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The National Hockey League said Friday night it has signed a letter of intent to sell the financially struggling Phoenix Coyotes to a new ownership group from Toronto.

"The NHL and Ice Edge Holdings announced today that they have entered into a letter of intent to proceed in attempting to document and close a proposed transaction pursuant to which Ice Edge would purchase the Phoenix Coyotes’ franchise. While much remains to be done, the NHL looks forward to working closely with Ice Edge to bring the sale to conclusion as expeditiously as possible. Ice Edge has committed to keep the Coyotes in Glendale, Arizona," NHL Commssioner Bill Daly said in a statement.

The Coyotes are in Chapter 11 bankruptcy and were bought by the NHL in October for $140 million.

Ice Edge investors include Canadians and Americans. The group wants to keep the team in Arizona but previously had talked about playing some home games in Canadian cities without NHL teams.

Ice Edge needs to finalize the purchase of the Coyotes from the NHL and then will work on an arena lease deal with the city of Glendale. The Phoenix suburb owns Jobing.com Arena where the Coyotes play.

"The city of Glendale is pleased that the National Hockey League has concluded the initial negotiations for the sale of the Coyotes and is entering into a letter of intent with Ice Edge Holdings to immediately assume operations of the team Faxless payday loans. The transfer of ownership and possession to Ice Edge Holdings is a major and final step in establishing the long-term presence of hockey in Glendale, Arizona," Glendale said in a statement.

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Technology has been a driving force in this year’s initial public offerings.

Consider ChangYou.com Ltd., a Chinese online game developer whose stock price jumped 25 percent at its offering day in April on the NASDAQ. It is now up more than 100 percent from its IPO price.

The company recently had the U.S. launch of its Dragon Oath martial-arts online game, a hit in Asia for the past three years. It has three more online games scheduled for release here and is opening a subsidiary in Santa Clara, Calif.

Among the 16 other tech IPOs in 2009, price gains of better than 30 percent since their offering have been produced by SolarWinds Inc., a management and monitoring software firm; A123Systems Inc., a manufacturer of rechargeable lithium-ion batteries; and Opentable Inc., an online reservation site.

In a year of other IPO gains by familiar names such as Hyatt Hotels and Vitamin Shoppe, the average first-day IPO price "pop" has been 7 percent, and the average overall return 10 percent, according to RenaissanceCapital.com.

But don’t get the impression we’ve returned to the wild-and-crazy IPO markets of the past. Some planned IPOs haven’t even hatched and others have quickly laid an egg because investor caution rules the roost.

"Demand for IPO money continues to run off the scale, as the need for companies to access the capital markets increases," observed David Menlow, president of IPOfinancial.com in Millburn, N.J. "However, the tug of war is between the comfort level of potential investors and the need for capital for these companies."

Investors are wary of debt-laden companies put on the IPO block by private-equity firms. An example is the Dole Food Co. IPO that was priced at the low end of its expected range, closed lower on its offering day in October and has since declined.

Rather than focus on one market sector, an investor should examine each IPO carefully to see if it makes sense, Menlow advised. Years ago, investors couldn’t care less what an IPO did because they just wanted in on the deal, resulting in "a lot of dogs with fleas" among those IPOs, he said.

"We’re in the last stage of a double-dip recession and starting to see some rays of sunshine in the IPO market," said Linda Killian, portfolio manager of IPO Plus Aftermarket Fund in Greenwich, Conn., up 16 percent over the past 12 months. "The IPOs that have come to market have been priced to sell."

Getting the 2009 IPO market off on the right foot was Mead Johnson Nutrition Co., a quality spin-off from Bristol-Myers Squibb Co. whose IPO was priced right, Killian noted. When that success was followed by Rosetta Stone Inc instant payday loan., another viable growth company, other firms were enticed to come to market, too.

IPO Plus Aftermarket Fund, which requires a $5,000 initial investment, buys a portfolio of IPO stocks at the time of the offering and in their subsequent aftermarket trading. The largest of the fund’s 23 holdings were recently Visa Inc., Constant Contact Inc., Athena Health Inc., Mead Johnson and Rackspace Hosting Inc.

"Individual investors can look for good IPOs that have traded down since they were offered," said Killian. "For instance, RailAmerica Inc. is below its IPO price and, although leveraged, is a well-run regional freight railroad operating in 27 states and part of Canada that has fared well in the economic downturn."

