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BRUSSELS – Markets somehow expect the European Union to backstop Greece’s sagging finances. But with officials denying a bailout is needed, the precise path out of the crisis for the EU’s incoming new leadership remains fogged with uncertainty.

The European Union’s own government-backed lender said Tuesday that it cannot bail out Greece or any other European country that can’t pay its debts.

The European Investment Bank said in a statement that it could “only finance economically viable projects” and that its rules would not allow it help an EU nation cover a budget deficit.

That narrowed the options as Europe’s currency union faces an unprecedented crisis as financial markets and the euro currency have tumbled in recent weeks — with the euro now trading near an eight-month low against the U.S. dollar — on worries that Greece might need financial rescue to cope with its soaring debt and deficit.

European stocks inched up on Tuesday, and the euro rose by three-quarters of a cent to $1.3725, on speculation that heads of state and government will have to announce some measure to help Greece when they meet at a summit in Brussels on Thursday.

Fears about Greece’s financial stability have hiked the cost of Greek borrowings and upped the pressure on other countries in the 16-nation eurozone that are running massive deficits, such as Portugal, Spain and Ireland.

Jittery markets are piling the pressure on EU nations to state clearly what they would do if a euro member is likely to default. Officials have not managed to calm these market worries with repeated assurances from both the EU and the Greek government that Greece can pull itself out of its debt crisis with a harsh austerity program of cuts to public spending that have already triggered strikes and protests.

The crisis shows one of the vulnerabilities of the 10-year old currency union, in that it lacks an effective central authority to enforce limits budget spending. With budgets in the hands of 16 separate governments, the euro relies on a set of rules limiting deficits to 3 percent of gross domestic product — rules that have been

Greek Prime Minister George Papandreou held government talks Tuesday on accelerating those cuts with reforms to pensions and wages — an effort to prove to markets that Greece can and will make long-term spending reductions and won’t need a bailout.

The EU’s executive commission has backed the Greek program and says no bailout will be needed. European Union nations say the same, rejecting reports that they are talking about possible bailout plans paydayloan.

European Central Bank member Juergen Stark even said last month that “markets are deluding themselves if they think that member states will open their wallets to save Greece.”

But they may have to if the crisis proves contagious and markets see defaults as likely for other eurozone nations.

EU leaders meet Thursday to talk about ways to speed up economic growth — but Greece is not officially on the agenda.

The bailout options are limited — but not impossible.

European Union agencies — such as the European Commission — can’t take on debt for governments. Neither can the EIB, it said. It has euro75 billion ($103 billion) to lend for infrastructure and economy projects, usually in poorer EU nations.

Three EU members that don’t use the euro — Hungary, Latvia and Romania — have secured bailouts from the International Monetary Fund and the EU. But EU officials say that IMF help won’t be needed for a euro country.

That leaves the ball in the court of EU governments. Legally, governments can do it if a member state “is seriously threatened with severe difficulties caused by … exceptional occurrences beyond its control.”

What remains is deciding how to do it — and what taking on Greek debt could do to richer nations.

EU governments could cut the costs of Greek spreads overnight by agreeing to jointly underwrite Greece’s debt — but this could hike the cost of their own borrowings.

They could also provide a loan to Greece — but it is uncertain that they could or would provide enough to give Greece some long-term relief. Greece is looking to borrow some euro51 billion from bond markets to pledge its budget gap this year.

Another option would be bonds, issued jointly by European governments to raise money from markets. EU and ECB officials have talked this down but European socialists are keen — including Greece’s current government — because it could ease harsh spending cuts.

What is clear is that EU governments do not want to let Greece off the hook — and that any option would force Greece to make long-delayed reforms to rife tax evasion, rigid labor market rules and an inefficient and high-spending pension and health care system.

EU searches for way out of debt crisis

Hot News: Fashioning rescue not easy for euro zone

TOKYO — Toyota plans to recall at least 311,000 of its 2010 Prius hybrid models after receiving a flurry of complaints about the vehicle’s brakes, a person briefed on the decision said late Sunday.

The decision is to be announced early this week, this person said. It comes after Toyota’s recall of about eight million cars worldwide over gas pedals that could stick or become caught on floor mats. The size of the recalls and questions about Toyota’s slow response to safety concerns have stung the automaker, which built its reputation on vehicle quality.

Regulators in the United States opened an investigation into the brakes of the 2010 Prius last week after complaints from drivers who said they had been briefly unable to stop their cars on uneven surfaces. The Japanese government has also said it is looking into the matter after similar complaints were reported in Japan.

Toyota executives acknowledged on Thursday that the company had identified a flaw in the car’s braking system and corrected it for Priuses built since late January, which would not be part of the recall. The Prius, which runs on a combination of gasoline and electric power, was redesigned for the 2010 model year.

Toyota sold about 311,000 Priuses for the 2010 model year as of the end of December, including 103,000 in the United States and 176,000 in Japan.

An announcement will come early this week and cover all regions where the latest model has been sold, said the person briefed on the plan, who was not authorized to speak on the record small personal loans.

The automaker is also looking into the two other hybrids with the same braking system — the Lexus HS250h and a model sold in Japan, the Sai — to determine whether they are at risk.

The 2010 Prius has an overhauled regenerative brake system different from those in previous models. Toyota says the 2010 model’s system increased fuel efficiency.

With regenerative braking, energy from the wheels is used to help recharge the car’s battery. The car also has an antilock brake system.

The Prius and other hybrid models also rely on electronic systems that combine regenerative braking with conventional brake pads, so the battery can absorb as much energy as possible while the pads do most of the work of stopping the car.

Toyota has determined that the problem occurred as the car switched to conventional from regenerative brakes just as the antilock brake system kicked in.

Toyota’s president, Akio Toyoda, apologized for the recent recalls at a news conference on Friday and said the company would cooperate fully with American authorities investigating the matter.

In Tokyo on Monday, Toyota shares were up in early trading.

Toyota Is Expected to Add 2010 Prius to Recalls

NEW YORK – Insurer Aetna says its fourth-quarter profit fell 15 percent, as it continued to struggle with pricing problems and rising medical costs that plagued it in previous quarters.

The Hartford, Conn., insurer says it earned $165.9 million, or 38 cents per share, in the three months that ended Dec. 31. That’s down from the $194.7 billion, or 42 cents per share, in the same period the prior year. Excluding one-time items it says profit totaled 40 cents per share. Revenue rose 13 percent to $8 free credit report and score.76 billion.

Analyst polled by Thomson Reuters forecast a profit of 42 cents per share on $8.65 billion in revenue.

Aetna says it spent 85.4 percent of its premium revenue on medical care. The company is the third largest publicly traded health insurer based on medical enrollment.

Aetna 4Q profit falls 15 percent on medical costs

TOKYO/DETROIT (Reuters) – Toyota Motor Corp is preparing to recall up to 300,000 of its latest model Prius hybrid cars due to braking problems, in a further blow to the reputation of the world's largest car maker.

Toyota is already recalling some 8 million cars around the world for problems related to unintended acceleration which have been linked to up to 19 crash deaths in the United States over the past decade.

