in extended trading. (AP in Yahoo! Finance) Higher prices for aluminum and strong demand from China and other developing economies helped offset the rising production costs. “They’re not hitting the cover off the ball, but it’s an in-line quarter, maybe a little bit better than some people expected,” said Morgan Stanley analyst Mark Liinamaa. (Reuters)
Ad firm WPP makes hostile bid for Taylor Nelson
Britain’s WPP Group, the world’s second-largest advertising firm, made a $2.13 billion hostile bid for market research company Taylor Nelson Sofres. London-based TNS rejected the same offer from WPP last week. WPP is looking to merge TNS with its Kantar unit to create the world’s No. 2 market research firm. (Bloomberg) The TNS board has already backed a merger with German rival GfK AG; WPP might now force GfK to make a counterbid. (Financial Times, free registration) WPP’s offer is 52 percent higher than TNS’s share price before the GfK merger surfaced. “The more nervous you are about the environment and about TNS’s ability to deliver synergies” with GfK, said Numis analyst Richard Hitchcock, “the more attractive WPP’s offer is.” (Reuters)
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