AP Business Highlights
Consumer spending up 0.7
percent in December
WASHINGTON (AP) --
Americans spent at the fastest pace in three years in 2010, boosted by a strong
finish in December.
Consumer spending rose 0.7
percent in December, the sixth straight monthly increase, the Commerce
Department reported Monday. Households saw their incomes rise 0.4 percent, the
same as November.
For all of 2010, consumers
boosted spending 3.5 percent. That was the best performance since a 5.2 percent
rise in 2007, before the recession began.
The government reported
Friday that consumer spending rose at a 4.4 percent rate in the final three
months of 2010 -- the most since 2006 and helping retailers to the best holiday
shopping season in that time.
Economists expect a cut in
Social Security taxes will lift January's spending and incomes even further
that last month.
But Paul Dales, senior U.S.
economist at Capital Economics, said the boost could be short-lived without job
growth.
For 2010, incomes rose 3
percent after having fallen 1.7 percent in 2009. Still, incomes grew at the
second-lowest annual pace in the eight years.
The rise in incomes and the
faster increase in spending meant that the savings rate dipped slightly in
December to 5.3 percent of after-tax incomes.
The savings rate edged down
slightly to 5.8 percent, from 5.9 percent in 2009. Still the 2010 figure is
well above the low of 1.4 percent hit in 2005 at the height of the housing boom
when rising home prices encouraged Americans to spend more.
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Egypt unrest casts dark
cloud on investments
CAIRO (AP) -- A week of
growing upheaval in Egypt with no quick end in sight enflamed investor
concerns, as a leading ratings agency cut the country's sovereign rating and
warned other downgrades were possible. Some international companies suspended
their operations, inflicting more economic damage to a nation once seen as a
pinnacle of stability in a restive Middle East.
Moody's decision to cut
Egypt's government bond rating from Ba1 to Ba2, driving it deeper into junk
status, was the latest in a series of setbacks in a nation beset by protests
demanding President Hosni Mubarak's ouster.
Tourism, a mainstay of
foreign revenue, took a hammering, with travelers flocking to the airport in
search of escape. The Egyptian stock market remained closed, as did banks. ATMs
were running out of cash, and so were residents. Regional markets rebounded
slightly from earlier losses on the unrest in Egypt, but the reprieve was
minimal given the scope of losses as high as $10 billion in a couple of days.
Companies were unwilling to
take risks after looters stormed businesses, including a Carrefour hypermarket,
and broke into homes.
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Fla. judge strikes down
Obama health care overhaul
PENSACOLA, Fla. (AP) -- A
federal judge declared the Obama administration's health care overhaul
unconstitutional Monday, siding with 26 states that argued people cannot be
required to buy health insurance.
Senior U.S. District Judge
Roger Vinson agreed with the states that the new law violates people's rights
by forcing them to buy health insurance by 2014 or face penalties. He went a
step further than a previous ruling against the law, declaring the entire thing
unconstitutional if the insurance requirement does not hold up.
Attorneys for the
administration had argued that the states did not have standing to challenge
the law and that the case should be dismissed.
Justice Department
spokeswoman Tracy Schmaler said Monday the department strongly disagrees with
Vinson's ruling and intends to appeal.
The final step will almost
certainly be the U.S. Supreme Court. Two other federal judges have already
upheld the law and a federal judge in Virginia ruled the insurance mandate
unconstitutional but stopped short of voiding the entire thing.
At issue was whether the
government is reaching beyond its constitutional power to regulate interstate
commerce by requiring citizens to purchase health insurance or face tax
penalties.
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Exxon profit up 53 pct,
best quarter since 3Q '08
NEW YORK (AP) -- Exxon
Mobil earned $9.25 billion in the last three months of 2010, its most
profitable quarter since the record third quarter of 2008.
The largest publicly traded
oil company said Monday that net income grew 53 percent in the fourth quarter
as it produced more oil to take advantage of higher prices.
Global consumption of
petroleum products increased during the quarter and oil prices rose 12 percent
to an average of $85.14 per barrel. Higher prices made production operations
more profitable. Increased demand boosted margins at refineries.
Exxon joined Chevron and
ConocoPhillips in reporting vastly improved results.
On a per-share basis,
Exxon's net income was $1.85 per share. In the year-ago quarter, the company
earned $6.05 billion, or $1.27 per share. Exxon set a record for quarterly net
income by a publicly traded company of $14.83 billion in the July-September
period in 2008.
Revenue increased 17
percent to $105 billion. The results beat Wall Street expectations of $1.62 per
share on revenue of $99.1 billion, according to FactSet.
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Intel finds chip error, but
raises revenue outlook
SANTA CLARA, Calif. (AP) --
Intel Corp. on Monday said it has found a design flaw in a recently released
chip, and is working with laptop makers to replace affected computers.
Sales lost while the
company rushes out a replacement chip, and the cost of replacing computers with
the flawed chip, will cost the company $1 billion, it said.
