Welcome to Finance World

One year after he was restructured out of the telecom sector and into unemployment, Bruce Bracken got a full-time job again.

His ordeal started in November 2008, as Canada’s unemployment rate began to rise. It ended in November 2009, when Bracken got one of the 79,100 new jobs Statistics Canada said was created last month across the country, with Toronto and Ontario leading the surge.

The remarkable growth, which one analyst called "stunning," dropped the national unemployment rate down a notch to 8.5 per cent, the federal agency said on Friday, though many predict this number will rise in 2010.

During his year working contracts, spending time with his two children, and volunteering with Habitat For Humanity, Bracken heard it all, including: "If we could hire two, we would hire you."

"I got a lot of silver medals," joked Bracken, 45, from the office of his new employer, Toronto-based Upstream Works Software.

His company’s decision was part of a surge in private sector hiring across the county, which saw 27,000 jobs created in Ontario – 21,000 of them in Toronto.

The bulk of Canada’s new jobs were created in the services sector, the agency said.

"It’s certainly encouraging, an economy can’t live off the government alone," said Avery Shenfeld, chief economist at CIBC World Markets, referring to the government stimulus projects that will likely not last through the next year.

He also cautioned monthly statistics such as these can be misleading and that multiple-month analysis is more accurate. Shenfeld said that after July, Canada has gained a steady 25,000 jobs per month.

By anyone’s calculation, November’s job growth is nowhere close to employing all those who lost jobs during the entire recession.

The country has lost 321,000 jobs since October 2008 payday loans for self employed.

And by Statistics Canada’s calculations, even Ontario’s strong growth was not enough to dent the province’s 9.3 per cent unemployment rate.

Toronto managed to shave 0.1 per cent off its higher unemployment rate, bringing it to 9.5 per cent.

In Ottawa, Transport Minister John Baird said the federal government is pleased with the numbers, but added: "We can’t, you know, pop the champagne corks."

The majority of these jobs – more than 73,000 of them across the country – were in Ontario, Quebec and Alberta, and were mainly in the service sector, particularly education services.

However, this latter point could be what Shenfeld calls "statistical noise," or could reflect one of two things: either this is pickup from September’s academic hiring or it’s hiring to handle the surge of students fleeing the recession in postgraduate studies.

Full-time jobs increased by 39,000 and part-time unemployment grew by more than 40,000, all while the number of the self-employed dropped – which analysts said was positive, considering the self-employed are not as well paid.

On Dec. 1, Statistics Canada recorded third-quarter GDP growth of 0.1 per cent – 0.4 per cent at the annualized rate – which effectively put an end to the recession.

A recession is defined by at least two consecutive quarters of GDP decline.

In September, the Organization for Economic Co-Operation and Development said Canada’s unemployment would only worsen throughout 2010.

With files from Susan Delacourt

Source

NEW YORK–The nation's retailers suffered miserably through November as a modestly positive start to the holiday shopping season wasn't strong enough to offset weak spending the rest of the month.

After posting two consecutive monthly sales gains after more than a year of declines, merchants collectively posted a surprise 0.3 percent decrease for November, compared with a year ago when business plummeted to historic lows as spooked shoppers clamped down after the financial meltdown. The sales decrease is an ominous sign for an economy in the early stages of a fragile recovery.

Now, the big worry is whether consumers won't go back to the stores until the final hours before Dec. 25 as they wait for even bigger discounts in a season that many analysts had hoped would generate sales that would be unchanged from a year ago.

According to sales results announced Thursday, most stores including department store chains Macy's Inc.,Children's Place Retail Stores Inc., teen merchant Abercrombie & Fitch Co. and discounter Target Corp. posted sales declines. Warehouse club operator Costco Wholesale Corp. posted a sales gain, though it's smaller than expected. Another exception was Limited Brands Inc., which runs Victoria's Secret and Bath & Body Works. It reported a solid sales gain instead of the sales decrease that Wall Street projected.

The figures are based on sales at stores open at least a year and are considered a key indicator of a retailers' health because they exclude the effects of store expansions or closings.

The 0.3 percent drop, according to the International Council of Shopping Centers-Goldman Sachs Index, is far worse than the original 5 to 8 percent growth forecast, which was whittled down to 3 to 4 percent gain earlier this week. The weak results come on top of a 7.7 percent drop a year ago.