Institutional investors still drive the overall IPO market, since only select investors at full-service brokers typically get the opportunity to invest in IPOs. Most average investors invest in IPOs on the secondary market after their initial price pop. IPO Plus Aftermarket Fund is another way of doing that.

"The overall stock market is driving the IPO market, which is playing catch-up," explained John Fitzgibbon, founder of IPOScoop.com in Edison, N.J. "The IPO market is a follower, not a leader, and you must have a good stock market in order to get a good IPO market."

Among financial IPOs, Cypress Sharpridge Investments Inc. and Invesco Mortgage Capital Inc. have made gains, pointed out Fitzgibbon, but "the rest are underwater." Some real estate investment trusts also attempted to sweep up toxic assets into IPOs to get rid of them, but those IPOs have stumbled, he said.

"I always keep an eye on the initial IPO filing versus the final filing, since an increase indicates excessive demand and therefore likely good aftermarket performance," he said.

Rue21 Inc., a fast-growing specialty retailer for young women and men whose recent IPO was priced above its expected range and ended its offering day up 28 percent, is "a barn-burner," believes Fitzgibbon. It has had rapid growth and rising profits while displaying ability to predict fads, he said.

He is less enthusiastic about Dollar General Corp., the largest retail-store IPO in more than a dozen years, because it was loaded with debt by Kolberg Kravis Roberts and "pushed out the door as an IPO." But even though that IPO was priced at the low end of its expected range, it has since risen in price based on current investor confidence in discount retailer prospects.

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Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Chinese growth is likely to be hurt by an absence of consumer demand from trading partners such as the U.S.

“The Chinese, I suspect, will have a bubble of their own to confront,” Gross said in a Bloomberg Television interview yesterday from Pimco’s headquarters in Newport Beach, California. “It’s gearing up for export that doesn’t find an end consumer, that’s the real problem in China.”

The “systemic risk” of new asset bubbles in global economies and markets is rising with the Federal Reserve keeping interest rates at record lows, Gross wrote in his December investment outlook posted on Pimco’s Web site yesterday. Under what Pimco has termed the “new normal,” investors should be prepared for lower-than-average historical returns with heightened government regulation, lower consumption, slower growth and a shrinking global role for the U.S. economy.

“With unemployment in the double digits and likely to stay close to that for the next six months despite job creation ahead, the Fed has nowhere to go,” Gross, co-founder and co- chief investment officer of Pimco, said on Bloomberg Television.

Fed Chairman Ben S. Bernanke said after a Nov. 16 speech in New York that it’s “not obvious” that asset prices in the U.S. are out of line with underlying values after a 64 percent jump in the Standard & Poor’s 500 Index from its March low.

Negative Rates

Treasury three-month bill rates turned negative yesterday for the first time since financial markets froze last year on concern that the rally in higher-yielding assets has outpaced the prospects for economic growth. The two-year note yield touched 0.68 percent, the least since Dec. 19.

The Fed cut its target rate for overnight lending between banks to a range of zero to 0.25 percent in December. Policy makers reiterated on Nov. 4 that they intended to keep the rate at the record low for an extended period.

The “heavy lifting” will likely be done first by other central banks such as those in Australia and Norway that have already begun to increase interest rates, Gross wrote cashadvance.

“China may abandon its dollar peg within six months’ time and with it, its own easy monetary policy that has fostered more significant mini-bubbles of lending and asset appreciation on the Chinese mainland,” he added.

China’s Currency

China has kept its currency at about 6.83 per dollar since July 2008 to help sustain exports amid a global economic slump.

China’s trade surplus in October almost doubled from the previous month, to $24 billion. The nation, with the world’s largest foreign-exchange reserves of $2.3 trillion, is the biggest creditor to the U.S., holding $798.9 billion of Treasuries as of September.

“With renewed upward appreciation of the yuan may come potentially volatile global asset price reactions to the downside — higher Treasury yields, and lower stock prices — which the Fed must surely be leery of before making any upward move, of its own,” Gross wrote.

The U.S. economy grew in the third quarter for the first time in more than a year as gross domestic product increased 3.5 percent from July through September after shrinking the previous four quarters, a Commerce Department report showed on Oct. 29.

Gross advised following the lead of billionaire investor Warren Buffett on buying utilities because their earnings growth will mimic U.S. economic growth and provide steady dividend income. Buffett’s Berkshire Hathaway Inc. agreed this month to take over Burlington Northern Santa Fe Corp., the No. 1 U.S. railroad, for $26 billion.

