INDUSTRY. TRADE. GOVERNMENT. CONSUMER. GIZMOS. GADGETS.  SHOPPING. GIFTS. PUBLIC PRACTICES.               by maximillien de lafayette

 

INDUSTRY. GOVERNMENT

U.S. housing construction tumbles, adding more evidence boom is cooling

U.S. housing construction and new building permits were down sharply in October, providing fresh evidence that rising mortgage rates are beginning to cool the five-year housing boom. The Commerce Department reported Thursday that construction of new homes and apartments fell by 5.6 per cent last month, the biggest decline in seven months. Applications for new building permits, a good sign of future activity, fell by 6.7 per cent, the biggest decline in six years. Analysts said these weaker-than-expected figures, combined with evidence homes are staying on the market longer, indicate the hot real estate market is cooling off. "We are likely to see a steady downward trend in housing activity over the next few months all tied to rising mortgage rates," said Nariman Behravesh, chief economist at Global Insight, a Lexington, Mass., forecasting firm. The fear is that home values have soared to such high levels that a slowing in demand could cause those prices to drop sharply, raising risks to recent purchasers who could end up with mortgage burdens that are higher than the falling values of their homes. Behravesh doesn't see that happening, saying higher mortgage rates "should serve to cool the market down without precipitating any kind of nasty scenario." On Wall Street, stocks surged Thursday with investors cheered as oil prices fell to their lowest levels in five months. The Dow Jones industrial average rose 45.46 points to close at 10,720.22. The S&P/TSX composite index closed up 6.04 points at 10,733.08 while the TSX Venture Exchange moved 18.79 points higher to 2,020.77.

The U.S. National Association of Realtors reported Tuesday that 69 cities around the U.S. saw double-digit price gains during the July-September quarter, compared with the same period a year ago, led by a 55.2 per cent surge in the Phoenix area and a 44.8 per cent jump in home prices in Fort Myers, Fla. Nationally, median prices for existing homes were up 14.7 per cent in the third quarter compared with a year ago. Analysts said as sales slow, double-digit price increases are likely to be a thing of the past as the Federal Reserve, or central bank, keeps pushing interest rates higher to combat inflation pressures. Freddie Mac reported Thursday that the 30-year mortgage rose to 6.37 per cent this week, the highest level in more than two years and well above this year's low of 5.53 per cent set in June. In addition to the big drop in construction starts in October, the National Association of Home Builders said a new survey showed builder optimism fell in November by the largest amount since right after the Sept. 11, 2001 terrorist attacks. David Seiders, chief economist for the home builders, said he believes sales of both new and existing homes, while still setting records for a fifth consecutive year in 2005, will be down by around five per cent next year, representing "an orderly simmering down process." But he cautioned that there were risks that the drop-off in activity could be more severe.

He said one of the biggest risks is if housing purchased by speculators starts being dumped on the market, causing a glut that will sharply depress prices. In other economic news, the Federal Reserve reported that industrial output posted a solid rebound of 0.9 per cent last month, reflecting the end of a strike at aircraft maker Boeing and the resumption of factory activity along the ravaged Gulf of Mexico coast. In September, industrial production had fallen by 1.5 per cent, the biggest drop in more than two decades. In another sign that the economy is recovering from the hurricanes, the Labor Department said storm-related job losses edged down last week to 19,000, far below the high of 108,000 hurricane-related layoffs recorded the third week of September. Over the past 11 weeks, the number of jobs lost because of hurricanes Katrina, Rita and Wilma totaled 561,400. Overall jobless claims fell by 25,000 last week to a seasonally adjusted 303,000, the lowest level since mid-April., said Martin Crusinger.

Disney posts lower profit in fourth quarter after several charges

Net income at media conglomerate The Walt Disney Co. dropped 26 per cent in the fourth quarter after several charges, including the expensing of stock options. Disney said Thursday that profit increased at its media networks division, which includes the ABC network and ESPN cable channel, as well as at its theme parks. But profit fell at Disney's studio, which sold fewer DVDs worldwide, and its consumer products division. The company released its earnings after the close of stock markets. Shares of Disney, which had risen 14 cents to $25.99 US on the New York Stock Exchange, fell 64 cents in after-hours trading. The Burbank, Calif.-based company reported net income of $379 million in the quarter ended Oct. 1, or 19 cents per share, compared to $516 million, or 25 cents per share in the same period last year. The results beat estimates from analysts surveyed by Thomson Financial, who had expected earnings of 18 cents per share. Revenue rose slightly to $7.7 billion from $7.5 billion in the same period last year. The company took an accounting charge related to the decrease in value of FCC licenses of its owned television stations. Disney also began expensing stock options in the quarter. Without the accounting charge and the expense for stock options, Disney said its earnings for the quarter would have been 23 cents per share.

