Financial Freedom. Best business news.

Responding to a Congressional inquiry, web portal Yahoo Inc. will let its users decline to see targeted, customized advertisements on the site.

Sunnyvale-based Yahoo (NASDAQ: YHOO), like other online portals, has sought to gather information about people using its site and to aim specific ads at them based on that knowledge. This lets the company charge advertisers more because Yahoo can guarantee them the target audience they want.

The House Energy and Commerce Committee asked 33 companies for information about customized ads, and Yahoo made this opt-out choice available as a result. Users will have this option by the end of the month.

Anne Toth, Yahoo's head of privacy, said "the trust of ours users is our greatest asset."

In a letter to John Dingell, the chairman of the committee, Yahoo said its users often want to receive targeted ads. "Consumers have and continue to respond strongly to Internet products and services that are customized to their interests," the letter said.

Yahoo also said that targeted ads like those it sells allow small businesses "to gain a foothold on the Internet."

Most of Yahoo's revenue comes from advertising. In the quarter ended March 31 $1.6 billion, or 87 percent, of Yahoo's $1.8 billion in revenue came from "marketing services" — display advertising and sponsored search ads as well as what the company calls "Content Match links," which are customized ads aimed at specific users.

Pakistan's central bank may increase its benchmark interest rate for an eighth time since 2005 after inflation accelerated to a 30-year high.

State Bank of Pakistan will raise its discount rate by 1 percentage point to 13 percent, according to six out of seven analysts in a Bloomberg News survey. One expects an increase to 13.5 percent. The policy statement is due today at about 4 p.m. local time in Karachi.

“Inflation seems to be heading toward an all-time high,'' said Suleman Akhtar, an economist at Foundation Securities Ltd. in Karachi. “The central bank and the government will do everything to reduce inflation. The impact of current oil prices and high commodity prices pose a challenge.''

Central banks across Asia are raising borrowing costs as soaring food and energy prices stoke inflation and spark protests from the region's poor. Higher rates in Pakistan may further weaken South Asia's second-largest economy, where last year's growth of 5.8 percent was the slowest since 2003.

Consumer prices in Pakistan jumped 21.53 percent in June from a year earlier, after gaining 19.27 percent in May. The central bank aims to keep average inflation at 12 percent this fiscal year, the same as the previous 12-month period.

Inflation may accelerate further after the government raised domestic fuel prices by as much as 15.2 percent on July 21, the sixth increase in five months, in line with global oil costs. Crude reached a record $147.27 a barrel on July 11.

Unexpected Move

Governor Shamshad Akhtar unexpectedly increased the benchmark rate by 1.5 percentage points to 12 percent on May 23, also raising the cash reserve requirement for commercial lenders to 9 percent of deposits from 8 percent.

Central banks in Indonesia, Thailand and the Philippines have all increased interest rates in the past month. Neighboring India is today expected to raised its benchmark repurchase rate for a third time in less than two months to 8.75 percent, according to 16 of 22 economists in a Bloomberg News survey.

Pakistan's central bank in June said government borrowing from the State Bank, estimated at 9 percent of gross domestic product last fiscal year, “cannot be sustained'' without further stoking inflation.

The budget deficit reached a 10-year high of about 7 percent of GDP in the 12 months to June 30, according to Finance Minister Naveed Qamar. Pakistan's first civilian government since a 1999 military coup says it wants to narrow the gap to 4.7 percent of GDP next fiscal year.

Standard & Poor's and Moody's Investors Service in May cut their ratings on Pakistan's foreign-currency debt, citing rising budget and current-account deficits and political instability.

Sourse

French business confidence fell to the lowest in more than three years in July as record oil prices and a stronger euro dimmed the outlook for economic growth.

An index of sentiment among 4,000 manufacturers dropped to 98 from 101 in June, according to Insee, the Paris-based national statistics office. That was the weakest since May 2005. Economists expected a reading of 100, according to the median of 22 estimates in a Bloomberg News survey.

Growth in the French economy is deteriorating as inflation and surging oil prices squeeze purchasing power and push up production costs just as the stronger euro hurts exports. The jump in consumer prices prompted the European Central Bank to raise interest rates earlier this month and President Jean-Claude Trichet is refusing to abandon his inflation-fighting rhetoric.

“The outlook for higher interest rates and the lingering uncertainty about the economic outlook are likely to continue to weigh on confidence,'' said Joost Beaumont, an economist at Fortis Bank in Amsterdam. “Overall, we think that confidence will continue to move around the 100 level in the near term, which is below its average in the past 10 years of 104.''

Insee's sub-index of how executives see the economic outlook fell to minus 34 from minus 15; a gauge of orders dropped to minus 18 from minus 13; and a measure of foreign orders slipped to minus 14 from minus 7.

