Yahoo replaces CEO; shares zoom

Shares of Yahoo (YHOO, news, msgs) jumped in after-hours trading following the announcement that Chief Executive Terry Semel would hand over the reins of the Internet giant to co-founder Jerry Yang.

The shake-up comes less than a week after Semel faced shareholders who are disillusioned with the company's lackluster performance during the last 18 months, when the company's stock price has fallen nearly 30%.

After the announcement this afternoon, Yahoo shares rose $1.11, or nearly 4%, to $29.17.

Besides naming Yang as CEO, Yahoo said Susan Becker, who was recently promoted to oversee advertising operations, would become the company's president. Semel will remain chairman.

Semel ranked No. 1 on The Associated Press' survey of 2006 executive compensation with $71.7 million.

Stock rally stumbles

Wall Street edged lower today amid lingering concerns about inflation and rising energy prices.

The Dow Jones Industrial Average ended down 23 points to 13,615. Investors appeared to be taking a break after last week's sharp rally, which pushed the blue-chip index to its largest three-day gain since November 2004.

The Nasdaq Composite Index was flat at 2,626 and the Standard & Poor's 500 Index fell nearly 2 points to 1,531.

Yields on Treasury bonds have moved higher over the past few weeks on concerns that inflation is high and the economy is rebounding, making it unlikely the Federal Reserve will lower interest rates. The yield on the 10-year Treasury traded as high as 5.18% today before closing at 5.15%, just below Friday's 5.16%.

Oil closed above $69 a barrel -- a nine-month high -- amid unrest in Nigeria that could crimp supply from the third-biggest exporter of oil to the U.S. Crude rose $1.09 to settle at $69.09 on the New York Mercantile Exchange.

Suitor for Dow Jones

General Electric (GE, news, msgs) is reportedly pairing up with Financial Times publisher Pearson (PSO, news, msgs) to make an offer for Dow Jones (DJ, news, msgs).

The Wall Street Journal, Dow Jones' flagship paper, and the Financial Times both reported today that GE and Pearson could make a bid for Dow Jones that would let the Bancroft family keep a minority interest in the company.

Under the proposed deal, GE's business channel, CNBC, would be combined with the Financial Times and Dow Jones in a privately held venture owned equally by GE and Pearson, The Journal reported. The Financial Times said the Bancrofts would maintain a 20% stake in Dow Jones.

A GE-Pearson offer could threaten Rupert Murdoch's previous $5 billion, or $60-per-share, bid for Dow Jones, made in early May. Murdoch has been the front-runner for Dow Jones, having met with members of the Bancroft family in recent weeks.

But a sticking point for the family is how to protect the editorial integrity of The Journal.

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A merger between Dow Jones and Murdoch's News Corp. (NWS, news, msgs) could mean trouble for CNBC because News is expected to launch its Fox Business Channel sometime this year.

Both papers reported that the new talks could fall through. Shares of Dow Jones have risen 62% since Murdoch made his bid May 1.

BHP Billiton to bid for Alcoa?

Aluminum giant Alcoa (AA, news, msgs), which has been trying to buy Canadian rival Alcan (AL, news, msgs), might now be a bigger target itself.

The Times of London reported that Australia's BHP Billiton (BHP, news, msgs) is in the early stages of a possible $40 billion takeover offer. A takeover had been discussed at BHP earlier this year, but BHP CEO Chip Goodyear shelved it in February, the British paper said. But now that Goodyear is retiring Oct. 1, his successor, Marius Kloppers, could revive the idea.

The aluminum industry has been a hotbed for takeover buzz, but recently there's been more talk than action. Rio Tinto (RTP, news, msgs) is also reportedly interested in Alcan, and Brazil's Companhia Vale do Rio Doce (RIO, news, msgs) is eyeing Alcoa, the newspaper added.

Alcoa had made a $33 billion bid for Alcan in early May, but Alcan's board persuaded shareholders to reject the bid.

Shares of Alcoa rose $1.09, or 2.6%, to $42.69 in midday trading.

Wendy's puts itself on the market

Fast-food chain Wendy's International (WEN, news, msgs) said today that it is exploring the possibility of a sale.

"The special committee has determined that the exploration of a sale is the appropriate next step in the investigation of value-creating alternatives for our stakeholders," Chairman James Pickett said in a statement today.

Wendy's also lowered its guidance for 2007. The company now expects to earn between $295 million and $315 million, down from a previous estimate for $330 million and $340 million. The company blamed weaker-than-expected sales at stores open at least one year.

Shares of Wendy's fell $1.48, or 3.7%, to $38.25 by midday.

What's on tap this week

Earnings season continues this week, with electronics retailer Best Buy (BBY, news, msgs) reporting Tuesday and rival Circuit City (CC, news, msgs) reporting Wednesday. Investment bank Morgan Stanley (MS, news, msgs) is also due to report earnings Wednesday.

Reports on housing starts and building permits come out Tuesday, with one analysis saying things still look ugly for the housing market.

The reports "will be a sobering reminder that the housing market has yet to bottom out," Global Insight economists Brian Bethune and Nigel Gault wrote in their weekly preview, according to MarketWatch.

Economists are looking for housing starts to decline 4% in May to a seasonally adjusted annual rate of 1.47 million. Starts rose in the previous three months, thanks mostly to decent weather.

Airbus scores deal with US Airways

Airline giant US Airways (LCC, news, msgs) has ordered 22 Airbus A350 jets, and the European aircraft maker has also secured a commitment from Qatar Airways.

A big order is good news for Airbus, as the A350 is its answer to rival Boeing's (BA, news, msgs) 787 Dreamliner.

The announcement comes at the beginning of the Paris Air Show, where industry eyes are carefully tracking the Boeing-Airbus rivalry.

"With Boeing having orders for about 600 Dreamliners, Airbus still has a lot of ground to make up," Craig Fraser, a fixed-income analyst at Fitch Ratings, told Bloomberg News. "Given Qatar's prior commitment to the plane, it's not entirely a surprise. But it definitely helps the A350 program."

Airbus has had to redesign the A350 three times to appease customers' worries about comfort and fuel efficiency.

Finish Line scores with Genesco

Athletic retailer Finish Line (FINL, news, msgs) said it would buy footwear and accessory company Genesco (GCO, news, msgs) for $1.5 billion, or $54.50 per share.

Genesco had rejected unsolicited bids from Foot Locker (FL, news, msgs) two times, the last time turning down a $1.37 billion offer on May 31.

Shares of Genesco jumped $4.12, or 8.3%, to $53.72 in midday trading; Finish Line shares were down 64 cents, or 5%, at $11.99.

Genesco owns the Johnston & Murphy shoe-store chain.

Private equity screams for ice cream

Friendly Ice Cream (FRN, news, msgs) has agreed to be acquired in a deal worth $337.2 million in cash, or $15.50 per share.

The buyer, Freeze Operations Holding, is an affiliate of buyout firm Sun Capital Partners. Friendly started to explore a sale in March, after its biggest shareholder urged the company to sell some of its franchised stores.

Shares of Friendly rose 80 cents, or 5.6%, to $15.13 by midday.

By Elizabeth Strott with wires