Safety regulators in both the United States and Japan have launched probes into the braking problems with the Prius, a pioneer in gasoline-electric hybrids and Japan's top-selling car last year.

Analysts said the latest problems were a further unwelcome development for Toyota, but would not necessarily cause permanent damage it its image.

"If Toyota can fix the faulty brakes properly and quickly, I don't think it will have any long-term impact on the brand," said Zhang Xin, an analyst with Guotai Junan Securities in Beijing. "After all it's been so popular in North American for so many years."

In what could be deemed a broader problem with hybrid cars, Ford Motor Co said on Thursday it would roll out a software patch for consumers to address similar problems with braking reported on its Ford Fusion and Mercury Milan models.

A source with knowledge of Toyota's discussions with Japanese safety authorities told Reuters on Friday the company was leaning toward issuing a recall, even if the transport ministry does not technically consider the issue to be a safety hazard.

Since its launch last May, Toyota has sold 311,000 units of the newest version — around 200,000 in Japan and another 103,200 in the United States.

HALO DENTED

Toyota's problems have cast a pall over its reputation for quality, hit sales and profits and knocked about $30 billion, or about a fifth, off its market value.

The Prius has emerged as a kind of environmental "halo car" for Toyota, an icon of green design with an intense following among loyalists, which has lifted the public image of the whole company.

"I feel a bit anxious," said 61-year-old Yasuo Ishizuka, who drives a Prius taxi in Toyko. "As a taxi driver security is very important to me and hearing that such troubles occurred to brakes, I cannot drive feeling safe anymore bad credit payday advance."

Both Toyota's and Ford's hybrids capture the energy from braking to recharge an on-board battery to boost mileage from its gasoline engine.

On bumpy roads and on ice, the regenerative brakes appear to slip, allowing the vehicle to lurch forward before the traditional brakes engage, Prius owners have said.

The U.S. National Highway Traffic Safety Administration said it has received 124 complaints about momentary braking problems after motorists rolled over bumps or potholes with the third-generation Prius.

Four crashes were alleged by motorists to have been caused by the problems, NHTSA said.

Both Toyota and Ford said they had come up with software fixes for the problem.

Ford's action came after Consumer Reports said one of its test engineers had experienced what appeared to be a loss of braking power with a Fusion hybrid.

Ford said it was aware of one minor accident related to the braking problem but no injuries.

The No. 2 U.S. automaker by sales notified its dealers of the problem in October but not the public because it did not believe the glitch represents a failure of the brakes.

Ford shares were ended almost 5 percent lower on Thursday.

Shares in Toyota picked up from a 10-month low on Friday in Tokyo after it reported better-than-expected quarterly results and raised its outlook despite its growing recall-related problems.

"It looks like some investors find Toyota shares attractive at current levels as the stock has fallen to about one times its price to book ratio," said Eiji Hakomori, analyst at Daiwa Securities Capital Markets.

The stock ended up 1.1 percent at 3,315 yen defying a sharp drop in other auto stocks hit by the stronger yen.

"The issues facing Toyota are not going to be solved that easily," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities. "What we're seeing today is a technical rebound because it was sold so much."

(Additional reporting by Chang-Ran Kim, Yumiko Nishitani and Elaine Lies in Tokyo; Fang Yan in Shanghai; John Crawley in Washington; Writing by Lincoln Feast; Editing by Jean Yoon)

Toyota eyes Prius recall; braking woes hit Ford hybrids

NEW YORK – Finding accusations “speculative and flimsy,” a judge has dismissed civil securities fraud charges against a New York brokerage firm and its executives that resulted from a probe into Bernard Madoff’s epic fraud.

The charges brought by the Securities and Exchange Commission were dismissed Monday against Cohmad Securities Corp., its chairman, Maurice “Sonny” Cohn, his daughter, Chief Operating Officer Marcia Cohn, and vice president and broker Robert Jaffe.

U.S. District Judge Louis L. Stanton gave the SEC permission to refile the charges but only if it can provide facts to back them up.

“Nowhere does the complaint allege any fact that would have put defendants on notice of Madoff’s fraud,” Stanton wrote. “Rather, the complaint supports the reasonable inference that Madoff fooled the defendants as he did individual investors, financial institutions and regulators.”

Madoff, 71, is serving a 150-year prison sentence after admitting that he operated a giant Ponzi scheme for at least two decades, cheating thousands of individuals, charities, celebrities and institutional investors out of billions of dollars.

Clifford Thau, a lawyer for Cohmad and the Cohns, welcomed the ruling, saying in a statement: “We remain confident that the SEC will not be able to allege any new facts that will cure the deficiencies that Judge Stanton found in the SEC’s complaint.”

SEC spokesman John Nester in Washington said, “We are reviewing the order and will proceed accordingly.”

A message seeking comment from a lawyer for Jaffe wasn’t immediately returned.

Britain’s Serious Fraud Office, meanwhile, said Tuesday it will take no action against Madoff Securities Ltd., the British arm of Madoff’s investment operations.

The office said there was “insufficient evidence to provide a realistic prospect of conviction” against either the company or its directors after it concluded a yearlong investigation.

Criminal and civil investigators have been probing the history of the Madoff company, his employees, his relatives and anyone who promoted his private investment business to find those culpable for the financial disaster that was revealed by Madoff in December 2008 free business cards.

Last year, the SEC accused the defendants in a lawsuit of securities fraud, saying they collected several hundred million dollars in fees from Madoff to solicit affluent though financially unsophisticated people to trust their money to him.

The regulators said the defendants were crucial to Madoff’s success because they gave the impression that one could only invest with Madoff as a favor through special access.

In his ruling, the judge noted that Madoff had operated his business since 1960 and that Maurice Cohn is Madoff’s former neighbor.

Cohmad was formed in 1985 and Marcia Cohn joined in 1988, three years before Madoff says he began operating his business as a fraud, the judge said. He also noted that the Cohns worked in Cohmad’s New York office on the same floors as Madoff’s legitimate market-making business.

Jaffe, who lives in Palm Beach, Fla., previously headed Cohmad’s Boston office. He is a son-in-law of Carl Shapiro, a prominent Boston-area businessman and philanthropist whose family was said to have lost hundreds of millions of dollars from their investments with Madoff.

In its complaint, the SEC said Madoff directed Cohmad and the Cohns to maintain a cloud of secrecy about his business and banned all written marketing materials, cold calls and e-mails. It said he also told the defendants he would not accept investors from the finance and banking industry because sophisticated investors ask too many questions.

The Cohns countered the allegations by saying an aura of exclusivity is a common marketing tactic.

The judge rejected the SEC’s conclusion that the defendants’ fraudulent intent could be inferred from allegations that Cohmad failed to disclose the full extent of its relationship with Madoff in its regulatory filings and books and records.

He said the argument “that that concealment was because any defendant knew that Madoff was committing fraud is speculative and flimsy.”

Civil Madoff-related fraud charges dismissed

PARIS — Nearly 10 years after a Concorde jet crashed on takeoff from Charles de Gaulle Airport outside Paris, Continental Airlines and five people went on trial on Tuesday in a French criminal court, accused of manslaughter in the deaths of 113 people.

