On Monday January 24, 2011, 6:18 pm
GM's China sales pass US
for first time in history
General Motors Co. sold
more cars and trucks in China last year than it did in the U.S., for the first
time in the company's 102-year history.
But despite GM's gains in
China, Toyota Motor Corp. managed to hold onto the title of world's largest
automaker. The Japanese company reported 8.42 million sales worldwide last
year. That's 30,000 more than GM's 8.39 million in global sales for 2010.
GM expects its sales growth
to continue, and industry analysts say it may dethrone Toyota as the global
sales leader this year. The news came the same day that GM announced it was
adding a shift and workers to a plant in Flint, Mich., that makes hot-selling
pickup trucks.
GM and Toyota tied for the
global sales lead in 2007, ending GM's 76-year string of dominance. Toyota took
the title in 2008 and has held it ever since, but last year's string of
embarrassing safety recalls and a resurgent GM combined to make the race close
again.
McDonald's may raise prices
as food costs rise
PORTLAND, Ore. (AP) --
McDonald's affordable food drew even more customers in its fourth quarter, but
the burger chain said it may raise prices this year as its own food tab rises.
Worries about rising costs
at the world's largest hamburger chain gave some investors pause even as
McDonald's ended a banner year in which it outperformed its competitors. Its
emphasis on low-priced items and an expanding menu, including the limited-time
McRib and its McCafe coffee line, helped sales grow all year.
McDonald's Corp., based in
Oak Brook, Ill., reported that its net income rose 2 percent to $1.24 billion,
or $1.16 per share, for the quarter. That's up from $1.22 billion, or $1.11 per
share, a year ago.
Revenue climbed 4 percent
to $6.21 billion.
The results met the
expectations of analysts surveyed by FactSet.
However, the company said
it expects food cost will rise 2 to 2.5 percent in the U.S. and 3.5 to 4.5
percent in Europe during the year.
McDonald's has already
raised some prices in the United Kingdom to cover higher costs. The company
said as prices for beef and other ingredients and other cost pressures in the
U.S. become more pronounced throughout the year, it will likely increase prices
to offset some, but not all, of its higher costs.
J.C. Penney closing some
stores; Ackman on board
NEW YORK (AP) -- J.C.
Penney Co. plans to close some stores, outlets and call centers, finish closing
its catalog business and add two opinionated shareholders, including activist
investor William Ackman, to its board.
The department store chain
said Monday that the moves are intended boost profitability and keep pace with
customers' increasing shift to online purchases.
J.C. Penney has been
working to close the catalog business for some time, announcing in November
2009 that it would stop publishing its twice-yearly "big book"
catalogs.
Chairman and CEO Myron E.
Ullman III admitted during a conference call that the retailer's business
started to shift heavily away from catalog to online about two years ago.
The company had also faced
potential pressure from Ackman's Pershing Square Management and Vornado Realty
Trust. Both Ackman and Vornado Chairman Steven Roth are joining Penney's board.
Other changes include
closing of six underperforming stores, two call centers, 19 outlet stores and
one furniture outlet. J.C. Penney did not disclose how many jobs would be lost.
RadioShack CEO Julian Day
retiring
NEW YORK (AP) -- RadioShack
said Monday its chairman and CEO Julian Day is leaving and announced
disappointing fourth-quarter guidance that sent shares down 11 percent in
midday trading.
RadioShack has struggled
with competition from online retailers like Amazon.com and bigger electronics
players like Best Buy. It brought on former investment banker Day -- known for
pulling Kmart out of bankruptcy -- as chairman and CEO in 2006 to help turn
around results.
Since then the company has
shifted its focus to smartphones and wireless plans and mobile phone kiosks
with some success. But Monday it said disappointing performance from its
T-Mobile business and a shift in sales toward lower margin handsets hurt
results in the fourth quarter. Smartphones such as the iPhone, which RadioShack
recently began carrying, have a lower margin than other products.
Treasury announces
Citigroup warrant auction
WASHINGTON (AP) -- The
government says it will sell 465.1 million warrants it holds from Citigroup
Inc. in an auction on Tuesday. It is the latest effort to recoup costs from the
$700 billion financial bailout.
Sale of the warrants gives
the holder the right to buy Citigroup common stock at a fixed price.
The warrant sales will add
to the $12 billion profit that Treasury says the government has realized from
its $45 billion bailout of Citigroup. Treasury released that estimate in
December when it completed the remaining sales of Citigroup common stock that
the government held.
The Citigroup warrants were
divided into two groups reflecting the different types of bailout support the
government supplied to the giant bank during the financial crisis.