"This suggests that consumers are still under a significant amount of pressure from unemployment and job worries," Ken Perkins, president of retail research firm Retail Metrics.

After consumers showed some signs of life in September and October, merchants saw a sales lull throughout November until shoppers crowded stores and malls for the early morning specials for the day after Thanksgiving payday loan lenders.

According to reports, however, shoppers were picky about what they bought for themselves and others, focusing on discounted basics like microwaves, boots and bed sheets over the holiday weekend. The hot areas were electronics and online shopping, which is not reflected in most of Thursday's sales figures.

Economists say that depressed spending could persist for several years amid stubbornly high unemployment – now at 10.2 percent, the highest in 26 years.

Amid a challenging economy, Costco fared well, posting a 6 percent increase; results were less than the 8.1 percent gain that analysts surveyed by Thomson Reuters expected. However, half of that increase results from currency shifts and higher gas prices.

But discounter Target said that strong sales during Thanksgiving weekend were not enough to offset weak business the rest of the month, sending sales in stores open at least a year down 1.5 percent. The drop was bigger than the 0.5 percent drop analysts were expecting and were on top of the 10.4 percent decline in November 2008.

Discount retailer Fred's Inc. posted a 3.3 percent decline, a bigger drop than the 1.6 percent decrease analysts predicted. The retailer said its pharmacy department was strong in the month but discretionary spending by consumers remained weak.

Consumers "utilized layaways to a much greater extent than last year, deferring recognition of those sales until December," said CEO Bruce A. Efird.

Macy's sales in stores open at least a year fell 6.1 percent in November, a bigger than analysts expected.

Macy's said the month was hurt by a shift of a sales event and warm weather. Still, Macy's said it had strong traffic early on Black Friday, the day after Thanksgiving when many Americans go shopping. Analysts had expected a 3.1 percent drop.

Abercrombie & Fitch's woes continued, with sales falling 17 percent, much worse than the 9.3 percent decline analysts predicted.

But Limited posted a 3 percent sales gain, surpassing estimates from analysts who had expected a 2.5 percent decline.

Source

The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed “short sales” of homes and other loan modification alternatives to stem a rising tide of foreclosures.

The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury’s website.

Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.

The incentives, first announced in May, expand on the government’s Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started.

“While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve” or offer a modification, the Treasury said in its announcement.

Financial incentives for completing short sales or similar deed-in-lieu transactions — in which the deed is simply transferred to the lender — include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.

Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower’s credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.

But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.

Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt.

It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings.

In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.

Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.

The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.

Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October.

“If there was a short sale program that didn’t recognize the second lien holder position, it could have pretty damaging consequences for the industry,” Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week.

(Editing by Leslie Adler)

Read more

Howard Weaver, former vice president for news at The McClatchy Co., has been acting as an adviser for an online news startup by eBay Inc. founder Pierre Omidyar.

Omidyar and Randy Ching, both former eBay executives, established Peer News Inc. in 2008 with the goal of producing original, in-depth reporting and analysis of local issues in Hawaii. The Honolulu-based news service is set to make its debut early next year.

“We’ve been talking to a lot of people in the industry about journalism and how we might be able to have an impact, listening and learning as much as we can,” Omidyar wrote on his Peer News blog. “One of the people who has been a huge help in particular as we began to envision our local news service is longtime industry insider Howard Weaver …”

Peer News has announced it is searching for an editor, and Weaver has said on his blog that he’ll be part of the team looking at candidates. Weaver is not a candidate himself.

Weaver wrote about the startup last week:

“I’m interested for a lot of reasons, but I’d sum it up this way: the new venture intends to demonstrate that a digitally native, technologically fluent Web organization can profitably serve targeted readers who want sophisticated journalism focused on local civic affairs.”

Weaver, who twice led his hometown paper, the Anchorage Daily News, to Pulitzer Prize gold medals, retired from McClatchy (NYSE: MNI) about a year ago. Reached at his home in Sacramento, Weaver said he’s keeping busy in his “next phase” of life. When he’s not advising and blogging, he’s consulting, sitting on a company board of directors, having fun and “trying to write fiction.”

e.Republic takes on ‘Governing’

E.Republic Inc., a Folsom publishing and research company that focuses on government technology news and events for the government and education markets, just made its first acquisition, expanding beyond information technology to government policy.