Intel said it's shipped 8
million of the defective chips, but complete PCs with those chips have only
been on sale since Jan. 9, so few of them have reached consumers.
The affected chips aren't
the main processors, which are based on the so-called "Sandy Bridge"
technology that Intel announced in January, but a support chip. The flaw means
it may degrade with use over a period of months or years, slowing down the
transfer of data to and from the computer's hard drives and DVD drives.
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Gannett earnings up but
print decline continues
NEW YORK (AP) -- Gannett
Co., the country's biggest newspaper publisher, said fourth-quarter earnings
grew by 30 percent because of aggressive cost-cutting and a boost from
political advertising. But investors focused Monday on the company's stagnant
revenue and pushed Gannett shares 3 percent lower.
The publisher of USA Today
and 80 other newspapers cut staff, closed plants and got a timely bump from its
TV division, which benefited from advertising tied to the November elections.
However, Gannett's print news business, which accounts for more than two-thirds
of revenue, continues to suffer. Print advertising revenue declined by nearly 6
percent in the final three months of 2010, and the fourth quarter capped four
straight years of revenue reductions at Gannett's publishing division.
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Japan industrial production
up for second month
TOKYO (AP) -- Japan's
industrial production expanded for a second straight month in December, as
strengthening global demand injected companies with renewed confidence.
Factory output rose 3.1
percent from November, the Ministry of Economy, Trade and Industry said Monday.
Driving the gains were export-reliant industries including transport equipment,
electronic devices and steel.
Monday's figure beat Kyodo
news agency's average market forecast for a 3 percent rise and prompted the
ministry to upgrade its assessment of industrial production -- a key barometer
of Japan's economic health.
The result marked the
strongest monthly showing of 2010 and indicates that overseas demand is
starting to accelerate, sparking the manufacturing sector. Global appetite for
Japanese goods, particularly from China, has served as a critical lifeline for
the country's recovery amid lackluster domestic demand.
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Baidu net income surges in
4th quarter
NEW YORK (AP) -- Baidu.com
Inc., which operates China's leading search engine, said Monday that its
fourth-quarter profit more than tripled to surpass Wall Street expectations,
sending shares higher in after-hours trading.
While Google Inc. has
become synonymous with Web searches in the U.S., Baidu dominates the Chinese
market. The research firm Analysys International says that as of September, 73
percent of Web searches in China are done on Baidu. Google snags only 22
percent of searches in China.
The Beijing-based company's
profit soared to 1.16 billion yuan ($175.9 million), or 3.32 yuan (50 cents)
per American depositary share during the December quarter. That compares with
year-earlier earnings of 427.9 million yuan, or 1.23 yuan per U.S.-traded
share.
Excluding stock options
expenses, the company earned 52 cents per share. Analysts expected 47 cents per
share, according to FactSet.
Revenue nearly doubled to
2.45 billion yuan ($371.3 million) from 1.26 billion yuan. Analysts predicted
$350.3 million.
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General Motors looks to
make multimillion-dollar statement with 5 ads during the Super Bowl
NEW YORK (AP) -- General
Motors Co. is back in the Super Bowl in a big way.
The automaker will air five
Chevrolet commercials during the Feb. 6 game on Fox, the company said Monday,
along with two ads in the pregame show and one in the post-game show, which it
also is sponsoring. GM also plans a tie-in with Fox's post-Super Bowl
"Glee" episode and will give a Camaro to the game's most valuable
player.
GM wouldn't say what it is
spending on the blitz. But with commercial time averaging about $3 million for
30 seconds, it's a multimillion-dollar investment for a company that has sat
out the game for two years as it reorganized and emerged from a government-led
bankruptcy.
The ads bear the tagline
"Chevy Runs Deep," introduced during the World Series last year. In
one ad, a seemingly mundane car dealership ad is disrupted when a Camaro
suddenly morphs into the Bumblebee character from the "Transformers"
movies.
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By The Associated Press
The Dow Jones industrial
average gained 68 points, or 0.6 percent, to close at 11,891.93. The broader
Standard and Poor's 500 index rose 10, or 0.8 percent, to 1,286.12. The Nasdaq
composite index gained 13, or 0.5 percent, to 2,700.08.
The price of Brent crude
rose $1.59 to settle at $101.01 a barrel on the ICE Futures exchange in London.
Brent is used to price oil in Asia, where demand is growing fast, and in
Europe, where a cold winter is leading to high demand for heating oil.
The price of U.S. benchmark
West Texas Intermediate, or WTI, rose $2.85, or 3.2 percent, to settle at
$92.19 a barrel on the New York Mercantile Exchange. That marks a two-session
gain of about 8 percent.
In other energy trading on
the Nymex, heating oil added 4.61 cents to settle at $2.7403 a gallon, gasoline
futures picked up 1.42 cents to settle at $2.5001 a gallon and natural gas
gained 9.7 cents to settle at $4.420 per 1,000 cubic feet.