General Motors Corp.'s slump drops market capitalization below Ford's General Motors Corp. shares weakened further on Thursday, whittling down the market capitalization of the world's biggest carmaker to less than $12 billion US. At Thursday's open, GM's market cap, or the aggregate value of its stock, stood at $11.9 billion, less than longtime rival Ford Motor Co. at $13.6 billion. GM's shares slipped eight cents, or 0.4 per cent, to $21.21 US in late-morning trading on the New York Stock Exchange. The Detroit-based automaker's stock fell to an 18-year low of $20.90 during the prior session on concerns about GM's financial hurdles and a showdown between the United Auto Workers and management at bankrupt Delphi Corp., a key parts supplier and former GM division. An alliance of Delphi's union workers, including the UAW, is girding for a battle against the company's aggressive cost-cutting plans. On Wednesday, they said the company's latest contract proposal is "not a framework for an agreement but a road map for confrontation." Ford's shares rose one cent, or 0.1 per cent, to $7.66 on the NYSE.  ______________________________________________________________________

INDUSTRY: GAMES, TOYS, GIZMOS, GADGETS, ELECTRONICS

Industry to help kids to command  toys and gadgets with the touch of a button.

The buzzword for hot electronic toys this season is "control." In short, kids (of all ages) love stuff they can command with the touch of a button, the sounds of their voices and the music they play. Increasingly sophisticated voice- and touch-recognition technology means that everything from fuzzy creatures to fearsome dinosaurs can respond to orders. One of last year's top electronic toys is back and going strong. Robosapien by WowWee, which earned a high rating from the Canadian Toy Testing Council, is a 30-centimetre-high infrared remote-controlled robot. It looks part Storm Trooper and part cartoon character, and performs 64 different functions, any six of which it can be programmed to follow in sequence.

It can walk forward and backward, turn, dance, give high-fives and pick things up with its three-digit hands. Building on Robosapien's popularity, WowWee is offering several other Robo-branded toys this year, all recommended for age six and up. The new 81-cm-long Roboraptor is a smooth-moving dinosaur that's programmed with three moods -- hunter, cautious and playful -- and features touch sensors on various parts of its body. Robopet -- a canine rendition of the Robo theme -- rounds out the inventory. Mini versions of all three robots with limited capabilities have also been released and cost between $15 and $20. The full-sized versions run from $99 to $120. In the "they're back" category, the new-and-improved Furby from Hasbro reappears. The animatronic bird-like beastie that caused holiday toy frenzy in 1998 is now larger and more "evolved," featuring what Hasbro calls Emo-Tronics, a combination of robotic technology, puppetry and lifelike reactions and movements. The Furby's voice-recognition capabilities mean the toy reacts when a child speaks to it. Furby is recommended for age six or older, and costs $40 and up, batteries included. Hot stuff aimed at the little girl on your list this season includes Pixel Chix from Mattel, a sort of "live" Polly Pocket doll living in a little 3-D house. The pixellated pixie is a virtual girlfriend on an LCD screen inside the house, in which she eats, sleeps, works out and hangs out, depending on the seven buttons the child pushes. New surprises are revealed the more the toy is played with. Pixel Chix can be connected so the virtual friends can party together.

