Big stakes as holiday season arrives

Big stakes as holiday season arrives

NEW YORK

Retailers awaiting the arrival of Black Friday are on the edge. How well they do during the biggest shopping season of the year will have lasting consequences not just on them, but the still-fragile economic recovery.

This weekend, many stores will for the first time use midnight openings along with the usual bevy of deals as they try to lure consumers, whose appetite for good buys has been increasing since the Great Recession.

Economists and business executives will be watching closely.

“A bad holiday season would raise recession fears again, whereas a strong one would start to dispel those fears,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics.

That would give companies more impetus to step up hiring, he added.

As usual, success will depend largely on consumer spending, which accounts for about 70 percent of U.S. economic activity. Their spending can impact stores’ expansion plans and inventory decisions into the new year.

And that trickles through the rest of the economy, from suppliers to jobs.

Groupon’s shares fall below IPO price

SAN FRANCISCO

Groupon Inc.’s stock fell below its initial public offering price for the first time Wednesday as investors reassess the challenges facing the still-unprofitable online-deals company in a shaky economy.

The shares plunged $3.11, or more than 15 percent, to close at $16.96. That’s well below Groupon’s IPO price of $20, which was set less than three weeks ago.

The rapid fall from Wall Street’s graces occurred almost entirely this week. Groupon has shed one-third of its market value since Friday’s close to wipe out nearly $6 billion in shareholder wealth.

Moody’s warns US to stick to deficit cuts

WASHINGTON

Moody’s Investors Services warned Wednesday that it could downgrade the U.S. government’s top credit rating if Congress backs off $1.2 trillion in automatic deficit cuts scheduled over the next decade.

The credit-rating agency said in a statement it will not lower the nation’s rating on long-term debt after a special congressional panel failed this week to reach agreement on alternative cuts to the deficit.

The impasse triggered the automatic cuts, which are scheduled to kick in beginning in 2013. Moody’s said any effort to reduce those cuts could force the agency to downgrade its rating.

Microsoft signs pact to scrutinize Yahoo

SAN FRANCISCO

It looks as if Microsoft wants a seat at the negotiating table if Yahoo decides to sell part or all of its business.

To gain better access, Microsoft Corp. has signed a nondisclosure agreement with Yahoo Inc. A person familiar with the situation told The Associated Press that on the condition of anonymity because the agreement hasn’t been formally announced.

Associated Press