On Friday February 18, 2011, 6:26 pm EST
Obama says companies can
help bottom line and nation
WASHINGTON (AP) -- Pushing
his jobs agenda, President Barack Obama made the case Friday that companies can
make money and build up the country at the same time. He cited chip maker Intel
Corp. as a model of smart investing in education.
Though Republicans in
Washington are balking at Obama's call for more spending on education, the
president said Intel's example has shown that spending on education and worker
training is a good investment -- even in difficult financial times.
The president spoke during
a West Coast swing designed to highlight his vision of making the U.S. more
competitive globally. Before the visit, the White House announced that Obama had
picked Intel CEO Paul Otellini, who at times has criticized the administration,
to serve on a presidential competitiveness council.
Intel last year announced a
10-year, $200 million commitment to promote math and science education; Obama
was impressed with the projects of the students he met during his visit. The
company is among those working to help meet Obama's goal of having the U.S.
lead the world in science and math education in a decade.
Bernanke urges nations to
help ease trade gaps
PARIS (AP) -- Federal
Reserve Chairman Ben Bernanke on Friday urged countries with large trade
surpluses, like China, to let their currencies rise in value to help prevent
another global financial crisis.
He also called on nations
with persistent trade deficits, like the U.S., to narrow their budget
shortfalls and save more.
Both steps would help
balance trade and investment flows among countries, Bernanke said in a speech
at the G-20 conference in Paris. Many countries worry about speculative money
flooding their economies and inflating assets like real estate or stocks.
The flow of capital and
global trade imbalances will be on the table at the Group of 20 industrialized
and emerging nations meeting in Paris Friday and Saturday. Bernanke and
Treasury Secretary Timothy Geithner represent the U.S.
China raises bank reserves
to curb lending
BEIJING (AP) -- China
ordered its banks Friday to hold back more money as reserves in a new move to
curb lending and cool a spike in inflation.
The order raising reserves
by 0.5 percent of deposits was the second such move this year by the central
bank and followed six reserve increases in 2010. Reserves vary by institution
but are about 20 percent for China's biggest state-owned lenders.
Beijing is using a series
of repeated, gradual hikes in interest rates and reserve levels to stanch a
flood of lending that helped China rebound quickly from the global crisis but
now is fueling higher prices.
Inflation is politically
dangerous for China's communist leaders because it erodes economic gains on
which they base their claim to power. Poor families are hit hardest in a
society where some spend up to half their incomes on food, and millions have
seen little benefit from three decades of economic reform.
Consumer inflation in China
climbed to 4.9 percent in January, driven by a 10.3 percent jump in food costs.
Analysts expect the inflation rate to continue to rise through midyear as
demand outstrips food supplies.
Beijing has raised interest
rates three times since October. Economists say more rate hikes are needed and
it will be months before the effect is seen.
UK retail sales rebound
from December slump
LONDON (AP) -- U.K. retail
sales rebounded strongly in January following a bad-weather slump in December.
The Office for National
Statistics said retail sales rose 1.9 percent in volume compared with December
and were 3 percent higher in value. In December, the volume of sales fell 1.4
percent compared with November.
Compared to a year earlier,
when winter weather cut into sales in January, sales were up 8.2 percent in
value and 5.3 percent by volume.
Vicky Redwood, analyst at
Capital Economics, says the one-month trend is probably deceptive. Assuming
that January's results were boosted by pent-up demand, she says sales are
likely to drop back in February.
Campbell says sales, profit
dip; cuts guidance
PHILADELPHIA (AP) -- The
Campbell Soup Co. sold more cans of soup in its fiscal second quarter, but at
such deep discounts it drove down the company's profit.
The quarterly decline was
expected, but it came with other bad news from the food maker. Campbell lowered
its full-year earnings and revenue guidance for the second time in about three
months.
The Camden, N.J., company
said Friday that its income fell 8 percent and sales were down 1 percent.