Europe's largest economies have shown signs of slowing since the end of the first quarter. Industrial orders in the euro region dropped more than twice as much as forecast in May. Business confidence in Germany and Italy probably also fell this month, separate surveys showed.

`Growth Trough'

The Isae Institute will release the data at 9:30 a.m. today in Rome and Germany's Ifo Institute publishes figures 30 minutes later.

Trichet said last week there will be a “trough'' in growth through the third quarter before the economy gathers strength toward the end of the year. The bank raised its benchmark rate by 25 basis points to 4.25 percent this month.

For companies such as Airbus, the world's biggest planemaker, the euro's 14 percent appreciation against the dollar over the past year is a “deep, substantial problem,'' Chief Executive Officer Tom Enders said yesterday. The euro climbed to a record $1.6038 on July 15 and traded at $1.5683 at 7:51 a.m. in London.

“We are preparing ourselves for a sustained period of a low dollar,'' Enders told reporters in Toulouse, France. With record oil prices also hurting the industry, Airbus faces a “challenging environment,'' he said. Crude oil has risen 70 percent in the past year, reaching a record $147.27 a barrel on July 11.

French Finance Minister Christine Lagarde last week said growth this year would be at the lower end of the government's forecast of between 1.7 percent to 2 percent.

Sourse

Australian business confidence fell to the lowest level in seven years in June as cooling domestic demand and spiraling raw-material costs eroded corporate profits.

The confidence index dropped to minus 9 points from minus 4 in May, according to a National Australia Bank Ltd. survey of 335 companies. It was the weakest result since the Sept. 11, 2001, terrorist attacks in the U.S.

Record oil prices and slower economic growth have damaged global sentiment, with New Zealand companies at their most pessimistic in 33 years and European investor confidence dropping by a record amount. Australian retailer Just Group Ltd. and builder Mirvac Group Ltd. reduced profit forecasts in the past month as interest-rate increases buffet consumer spending, while Qantas Airways Ltd. has cut routes and fired workers.

“The bottom line is for a marked slowdown in Australian economic growth,'' said Alan Oster, chief economist at National Australia Bank in Melbourne. “Activity across interest-rate sensitive areas has moderated significantly.''

Weaker confidence follows figures this week that showed job advertisements dropped the most in almost two years in June and construction work contracted. They all reinforce speculation the central bank has finished raising interest rates.

Australia's dollar traded at 95.48 U.S. cents at 12:36 p.m. in Sydney from 95.57 cents before the report was released. The two-year government bond yield fell 4 basis points to 6.71 percent from yesterday.

Less Than Zero

The sentiment index posted a sixth straight reading of less than zero, which indicates companies expecting their industry will deteriorate outnumber those seeing an improvement.

The survey's business conditions gauge fell to zero, also the lowest since 2001, from 7 points in May. The reading is a measure of corporate hiring, profits and sales in June.

Central bank Governor Glenn Stevens and his board have raised borrowing costs in four quarter-point moves since August to cool inflation that is running at the fastest pace in almost two decades.

“The Reserve Bank will remain on an inflation alert, but it will become increasingly less alarmed'' as slower growth helps quell price pressures, Oster said. “The bank will remain on hold for the rest of 2008, before lowering the cash rate during 2009.''

The rate increases boosted the nation's benchmark to 7.25 percent. Higher borrowing costs pushed consumer confidence down to the weakest in 16 years, triggering a slowdown in spending.

Shares Decline

The S&P/ASX 200 index of shares has dropped 21 percent this year, outpacing declines in benchmark indexes in the U.K., Japan and the U.S. Australia's stock index fell 0.3 percent today.

Just Group, the nation's largest specialty clothing retailer, cut its profit forecast last week as record fuel prices and higher interest rates erode sales.

Earnings-per-share will be between 29.2 Australian cents and 30.6 cents in the year ending July 31, compared with last month's forecast of 33.4 cents, the Melbourne-based company said.

Mirvac Group Ltd., a property investor and apartment builder, said on June 20 that 12-month earnings may be as much as 8.5 percent lower than previously forecast.

Qantas Airways, the nation's largest carrier, said in June that it will slash services to Japan, shift other Asian routes to low-cost unit Jetstar and cut jobs.

As domestic demand slows, a mining boom is helping shore up Australia's economy. Exports rose to a record in May as demand from China boosted earnings from iron ore and coal shipments.

“Mining conditions, if anything, have picked up since late 2007,'' Oster said. “Solid expansion in emerging-market economies, such as China and India,'' are spurring global growth.

Sourse

Estonian consumer confidence rose in June from its lowest level in more than four years on improving expectations about state and personal finances, indicating the Baltic economy may avoid a recession.

The consumer confidence index rose to minus 16 from minus 19 in May, the lowest since December 2003, the Tallinn-based Konjunktuuriinstituut said today on its Web site.