Recommended for age seven and up, Pixel Chix cost about $30 each, batteries included. Striking a new groove this year are toys that respond to music, including the Sega i-Dog from Tiger Electronics and the iZ from Zizzle. The i-Dog is a miniature robot dog with multicolored lights on its white mug. It composes music of its own, or grooves along, wiggles its ears and sways its head to the beat of your music when plugged into most portable music systems. The pooch even expresses its likes and dislikes through a seven-LED pattern. For ages eight and up, costs about $25. What is an iZ? The iZ from Zizzle is a funky alien-looking creature that can be twisted and turned to create new combinations of musical rhythm and melody tracks. Its belly can be pressed to change the beat. Its eyes bounce to the music, and its horn glows in rainbow colors to the beat. You can also hook iZ up to your iPod or other music source and hear it play the songs in its own way. It costs about $50, and is good for ages five and up -- and it's proving to be a popular gadget with tweens and teens, too. Animal, vegetable or mineral? A modern twist on an old game of deduction is another top electronic toy pick. The 20Q by Radica is a colorful handheld plastic sphere with a scrolling electronic readout and a few simple buttons. Based on the classic word game of 20 questions, 20Q tries to guess what you're thinking by asking a series of yes-or-no questions. It's uncanny how accurate the toy can be, and even grownups enjoy trying to stump the game. Batteries are included, ages eight and up, $15.The company has also released the 20Q Challenge, a table-top multiplayer version of the game, for about $40, said Karen Dourie.

You shall have music wherever you go

Panasonic EP3513K Real Pro Elite massage chair, $6,500, Sure, this is a little pricey, but what the heck, you owe it to yourself. Panasonic says the chair has technology built in that scans your body to adjust the massage just for you. Thirty-three air bags are said to work together to press and squeeze those tired muscles in your upper body and relax parts of the lower body. It comes with five different programmed massages including Shiatsu -- with squeezing and finger pressure -- and Swedish. Personalized programs can be added for as many as three users. Lexmark C520n color laser printer, $799 With speeds for both black and color estimated at 20 pages per minute and a cost that starts at just under $800, the new C-series color laser printers from Lexmark are aimed at small and medium business customers. If you're afraid your employees waste precious supplies, these new 1200 x 1200 dpi printers come with tools that save toner, authorize color printing and estimate the per-page cost of color. Sonos Digital Music System zone player bundle, $1,500. You shall have music wherever you go, if you decide that the Sonos digital system is for you. The bundle includes a controller with an LED screen and two zone players. These devices allow you to take the music from your computer (Mac or PC) or an attached storage box and send it wirelessly to two separate rooms in your house. And if you've got the cash, you could add to the system and have the tunes flowing to 32 separate locations. It's likely two will do for most of us. It's available in Canada at Future Shop.

 

INDUSTRY, RETAIL AND CONSUMERS

Retailers missing the point of loyalty reward programs, Air Miles head says

Retailers have lost their way and have become too focused on using loyalty reward programs as a currency to attract customers, says the president of Air Miles. Bryan Pearson says most retailers are neglecting the wealth of shopper data that is collected by the programs that could be used to better market to their customers, which was one of the purposes the program was created in the first place. "Points are really viewed as discounts or an alternative way to get something extra and that's not a bad thing, but I'm not sure it's sustainable in the long run," Pearson said in an interview Thursday. "The de facto result of having a loyalty program really viewed as a way to attract the consumer through short-term tactical initiatives is you end up using what should be a targeted marketing tool as a mass marketing tool." Pearson, who was in Vancouver to speak to the city's board of trade, suggested that the majority of consumers feel there is too much advertising and marketing out there making targeted marketing all the more important. "It's about relevance, its about creating a differential experience for the consumer so you can get about getting that preferred relationship," he said. Since its launch in 1992, the Air Miles reward program has grown from a group of 13 sponsors to more than 100 today and more than 15.4 million actively participating individuals. But the company is beginning to face greater competition. With a restructured Air Canada's decision to spin off its Aeroplan program, the airline's loyalty program has looked to expand beyond its traditional base of travel-related places to earn miles like flights, hotels and rental cars. Rebranded and operating on its own, Aeroplan (TSX:AER.UN, TSX:ACE.B, TSX:ACE.RV) has started to sign up new partners including Bell, Esso and Futureshop. Aeroplan spokeswoman Gillian Hewitt said the program would like to sign up a marquee partner in each of several retail categories including groceries, drug stores and home improvement. She suggested that while Air Miles may have more members, Aeroplan's members are likely more affluent and more attractive to marketers seeking to learn more about their customers. "There are data mining capabilities that we have that we do offer to our partners as part of our partnership services," Hewitt said. But Pearson says Aeroplan still can't offer the broad snapshot of its customers' shopping habits because while it has plenty of sponsors they don't have the same reach as Air Miles. "It gives us a powerful insight and an ability to create that sort of information pool that helps us work with our sponsors to begin to move to this experience marketing," he said. By Greg Wong

Industry and Retail: It's everything: It is a a printer. It's a CD burner. It's both!

