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Microsoft has agreed to buy Greenfield Online, owner of popular European price comparison website ciao.com, for about $486 million to boost its Internet search and e-commerce business in Europe.

Microsoft, whose $47.5 billion bid to buy Yahoo earlier this year failed after a long battle, said on Friday the acquisition — the latest in a series — should help it build a more consumer-friendly, results-oriented search engine.

“We call it ‘instant answers’,” said John Mangelaars, head of Microsoft’s consumer and online business in Europe. “I hope it’s getting very clear that we’ve very serious about EMEA,” he added, speaking to Reuters by telephone.

Internet search is dominated by Google, which has 62 percent of the global search market and 79 percent in Europe, according to Web usage tracker ComScore.

Microsoft has a 2 percent market share in Europe and 9 percent worldwide, behind both Google and Yahoo payday loan. In Europe, Microsoft is also outranked by online auction site eBay and Russia’s Yandex.

But Mangelaars said buying ciao.com was an important step in Microsoft’s attempt to distinguish itself by providing search results more useful to consumers, particularly shoppers, than those thrown up by a Google search.

For example, results of a Microsoft search for a particular camera model could include which prices were available from which retailers, and maps of where those retailers were, rather than just links to the manufacturer’s and retailers’ websites.

The acquisition follows those of Norwegian enterprise search company Fast for about $1.2 billion early this year and shopping-and-auction site jellyfish.com for an undisclosed sum last year. 

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AnnTaylor Stores Corp. reported an almost 8% decline in second-quarter earnings amid a weakening economy but reiterated its full-year profit outlook as the women’s clothing chain reaps the benefits from tighter control of inventories.

The New York-based retail chain said Friday that it earned $29.3 million, or 51 cents per share, for the three-month period ended Aug. 2 compared with $31.7 million, or 50 cents per share, in the year-ago period.

The earnings per share rose in part because there were 5.8 million fewer shares outstanding in the latest quarter than in the year-ago period.

Revenues declined 3.6% to $592.3 million from $614.5 million in the year-ago period. Same-store sales, or sales at stores open at least a year, dropped 10.8% from a year ago. Same-store sales are considered a key indicator of a retailer’s health.

Analysts surveyed by Thomson Reuters (TRI) expected earnings per share of 49 cents on $622.9 million for the period.

"We delivered a very respectable second-quarter performance, despite the impacts of significant macroeconomic softness and a deteriorating consumer environment, both of which continue to weigh on the retail sector," Kay Krill, president and CEO of AnnTaylor (ANN), said in a statement fast cash now. "Our relentless focus on inventory management and expense control, along with our share repurchase program, enabled us to deliver earnings per share that exceeded year-ago."

AnnTaylor said that it continues to expect earnings per share to be in the range of $1.80 to $1.90 per share for the current fiscal year. The projections are based on total net sales expected to be unchanged to down slightly. Same-store sales are expected to be down in the mid-single digits for the year. 

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Barnes & Noble Inc., the nation’s largest bookseller, posted a 15% drop in second-quarter profit Thursday as it struggles with sluggish consumer spending.

The New York-based retailer also projected that sales at established stores would be weaker than expected, but reiterated its earnings guidance for the year.

Investors were not appeased, sending shares of the company down more than 6%, or $1.74, to $24.00 in midmorning trading.

Barnes & Noble (BKS, Fortune 500), which had benefited from sales of Harry Potter and the Deathly Hallows during the second quarter of last year, also had some big sellers this year such as Stephenie Meyer’s Breaking Dawn and Randy Pausch’s The Last Lecture.

"The closer examination of sales will reveal that even in this soft retail environment across America, the book business is stubbornly holding up," said Chief Executive Steve Riggio.

The company saw double-digit declines in sales of music, but saw its online business boom - growing 13.9%, excluding the effect of Harry Potter payday loans in 1 hour. The head of the company’s online business division resigned this week and will stay on as a consultant.

Barnes & Noble earned $15.4 million, or 27 cents per share, in the three months ending Aug. 2. That compares to $18.05 million, or 26 cents per share, a year earlier.

The 2008 quarterly earnings results included an after-tax benefit of 12 cents per share, resulting from a more favorable physical inventory shortage rate than previously estimated.  

