News Analysis for the Investor on Feb. 8, 2012

Greece Misses Bail-Out Deadline

 Another day passes, and so does a deadline for Greece to approve conditions for a second $130 billion bail-out. "A meeting with political leaders was postponed until Wednesday because of last-minute haggling with international lenders over emergency spending cuts," the Financial Times reports. A government official said that a deal is expected to be presented for approval at a meeting of eurozone finance ministers later in the week. Greece has already missed two deadlines this week, frustrating eurozone leaders and putting the second bail-out in jeopardy.

 Yahoo Cleans House

 Yahoo chairman Roy Bostock and three other directors will step down at this year's annual meeting in a bid to restore investor confidence in the Internet company, the Financial Times reports. Yahoo will operate with a seven-member board appointed within the last two years. The company had faced "intense pressure" from Wall Street over several recent setbacks, FT reports, including the failure of negotiations over an acquisition by Microsoft in 2008.

 Congress at Odds—Again—Over Payroll Tax Cut Extension

 Both sides cried politics, but the end result is that lawmakers are no closer to a bipartisan deal to extend the payroll tax cut for 10 months before the extension runs out on Feb. 29, CNN reports. The tax break affects an estimated 160 million Americans. In addition to the extension, the 20-member House-Senate conference committee is also trying to extend jobless benefits for the long-term unemployed. At issue is how to pay for the package, with Republicans arguing for cutting spending in the federal budget and the Democrats wanting to impose a surtax on those who make over $1 million and eliminated some corporate tax subsidies.

 International Mining Merger

 Swiss mining company Glencore International has agreed to acquire rival Xstrata for $61.9 billion in stock, according to CNN Money, reporting on a joint statement released by the companies on Tuesday.

 The combined company, Glencore Xstrata International, would have a market value of $90 billion and would remain headquartered in Switzerland, where both firms are domiciled. The agreement would provide Xstrata shareholders 2.8 shares of Glencore stock for every Xstrata share, a value yielding a 15 percent premium over the Feb. 1 value of Xstrata stock. The deal would also give Xstrata shareholders a 45 percent stake in the new company.

 The two companies represent a huge share of the world mining industry. Xstrata, the world’s largest copper producer and one of the largest zinc and nickel miners, employs 70,000 people in 20 countries, while Glencore employs 70,000 people in 40 countries.

 BP Reports Strong Earnings, Desire to Resolve Claims

 BP announced strong quarterly profits and increased shareholder dividends on Tuesday in a statement announcing the company’s eagerness to resolve billions of dollars in outstanding claims resulting from a massive oil spill in the Gulf of Mexico, according to The New York Times. The company is headed for a trial scheduled to begin on Feb. 27 in New Orleans.

 A deadly explosion of a drilling rig in April 2010 created a massive environmental disaster that forced the company to sell $30 billion, or about 20 percent, of its assets to pay for costs and claims related to the accident. BP stock has yet to recover from the accident.

 The company now claims to be on the right path and reports a $7.7 billion profit for the fourth quarter of 2011, a 38 percent increase from the same period last year.

 Apps Create Jobs in Down Economy

 The mobile apps industry has created 466,000 jobs in the U.S. since 2007, according to an industry study reported by CNN Money. The technology trade group Tech Net estimates companies making apps added 311,000 jobs during the period, which included times of peak unemployment. Increased spending on apps has led to the creation of another 155,000 new jobs by local merchants.

 The new jobs may just be the beginning, according to Tech Net, which says the “app economy” is still in the early stages of growth fueled by mobile technologies and expanding social networks.  Currently, there are more than 500,000 apps available for Apple products, alone.