Photo: The Lexmark P450.

Now this is a cool idea. Lexmark, who has been producing good quality business printers for years, is the first to release a printer that actually contains a CD burner. That’s right, the little P450 Photo Printer has a CD burner built-in to the printer that enables you to burn your photos directly onto a CD without having to connect anything to a computer. You can print or burn directly from your camera using PictBridge technology. You also can print or burn directly from any number of popular flash media available. The printer accepts CompactFlash I and II, SmartMedia cards, Sony Memory Stick and Memory Stick Pro, SD Cards, MultiMediaCards, xD Cards. It will also accept Sony Memory Stick Duo, Mini SD Card and Sony Memory Stick Duo - all with an adapter. You can print photos from a CD, a USB thumb drive or even from a Bluetooth camera, although you’ll need a special adapter for that. You can look at your pictures on the 60mm pop-up LCD screen or, if you want to get a good look at the photos, you can connect the printer to your TV with the appropriate adapter. The attached LCD pop-up screen isn’t just for looking at photos though, you can crop, rotate, resize images prior to printing - all without having to connect the P450 to a computer. Actually, it’s not a question of whether you want to connect the printer to a computer or not - you can’t. The Lexmark P450 is designed as a stand-alone printer that can’t connect to a computer. When you decide to use the P450 as a printer, you can fire off near photo lab quality 4” x 6” prints in 38 seconds at 480 x 1200 dpi resolution. You have the option of sticking your flash media into the printer, doing whatever you like to the pictures and then printing them all off - then you can simply archive your photos on a CD. The Lexmark P450 has a very small footprint at 6.1” H x 10.9” W x 9.3” D with the trays retracted, and it weighs in at 6.5 pounds. It uses a single printer cartridge for color and black and white printing. Retailing at $299 CAD, the P450 is ideal for people who own a digital camera but not a computer.  The digital camera revolution is fully underway, with digital cameras outselling film cameras by a considerable margin. Not everyone has the cash to own a computer, so there’s a definite market for a device like the P450. It’d be a lot more useful if it could connect to a computer, however the P450 definitely fills a niche as it comes out of the box. PROS: To be able to print photos directly onto a CD from the camera or and number of flash media is a great idea. CONS: You can’t connect the printer to either a PC or a Mac - it’s a stand-alone product. You can’t print directly onto the CD, and there’s no way to print from your computer to the CD burner, said Muray Hills.

INDUSTRY, TECHNOLOGY, COMPUTERS AND FAMILIES

Entrepreneurs are ready to fill that void. Microsoft chief financial officer Chris Liddell has been quoted as saying his company will ship between 4.5 million and 5.5 million 360 consoles by June 2006.

Photo: Xbox360 game machine. Three factories in China are churning them out 24 hours a day but the new Xbox 360 may still be in short supply when it hits North American store shelves on Tuesday.

Three factories in China are churning them out 24 hours a day but the new Xbox 360 may still be in short supply when it hits North American store shelves on Tuesday. EB Games, which has 260 stores across the nation , says all of its Day 1 stock of the next-generation video console is already committed to pre-orders. Some consumers put their names down as far back as two years ago. "I think the market right now needs a new console," said EB Games Canada president Jim Tyo. "There's a lot of pent-up demand for this system, so we expect (Tuesday) to be chaotic." The 360 was already listed as sold out on Future Shop's website. Gamestop, a U.S. retailer, also had a sold-out sign on its Internet site for all six of its 360 bundles, including the deluxe $1,999 US Omega package, which includes 20 games and other goodies, and the top-of-the-line $4,500 package that comes with a 42-inch (107-centimetre) plasma TV. Entrepreneurs are ready to fill that void. EBay Canada had 31 pages worth of listings for the new console as of Thursday afternoon. Jason Anderson, Xbox Canada's head of marketing, says Microsoft plans to sell between 2.75 million and three million units worldwide in the first 90 days of release. "We're going to be the hottest product this holiday and Nov. 22nd is probably going to be one of the biggest retail days of the year," predicted Anderson. The 360 is being billed by Microsoft as more than a gaming machine.