E.Republic will buy “Governing” magazine from the Times Publishing Co guaranteed approval payday loans. The deal is expected to close Nov. 30. Details were not disclosed.

E.Republic has about 150 employees and continues to grow, unlike many news organizations that have laid off workers during the recession, said Paul Harney, chief operating officer for e.Republic. He said it’s been a tough year for the company’s print publications, except for “Emergency Management.” But e.Republic’s Web sites are “robust” and sponsorships for the company’s 160 events are strong, Harney said.

“People still want to meet face to face and talk business,” he said.

E.Republic also is home to the 10-year-old Center for Digital Government, which provides market research on technology and trends in local and state government.

Harney said e.Republic will be adding staff from “Governing” but it’s unclear yet how many. “Governing” will remain in its Washington, D.C., offices under the leadership of publisher Fred Kuhn.

Harney said the 80,000-circulation publication has been around for 20 years and has a loyal audience.

Extra! Extra! N&R moving

The Sacramento News & Review is finally making its move out of midtown from a rented space at 1015 20th St. to a once-vacant and dilapidated building at 1124/1132 Del Paso Blvd.

The free alternative weekly newspaper’s 60-member staff is set to move Dec. 10.

The newspaper received about $2 million in grants and loans from the Sacramento Housing and Redevelopment Agency to finance the purchase and renovation of the building, and another $2 million from a Small Business Administration loan. The project has been in the works for several years, said Sacramento News & Review president and chief executive officer Jeff vonKaenel.

“We’re very exciting about moving over,” he said.

Source

The U.K. inflation rate rose more than economists forecast in October, climbing for the first time in eight months as fuel costs and air fares climbed.

Consumer prices gained 1.5 percent from a year earlier, compared with 1.1 percent the previous month, the Office for National Statistics said today in London. The median forecast in a Bloomberg News survey of 30 economists was 1.4 percent. On the month, prices rose 0.2 percent.

Bank of England policy maker Andrew Sentance said in an interview yesterday that there may be “volatility” in inflation, which risks exceeding the 2 percent target after two years. He said it is still too soon to consider tightening policy after the central bank expanded its bond-purchase plan to 200 billion pounds ($336 billion) to combat deflation.

“This is the first of a period of sharp increases in headline inflation over the next few months,” James Knightley, an economist at ING Financial Markets in London, told Bloomberg Television. “Given the spare capacity in the economy, there’s no real need to tighten monetary policy any time soon. Inflation is likely to move quite sharply lower again through the back end of next year.”

The yield on the two-year government bond slipped 1 basis point to 1.32 percent. The pound fell 0.1 percent to $1.6788 as of 11:36 a.m. in London.

Bond Purchases

Policy makers decided this month to increase their program to buy bonds with newly created money by 25 billion pounds as they left they key interest rate at a record low of 0.5 percent. Bank of England Governor Mervyn King said last week that he has an “open mind” on whether to expand it further installment payday loans.

The inflation rate increased as prices of fuels and lubricants fell less this year than they did in the same month a year earlier, the statistics office said. The cost of second- hand cars increased by a record on the month because of a shortage of stock, while air fares climbed this year compared with a drop in 2008.

EasyJet Plc, Europe’s second-biggest discount airline, said today revenue per seat at constant currency, a proxy for ticket prices, rose 4.1 percent in the year ending Sept. 30 as the recession buoyed demand for low-cost carriers.

The Bank of England published new quarterly growth and inflation forecasts Nov. 11 showing the inflation rate won’t return to the 2 percent target until 2012, though will rise above the goal around the turn of the year as a temporary cut in value-added tax expires.

Inflation Pressure

“In the short term, inflation is likely to be below target, though we’re also likely to see a bit of volatility,” Sentance said in an interview with Bloomberg Television. “As the recovery develops, there will be some upward pressures on inflation.”

By contrast, Federal Reserve Chairman Ben S. Bernanke said yesterday that inflation “seems likely to remain subdued for some time” as reduced bank lending and a weak labor market restrain the pace of growth. The Fed’s preferred inflation gauge, which excludes food and energy prices, rose 1.3 percent in September from a year earlier, below the 2 percent goal preferred by the majority of Fed policy makers.