Confidence of Estonian consumers, boosted by entry into the European Union in 2004, has slid after hitting record highs in January 2007 as the country's property sector cooled, banks set stricter lending terms to avoid overheating and inflation accelerated.

Rising investments may signal the Baltic economy is turning around after its economic expansion almost stalled in the first quarter to 0.1 percent, the weakest in the European Union, Maris Lauri, chief macro analyst with Hansabank Markets in Tallinn, said earlier this month.

Copenhagen-based Danske Bank A/S and London-based Capital Economics Ltd. forecast a full-year contraction this year after 7.1 percent growth in 2007.

Sourse

Retail stores nationwide will be cutting prices on food and beverages to cushion the financial pain of soaring gasoline prices, according to the National Retail Federation.

The Washington D.C.-based trade organization’s survey showed almost 60 percent of consumer respondents said spiraling fuel prices will exercise a downward effect on their holiday spending.

Only 42 percent said the same thing in a survey a year ago.

"Americans will continue to commemorate Independence Day this year, though higher gas prices will impact how they celebrate," NRF President and CEO Tracy Mullin says in a statement. "Retailers are aware of the strain gas prices have on consumers’ wallets and will be offering special promotions on food and beverages for the millions of people planning summer barbecues."

That may help the 61 percent of survey respondents who said they plan to barbecue or attend a cookout during the holiday. Forty percent said they will go to a fireworks display, 10 percent will view a parade and 11 percent say they will take a vacation.

"A traditional Fourth of July trip to the beach or amusement park will be more expensive than it has ever been," says Phil Rist, vice president of strategy at BIGresearch, which conducted the survey of 8,351 consumers from June 3 to 10. "Instead of making elaborate travel plans, many consumers will choose to spend the holiday closer to home with family and friends."

www.nrf.com

Sourse

Sales at U.S. retailers probably rose in May as Americans started spending their tax-rebate checks, and record gasoline prices inflated receipts at service stations, economists said before a report today.

Purchases rose 0.5 percent, following a 0.2 percent drop the prior month, according to the median estimate in a Bloomberg News survey before the Commerce Department's report. Figures from the Labor Department may show the cost of imported goods surged 2.5 percent last month, led by climbing fuel expenses.

Wal-Mart Stores Inc. is among retailers benefiting from about $50 billion in stimulus checks the government sent out through May as the increase in prices drove consumers to discount chains. The boost may be short-lived as tighter credit, plummeting property values and a weakening labor market signal Americans will retrench once the extra cash is spent.

“The rebates should provide some boost to consumer spending, but the stimulus checks won't provide the economic lift policy makers had hoped for,'' said Ryan Sweet, an economist at Moody's Economy.com in West Chester, Pennsylvania. “The surge in gasoline prices is diluting the benefit.''

The Commerce Department's report is due at 8:30 a.m. in Washington. Forecasts ranged from a decline of 0.3 percent to a 1.2 percent gain. Excluding autos, sales probably rose 0.7 percent, the most since November, according to the survey.

The Labor Department's figures on import prices, due at the same time, will probably show costs accelerated after a 1.8 percent increase in April. Predictions ranged from gains of 0.5 percent to 4 percent.

$4 Gasoline

The cost of gasoline has risen 33 percent so far this year, reaching a record exceeding $4 a gallon this week for regular unleaded, according to AAA. Food prices have also surged, prompting shoppers to hunt for bargains at discounters.

Wal-Mart, the world's largest retailer, had a 3.9 percent jump in same-store sales last month as consumers bought cut-rate staples and took advantage of promotions linked to the tax rebates.

“Many of our customers need to live from paycheck to paycheck,'' Wal-Mart Chief Financial Officer Thomas Schoewe told reporters last week. “The amount they're spending on basics is a big portion of the total basket.''

Consumers cashed $350 million in rebate checks at Wal-Mart stores, Schoewe said. The retailer doesn't know how much of that was spent at the chain.

Rebates Spent

Households will spend about $90 billion more this year on gasoline if prices remain around current levels, according to a forecast by economists at Credit Suisse Holdings in New York. That will consume about 80 percent of the more than $110 billion in rebate checks the government will eventually send out.

“Consumers should start to respond to the additional cash by increasing spending,'' said Michael Hanson, an economist at Lehman Brothers Holdings Inc. in New York. “The rebate will act like a shot of caffeine,'' even as the effects “will be temporary.''

Consumers aren't buying big-ticket items such as automobiles, reflecting slumping confidence and weakening household finances. Cars and light trucks sold at a 14.3 million annual pace in May, the fewest since July 1998, according to industry data.

Spending may grow at an annual rate of 0.8 percent this quarter, down from a 1 percent pace in the prior quarter and the weakest since the first three months of 1995, according to the median estimate of economists surveyed by Bloomberg News this month.

Sourse