Google awards $100 million
to Eric Schmidt, whose CEO stint ends in April
NEW YORK (AP) -- Google
Inc. has awarded $100 million worth of equity to Eric Schmidt, who is stepping
aside as CEO but will stay with the company as executive chairman.
Google said in a regulatory
filing on Monday the stock and stock options will be granted on Feb. 2 and will
vest over four years.
Schmidt, 55, is being
replaced as Google's CEO by co-founder Larry Page. Both men, along with
Google's other co-founder Sergey Brin, have limited their salaries to $1 for
years. But the three are Google's controlling shareholders and Schmidt's net
worth is about $5.45 billion, according to Forbes magazine.
Page, 37, takes over the
CEO role in April.
Schmidt has led Google
since 2001, three years before the company went public in August 2004. Since
then, Google's shares have grown more than sixfold, at one point surpassing
$700. Google's market capitalization is now about $196 billion. Though it faces
a formidable crop of young new rivals, notably Facebook, Google so far has
managed to stay on top of the online advertising food chain, relying mainly on
its search prowess but flexing its muscles in other areas too.
Rock-Tenn to buy
Smurfit-Stone in $3.5B deal
NORCROSS, Ga. (AP) --
Packaging manufacturer Rock-Tenn Co. is buying competitor Smurfit-Stone
Container Corp. for $3.5 billion in cash and stock, the companies announced
Sunday.
The combined company will
have annual sales of more than $9 billion, they said, making it one of the
largest North American paperboard companies.
The deal values
Smurfit-Stone's common shares at $35, a 27 percent premium over Friday's
closing price of $27.52.
Both companies' boards
agreed to the half-stock, half-cash deal. Rock-Tenn, based in Norcross, Ga.,
will pay 0.30605 share of its own stock, plus $17.50 in cash, for each share of
Smurfit-Stone.
House GOP leader says no
federal bailout of states
WASHINGTON (AP) -- A top House
Republican said Monday that the federal government will not bail out fiscally
ailing states and said he opposes a proposal that Congress allow states to
declare bankruptcy as a way of handling their growing piles of debt.
Though there has been
little discussion of Washington bailing out states, some congressional
Republicans and conservative groups are suggesting that states be allowed to
seek protection in federal bankruptcy court, which they are currently barred
from doing. Public employee unions, liberal groups and some lawmakers of both
parties oppose the bankruptcy idea.
House Majority Leader Eric
Cantor, R-Va., told reporters Monday that he believes states already have the
tools they need to ease crushing budget deficits since they can cut spending,
raise taxes and pressure public employee unions to renegotiate their contracts
and pension benefits. As a result, he said, he opposes letting states declare
bankruptcy because he said they don't need that power.
While some conservatives
say that allowing states to declare bankruptcy would prevent a federal bailout
of states, Cantor said he disagreed.
Supporters of allowing
states to declare bankruptcy say it is the best way for states to dig
themselves out of debt. Opponents say the idea will drive up borrowing rates
for states on the already shaky municipal bond market and make it easier for
states to cut government workers' benefits and pensions, even though those
benefits are just a minor cause of states' budget problems.
Spain says banks need
euro20 billion
MADRID (AP) -- Spain says
its banks will need euro20 billion ($27 billion) in fresh capital to meet new
reserve requirements aimed at strengthening their finances.
Finance Minister Elena
Salgado also says said a government fund that has been pouring money into
mergers among troubled cajas, or savings banks, might eventually buy stakes in
the entities that cannot meet the new criteria.
She says that for that to
happen banks will have to be listed on the stock market. The savings banks or
cajas are not listed.
Worries about Spain's
banking system have been an aggravating factor in the government debt crisis
plaguing the eurozone.
By The Associated Press
The Dow Jones industrial
average gained 108.68 points, or 0.9 percent, to 11,980.52. The last time the
average closed above 12,000 was June 19, 2008.
The broader Standard and
Poor's 500 index rose 7.49, or 0.6 percent, to 1,290.84. The Nasdaq composite
gained 28.01, or 1 percent, to 2,717.55.
Benchmark crude for March
delivery lost $1.24 to settle at $87.87 per barrel on the New York Mercantile
Exchange.
In other energy trading on
the Nymex, heating oil lost 3.12 cents to settle at $2.6231 a gallon. Gasoline
futures lost 4.06 cents to settle at $2.4379 a gallon. Natural gas for March
delivery fell 14.5 cents to settle at $4.598 per 1,000 cubic feet.
In London, Brent crude gave
up 99 cents to settle at $96.61 per barrel.