Source

A senior Citigroup Inc executive said the bank is comfortable with its valuation for an asset that one accounting expert expects to be written down.

Citigroup has a roughly $38 billion deferred tax asset, which essentially represents expected cash flow from future tax benefits. Accounting expert Robert Willens said on a conference call late last month that he expects the bank to write the asset down by about $10 billion in the fourth quarter. That would represent about 7 percent of the bank’s net worth as measured by the reported value of the company’s shareholder equity.

Any writedowns would sting Citigroup, which has taken $45 billion of government help in three separate rescue efforts. Taxpayers now hold about a third of the bank.

Speaking at a conference on Wednesday, Citigroup Vice Chairman Ned Kelly said the bank stands by its deferred tax asset valuation.

“We are comfortable with the valuation,” Kelly said, adding that the bank looks at its deferred tax asset at the end of each quarter quick cash advance. About $16 billion of the deferred tax asset must be realized by around 2016, and the rest has a much longer time frame, Kelly added.

Kelly was chief financial officer at Citigroup but stepped down over the summer soon after he was quoted in The Wall Street Journal describing the Federal Deposit Insurance Corp as the bank’s “tertiary regulator.” The newspaper article described how the FDIC was pushing for new leadership at the bank.

On Wednesday, in response to a question about whether U.S. regulators would be as harsh to banks receiving government aid as European regulators have been, Kelly pointed to Citigroup’s successful efforts to reduce its assets and said the bank is working well with the government.

“I think we have a very constructive relationship with all of (our regulators),” Kelly said.

(Reporting by Dan Wilchins; editing by John Wallace)

Read more

Major U.S. auto dealerships see only a grudging recovery in demand in 2011, a cautious outlook at odds with the consensus view that the battered industry could see a double-digit percentage rebound.

“We can feel that there is demand, but it is very cautious demand,” Asbury Automotive Group Chief Executive Officer Charles Oglesby said in an interview on Thursday.

Asbury, which ranks sixth in sales among U.S. dealerships, said it was basing its own planning decisions on the view that 2010 U.S. auto sales would be only flat with the 10.5 million vehicles projected for this year.

“While that may prove to be conservative, we feel that’s the prudent way to run the business,” Asbury Chief Financial Officer Craig Monaghan also told Reuters.

That view echoed the line taken earlier this week by Sonic Automotive. The No. 3 U.S. auto retailer also set its 2010 industry sales forecast at 10.5 million vehicles.

That is sharply lower than most industry forecasts, including those from major auto manufacturers.

CSM Worldwide has forecast industrywide U.S. sales of 11.8 million cars and light trucks for 2010, while J.D. Power is expecting 11.5 million.

Ford Motor Co, the only U.S. automaker to avoid bankruptcy and the most bullish in its projection for a recovery, has forecast sales of more than 12 million.

General Motors Co GM.UL has said it expects sales of about 11.5 million vehicles in the United States next year low fee payday advance.

The gap between the outlook of auto retailers and major manufacturers could be an issue for the industry as dealerships look to restock inventories that plunged to record lows this summer in the wake of the brief boom touched off by the U.S. government’s “Cash for Clunkers” sales incentive program.

Automakers are in the process of setting production plans for next year. If the industry fails to see the stronger growth expected, it could force automakers to discount more heavily, a step that those based in the United States have vowed to avoid.

Both GM and Chrysler went through government-funded bankruptcies this year to slash their operating costs and give them flexibility to run factories at lower volumes.

AutoNation CEO Mike Jackson said he believed the industry’s crisis this year and the changes made under pressure from U.S. officials had killed a failed “push” model in which automakers set output targets without regard to demand.

Jackson expects U.S. auto sales to recover to above 11 million vehicles in 2010, a level that he said was still deeply depressed by historical standards.

He said he was encouraged by “signs of life” in the market for financing near-prime and subprime borrowers and for underwriting vehicle leases. Last year’s credit crisis had shut down those riskier areas of the auto market. 

Read more

Japan and Australia outlined competing visions for an East Asian trade bloc during a 16- nation summit in Thailand, offering plans that differ on what role the U.S. will play.