Fund Returns

The Total Return Fund managed by Gross boosted its investment in Treasuries, so-called agency debt and other government-linked bonds to 48 percent of assets in September from 44 percent in August, according to Pimco’s Web site. The holdings were the most since August 2004.

The $192.56 billion Total Return Fund returned 18.29 percent in the past year, beating 54 percent of its peers, according to data compiled by Bloomberg. The one-month return is 1.11 percent, outpacing 59 percent of its competitors. Pimco is a unit of Munich-based insurer Allianz SE.

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Stocks recovered from early losses Tuesday, closing at 13-month highs for the second day in a row, as strength in commodity-linked shares offset weakness in the retail sector.

The Dow Jones industrial average (INDU) rose about 30 points, or 0.3%, to close at 10,437.42. The S&P 500 (SPX) gained 1 point to close above the key 1,100 level. The Nasdaq composite (COMP) advanced 0.3% to end at 2,203.78.

All three indexes are at their highest levels since October 2008.

Stocks opened lower and struggled for most of the day as the dollar regained ground against rival currencies, reflecting a decreased appetite for risky assets.

The tone improved in the last few hours of trading as oil and gold prices reversed direction. Oil closed above $79 a barrel, while gold edged up to settle at a fresh all-time high.

The rebound in commodity prices boosted shares of energy and materials companies. But gains were limited by weakness in the retail sector after Home Depot and Target offered cautious earnings outlooks.

Tuesday’s economic news was mixed. Government data showed inflation at the wholesale level remains subdued, while industrial production was weaker than expected in October.

Ryan Larson, senior equity trader at Voyager Asset Management, said the stock market continues to look to the dollar for direction.

"The main story has been the dollar trade," he said. "When the dollar is weak, investors take on more risk. If it’s strong, they take the risk off."

The dollar has wallowed near a 15-month low against rival currencies in recent weeks as investors take advantage of U.S. interest rates near zero percent to fund bets in more risky stock and commodities markets.

However, after pushing the major indexes up some 30% from the lows of early March, investors have become wary of placing big bets as the economic outlook remains cloudy.

"The economy is growing, but shows a loss of momentum given the recent round of economic and corporate data," said Nick Kalivas, vice president of financial research at MF Global.

Investors will digest reports on consumer prices and initial construction of new homes Wednesday morning. Later in the week, the government will report on the number of Americans filing first-time claims for unemployment benefits.

Stocks rallied Monday as investors bet on the weak dollar and Federal Reserve Chairman Ben Bernanke said interest rates will remain low amid a slow recovery.

Economy: The government reported that the Producer Price Index, the key measure of inflation for manufacturers, edged up 0 cash till payday.3% in October. Core PPI, which excludes volatile food and energy prices, fell 0.6%.

The PPI was expected to have risen 0.5% for the month, according to a consensus of economist opinion from Briefing.com. The core was expected to have edged up 0.1% in October.

Before the start of market trading, the government also reported that industrial production rose 0.1% last month versus a forecasted 0.4% increase. In September, production rose 0.7%. Capacity utilization rose by 0.2 percentage point to 70.7%, a rate slightly below economists’ expectations for 70.8%.

Companies: Home Depot (HD, Fortune 500) reported a decline in third-quarter earnings to 41 cents per share from 45 cents in the year-ago quarter. While the results were better than 36 cent per share profit that analysts had expected, the company said it expects earnings for the full year to be down 13%.

Discount retailer Target (TGT, Fortune 500) reported an 18% increase in third-quarter profit, helped by gains in the company’s credit card portfolio. But Target, which had suffered declining profits for the last eight quarters, remained cautious about the outlook for holiday spending.

TJX (TJX, Fortune 500), which owns the T.J. Maxx and Marshalls chains, reported a larger-than-expected quarterly profit on increased consumer demand for discount products. The company said it expects profit from continuing operations of 65 cents to 71 cents per share in the fourth quarter. Analysts surveyed by Thomson Reuters are forecasting a profit of 71 cents per share in the fourth-quarter.

On the higher end, Saks (SKS) reported a quarterly profit, surprising analysts who were expecting the company to report a loss. However, the results were driven mostly by cost-cutting, and the company offered a cautious outlook.

International markets: The Nikkei and the Hang Seng each closed lower by a fraction of a percent. European markets ended with losses of less than 1%.

Other markets: Treasury prices rose, with the yield on the 10-year note falling to 3.33%.

The weak dollar recovered a little Tuesday. The dollar index, which measures the U.S. currency against a basket of rivals, was up 0.7% to 75.38 from 74.92.