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Shares of Wachovia Corp. rose Wednesday after a private real estate company reported buying up some of the bank’s troubled land and construction loans.

Shares rose 32 cents, or 2.2%, to $13.98 in afternoon trading. Shares are down about 62% for the year.

A joint venture led by LandCap Partners said Wednesday that it has completed the purchase of a multistate loan portfolio from the Charlotte, N.C.-based bank.

The loans are secured by 2,900 lots in different stages of development in a handful of states, including Florida and California paydayloan. Some of the loans are in distress, said LandCap Chief Executive Jeffrey Gault.

A Wachovia (WB, Fortune 500) spokeswoman said the company does not comment on transactions.

Gault said he hopes to have a continuing relationship with the bank, which has a minority interest in the joint venture. 

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The U.S. trade deficit shrank unexpectedly in June, as the weak U.S. dollar helped push exports higher and overpowered record-high prices for imported oil, a Commerce Department report showed on Tuesday.

The trade gap totaled $56.8 billion, down from a revised estimate of $59.2 billion in May. The monthly tally was also much lower than the $61.5 billion midpoint estimate of analysts surveyed before the report.

Both exports and imports of goods and services set records in June, but exports rose by 4.0 percent compared to a 1.8 percent gain for imports.

The U.S. trade sector has been one of the bright spots for an economy struggling with a deep housing downturn and credit crunch. Trade contributed 2.4 percentage points to economic growth in the second quarter, which would have shrunk 0.5 percent without that support, according to preliminary estimates.

The June trade numbers are “slightly favorable for second-quarter GDP fast cash advance. Imports will be a little less of a drag on economic growth than appeared earlier. But weaker imports still reflect the overall weakness in the U.S. economy,” said Gary Thayer, senior economist at Wachovia Securities in St. Louis.

The dollar rose against the euro on news the trade gap narrowed in June, while U.S. Treasury prices held steady at higher levels and stock futures were mostly flat.

The smaller-than-expected trade gap “will support growth going into the third quarter,” said Kurt Karl, chief U.S. economist at Swiss Re in New York.

But the narrowing of the trade deficit also is one more piece of evidence the U.S. economy is in a recession because it shows consumers are buying less, he said. 

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Europe’s largest computer chip maker STMicroelectronics NV (STM.PA: Quote, Profile, Research, Stock Buzz) has sued Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz) for allegedly placing $450 million of its cash into auction-rate securities without authorization, and said a dozen or more companies with billions invested were victimized.

STMicro claimed in its lawsuit that “at least a dozen other multinational corporations are victims of the same scheme carried out by the same group of brokers and directors at Credit Suisse Securities and furthered by Credit Suisse.”

STMicro said it believed more than $2 billion of these clients’ money ended up invested in auction-rate securities.

“The banks are playing chicken here, thinking that companies like STMicro aren’t going to take the steps they did,” said Steve Williams, a plaintiffs attorney at law firm Cotchett, Pitre & McCarthy in Burlingame, California. “Banks are going to be very mistaken in that judgment, and I think a lot of big entities are going to start filing these to get their cash out.”

He forecast corporations scrambling to make up their losses by piling on in legal attacks against Wall Street banks and accusing bankers of assuring investors that their cash was being placed in conservative investments, not in auction-rate securities easy payday loan. That market froze early this year.

Already, nonfinancial companies such as drugmaker Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research, Stock Buzz), networking gear maker Ciena Corp (CIEN.O: Quote, Profile, Research, Stock Buzz), software firm Lawson Software Inc (LWSN.O: Quote, Profile, Research, Stock Buzz) and others have cited so-called structured investment vehicles such as asset-backed securities as hitting profits.

Canadian drugmaker Biovail Corp (BVF.TO: Quote, Profile, Research, Stock Buzz) said in a May 12 filing with the U.S. Securities and Exchange Commission that it had undertaken arbitration proceedings against Credit Suisse over auction-rate securities. It is seeking $27 million in damages and $54 million in punitive damages.

ST Micro alleges in the August 6 complaint filed in federal court in Brooklyn, New York, that by late 2006 Credit Suisse knew that collateralized debt obligations, especially those linked to subprime loans, were risky investments and began to decrease its exposure to them. 