A 2002 report by French air accident investigators concluded that a small strip of metal had fallen off a Continental DC-10 that took off minutes earlier, and that the piece punctured a tire of the Air France Concorde as it accelerated down the runway on the afternoon of July 25, 2000. The damaged tire disintegrated in seconds, investigators said, sending shards of rubber into the fuel tanks and causing a catastrophic fire. All 109 passengers and crew were killed, along with 4 people on the ground.

Continental has always strenuously denied responsibility for the crash, and the airline’s lawyer, Olivier Metzner, plans to present testimony from more than 20 witnesses that he said would prove that the supersonic jet caught fire several seconds before it reached the titanium metal strip.

The trial is likely to continue until the end of May, with a verdict expected in the fall. Continental faces a fine of nearly $500,000, and its employees — an American mechanic and his supervisor — could receive suspended sentences of up to three years in prison if convicted, Mr. Metzner said.

Prosecutors will also seek to implicate two employees of Aérospatiale, the French manufacturer that took part in creating the Concorde, as well as an official of France’s civil aviation authority responsible for regulating the jet’s safety. A French judicial inquiry determined that the Concorde’s makers had been aware since 1979 of a design flaw that left the plane’s fuel tanks vulnerable to external shocks.

The decision to bring criminal charges in the Concorde case has raised hackles among airlines and aviation safety experts worldwide, who contend that the threat of prosecution can dissuade some witnesses from cooperating in crash investigations guaranteed approval cash advance loans. France is one of a handful of countries that routinely seek criminal indictments in transportation accidents, regardless of whether there is clear evidence of criminal intent or negligence.

Such cases do not always result in convictions. In 2006, a French court acquitted five former aviation officials and a former Airbus executive of all charges linked to the 1992 crash of a passenger jet in the mountains near the German border, which killed 87 people.

Air France itself is not accused of wrongdoing and has joined the case as a civil party in the hope of recouping financial damages from Continental. The airline reached a $150 million civil settlement in 2001 with the families of the victims, most of them German citizens.

The crash of Air France Flight 4590 was the only fatal accident involving the Concorde, which first took to the skies in 1969. The disaster hastened the end of commercial operations of the plane, which had become a financial burden for its two operators, Air France and British Airways. Both airlines took the plane out of service in 2003.

Only 20 of the planes were ever built, and just 14 entered commercial service with Air France and British Airways, catering to affluent trans-Atlantic travelers ranging from investment bankers to rock stars. With a maximum cruising speed of 1,350 miles per hour, the Concorde was capable of flying from London to New York in less than three and a half hours.

Trial Opens in Concorde Disaster

LOS ANGELES — Affirming her role as one of the reigning queens of pop music, Beyoncé was the top winner at the 52nd annual Grammy Awards on Sunday night, taking six prizes, including song of the year for her inescapable hit “Single Ladies (Put a Ring on It).”

But she shared the spotlight with Taylor Swift, the poised 20-year-old country-pop singer, who was crowned a new superstar with four wins, including the top prize, album of the year, for “Fearless.”

“This is the story we’re going to be telling over and over again — in 2010, we got to win album of the year at the Grammys,” she said while accepting the award.

After a punishing decade for the music industry, the voters of the Recording Academy, the organization that bestows the awards, reversed its recent trend of showering acclaim on modest sellers, sticking instead to the biggest names in entertainment. Right behind Beyoncé, with three awards each, were the Black Eyed Peas, a powerhouse of radio-friendly hip-hop, and the alternative rock band the Kings of Leon.

Kings of Leon won record of the year for the boogieing blues-rock song “Use Somebody.” (The record category is for performers; song of the year recognizes songwriters.) Beyoncé’s “Single Ladies” also took best R&B song and best female R&B performance, and her “Halo” won best female pop vocal performance.

The Black Eyed Peas won for best pop vocal album (“The E.N.D.”) and best pop performance by a duo or group, and the R&B singer Maxwell won best male R&B performance and best R&B album (for “BLACKsummers’ Night”). The Zac Brown Band, a country-rock group from Atlanta, won best new artist, though since 2004 it has released three albums. The ceremony, packed with splashy performances, celebrated the power of pop celebrity in an age when the foundations of the recording industry are being shaken, and it linked older, established stars with their younger progeny, whose record sales may not be as great but are reaching for the same level of fame.

Lady Gaga opened the show, held at the Staples Center, in a duet with Elton John, both singers covered in soot as they faced each other for a medley of Lady Gaga’s “Speechless” and Mr. John’s “Your Song.” It was a typically meta statement by Lady Gaga about her travails through the machinery of “the fame factory,” as the stage set proclaimed. “How wonderful life is with Gaga in the world,” Mr. John sang.

Their performance also hinted at the prominence of powerful female pop stars, and ones who are particularly young for a ceremony that often favors established, midcareer artists. There is Ms. Swift and then there’s Lady Gaga, whose real name is Stefani Germanotta. She is only 23 and has rocketed to pop fame in less than two years (though she ended up with only two awards). Beyoncé, a seasoned veteran — her wins this year brought her Grammy total to 16, along with her awards with Destiny’s Child — is 28. (Ms. Swift had a cross-generational superstar moment of her own, dressed in virginal white while singing Fleetwood Mac’s “Rhiannon” and her own “You Belong With Me” with Stevie Nicks, whose dress was black as a black cat.)

For Ms. Swift, the Grammys capped a remarkable year. Her album “Fearless” (Big Machine) was the biggest seller of 2009, and she has taken trophies at almost every other big awards show, including the MTV Video Music Awards and the Country Music Association Awards. When “Fearless” took the Grammy for best country album, she gushed, “I feel like I’m standing here accepting the impossible dream.”

The Grammys are voted on by about 12,000 members of the Recording Academy, who must have credits on at least six commercially released tracks to qualify. To avoid competition with the 2010 Winter Olympics, which begin on Feb. 12 in Vancouver, British Columbia, the awards are being held earlier in the year than they ever have been before, and as a result the window of eligibility for nominations had to be adjusted to 11 months, from Oct us fast cash. 1, 2008, to Aug. 31, 2009.

That change disqualified a number of major albums released in September, including releases by Jay-Z, Barbra Streisand, Miranda Lambert and Mariah Carey. But that did not prevent Jay-Z from taking three for singles, including best rap song and best rap/sung collaboration for “Run This Town,” and best rap solo performance for “D.O.A. (Death of Auto-Tune).”

For all the power of youth, the Grammys still gave pride of place to older legends. A 3-D tribute to Michael Jackson featured Smokey Robinson, Celine Dion, Jennifer Hudson and Carrie Underwood singing along with Jackson’s recorded voice in the ecological hymn “Earth Song.” Jackson’s two oldest children, Prince and Paris, accepted their father’s lifetime achievement award. “In all his songs, the message was simple: love,” Prince said, haltingly. “We will continue to spread his message and help the world. Thank you.”

The memory of Jackson, who died in June, hung over the ceremony as one of its most beloved recipients and as a symbol of lost megacelebrity. He was the best-selling artist of 2009 by a wide margin; his 1982 album, “Thriller,” stands as one of the most popular recordings ever made; and in 1984 he won eight Grammys.