Oil prices rose 24 cents to settle at $79.14 barrel in New York.

The price of gold closed at an all-time high of $1,139.40 an ounce, up 20 cents from Monday’s record close of $1,139.80. 

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U.S. President Barack Obama said on Sunday the world economy was on a path to recovery but warned that failure to re-balance the global economic system would lead to further crises.

Obama was addressing Asia Pacific leaders in Singapore, where officials removed any reference to market-oriented exchange rates in a communique after disagreement between Washington and Beijing over the most sensitive topic between the two giants.

The statement from the Asia Pacific Economic Cooperation (APEC) forum endorsed stimulus measures to keep the global economy from sliding back into recession and urged a successful conclusion to the Doha Round of trade talks in 2010.

An earlier draft pledged APEC’s 21 members to maintain “market-oriented exchange rates that reflect underlying economic fundamentals.”

That statement had been agreed at a meeting of APEC finance ministers on Thursday, including China, although it made no reference to the Chinese yuan currency.

An APEC delegation official who declined to be identified said debate between China and the United States over exchange rates had held up the statement at the end of two days of talks.

That underscored strains likely to feature when Obama flies to China later on Sunday after Washington for the first time slapped duties on Chinese-made tires.

Beijing fears that could set a precedent for more duties on Chinese goods that are gaining market share in the United States.

Obama told APEC leaders the world could not return to the same cycles of boom and bust that sparked the global recession.

“We cannot follow the same policies that led to such imbalanced growth. If we do, we will continue to drift from crisis to crisis, a failed path that has already had devastating consequences for our citizens, our businesses, and our governments,” Obama said.

“We have reached one of those rare inflection points in history where we have the opportunity to take a different path — to pursue a new strategy for jobs and growth. Growth that is balanced. Growth that is sustainable.”

Obama’s strategy calls for America to save more, spend less, reform its financial system and cut its deficits and borrowing. Washington also wants key exporters such as China to boost domestic demand.

YUAN ON THE AGENDA Chinese President Hu Jintao has been under pressure to let the yuan appreciate, but in several speeches at APEC he ignored the issue and focused instead on what he called “unreasonable” trade restrictions on developing countries.

One of the key themes when Obama visits China for three days will be the yuan, which has effectively been pegged against the dollar since mid-2008 to cushion its economy from the downturn.

Washington says an undervalued yuan is contributing to imbalances between the United States and the world’s third-biggest economy. China is pushing for U.S. recognition as a market economy and concessions on trade cases that would make it harder for Washington to take action against Chinese products. 

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Opel’s top German labor leader said on Sunday he was willing to hold negotiations over a restructuring of the European carmaker under its parent General Motors so long as it gains greater independence.

Klaus Franz was shocked last week when GM’s board abruptly dropped plans to sell a 55 percent stake in Opel to auto parts maker Magna and its Russian bank partner Sberbank.

“GM does not enjoy any credibility or faith in the eyes of the public or the (German) government, so they have to consider whether they now want to seek confrontation or cooperation by finding a common solution,” Franz told Reuters on Sunday.

“To see whether they are interested in cooperation, we need to know whether they are willing to start off where we last stopped — namely, the degree of autonomy and freedom that was set in the contract with Magna and accepted by General Motors,” he said.

He said this was a clear condition for any talks. GM’s chief executive, Fritz Henderson, is due to travel to Opel’s headquarters in Ruesselsheim this week and is expected to discuss the decision with local management on Monday.

Following the sudden decision last week to drop the sale management scared unions by threatening Opel’s bankruptcy and its German boss Carl-Peter Forster left the company after attacking the board’s decision.

A newspaper report said on Sunday that Forster, a former BMW executive and son of a German diplomat who grew up in London, is now slated to take over as head of Indian group Tata Motors’ British carmaker Jaguar Land Rover.

Briton Nick Reilly, currently head of GM’s international operations, is now set to lead the reorganization of Opel, a person briefed on the plan told Reuters on Friday, with GM’s global marketing chief Bob Lutz to be Opel’s new chairman.

Lutz was quoted as saying on Sunday that GM would probably stick to a plan to slash fixed costs at Opel by nearly a third. “The restructuring plan developed at the end of last year is still the basis for a profitable business model. The plan foresees a 30 percent cut in structural costs,” he told Swiss newspaper Sonntag.

Meanwhile Magna’s top European executive, Siegfried Wolf, advised GM to give more freedom to Opel and tread carefully with regard to the brand.