Campbell says it now
expects full-year revenue to be essentially flat -- between a 1 percent decline
and 1 percent growth. Earnings per share should fall by 1 to 3 percent. To
reach that, Campbell will have to have a stronger performance between now and
the end of July than it's had over the past six months.
Previously the company said
it expected earnings for the year to be up by 2 to 4 percent, or between $2.52
and $2.57 per share for the full year. The revised guidance is for profit
between $2.40 and $2.45 per share.
The second-quarter result
matched Wall Street expectations.
Campbell President and CEO
Doug Conant said the company used heavy promotions to sell a higher volume of
soup in the U.S. The company still didn't sell as much as it had hoped -- and
promotional spending was so high that it wiped out any gains in revenue. Conant
said that was the right strategy to keep customers.
Ford plans to team with
Sollers in Russia
DETROIT (AP) -- Ford Motor
Co. is teaming up with Russian automaker Sollers to make and distribute cars in
Russia, one of the fastest growing auto markets.
Under a deal announced
Friday, Sollers will build Fords at Russian plants, helping to boost a
struggling local industry. Ford will have access to a huge market that could
bolster its revenues.
Financial details weren't
disclosed, but the automakers said they will have equal stakes in their joint
venture called Ford Sollers. Ford declined to give production or sales targets
for the venture.
The announcement came
shortly after Italian automaker Fiat SpA backed out of a potential partnership
with the same Russian company. The unraveling of the Fiat Sollers venture gave
Ford an opportunity to step in.
Ford and Sollers are
expected to finalize their deal in June. The venture's operations could start
by year's end.
The Dearborn, Mich.,
company began selling cars directly to Russians in 2002, and like many car
makers Ford is eager to expand business there as demand improves.
While domestic auto
companies in Russia have been struggling, the market itself has been getting
stronger. Car sales in Russia rose by 30 percent last year to 1.9 million,
according to the Moscow-based Association of European Businesses. Nine of the
10 best-selling models were produced locally, while Ford Focus was in the top
five best-sellers.
Southwest blames fuel for
latest fare increase
DALLAS (AP) -- Southwest
Airlines Co. is raising fares by $10 for a round trip, saying it needs the
money to offset higher fuel costs.
The move Friday was the
latest in a series of price increases from major U.S. airlines, most of which
are making money after a two-year slump.
Jet fuel prices have risen
about 50 percent to around $2.80 per gallon in the past year. Southwest CEO
Gary Kelly says fuel is the only worrisome factor in the airline's outlook for
2011.
In 2010 Southwest spent
$3.6 billion on fuel. That was one-third of its budget and barely behind labor
as the Dallas company's biggest expense.
Fortunately for airlines,
the higher fuel costs come at a time when they are enjoying more power to raise
prices. Passenger planes are flying at record occupancy levels because airlines
have limited new flights while travel demand has picked up.
The airlines, including
Southwest, have raised fares on leisure travelers several times since December.
They've also twice tried to raise fares even more sharply on high-priced
tickets favored by corporate travelers. One such increase stood, but a second
attempt to boost fares by up to $120 per round trip failed this week when US
Airways balked.
Fare increases can collapse
if a major airline refuses to go along because other carriers fear losing
customers if their prices are even a few dollars higher.
By The Associated Press
The Dow Jones industrial
average gained 73.1 points, or 0.6 percent, to close at 12,391.25. The S&P
500 rose 2.58 points, or 0.2 percent, to 1,343.01. The Nasdaq composite rose
2.37, or less than 0.1 percent, to 2,833.95.
Benchmark West Texas
Intermediate oil for April delivery rose 87 cents to settle at $89.71 a barrel
on the New York Mercantile Exchange. Brent crude for March delivery lost 7
cents to settle at $102.52 on the ICE Futures exchange in London.
In other Nymex trading,
heating oil lost 1.95 cents to settle at $2.7129 a gallon and gasoline rose
2.36 cents to settle at $2.5513 a gallon. Natural gas added 0.8 cent to settle
at $3.876 per 1,000 cubic feet.