Other eye-catching performances included Pink singing “Glitter in the Air” suspended acrobatically from a snow-white swatch of silk, dripping what looked like sparkling water over the Staples Center’s orchestra seats. Beyoncé sang a medley of her song “If I Were a Boy” and Alanis Morissette’s girl-power anthem “You Oughta Know,” which won two Grammys in 1996.

Mary J. Blige and Andrea Bocelli sang Simon and Garfunkel’s “Bridge Over Troubled Water,” with proceeds from a future iTunes download going to Haiti relief efforts. Bon Jovi, in this year’s Grammy Internet experiment, played a medley that included “Living on a Prayer” by fans’ online requests.

Lifetime achievement awards were also given to Leonard Cohen, André Previn, Loretta Lynn, the 89-year-old jazz trumpeter Clark Terry, the 94-year-old blues guitarist David (Honeyboy) Edwards and Bobby Darin (who died in 1973).

Of the 109 award categories this year, 100 were given out in a brisk and far less glamorous pretelecast ceremony. Many winners — including Lady Gaga, who won two early prizes — did not appear, but one who did was Neil Young, who won his first-ever Grammy. Along with Gary Burden and Jenice Heo, Mr. Young, under the title of art director, won best boxed set or special limited edition package, for his mammoth “Neil Young Archives Vol. 1 (1963-1972)” project. (He was held off from winning a Grammy that recognized his music; Bruce Springsteen’s “Working on a Dream” beat Mr. Young’s “Fork in the Road” for best solo rock vocal performance.)

Also in the pretelecast ceremony, Alison Krauss won her 27th Grammy as a participant in the album “Yo-Yo Ma & Friends: Songs of Joy and Peace,” tying her with Quincy Jones for the most lifetime wins of any living musician. Phoenix won best alternative album for “Wolfgang Amadeus Phoenix” (Loyaute/Glassnote).

For all its big names and elaborate, Las Vegas-esque productions, the Grammys can also cast a light on the shoestring budgets that most musicians have adapted to. Accepting an award during the pretelecast ceremony for best-spoken-word album for children, Buck Howdy, a singer-songwriter from San Diego, commented that it cost him less to produce his album than it did to pay for valet parking at the Grammy nominees’ dinner.

Biggest Haul at Grammys Goes to Beyoncé

NEW YORK – New copies of Hilary Mantel’s “Wolf Hall,” Andrew Young’s “The Politician” and other books published by Macmillan were unavailable Saturday on Amazon.com, apparently the biggest rift yet in the ongoing dispute over e-book prices.

An official with knowledge of the dispute said the two sides were in discussions, but would not say why Amazon.com Inc. took such a public step. The official asked not to be identified, citing the sensitivity of the talks.

Macmillan and other publishers have criticized Amazon for charging just $9.99 for best-selling e-books on its Kindle e-reader, a price publishers say is too low and could hurt hardcover sales.

For its part, Amazon wants to keep a lid on prices as competitors line up to challenge its dominant position in a rapidly expanding market no credit check payday loan. The company did not immediately return messages seeking comment Saturday.

The latest and most talked about challenger is Apple Inc., which just introduced the long-awaited iPad tablet computer and a new online book store modeled on iTunes. Apple CEO Steve Jobs, in an interview with The Wall Street Journal, suggested publishers may offer some e-titles to Apple before allowing them to be sold on Amazon.

___

AP Business Writer Andrew Vanacore in New York contributed to this report.

Books pulled from Amazon in pricing dispute

DETROIT – Toyota Motor Corp. says it has figured out how to fix a problem with sticking accelerator pedals and will update employees with details.

The company said in an e-mail to workers Thursday night that it presented a remedy to federal regulators.

The e-mail obtained by The Associated Press says that plans are being developed on a variety of fronts. The company says it will update workers on Friday.

The company says its engineers are working around the clock to fix the problem in eight of its models, including the top-selling Camry midsize sedan no faxing payday loan.

Toyota says accelerators rarely stick. But earlier this week the company halted sales and production of the models. It has recalled at least 2.4 million cars and trucks in the U.S., Europe and China because of the problem.

Toyota finds fix for gas pedals; update due Friday

Hot News: Disappointing Economic Data Push Markets Lower

The Boeing Company posted a bigger-than-expected fourth-quarter profit on Wednesday and said testing of its two newest planes was on track.

Boeing also said it would not scale back aircraft production, which some had feared. Its forecast for 2010 profit was less than analysts had expected, but shares of Boeing rose $4.22, or 7.3 percent, to $61.93 on Wednesday.

Boeing said it earned $1.27 billion, or $1.75 a share, in the fourth quarter, reversing a loss of $86 million, or 12 cents a share, a year earlier. Revenue rose 42 percent, to $17.94 billion from $12.66 billion.

Results in last year’s fourth quarter were constrained by a strike and a charge for delays on the 747-8 plane.

Operating profit at Boeing’s commercial airplane division rose to $1.02 billion, reversing a year-earlier loss of $968 million.

Operating profits in Boeing’s military unit fell 6 percent, to $829 million.

Boeing, which is based in Chicago, gave a cautious outlook for 2010 after dealing with program delays and declining orders in 2009 payday loan companies. It expects to earn $3.70 to $4 a share this year. Wall Street analysts had forecast $4.26 a share.

Boeing’s new 787 flew for the first time last month, and flight testing is under way on the first two planes. W. James McNerney, the chief executive, said the plane was on track to meet its weight goals, an aspect that had been a concern of analysts.

“We don’t anticipate any major modifications to the airplane,” Mr. McNerney said.

Boeing said it planned to fly its new 747-8 “in the near future.” The new version of its 41-year-old plane is longer and can fly farther than its predecessors. Boeing plans to deliver a handful of both the 747 and the 787 by the end of this year.

Plane Tests On Track, Boeing Says

PARIS — General Motors said Tuesday it had struck a preliminary deal to sell Saab to Spyker Cars, a tiny Dutch maker of high-end sports cars, saving the Swedish automaker from what seemed like certain extinction after earlier bids for it collapsed.

Under the preliminary terms of the deal, Spyker will give G.M. $74 million in cash and $326 million in preferred shares of the new, combined Saab-Spyker entity.

Through the lengthy negotiations, G.M. had been seeking roughly $200 million in cash for Saab. In 1990, G.M. paid $600 million for half of Saab, and anted up $125 million in 2000 for the rest of the company.

“Today’s announcement is great news for Saab employees, dealers and suppliers, great news for millions of Saab customers and fans worldwide, and great news for G.M,” said John Smith, General Motors’ vice president for corporate planning and alliances.

“General Motors, Spyker Cars, and the Swedish government worked very hard and creatively for a deal that would secure a sustainable future for this unique and iconic brand, and we’re all happy for the positive outcome,” Mr. Smith said.

G.M. said the deal was expected to close in mid-February and that the wind-down process at Saab would be halted immediately.

G.M. had begun the process of shuttering Saab’s production line and other facilities in Trollhattan, Sweden, at the beginning of the year. The deal with Spyker, in addition to halting that process, will buy time for Saab to begin rolling out new cars.