They see it as an entertainment hub that can play DVDs and music, and connect to a digital camera or PC. Following the North American launch, the 360 will go to European stores on Dec. 2 and Japan on Dec. 10. Microsoft chief financial officer Chris Liddell has been quoted as saying his company will ship between 4.5 million and 5.5 million 360 consoles by June 2006. "I think no matter how big the number becomes, it still won't satisfy demand," J. Allard, Microsoft's corporate vice-president and Xbox guru, told the website eurogamer.net. "We're going to sell every one we can make." The 360 comes in two forms: the core ($399.99 Cdn) and premium ($499.99), although retailers will also offer the console in more expensive bundles with games. More copies of the premium than the core are expected on the market. Gamers who choose the core option will have to buy the 360's 20-gigabyte hard drive separately ($129.99) if they want to be able to play more than 200 original Xbox titles or save game play without using a memory unit. There are some 22 million original Xboxes in the worldwide market already. Canada represents Xbox's No. 1 market globally on a per capita basis. In overall numbers, Canada is No. 3 behind the U.S. and Britain. Shortages at launch date are not new. Getting hold of a PlayStation 2 was a challenge when it launched in North America in October 2000. A computer component shortage meant Sony had to halve its initial planned shipment of one million PS2 consoles to North America. Only about 50,000 units came to Canada at launch. Since then, more than 90 million PS2 units have sold worldwide. Nintendo, meanwhile, has sold 19 million GameCubes. The 360 is the first of the next-generation consoles to hit the market. Microsoft was determined to be first out of the gate after trailing both Sony and Nintendo the last time. Both the PlayStation 3 and Nintendo Revolution are expected out next year. The new Xbox consoles started arriving in Canada two weeks ago and are either already at retailers or stored in distribution centers and warehouses. "Because we are in such a high demand, absolutely, most retailers will be putting pretty much all of them out on the floor and then waiting for additional shipments to come into the country," Anderson said. And new supplies are expected to come into the country by truck every few days. Anderson's advice? "Get out there on Nov. 22nd." And if that doesn't work? "Just work with whatever favorite retailer you might have. ... They'll be able to let you know when you can get your hands on one." Added Tyo: "The consumer is going to have to step up and get in line for it rather quickly. Because once the media blitz hits, it's going to explode." Tyo said he has seen consumers at his store drawn to interactive displays of the 360 technology "like a magnet." Outside of lining up on launch day - some stores are opening their doors at midnight Monday - your best bet may be to find a large retailer outside of an urban area and try there. N. Daviddson reported that Tyo says EB Games continues to take orders, although when they will be filled is uncertain at this point. But he said the only 360 boxes in his stores for the next while will be for display purposes. Patience may be the best advice of all. More manufacturing plants are planned, and demand will eventually subside after hardcore gamers get their machines. Plus there is no shortage of new games planned for the original Xbox and other consoles. Also available are walks in the park, books, films, time with the family.

 

Serious crime: The Vastmanlands district court found that downloading copyrighted material was not illegal at the time. But it ruled that distributing the film breached Sweden's copyright law. "This kind of crime should be taken seriously," said the ruling. "Making a film available to the public on the internet has significant consequences for the film industry. Illegal material can in this way be spread quickly and reach many people, which can lead to heavy economic losses for the copyright owners," the court said. File-sharing carries a maximum sentence of two years in prison, but in this case the court chose just a fine as the man was not trying to profit financially from his actions. Bawer's lawyer said his client had not yet decided whether to appeal against the verdict. "It's a lot for uploading one film on one occasion and without financial gain," said Torbjorn Persson. The Swedish Anti-piracy Agency, which represents the entertainment industry, hailed the verdict as a big step forward. "This sends a very strong signal to file-sharers," said Henrik Ponten, legal council at the group. "Now we have taken the first step toward a functioning copyright law." The decision to fine rather than send Bawer to jail could have serious implications for the fight against internet piracy. Swedish police can only request personal details from an internet provider about who own a specific net address if they are suspected of a crime that warrants a prison sentence.