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As the U.S. economy teeters on the brink of recession the credit-card asset-backed market is showing signs of stress as rising unemployment squeezes consumers further, forcing defaults on credit card payments.

Delinquencies on credit cards are rising, investors are demanding higher yield spreads for credit card-backed securities, and issuance is down as the sector’s largest buyers retreat.

“This is typical borrower performance as we enter a recession. This is not a replay of the subprime mortgage disaster but the market is pricing it in that way,” said Glenn Schultz, analyst at Wachovia Securities. “Underwriting in the credit card segment was much better than subprime.”

Fears that the problems in the subprime mortgage market would spread to the ABS market saw spreads widen in the last year or so. Spreads rated “AAA” on three-year credit cards reached 110 basis points over the London interbank offered rate in March, after trading close to Libor a year earlier, said Schultz credit report.

Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz), one of the banks hardest hit in the year-long global credit crisis, last week posted a quarterly net loss of $176 million from securitization of credit cards, compared with a year-ago $243 million profit.

Delinquencies and chargeoffs, or balances written off as uncollectable, have both risen past historical norms.

May’s charge-off rate rose to 6.41 percent from 4.68 percent a year earlier, according to Moody’s Investors Service.

After the last two economic contractions, in 1991 and 2001, charge-off rates peaked at just over 7.0 percent, it said, versus an historical average of 6.0 percent. 

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New York state Attorney General Andrew Cuomo said Friday that his office intends to file charges against Citigroup for the alleged fraudulent marketing and sale of troubled auction-rate securities to everyday investors.

Cuomo outlined his intentions in a letter to Citigroup’s general counsel dated Friday, saying that charges were imminent.

In the letter, the New York Attorney General’s office alleged that the nation’s largest bank "has repeatedly and persistently committed fraud by material misrepresentations and omissions" in the underwriting, distribution and sale of auction rate securities, touting them as safe, cash-equivalent investments.

Cuomo’s office claimed that the sale of these securities had "a severe detrimental impact" on tens of thousands of Citigroup customers.

The AG also claimed that Citigroup "destroyed recordings of telephone conversations" related to the marketing and sale of auction-rate securities.

In a statement, Citigroup said it was working with market participants and regulators to find an industry-wide solution to auction rate security issues, adding it was cooperating with regulators in all aspects of the investigation.

"Citi has acted in good faith and in the best interests of our clients both before and since auctions began to fail, and there is simply no basis for claims to the contrary," the company said.

Citigroup added that it is the company’s "practice to recycle tapes" and that "the recycling of the tape in question was inadvertent."

Cuomo’s letter comes just a week after he brought a multi-billion dollar civil lawsuit against the Swiss banking giant UBS (UBS) for its role in selling auction-rate securities to its customers at a time when the market for these securities was under severe strain.

Auction-rate securities are long-term bonds that hospitals, cities and corporations sell at weekly or monthly auctions, which many investors, until now, had treated like cash investments get a free credit report. The market for these investments is worth about $330 billion.

The auction-rate security market began to fail in February as the credit crisis took a turn for the worse, effectively locking up the market for these securities.

Earlier Friday, Citigroup revealed in a quarterly filing that the Securities and Exchange Commission had initiated a formal probe into whether it violated various federal securities laws in connection with the sale of auction-rate securities.

The company also said it was responding to subpoenas from state agencies in Texas, New York and Massachusetts over the sales.

Other securities firms have been targeted by state regulators in the ever-widening auction rate security scandal.

In June, Massachusetts state securities regulators filed a civil suit against UBS. Earlier this week, Massachusetts charged Merrill Lynch (MER, Fortune 500) with fraud for promoting auction-rate securities.

And a little over two weeks ago, Missouri state securities regulators inspected the offices of Wachovia Securities in St. Louis seeking documents related to the sales of auction-rate securities. Wachovia Securities is a subsidiary of Wachovia (WB, Fortune 500), the nation’s fourth-largest bank.

Cuomo’s office said it was seeking a settlement with Citigroup in which the bank buys back the securities from investors at face value, reimburse investors for any damages they have suffered and pay a penalty for misconduct during the investigation.

Citigroup (C, Fortune 500) shares finished 1% higher in Friday trading. 