It was the latest turn in a saga that had riveted workers and politicians alike in Sweden, as well as among Saab’s famously devoted customer-base.

Still, it will be an uphill battle for Saab to survive over the long term, auto experts said, noting that just finding a buyer took more than a year for G.M. Amid the uncertainty over the company’s survival, sales plunged 50 percent in the first half of 2009, to 24,000 cars, far too slow a pace for Saab to operate profitably.

Even so, taking over Saab will be a huge leap for tiny Spyker, which sells 30 to 50 made-to-order cars a year for about a quarter-million dollars each. In 2008, Saab produced more than 90,000 cars. And while Saab has 3,400 workers, mainly in Trollhattan, Spyker has just 110.

In part, the deal depends on a loan of €400 million, or $xxx, from the European Investment Bank which backers hope the Swedish government will guarantee payday loan with savings account.

“Throughout the negotiations, G.M. has always had the hope to find a solution for Saab that would avoid a wind down of the brand,” added Nick Reilly, the president of G.M. Europe. “We’ve worked with many parties over the past year, including governments and investors, and I’m very pleased that we could come to such a good conclusion, one that preserves jobs in Sweden and elsewhere. G.M. will continue to support Saab and Spyker on their way forward.”

An earlier bid from Spyker was rejected by G.M. in late December because G.M. was uncomfortable with Spyker’s Russian backers, according to several people familiar with the negotiations who insisted on anonymity because they were not permitted to comment publicly.

The biggest investor in Spyker is the Russian bank Convers Group, which is controlled by Alexander Antonov. In March, Mr. Antonov was shot seven times and reportedly lost a finger in an attempt on his life in Moscow. No arrests have been made. His son Vladimir, 34, is a top executive at Convers and the chairman of Spyker.

In the first half of 2009, Spyker borrowed €11.6 million from Bank Snoras, a Lithuanian bank also controlled by the Antonovs.

After G.M’s initial rejection, however, Victor Muller, Spyker’s chief executive, crafted a new package that did not rely as heavily on Russian financing and addressed G.M.’s fears that Saab’s latest technology could fall into the hands of Russian competitors.

Despite Saab’s huge losses over the last decade, its stylish yet idiosyncratic cars have drawn a loyal following in northern Europe and the United States, especially the northeast. For Saab fans, the Spyker acquisition should allow Saab to roll out a new version of its 9-5 sedan, the luxury model’s first update in 12 years. If it does indeed arrive in showrooms this spring, the new model promises a return to Saab’s Swedish roots as well as a price tag in the $40,000 range, enabling it to compete with rival offerings from BMW and Audi.

G.M. Strikes Deal to Save Saab

Hot News: Mamma Mia! ABBAWORLD theme park opens in London

LONDON (Reuters) – Oil prices slipped slightly toward $74 a barrel on Monday, nearing a one-month low, after a U.S. proposal to toughen bank trading rules and on continuing signs of weak demand.

Prices have fallen by almost $10 a barrel over the last two weeks since hitting a 15-month peak of $83.95 on January 11.

U.S. crude for March delivery rose 25 cents to $74.29 a barrel by 1403 GMT. The contract fell $1.54 to settle at $74.54 a barrel on Friday, the lowest settlement since December 22, after trading as low as $74.01.

London ICE Brent fell 8 cents to $72.75.

"It is very narrow trading today. You could call it consolidation after last week's fall," VTB Capital analyst Andrey Krynchenkov said.

"It is quiet ahead of the U.S. Federal Reserve announcement on interest rates on Wednesday," he added.

Wall Street stocks had their worst three-day slide in 10 months at the end of last week on fears President Barack Obama's plan to limit risk-taking by banks would undermine profits, but U.S. stock index futures pointed to a possible rebound on Monday.

"Besides raising concerns that the new ruling could threaten the profitability of the financial sector, Obama's plan also raised worries concerning liquidity in commodity markets," JBC Energy analyst David Wech said.

Oil prices have broken below the 100-day moving average around $75.25, a key indicator of market sentiment which measures the average price of oil over the last three months pay day loan lenders.

PRICE POLL

Demand for oil remains relatively weak in the wake of the financial crisis.

U.S. crude oil is expected to rise to an average of $77.50 a barrel in 2010, a Reuters poll of 29 market analysts showed on Monday.

Analysts said sentiment during the week would be shaped by the latest U.S. Federal Reserve comments on interest rates due on Wednesday.

The dollar was broadly weaker on Monday. A weak dollar tends to support commodities priced in dollars as they become cheaper for holders of other currencies.

Having fallen in seven out of eight trading sessions since Jan 11, oil prices could see some support near current levels, analysts said. More bearish news could push the price toward a low of $68.59 — last seen in late December.

An oil spill in Texas, following a collision between an oil tanker and a barge in the Sabine-Neche Waterway, blocked seaborne supplies to four Texas refineries representing 6.5 percent of U.S. capacity.

Texas officials said the clean-up of the 11,000 barrels of oil is underway. The spill is the biggest in Texas since 1991.

Separately, Mexico closed its Dos Bocas oil terminal on Sunday due to bad weather, the government said. Almost all of Mexico's crude oil exports are shipped to refineries on the Gulf Coast of the United States.

(Additional reporting by Fayen Wong in Perth; Editing by William Hardy)

Oil slips towards $74, close to one-month low

WASHINGTON – The top Democrat in the Senate has endorsed Ben Bernanke for a second term as chairman of the Federal Reserve.

Majority Leader Harry Reid says the Fed will have to do more to help struggling homeowners keep their homes and urge banks to lend to small businesses.

The Nevada Democrat’s endorsement was a welcome sign for Bernanke since more and more senators in both parties have announced opposition to Bernanke or said they are undecided. Reid raised eyebrows on Thursday after issuing a statement that failed to endorse Bernanke.

Democrats had sharply criticized Bernanke for failing to police high-risk mortgages and missing the housing bubble.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

WASHINGTON (AP) — Federal Reserve Chairman Ben Bernanke faced mounting Senate opposition for another four-year term Friday, even as the White House described President Barack Obama as confident about his confirmation.

Four Democrats say they will vote against Bernanke on the Senate floor. And at least two senators who voted for Bernanke in the Senate Banking Committee last month are weighing their support.

Many others have not made their inclinations known, suggesting a vacillation in the Senate over Bernanke and his stewardship of Wall Street both before and after the financial crisis.

While no one is declaring his confirmation doomed, the emergence of opposition and the shift by some to undecided illustrate just how difficult the terrain has gotten for Obama, especially since a Republican Senate victory in Massachusetts this week.

The roster arrayed against him grew Friday, with Democratic Sens. Barbara Boxer of California and Russ Feingold of Wisconsin announcing their opposition.

“It is time for a change — it is time for Main Street to have a champion at the Fed,” Boxer said.

Sen. Jeff Merkley, D-Ore., who opposed Bernanke in committee, also said Friday he was opposing Bernanke’s nomination. He blamed Bernanke not only for missing signs of the smoldering crisis. “Ben Bernanke helped set the fire,” Merkley said on Friday.