Photo: NISBET'S WINDMILL.

Cost: £10,000 plus £5,000 grant

Life: Blades will last 20 years, magnets in generator 20 years, steel tower and foundations 60 years

Location: 15m from his house, 35m from neighbors

Height: 11.5m

His motivation was both financial and environmental and he was inspired by seeing two windmills at the Ford plant where he works. Although he says the concerns of others have been allayed, the first few months haven't been as windy as he hoped. "In the last eight to 10 years we've had strong south-westerly winds but not this year," he says. "It's been fickle and I'd put this six months down as a lean year. "It's been generating electricity but not as much as I had hoped for. It's connected to the grid and any surplus flows back into the grid." The wind provided 80% of his electricity in the summer and he estimates it will heat the house through winter, thereby saving him a total of £1,000 a year in heating bills. In 10 years, he hopes to have paid off his investment, but he will still have been buying electricity from the grid during that time. It isn't possible to be totally dependent on wind because it doesn't blow every minute, says Alison Hill at the British Wind Energy Association. "You may get the 4-5,000 units a year to run a household but not every single hour of every day so you would need to have standard electricity grid connection to get electricity from the grid. "We are quite lucky in the UK because when we have most wind we have most demand - winter. That profile of generation is quite beneficial, but no-one can have 100% self-sufficiency on wind alone. "If it looks like you have a big wind resource and a good turbine, you can connect that turbine to the grid and sell that, so there's an additional revenue for householders there." Typically, a household sees a reduction of between a quarter and a third in its annual electricity bill." Solar panels can supplement wind to boost a home's renewable sources but some households do claim to make a profit purely from wind, by generating so much electricity that the amount they sell back is greater than the amount they buy. That would require a very energy-efficient house and living in a particularly windy part of the UK, says Ms Hill. And the future is bright - despite the end of government grants in February - because big companies like British Gas are investing in new kinds of turbines which have yet to come on the market, she adds.

 

People 'lack mortgage knowledge'

The FSA website promises to lay the mortgage world bare.

Many consumers have trouble understanding how mortgages work and are baffled by lenders' jargon, a survey has suggested. Nearly six out of 10 consumers said they did not know what APR (annual percentage rate) stood for. In addition, 52% of 800 mortgage holders interviewed were unaware what APR they were paying, according to the Financial Services Authority (FSA). To educate consumers about mortgages the FSA has launched a new website. The FSA, which assumed regulatory responsibility for mortgages last year, says it wants to help explain mortgages to consumers. To this end the regulator is spending £1.5m publicizing it's new website.

 

Mortgage choice is a good thing but consumers need to arm themselves with more knowledge.

The website offers users tips on shopping around for a mortgage deal, information on different types of mortgages and interactive tools allowing them to work out what level of repayment they can afford. People will also be able to use the website to check to see if a firm is authorized to offer mortgage advice. "It use to be the case that consumers would be offered one type of mortgage by their bank or building society... these days there are so many different types of mortgages available, all with their own jargon," David Whiteley, FSA spokesman, said "Mortgage choice is a good thing but consumers need to arm themselves with more knowledge, this is where the website comes in," Mr. Whiteley added.
 

McDonald's puts fat facts on food

Photo: McDonald's says the facts will be right in front of the customer.

Fast food giant McDonald's is to begin printing nutritional facts on the packaging of its burgers and fries. McDonald's said the labeling would include the fat, salt, calorie and carbohydrate content of its foods. Critics have accused the company of contributing towards rising levels of obesity and other health problems. Nutritional information on items such as the Big Mac, which contains 30g of fat, are currently only available in leaflets or on the company's website. McDonald's said it hoped to have the new packaging in 20,000 of its 30,000 fast food restaurants worldwide by the end of 2006.

'Take responsibility': McDonald's chief executive Jim Skinner said printing nutritional facts on the packaging of its foods would put the information directly in the hands of the company's customers. "We think this the absolutely easiest way to communicate it," Mr. Skinner said. "We've given them what they asked for and then people take responsibility about whether they add it up or not add it up." McDonald's has been introducing items such as salads and fruit to its menus, alongside the company's more traditional fare of burgers, fries and milkshakes. Earlier this year, the US company announced that it was giving its iconic mascot clown Ronald McDonald a sporty new makerover in a bid to encourage children to take up more active lifestyles. But critics have maintained that many of the foods on offer at McDonald's are unhealthy and fattening, at a time when obesity levels in many countries are soaring. The world's biggest restaurant company said it hoped to introduce the new packaging by February next year in time for the Winter Olympics in Italy.