Australian Prime Minister Kevin Rudd discussed his idea for an “Asia-Pacific Community” that would include the U.S. and India. Japan’s Prime Minister Yukio Hatoyama, who took power last month, suggested an “East Asian Community” whose membership has yet to be determined, foreign ministry spokesman Kazuo Kodama said yesterday.

“Both Japan and Australia proposed bigger communities, which is a test for us,” Thai Prime Minister Abhisit Vejjajiva said yesterday in a weekly interview on a channel operated by state-controlled MCOT Pcl. The Association of Southeast Asian Nations “must be firmly integrated when we enter a bigger community.”

The proposals, which included few specifics, underscore different views within the region on U.S. power and economic dominance. The model of relying on Western demand for local goods and services “will no longer serve us as we move into the future,” said Abhisit, the meeting’s host.

“Japan wants to stay a major player and keep China from dominating,” said Carlyle A. Thayer, a politics professor at the University of New South Wales in Canberra. “Australia is worried about American staying power in the region.”

Asean countries account for about half of the world’s population and a quarter of global gross domestic product.

‘Closely Discuss’

Japan will “closely discuss and coordinate” with the U.S., Kodama said yesterday without elaborating. China is “positive and open” to the establishment of an “East Asian community,” Assistant Foreign Minister Hu Zhengyue said two days ago.

The U.S. signed a friendship accord with Asean in July to bolster ties with an area that contains sea lanes vital to world trade, as well as coal, oil and other commodities. The treaty is a prerequisite for joining the East Asia Summit, which consists of the 10-member Asean, China, Japan, South Korea, India, Australia and New Zealand, which also took place yesterday in Thailand.

Border Disputes

In a bilateral meeting on the sidelines of the summit, Indian Prime Minister Manmohan Singh and Chinese Premier Wen Jiabao vowed to improve relations and work on “issues” such as border disputes. The two countries need to build “better understanding and trust” to keep relations “robust and strong,” Singh said, according to a statement from India’s Ministry of External Affairs.

Asean also set up its first human rights commission at the weekend’s meeting, one without any authorization to discuss country-specific violations. Human rights groups have faulted Asean for its reluctance to criticize members such as Myanmar that are accused of silencing dissent.

Myanmar authorities may consider easing their stance on the detention of opposition leader Aung San Suu Kyi if she continues to have a “good attitude,” Kodama told reporters, citing comments by Myanmar Prime Minister Thein Sein.

Rice Reserves

China, Japan, South Korea and Asean said they will expedite the development of permanent emergency rice reserves to ensure food security in times of crisis and disasters, according to a joint statement. China pledged 300,000 tons of rice.

Australia and New Zealand’s free-trade agreement with a group of Southeast Asian nations will take effect next year, Australia said yesterday. The deal, originally signed in February at an earlier Asean meeting, is designed to eliminate or lower tariffs on products such as coffee, dairy, minerals, cars and vegetables in the next 12 years.

Southeast Asian countries are “on track” to eliminate tariffs on most goods traded within the region by the beginning of 2010, Asean said in a statement yesterday. The group aims to form a free-trade area by Jan. 1 that would remove tariffs on more than 87 percent of imports, part of its efforts to create an economic zone modeled after the EU, without a common currency, by 2015.

Regional Groups

The Japanese and Australian proposals would build on existing regional groupings. Those include the 10-member Asean, the 21-member Asia-Pacific Economic Cooperation bloc set to meet next month in Singapore and the 27-member Asean Regional Forum that U.S. Secretary of State Hillary Clinton attended in July.

Rudd’s Asia-Pacific Community would include the U.S., Japan, China, India, Indonesia and “the other states of our region,” he said in a speech last year. Its purpose would be to cooperate on economic, political and security matters and dispel notions that a conflict in Asia may be inevitable, he said at the time.

Hatoyama, who came to office Sept. 16, said in a speech at the United Nations a week later that he would strive to create an East Asian community similar to the European Union. The goal was seen as potentially excluding the U.S. after he published an opinion article in the New York Times in August arguing that “the era of U.S.-led globalism is coming to an end.”