Democrat Byron Dorgan of North Dakota announced Thursday he would oppose Bernanke on the Senate floor.

White House deputy press secretary Bill Burton, talking to reporters as Obama headed to Ohio Friday, said the president has “a great deal of confidence” in the actions Bernanke already has taken and believes he’s “the best person for the job.”

Burton said the White House still believes that Bernanke, 56, will get enough votes in the Senate to run the nation’s central bank for another four years.

Behind the scenes on Friday, the White House worked aggressively to keep Bernanke’s nomination afloat, with Obama chief of staff Rahm Emanuel and Treasury Secretary Timothy Geithner on the phone throughout the day to key senators to shore up support, said two senior administration officials, speaking on condition of anonymity to more freely discuss behind the scenes activity.

The administration’s concerns about the status of the nomination also lessened somewhat, despite the Democratic defections, by the knowledge that several Republicans were committed for Bernanke, one official said.

Bernanke faces a 60-vote Senate hurdle because Sen. Bernie Sanders, an independent liberal from Vermont, has placed a “hold” on the nomination, meaning it will require a super-majority to confirm him bad credit car loans.

The political waters have been getting rougher for Bernanke, and the Senate confirmation vote may be much tighter than many had anticipated just a month ago. Counting votes against him in committee, Bernanke has at least 10 senators publicly against him.

Bernanke has no real Senate constituency with either party because he was appointed to his first term by President George W. Bush but is now closely linked to Obama’s economic policies.

A spokeswoman for Sens. Sherrod Brown, D-Ohio, who voted for Bernanke in committee, said he is now undecided. And Sen. Bob Corker, R-Tenn., one of four Republicans to side with Bernanke in committee, said that while he wants to support him and is carefully examining Bernanke’s record, “I do reserve the right to vote against him” — a view he expressed in committee last month.

Corker said a strong argument for Bernanke is that he is best equipped to mop up massive amounts of money pumped into the economy during the crisis to avert another dangerous problem: an outbreak of inflation.

“On the other hand, at some point you have to weigh that against the fact that regardless of what he’s done, even if everything he’s done has been perfect, you’ve got to understand that trust that the public has in the Fed today has been greatly diminished by the activities that have taken place over the last couple of years,” Corker said in an interview.

A time for a vote still hasn’t been set. Officials at one time had hoped that it would come this week. Bernanke’s term expires on Jan. 31.

Don Stewart, spokesman for Senate Republican leader Mitch McConnell of Kentucky, said that Democrats had asked GOP leaders to measure support among Republicans. “We didn’t think we’d even have to count,” Stewart said.

If Bernanke is not confirmed before his term expires, Fed Vice Chairman Donald Kohn would probably step in as chairman and run the central bank on a temporary basis.

Just days after losing their filibuster-proof Senate majority in a Massachusetts special election, Senate Democrats are searching for a way to defuse voter anger that the economy remains sluggish and is recovering slowly from a recession that was as harsh as any in decades.

While praised for preventing the recession from turning into another depression, Bernanke’s support of Wall Street bailouts — especially the $182 billion rescue of insurance giant American International Group Inc. — has touched a nerve on Main Street.

“The whole AIG issue — you’d have to be asleep not to know that that has certainly clouded the issue,” Corker said.

Bernanke and Sen. Majority Leader Harry Reid, D-Nev., met Thursday to discuss ways to strengthen the economy, encourage more lending by banks and curb home foreclosures. Reid hasn’t said where he stands.

Sen. Daniel Akaka, D-Hawaii, who also supported Bernanke in committee, still backs the Fed chief. So do Jon Tester of Montana and Mark Warner of Virginia.

The Senate Banking Committee in mid-December sent Bernanke’s nomination to the Senate floor on a 16-7 vote. Six Republicans and one Democrat — Merkley of Oregon — lined up against him.

___

Associated Press writers Andy Taylor, Laurie Kellman, Jennifer Loven, and Al Fram contributed to this report. Philip Elliott reported from aboard Air Force One.

Top Senate Democrat endorses Bernanke

NEW YORK (MarketWatch) - Schlumberger on Friday reported a 31% drop in fourth-quarter profit, signaled continued confidence in a recovery in the petroleum sector, and cautioned about an oversupply of natural gas.

The Houston oil-services giant’s earnings dropped to $795 million, or 65 cents a share, from $1.15 billion, or 95 cents, in the year-earlier period.

Revenue shrank 16% to $5.74 billion from $6.87 billion.

From continuing operations, Schlumberger reported Friday that it earned 67 cents a share, ahead of analyst estimates of 64 cents a share.

Shares of Schlumberger fell 4.5% to $65.24 during a broad sell-off in the energy sector.

Analysts at Houston research firm Tudor Pickering Holt called the results “ho-hum” and said other oil-service firms may deliver stronger results.

While Schlumberger beat Wall Street’s profit target, it benefited from a lower-than-expected tax rate while absorbing a weak performance in Canada, Tudor Pickering Holt noted.

Hot Stocks: Energy Under Pressure

Energy stocks end a punishing week with more losses as a result of lower crude prices, broader-market weakness and less-than-inspiring results from Schlumberger. MarketWatch’s Steve Gelsi reports.

One positive indicator could be its 25% boost in year-over-year capital spending “to get ready for [a] cyclical uptick,” analysts said.

The company expects oil prices to be sustained at current levels and it said in a Friday statement that as its customers’ confidence grows, their exploration-and-production budgets will increase. But natural-gas markets remain generally oversupplied.

Oilfield-service revenue - the biggest chunk of its business - fell 17% from the year-ago period to $5.17 billion, but managed to rise 4% from the previous quarter.

International growth

Looking ahead, Schlumberger Chief Executive Andrew Gould said the company expects to see additional investments coming from its customers in offshore markets, including Russia and Iraq no fax pay day loan.

“These events will be dependent on continued increases in economic growth in the second half of the year beyond the current government stimulus packages,” Gould said.

He said the company remains much more cautious on natural-gas activity.

“Despite signs of some recovery in industrial demand and the impact of the recent cold weather, we consider that markets remain generally oversupplied,” Gould said.

“Increased flows of liquid natural gas — with additional capacity being added in 2010 –as well as the general uncertainty over the decline rates of unconventional gas production have the potential to limit the current increase in the North American gas-drilling rig count.”

The company said its 2010 performance ultimately depends on whether the general economy continues to find its footing.

Schlumberger noted that analysts and industry pundits have forecast that oil demand will increase this year for the first time since 2007, led by rising consumption in the developing world.

Schlumberger remains the largest company by market cap in the Philadelphia Oil Service Index . Oil-service shares are collectively up about 75% in the past year as the fastest growing subsector among energy stocks.

The group has more than doubled the roughly 30% return from the S&P 500 amid optimism about economic improvement and hope for renewed exploration efforts.

Exxon Mobil’s expansion into unconventional natural gas by buying XTO Energy has helped endorse the need for horizontal drilling techniques provided by oil service firms.

Schlumberger profit falls 31%, shares drop sharply

Hot News: Special Report: Global Financial Outlook: The London Banking Center Is Beginning to Feel Like Itself Again.