“GM must now smooth things out and win back trust. That requires a lot of sensitivity and tact,” he was quoted as telling German newspaper Bild am Sonntag.

(Reporting by Christiaan Hetzner, additional reporting by Emma Thomasson in Zurich; Editing by Greg Mahlich)

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The Securities and Exchange Commission is in settlement talks with several large financial institutions to resolve investigations into the awarding of municipal investment contracts, the Wall Street Journal reported on Saturday.

UBS and Bank of America Corp are among a few firms negotiating settlements with the SEC, the Journal said, citing people familiar with the matter.

The report comes after the three-year investigation led to indictments on Thursday against CDR Financial Products Inc and some of its current and former executives, for bid-rigging and fraud related to municipal bond contracts.

The charges were the first to be filed in the U.S. Justice Department’s ongoing investigation into bid-rigging in the municipal bond industry fast payday loan no faxing.

The SEC had no immediate comment on Saturday. Officials at the Justice Department, Bank of America and UBS could not immediately be reached for comment.

Bank of America entered into a leniency agreement with the Justice Department in connection with a probe into bidding practices, the bank said in February 2007. In a leniency agreement, the Justice Department promises not to bring criminal charges in exchange for the company’s information about wrongdoing.

(Reporting by Tiffany Wu and Rachelle Younglai; Editing by Eric Beech)

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China’s economic growth picked up last quarter as expected as a combination of breakneck investment and buoyant bank lending more than made up for a slump in exports.

But the 8.9% growth rate fell short of some of the more optimistic predictions in the market, and the government promptly said it would stick to the ultra-loose policies it has been following for the past year.

Andy Rothman, a macro strategist for brokerage CLSA in Shanghai, described the figure as strong but not strong enough to trigger a policy tightening, which he said was unlikely until the second half of 2010 at the earliest.

"China has begun, however, to implement its ‘exit strategy’, which is a gradual reduction in the level of stimulus (credit and infrastructure spending) in response to rising private investment and consumption," Rothman said in a note to clients.

Last quarter’s year-on-year growth exactly matched the forecast of a Reuters poll and was up from 7.9% in the April-June period and just 6.1% in the first three months of 2009 in the depths of the global downturn.

Goldman Sachs said quarter-on-quarter growth had in fact slowed to around 10.2% from the second quarter’s annualized pace of 16.5%.

But with GDP expanding 7.7% in the first nine months, the government said it would now easily reach its target of 8% average growth for the year as a whole, widely regarded as the minimum needed to keep a lid on unemployment.

"We can say with certainty that achieving 8% GDP growth this year is completely assured. Without doubt," said Li Xiaochao, the spokesman of the National Bureau of Statistics, which released the figures.

Li, though, quickly reaffirmed the policy status quo.

"We have stressed a proactive fiscal policy and appropriately relaxed monetary stance to keep consistency and stability in economic policy — according to my understanding, that means no change in policy," he said, restating the thrust of a cabinet statement issued on Wednesday.

A breakdown of growth so far this year showed just how effective Beijing’s 4 trillion yuan ($585 billion) pump-priming package has been in galvanizing investment and putting the once-fanciful 8% growth goal target easily in reach.

Capital spending contributed 7.3 percentage points to headline growth of 7.7% in the first three quarters, while consumption accounted for 4.0 percentage points. Net exports, meanwhile, subtracted 3.6 percentage points.

Domestic demand

With the United States and Europe emerging from recession with huge debt burdens that will weigh on consumption, global policymakers are looking to China to pull more weight by expanding domestic demand.

Thursday’s data showed China doing just that.

Fixed-asset investment in urban areas, which has been the main driver of China’s double-digit growth of recent years, rose by a third in the first nine months.

Whereas investment in the first half of the year was overwhelmingly government-led, capital spending by mostly private real estate developers is now surging in response to the ready availability of credit and growing confidence in the economy.

That confidence is being buoyed by rising incomes. Urban Chinese had 10.5% more disposable income in the first nine months, after adjusting for inflation, than a year earlier.

Retail sales rose 15.5% in the 12 months to September, accelerating from August’s reading of 15.4% and exactly in line with market forecasts.

Industrial production growth quickened to 13.9% in the 12 months to September from 12.3% in August, beating the median market forecast of 13.3%. Daily steel output in September matched August’s record, while iron ore production scaled a new high.

"Good figures. Economic growth has picked up very swiftly. said Wang Hu, an analyst at Guotai Junan Securities in Shanghai.

Stronger next year?