Besides Thailand, which holds Asean’s rotating chairmanship, the group includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore and Vietnam. A wider East Asian free trade area may emerge before a new regional community is formed, Abhisit said yesterday.

Source

Tech stocks rallied on Wednesday after bellwether Intel Corp reported quarterly earnings and a revenue forecast that blew past expectations, buoying investor hopes of a recovery.

Investors have been scrutinizing the battered tech sector for signs of strength after the economic crisis depressed demand and severely crimped corporate spending.

Advanced Micro Devices Inc and Nvidia Corp should see a direct impact from Intel’s strong report, and there could be secondary impact on companies like Intersil Corp, said Oppenheimer & Co analyst Rick Schafer.

“It sets the tone. It sets the pace for semiconductor companies, particularly those with PC exposure.”

“Valuations for chip stocks look attractive, particularly when you consider we believe there is a positive bias, or an upward bias to earnings,” he said.

Intel’s shares rose more than 2 percent on Wednesday after analysts raised their price targets for the stock following the strong quarterly earnings report and revenue forecast on Tuesday. The shares are trading at roughly 31 times forward earnings, compared with a semiconductor industry figure of 17 times forward earnings.

Chief rival AMD is not currently profitable. Tech companies Google Inc and International Business Machines Corp are respectively trading at 24 times forward earnings and 13 times forward earnings. All three companies are due to report on Thursday.

Despite Intel’s strong results, some analysts were cautious. Robert W. Baird and Co analyst Tristan Gerra reiterated his neutral rating on the company.

“We expect gross margin to peak in this December quarter, and historically, the stock peaks when gross margins peaks,” he said.

Gerra said in a note that Intel’s business is still highly sensitive to consumer demand and the company’s push into smartphones and set-top boxes is “unlikely to materially impact revenue growth in 2010-2011.”

UBS raised its price target for Intel shares to $27 from $24 after the report while Lazard Capital increased its price target to $26 from $24.

“Intel is benefiting from strong demand for retail notebooks and Nehalem servers. With better control of costs and prices, we see a structural improvement in Intel’s margin profile,” Needham & Co analyst Edwin Mok said in a research note in which he announced a price target increase to $28.

Computer maker Dell Inc saw its shares rise more than 2 percent after Intel forecast fourth-quarter revenue of $10.1 billion, well above Wall Street expectations of $9.5 billion. Microsoft Corp shares were up 1.5 percent.

In 2010, Mok said, technology investors could look forward to a boost in computer sales after Microsoft releases its Windows 7 computer operating system on October 22.

“Beyond the near-term, we believe Windows 7 will drive a much-needed corporate refresh in 2010, leading to further revenue growth and substantially higher earnings,” Mok said.

FBR Capital Markets analyst Craig Berger said Intel’s fourth-quarter revenue guidance “is back to levels achieved … before the credit driven financial meltdown.” 

Read more

While optimism among small U.S. businesses perked up slightly in September, owners saw little to celebrate as they planned to cut inventories and trim their workforce, a survey released on Tuesday showed.

The National Federation of Independent Business said its small business index for last month rose 0.2 point to 88.8 and was 7.8 points higher than the survey’s second-lowest reading reached in March.

“The good news is the index didn’t decline,” said William Dunkelberg, chief economist for the group. “The bad news is that improvements were far less than what we hoped for.

“The job generating machine is still in reverse,” said Dunkelberg. “Sales are not picking up, so survival requires continuous attention to costs, and labor costs loom large.”

More firms plan more inventory reductions than plan to invest, and more owners plan to trim their workforce than plan to increase employment, NFIB said.

Credit markets are expected to remain difficult for those wanting to borrow, but with inventory investment and capital spending plans near historic lows, it is clear that loan demand — not the supply of credit — is weak, the trade group said no fax pay day loans.

There is not a lot of optimism about the economy, which is one reason why hiring and spending plans remain depressed, Dunkelberg said.

Only 7 percent think the current period is a good time to expand, the group said.

“Although third-quarter real GDP growth will likely be over 3 percent, the surge hasn’t shown up on Main Street as yet,” Dunkelberg said.

Of the small business owners polled, 32 percent said their biggest problem was a dearth of customers.

(Reporting by Nancy Waitz; Editing by Kenneth Barry)

Read more