RICHMOND, Va. – A procedural move by Virginia House Republicans on Tuesday forces House Democrats to vote this week to either approve former Gov. Tim Kaine’s $2 billion income tax increase or spurn the budget their national party chairman advocated.

The GOP-dominated House Rules Committee voted to send a bill that would boost the state income tax rate by 1 percent directly to the House floor.

The move circumvents the 15-member House Finance Committee, which is supposed to hear all revenue measures, and puts the bill on track for a decisive vote Thursday or Friday.

“This is too important for a handful of us to decide,” House Republican Leader H. Morgan Griffith said, trying to keep a straight face. “Should 15 of us be making the directional turn signal for all of us?”

In the austerity budget Kaine submitted on Dec. 18, he proposed ending the state’s $950 million annual reimbursement to cities and counties for money they lost in a 12-year-old phaseout of the local property tax on personal vehicles.

Cutting that $950 million yearly expense eliminated nearly half of the $4 billion revenue shortfall the state expects for the new budget lawmakers must pass this year for fiscal years 2011 and 2012.

But without those yearly reimbursements, local governments would incur deep deficits. So Kaine proposed legislation separate from his budget bill that substitutes proceeds from the income tax for the car tax reimbursements made directly from the state general fund. To qualify for a share of the income tax revenues, however, cities and counties would have to forever repeal their car taxes no fax cash advances.

The House’s Republican majority — bolstered by a net gain of six seats in November’s elections — and new Republican Gov. Bob McDonnell had both warned that they would kill any general tax increase.

Kaine argued that after nearly $7 billion in budget reductions in 18 months, cutting an additional $2 billion in government services would destroy the state safety for the disabled and indigent and threaten many core state services. So he called for the tax increase anyway, and Del. Robert Brink, D-Arlington, introduced it.

House Speaker William J. Howell, the Republican who heads the Rules Committee, assigned the bill to his committee, ensuring that it goes to the floor and forces a difficult, recorded vote by all House Democrats.

House Democratic Leader Ward L. Armstrong of Henry County and Kenneth Plum of Fairfax, two of the five Rules Committee Democrats, were the lone votes against sending it to the floor. They tried unsuccessfully to have the bill passed by.

“Why did the speaker feel it was important to assign this bill to Rules rather than Finance,” Armstrong asked Howell.

“It was my feeling that this was such an important bill that we want to send it to the floor as soon as possible,” Howell said.

Va. House panel sends income tax bill to floor

NEW YORK (Reuters) – U.S. stocks rose on Tuesday as investors bet that a Senate race in Massachusetts could put President Obama's reform plans, especially those on healthcare, in jeopardy.

The S&P Healthcare Index (.GSPA) climbed 2.1 percent, led by Humana Inc (HUM.N), which jumped 5.5 percent to $51.17, as voters headed to the polls to determine who will replace Edward Kennedy in a close race.

Pharmaceutical companies' shares also advanced, with Merck & Co (MRK.N) up 3 percent at $40.64, and Pfizer Inc (PFE.N) up 2.2 percent at $19.91. The pair represented the Dow's top two percentage gainers.

"A Republican win would be a positive for the markets since it would mean increased potential for gridlock in Washington," said Carmine Grigoli, chief U.S. strategist at Mizuho Securities USA in New York.

"This is probably especially true now, given the very large social agenda of the Obama administration."

The Dow Jones industrial average (.DJI) gained 100.06 points, or 0.94 percent, to 10,709.71. The Standard & Poor's 500 Index (.SPX) rose 12.64 points, or 1.11 percent, to 1,148.67. The Nasdaq Composite Index (.IXIC) climbed 29.11 points, or 1.27 percent, to 2,317.10.

The Dow also received boost from McDonald's Corp (MCD.N) after Credit Suisse upgraded the fast food giant to "outperform," saying its international businesses were a potential driver of earnings estimates.

McDonald's stock gained 2.1 percent to $63.58 and was the Dow's top percentage gainer not related to healthcare.

Citigroup Inc (C.N) was up 3.5 percent at $3.54 after it reported a fourth-quarter loss that narrowed from the previous year. The loss came on charges linked to repaying government funds, following in the footsteps of JPMorgan Chase & Co's (JPM payday loans with no fax.N) disappointing results on Friday.

Kraft Foods Inc (KFT.N) was the biggest drag on the Dow, falling 1.9 percent to $29.04 after it agreed to a revised cash-and-stock deal to buy Cadbury (CBRY.L) for about $19.6 billion.

In other acquisition news, Tyco International (TYC.N) agreed to buy Broadview Security, which operates as Brink's Home Security Holdings Inc (CFL.N), for $1.9 billion. Brink's shares surged almost 32 percent to $41.34.

Semiconductor stocks helped push the Nasdaq higher, with chipmaker Xilinx Inc (XLNX.O) up 1.1 percent at $23.78 after RBC Capital raised its rating on the stock to "outperform" from "sector perform."

The PHLX Semiconductor Index (.SOXX) advanced 1 percent.

Parker Hannifin Corp (PH.N) jumped 4.9 percent to $61.45 after the maker of motion control technology reported a smaller-than-expected drop in quarterly profit and raised its full-year earnings forecast.

The pace of corporate earnings builds later in the week, with IBM Corp (IBM.N) scheduled to report after the close on Tuesday and Google Inc (GOOG.O), Goldman Sachs Group Inc (GS.N) and American Express Co (AXP.N) results due in the following days.

IBM's shares rose 1 percent at $133.11 while Google added 1.2 percent to $587.01, Goldman was up 0.9 percent at $166.74 and AmEx was up 1.3 percent at $42.92.

(Reporting by Ryan Vlastelica; Additional reporting by Rodrigo Campos; Editing by Jan Paschal)

Stocks advance on healthcare and McDonald’s

SAN FRANCISCO (MarketWatch) — The Dubai government said Monday that its $10-billion bailout from Abu Dhabi announced late last year will be half the amount it had been expecting, according to published reports.

A story in the online edition of the Wall Street Journal citing a Dubai government spokeswoman raises questions about how the United Arab Emirates plans to cut Dubai’s substantial debt, estimated to total as much as $80 billion.

World’s tallest building opens in Dubai

The world’s tallest building — the Burj Khalifa — opened to great fanfare on Monday. The structure’s actual height is a closely guarded secret but it’s estimated at over 800 meters, nearly twice the height of the World Trade Center towers. Video courtesy of Reuters.

In late November, global markets were shaken when Dubai World, a large real estate conglomerate controlled by the city-state of Dubai, said it was seeking to delay payment on its debt faxless pay day loans.

Dubai’s debt crisis put investors on high alert of sovereign credit risks, or the danger that national governments or state-controlled entities wouldn’t be able to keep current on debt payments as they wrestled with lingering problems from the 2008 credit crisis.

Dubai had announced in December that the government of Abu Dhabi and the capital of the UAE, would provide $10 billion to the Dubai Financial Support Fund. Part of that money would finance Dubai World’s obligations through the end of April 2010. Read more on Abu Dhabi’s financing of Dubai.