Most economists expect even stronger growth in 2010 given this year’s relatively low base of comparison, the likelihood of a partial recovery in net exports and the fiscal stimulus already in the pipeline.

The median forecast of a Reuters poll published on Oct. 18 was for 9% growth in 2010, but several banks have since taken an even rosier view.

In the currency market, non-deliverable forwards (NDF) over the past week had priced in a faster pace of yuan appreciation, partly in anticipation of a sparkling set of data.

But the yuan lost a little ground in the NDF market after the figures and the Shanghai stock market was also underwhelmed. The main index ended the morning down 0.05 percent.

Although the economy has perked up, China is still mired — technically — in deflation. The consumer price index fell 0.8% in September from a year earlier, while producer prices were down 7%. Both figures were exactly as expected.

Both gauges have shown prices rising steadily month on month since July, but Li, the NBS spokesman, said inflation was not a problem for now. 

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Google will soon allow users to to listen to music and buy songs on its search results page, according to several news reports.

The search leader has partnered with streaming music sites Lala.com and iLike.com to give searchers the ability to stream music directly from Google. If a listener wants to purchase the song, links will take them to Apple’s (AAPL, Fortune 500) iTunes Store or Amazon.com (AMZN, Fortune 500) to buy the music, the reports said, citing sources.

Google (GOOG, Fortune 500) did not return requests for comment for this story.

The music results will appear at the top of Google’s search results page, displayed similarly to results for weather forecast searches and movie searches. The music search initiative is expected to launch next week.

All four major record labels — Warner Music Group (WMG), EMI Group, Sony Music Entertainment (SNE) and Universal Music Group — have licensed their music to Google for the music search results.

Google is not expected to get any direct revenue from the purchases or streams. 

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Google said Thursday the worst of the recession has passed, as it reported quarterly profit and sales that rose from year-earlier results and easily trounced Wall Street’s forecasts.

"Google had a strong quarter — we saw 7% year-over-year revenue growth despite the tough economic conditions," said Eric Schmidt, Google’s chief executive, on a conference call with investors. "While there is a lot of uncertainty about the pace of economic recovery, we believe the worst of the recession is behind us and now feel confident about investing heavily in our future."

Google’s strong third quarter could be a good sign for the economy, as the company’s ad clicks serve as a kind of barometer of consumers’ willingness to spend. The more people click on ads, the more willing they are to buy things.

"It’s all good news from our perspective," said Schmidt. "I’m very proud of our management team in what could have been a very significant downturn for Google."

By the numbers: The Mountain View, Calif.-based search giant’s net income was $1.64 billion, or $5.13 per share, in the third quarter, up 27% from the same period last year.

Excluding one-time charges, including $95 million from a Google Books settlement with the Authors Guild, Google reported earnings of $1.88 billion, or $5.89 per share. Analysts polled by Thomson Reuters, who typically exclude one-time charges from their forecasts, expected earnings of $5.42 per share.

Sales rose 7% to $5.94 billion. Excluding advertising sales that Google shares with partners, a figure also known as traffic acquisition costs, the company reported revenue of $4.38 billion, which beat analysts’ forecast of $4.24 billion.

Google makes the vast majority of its sales from online advertising, a market that has struggled over the past year. But two important indicators of advertising market health improved: The number of paid clicks, which include clicks on ads served on Google sites and its partners, rose 4% from the previous quarter and 14% from the same period last year.

The average amount paid to Google per click also increased about 5% from last quarter. That figure was down about 6% from the same period a year ago, but the company said that much of that discrepancy had to do with currency fluctuations.

Both measures improved from the second quarter, when paid clicks were down sequentially and cost-per-click was down by a double-digit percentage from a year earlier.

Shares of Google (GOOG, Fortune 500) rose more than 2% in after-hours trading.

Looking ahead: Schmidt said the companies new investment would come in the form of "people and innovation." He reiterated a statement that he made last week, saying that the advertising recession had ended, and the company has ramped up its hiring as a result. Last quarter, the company shed 121 employees.

The company hasn’t quite returned to its typical purchase rate of about one company a month. But Schmidt said Google has many small, innovative companies in its sights, and the company plans on increasing the number of acquisitions it makes in the coming months.

The company also said another encouraging sign is that advertisers have expressed a desire to spend more money with Google. As a result, Google is continuing to develop new products to assist with that interest.

For instance, the company said its new DoubleClick Ad Exchange will improve advertisers’ ability to put display ads onto Web sites. Google also said it is making improvements to Google Maps, making it easier for companies to connect with customers online on a local level. 

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