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Biotechnology company ImClone Systems Inc (IMCL.O: Quote, Profile, Research, Stock Buzz) said on Monday that a $60-per-share takeover bid from partner Bristol-Myers Squibb Co (BMY.N: Quote, Profile, Research, Stock Buzz) was too low, but it would hire financial advisers to help it study the unsolicited offer.

Bristol-Myers offered last week to acquire the ImClone shares it does not already own in a deal that values the company at $5.2 billion.

Activist investor Carl Icahn, who is chairman of ImClone and a large shareholder of the company, told its board that he opposed Bristol-Myers’ offer because he believes it “greatly undervalues the company.”

“We all expected Carl would come back and say the initial offer was inadequate,” said Cowen & Co analyst Eric Schmidt. “There has been posturing on both sides.”

ImClone shares fell 1.1 percent to $64.60 in morning trading on Monday http://pay-day-home.com. Analysts said last week that ImClone could fetch much more than what Bristol-Myers had offered.

ImClone said its board had been discussing the possibility of splitting the company in two, separating its Erbitux cancer treatment and its drug-development pipeline businesses.

Erbitux is approved for colorectal and head and neck cancer in the United States, and Canada, while a recent approval for the drug in Japan and new lung cancer data are expected to drive sales.

ImClone said it believed the pipeline business “may be extremely valuable and significantly increase stockholder value as a separate business.” 

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New Zealand wages rose less than economists forecast in the year ended June 30, adding to signs that companies are resisting union demands for pay increases.

Wages for non-government workers, excluding overtime, increased 3.5 percent in the 12 months to June, according to Statistics New Zealand's labor cost index released in Wellington today. Wages rose 0.8 percent from the first quarter.

New Zealand's economy stalled in the first half of 2008, reducing profits and making companies less willing to meet wage demands from workers who face soaring food and fuel costs. Reserve Bank Governor Alan Bollard said last month he expects wage growth will slow from next year, combating inflation.

“Firms are struggling to deal with rising costs and slowing demand, with falling profitability likely to keep a cap on wage growth,'' said Nick Tuffley, chief economist at ASB Bank Ltd. in Auckland. “The Reserve Bank is betting on lower demand keeping wage pressures in check.''

Annual wage inflation matched the previous two quarters, which is the fastest pace since the series began in the fourth quarter of 1992. Economists expected 3.6 percent, according to the median estimate of 11 economists surveyed by Bloomberg News.

New Zealand's dollar bought 72.83 U.S. cents at 12:05 p.m. in Wellington from 72.79 cents before the report.

Union Demands

The economy contracted in the first quarter and eight of 13 economists forecast it also shrank in the three months to June, putting New Zealand in its first recession since 1998.

Bollard cut the benchmark interest rate a quarter point to 8 percent on July 24, the first reduction in five years, saying slowing economic growth will ease inflation to less than 3 percent by mid-2010.

New Zealand's biggest union said this month it will seek higher wages for its 50,000 members after a report showed gasoline prices rose 13 percent in the second quarter payday advance lender.

“Every time our members fill up their cars or fill their supermarket trolleys, they're feeling the pinch and the only answer to that is to ensure that they're getting high enough wages to keep ahead of the game,'' said Andrew Little, national secretary of the Engineering, Printing and Manufacturing Union.

Forty three percent of employers cited the need to match increases in the cost of living as reasons to increase wages, the statistics agency said today. Thirty percent cited the need to match market rates.

Overtime Rates

Including overtime, wages for non-government workers rose 0.8 percent from the first quarter, for an annual increase of 3.4 percent, today's report showed.

A separate series based on reported salary and ordinary- time wage rates of non-government workers rose 1.2 percent in the second quarter and 5.5 percent from a year earlier, Statistics New Zealand said.

A separate report today showed average hourly ordinary time wages of non-government workers climbed 2 percent in the second quarter for an annual gain of 5.4 percent.

Statistics New Zealand also released indicators showing the demand for labor rose in the second quarter after an unexpected slump in the first three months of the year.

The number of full-time equivalent employees gained 0.8 percent from the first quarter when it fell 1 percent. The number of total filled jobs increased 1.7 percent after dropping g 2.3 percent in the first quarter.

Total paid hours rose 0.5 percent, seasonally adjusted, from the first quarter, the statistics agency said.

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