• Wholesale prices rose 0.2% in April after seasonal adjustments, with food prices flat and energy prices falling, the Labor Department reported yesterday (Tuesday). The core PPI – which excludes food and energy prices – rose 0.4% in April, more than expected, MarketWatch reported.

• Target, the nation’s second-largest discount retailer said softer-than-expected sales and higher costs caused the profit fall 8% for the quarter that ended May 3, the Associated Press reported. Target reported a profit of $602 million, or 74 cents per share, in the three months ended May 3, down from $651 million, or 75 cents per share, during the same period last year. Revenue rose 5% to $14.8 billion.

• Chinese power plants are running out of coal, with less than a three-day supply in some areas, the Associated Press reported yesterday (Tuesday). It is the second time in three months that Chinese power plants have run short of coal, an unintended effect of government price controls to shield the public from rising global energy costs. About 32 power plants have already shut down due to lack of fuel, the State Electricity Regulatory Commission said in a report.

• Carl Icahn’s proxy gambit with Yahoo Inc. (YHOO) was given a boost yesterday, when Third Point LLC, a $5.7 billion hedge fund with more than 5 million Yahoo shares, announced its support for Icahn, Reuters reported, citing a source familiar with the matter. Last week, another hedge fund, Paulson & Co., announced its support of Icahn’s plan. Paulson & Co. owns 50 million shares in Yahoo.

• Oppenheimer & Co. analyst Meredith Whitney, who has famously slashed forecasts for leading U.S. banks in the past year, again cut her earnings outlook for several top banks, citing a “far from over” credit crisis, Reuters reported. She cut her outlooks for Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC) and Wachovia Corp. (WB).

• Luxury department store operator Saks Inc. (SKS) announced yesterday (Tuesday) that its first-quarter net income increased 66% to $18.3 million, or 13 cents a share, from $11 million, or 7 cents a share, for the same period in the prior year. Analysts had expected earnings of 17 cents per share, causing Saks stock to shed 93 cents, a decline of over 6%, to close at $13.20.

• New Jersey-based Merck & Co. Inc. (MRK) has agreed to pay $58 million to 30 states to settle complaints that it made deceptive claims about its Vioxx-brand arthritis drug and painkiller. Attorneys claimed Merck played down the drug’s health risks in advertising. Shares dropped 28 cents yesterday (Tuesday) to close at $39.74.

• U.S. Federal Reserve Vice Chairman Donald Kohn indicated the Fed intends to pause in its rate-cutting campaign. “With the information now in hand, it is my judgment that monetary policy appears to be appropriately calibrated for now to promote both rising employment and moderating inflation over the medium term,” Kohn said yesterday (Tuesday), while speaking before a business group in New Orleans, MarketWatch reported.

Global Investing Roundups: Wednesday, May 21st, 2008

More than $16 billion in write-downs and higher consumer credit costs caused the company to record a loss of $5.11 billion, or $1.02 a share, compared with a profit of $5.01 billion, or $1.01 a share, a year earlier. Revenue fell 48% to $13.22 billion.

Reuters analysts expected an average loss of 96 cents a share and revenue of $14.35 billion.

“This is the quarter they get to clear the decks,” Arthur Hogan, chief market analyst at Jefferies & Co. in Boston, told Reuters. “(Chief Executive Officer) Vikram Pandit is coming in and making pretty big changes, and that’s what he gets to do.”

But so was the fourth quarter, with the first 4,200 job cuts.

Pandit, who assumed CEO duties in December, said the company’s financial results “reflect the continuation of the unprecedented market and credit environment and its impact on our historical risk positions.”

Despite Citigroup’s loss, its stock rose more than 6% by mid-morning trading today (Friday).

Financials’ Earnings

Citigroup’s earnings cap a week that’s seen many of the nation’s biggest financial firms post mixed, though fairly cathartic, results.

On Thursday, Merrill Lynch & Co. (MER) posted its third consecutive quarterly loss – $1.96 billion, or $2.19 a share – and announced 3,000 job-cuts.

On Wednesday, JPMorgan & Chase Co. (JPM) reported profit of $2.37 billion (or 68 cents a share), more than a 50% drop from $4.79 billion (or $1.34 a share) from a year earlier.

On Monday, Wachovia Corp. (WB) beat estimates with a first-quarter loss of $350 million. Washington Mutual Inc. (WM), however, reported a $1.1 billion loss.

Bank of America Corp. (BAC) will release its earnings Monday, and expectations are low.

“Our expectation is for the economic environment to continue to be weak and for the capital markets to remain under stress,” JPMorgan CEO Jamie Dimon said Wednesday.

National City was forced to take a $333 million fourth quarter loss due to an ill-timed push into the residential mortgage market with a heavy emphasis on subprime loans. The Cincinnati-based bank also recently expanded its retail branch network into Florida, an area that has been hit particularly hard by the slowdown in the real estate market.

Cleveland-based Fifth Third is the 12th-largest U.S. bank with $110 billion in assets. The two banks key market areas overlap and a merger could potentially offer a sizeable cost advantage.

KeyCorp (KEY), another Cleveland-based bank with about $100 billion in assets is also considering an offer for National City, with the backing of private equity firm Kohlberg Kravis Roberts & Co.

But KeyCorp has a sizeable portion of its business in the Northwest and Rocky Mountain region, potentially making it a less than perfect fit for a merger with National City. A Fifth Third/National City merger would prove a formidable rival.

“Both of those companies because of the overlap with National City would be able to cut costs,” Terry McEvoy, an analyst at Oppenheimer & Co. (OPY) told Reuters, referring to KeyCorp and Fifth Third. “Cutting costs would support a higher price should the one option National City decides be to sell out.”

Any potential merger would be complicated and a deal has yet to be reached.

“While we never comment on potential mergers, we have consistently said that we are focused on strategic opportunities for in-market consolidation,” a Fifth Third representative said, The Wall Street Journal reported.

National City declined to comment, other than to say the bank was investigating options with the help of hired advisor, Goldman Sachs Group Inc. (GS).