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February 12, 2008 Issue Posted February 12, 2008, 4:14PM EST

News You Need to Know

The Primaries: It Isn't Over

For Senator John McCain, it truly was a Super Tuesday. The Arizona Republican scored decisive wins in Feb. 5 primary voting that spanned the nation. Now the maverick becomes the front-runner, and former Massachusetts Governor Mitt Romney will have a tougher time building momentum. By Feb. 6 the delegate count, as tallied by the Associated Press, had McCain with 703, Romney 269, and former Arkansas Governor Mike Huckabee 190. On the Democratic side, the contest became even more muddled as both Senators Hillary Clinton and Barack Obama won in key states. The AP count put Clinton ahead, 1,000 to 902, largely on the strength of "super delegates," or party officials who are not bound by any primary votes.

See "Is John McCain Good for Business?"

—Edited by Harry Maurer & Cristina Linblad

Ballmer's Big Bet

Microsoft (MSFT) is pushing more chips into the Internet pot—a whole lot more chips. Having spent billions trying to build a Web business to catch up to rival Google (GOOG), the software king admitted that it's not getting the job done by making an unsolicited $44.6 billion bid on Feb. 1 for Yahoo! (YHOO) The Web pioneer has rebuffed advances in the past, but Microsoft CEO Steven Ballmer figures a 62% premium may sway shareholders. If it does, his work will be just beginning. Microsoft will need to win over regulators and meld operations while trying not to alienate crucial Yahoo employees, all while trying to eke out $1 billion in efficiencies.

—Edited by Harry Maurer & Cristina Linblad

Bush's Last Budget

There will be a new President in office in 2009, but whoever it is will have to deal with the fallout from the budget war starting now. President George W. Bush on Feb. 4 unveiled a $3.1 trillion budget for 2009, which would raise the federal deficit to a near-record $407 billion. (It also projects $410 billion for 2008.) Although the budget is usually the starting point for negotiations between the White House and Congress, this year's document may matter less than most, given Bush's lame-duck status and Democrats' unwillingness to give him victories in an election year.

—Edited by Harry Maurer & Cristina Linblad

More Recession Fears

Et tu, services? On Feb. 5 the Institute for Supply Management said its services index sank to 41.9 in January, the lowest level in nearly five years, from 54.4 in December. Anything under 50 means activity is contracting. That was enough to make the "R" word loom even larger, and investors pounded the Dow down 370 points, about 3%.

—Edited by Harry Maurer & Cristina Linblad

CSI: Wall Street

Those suits you see prowling New York's financial canyons these days may be G-men, not bankers. Investigators are probing Société Générale (SCGLY) in connection with stock sales by a U.S. board member that preceded the French bank's announcement of a $7.1 billion trading loss and a big subprime writedown. And the FBI says it is pursuing criminal inquiries of 14 companies in connection with the mortgage crisis. Prosecutors are known to be looking at whether UBS (UBS) misled investors about the value of mortgage bonds, and the SEC is looking into possible mispricing of mortgage securities by UBS and Merrill Lynch (MER).

—Edited by Harry Maurer & Cristina Linblad

The Fight for Rio Tinto

Well, O.K., will $147 billion do? That's the price offered by mining giant BHP Billiton (BHP) on Feb. 6 for rival Rio Tinto (RTP), which had sniffed at BHP's original bid—and quickly rejected this one. The 13% boost came days after Chinese aluminum maker Chinalco and Alcoa (AA) paid $14 billion for a 12% stake in Rio. Now, BHP hopes to persuade 50% of Rio's shareholders and get regulatory clearance from Australia and the EU.

See "BHP's Higher Bid Doesn't Sway Rio Tinto"

——Edited by Harry Maurer & Cristina Linblad

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