Dubai is currently in talks of proposing a debt standstill and a restructured agreement with lenders, who hold $22 million in debt issued by Dubai World.

Dubai’s bailout smaller than expected

WASHINGTON (MarketWatch) — After plunging by about 75% from the lofty levels during the housing bubble, new home construction has finally stopped falling.

But, despite massive healing efforts by the government and the industry, home building hasn’t shown any real improvement since bottoming early last year.

Through November, housing starts were essentially flat for the past year at an average annual pace of about 550,000, bouncing higher in one month and drifting lower in the next.

News Hub: Economists Cautious on Outlook for 2010

WSJ’s Phil Izzo parses the latest findings from The Wall Street Journal’s monthly survey of leading economists. He joins Kelsey Hubbard on the News Hub to discuss what it says about the recovery and the growth outlook for 2010.

Economists expect little change when the government reports on December’s starts activity on Wednesday of the coming week. The housing number will be the major economic release of the week.

The consensus forecast of economists surveyed by MarketWatch calls for a 3% decline in starts to a seasonally adjusted rate of 555,000 from 574,000 in November. Read our full economic calendar and consensus forecast.

“Activity in the residential construction sector is still essentially unchanged relative to where it bottomed out in early 2009,” wrote Meny Grauman, an economist for CIBC World Markets. It is quite possible that housing starts will see the first year-over-year increase since early 2006; starts hit a pace of 556,000 in December 2008.

MarketWatch consensus See economic calendar date report Consensus previous Jan. 19 Home builders index 16 16 Jan. 20 Housing starts 555,000 574,000 Jan. 20 Producer price index -0.2% 1.8% Jan. 20 Core PPPI 0.0% 0.0% Jan. 21 Jobless claims 445,000 444,000 Jan. 21 Philly Fed 15.0 20.4 Jan. 21 Leading indicators 0.7% 0.9%

Weather could play a factor in this December’s figures, economists for IHS Global Insight said. The numbers are seasonally adjusted, but unusual weather can extend the building season, or shorten it. In November, starts increased nearly 9%, in part because it was the one of the warmest and driest Novembers on record good credit score.

“As a result, some homes that would have been started in December were instead started in November,” said Brian Bethune and Nigel Gault of Global Insight. December’s weather was the opposite: cold and wet.

Home building is really two markets: single-family and multifamily. Building of single-family homes has actually improved, rising by about 30% from the lows of last year. In the meantime, starts of multifamily dwellings have collapsed, dropping over 50% from November 2008 to November 2009.

The industry has slashed production of new homes to work off a massive inventory of unsold homes. As of November, the number of new homes on the market had fallen about 60% to just 235,000, the fewest since 1971. And many of those homes are simply not salable. If it wasn’t sold before, it’s taking nearly 14 months on average to sell a home once it’s completed.

The government, at the bidding of the builders, Realtors and bankers, subsidized buyers. But most of the first-time home buyers went for more-affordable existing homes, not new ones. However, repeat buyers are now eligible for the taxpayer-funded subsidy.

“The expansion of the program to include buyers who have previously owned homes could benefit the new market,” wrote Peter D’Antonio, an economist for Citigroup Global Markets.

The new-home market is still at a disadvantage because of the number of foreclosures and short-sales.

In this environment, builders aren’t eager to expand production, particularly because they don’t know how the housing market will fare once the extraordinary support from the federal government wanes after the first half of the year, when the tax credit goes away and the Fed stops propping up the secondary market for mortgages.

“Residential construction should not be a significant driver of economic output in 2010, or even 2011 for that matter,” Grauman predicted. Another reason to believe that the economy won’t boom.

Economic Preview: Home building is going nowhere

NEW YORK (Reuters) – U.S. stocks added to losses on Friday, with the Dow Jones industrial average falling 1 percent, pressured by bank shares after JPMorgan Chase & Co (JPM.N) reported deep fourth-quarter losses.

The S&P and Nasdaq indexes also fell 1 percent.

The Dow Jones industrial average (.DJI) was down 100.97 points, or 0.94 percent, at 10,609.58, after briefly falling more than 1 percent guaranteed online payday loans. The Standard & Poor's 500 Index (.SPX) was down 11.63 points, or 1.01 percent, at 1,136.83. The Nasdaq Composite Index (.IXIC) was down 23.51 points, or 1.01 percent, at 2,293.23.

Banks weigh on Wall Street after JPMorgan earnings

NEW YORK (Reuters) – Technology shares drove Wall Street higher on Thursday on bets ahead of Intel's quarterly results that business spending will bolster profits in the sector.

Intel Corp (INTC.O), a Dow component and the world's largest chipmaker, after the bell reported a quarterly profit that beat expectations. Its shares had risen 2.5 percent ahead of the results.

Intel results "tell you a lot about what companies are capable of doing post-recession," said Marc Pado, U.S. market strategist at Cantor Fitzgerald & Co in San Francisco.

"Even on flat revenues companies are going to make money. That's the coattail that Intel is going to have for everybody tomorrow."

Software was also boosted in regular trading after Morgan Stanley added Oracle Corp (ORCL.O), the world's No. 2 business software maker behind Microsoft Corp (MSFT.O), to its "best ideas" list and raised its price target.

Oracle gained 2.5 percent to $25.37 and Microsoft rose 2 percent to $30.96, leading gains in the Nasdaq (.IXIC).

The Dow Jones industrial average (.DJI) added 29.78 points, or 0.28 percent, to 10,710.55. The Standard & Poor's 500 Index (.SPX) rose 2.78 points, or 0.24 percent, to 1,148.46. The Nasdaq Composite Index (.IXIC) gained 8.84 points, or 0.38 percent, to 2,316.74.

After the bell, Intel shares gained 1.7 percent to $21.85 and stock futures ticked higher as trading resumed after 4:30 p.m. (2130 GMT). Shares of Advanced Micro Devices (AMD business card design.N) , an Intel rival, and Microsoft also rose in after-hours trade.

During regular trading, the market rose despite an unexpected drop in December U.S. retail sales and an increase in new jobless claims last week that topped estimates.

"The market was able to shrug off the data because as long as news is bad, government stimulus will keep coming," said Doug Roberts, chief investment strategist at ChannelCapitalResearch.com in Shrewsbury, New Jersey.

In the financial sector, the KBW bank index (.BKX) was up 1.6 percent, led mainly by regional and mid-size banks. Comerica Inc (CMA.N) jumped 2.9 percent to $34.13 after brokerage Raymond James upgraded its stock.

Bank shares were in the spotlight after U.S. President Barack Obama on Thursday proposed a fee to make big banks repay taxpayers for bailouts.

The sector had fallen earlier in the week on speculation about the fee.

On the New York Stock Exchange nearly 890 million shares changed hands, below last year's estimated daily average of 2.18 billion. On the Nasdaq, about 2.29 billion shares traded, above last year's daily average of 1.63 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of about 4 to 3, while on the Nasdaq nearly 7 stocks rose for every 5 that fell.

(Additional reporting by Ellis Mnyandu; Editing by Leslie Adler)

Techs lead Wall St higher; Intel up after results