 

INDUSTRY: MARKETS

New York markets put in a positive finish thanks to lower oil prices. 

U.S. home construction in October plunged by the biggest amount in seven months.

The Toronto stock market closed little changed Thursday as earlier strong gains melted away in the face of a tumble in the price of oil. However, the market got a boost from gold stocks as the price of gold hit an 18-year high. New York markets put in a positive finish thanks to lower oil prices and data that eased concerns that September's hurricanes did lasting damage to the U.S. economy. New York's Dow industrial average moved up 45.46 points to 10,720.22. The Nasdaq advanced 32.53 points to 2,220.46 and the S&P 500 moved up 11.59 points to 1,242.8. Crude oil prices faltered as traders weighed the effects of a cold front descending on the United States against a build in U.S. heating oil inventory figures and rising U.S. natural-gas inventories. Light sweet crude for December moved down $1.54 to $56.34 US a barrel on the New York Mercantile Exchange after rising almost $1 on Wednesday. West Texas Intermediate closed at $56.35 US, down $1.54. The TSX energy sector backed away 0.85 per cent as EnCana Corp. lost earlier strong gains to move down $1.25 to $52.60. But Talisman Energy shares advanced $2 to $55.59 on a report that a major oil company made an informal proposal for the Calgary-based company but the proposal was rejected as inadequate. Elsewhere in the sector, units in Petrofund Energy Trust were off 83 cents to $20.24 after it signed a deal to acquire Kaiser Energy Ltd., a private Canadian company, for $485 million. Shell Canada Ltd. shares added 17 cents to $34.77 on its plans to boost capital spending plans by 60 per cent to $2.7 billion next year to develop its oil and natural gas operations. The Toronto gold sector moved ahead 1.2 per cent as the December contract for bullion on the Nymex hit an 18-year high, gaining $7.80 to $486.90 US an ounce. "And it has all the gold bugs excited," said Mark Russell, equity analyst at BMO Nesbitt Burns. "You can say it's inflation, you can say it's central bank buying . . . there are also concerns over the euro as a reserve currency. My issue with the gold companies is that they don't make money because their costs have gone through the roof." Bema Gold advanced 18 cents to $3.47. The utilities sector was strongest, up almost three per cent, led by an 8.8 per cent climb in CU Inc. Its shares ran up $3.64 to $45 after announcing it will issue $185 million of 5.183 per cent debentures. The health-care sector was the leading decliner as Biovail shares shrank $3.45 to $26.25. Investors also took in data showing that rising mortgage rates are beginning to dampen the U.S. housing boom.

U.S. home construction in October plunged by the biggest amount in seven months, falling 5.6 per cent - double what analysts had been expecting. "Most people are relieved that housing is beginning to show some sort of response to interest rates," said Michael Strauss, chief economist at Commonfund in New York, adding "the level of housing activity is still very strong by historical standards. We are not at normal levels." Wall Street also welcomed a report saying the manufacturing sector expanded at a slower pace in November. The report, from the Federal Reserve Bank of Philadelphia, showed that prices in the region's manufacturing sector were steady or falling. Other data showed output at U.S. factories, mines and utilities rose 0.9 per cent in October, the fastest pace in 17 months. The increase followed a 1.5 per cent plunge in September. On the TSX, advances beat declines 801 to 715 with 217 unchanged. In other corporate news: -Mega Bloks Inc. shares climbed 49 cents to $25.16 after winning a Supreme Court case. Rival Lego had claimed the Montreal-based company infringed its trademark by copying the "look" of the tiny knobs that allow Lego's construction blocks to snap together. -U.S. liquor giant Constellation Brands Inc. has asked the Ontario Securities Commission to nullify a "poison pill" being used by Vincor International to battle Constellation's $1.4-billion takeover bid. Vincor shares were 25 cents lower to $34.50. -Recruiting firm Brainhunter Inc. is extending its national service - and also reaching into the United States - after acquiring IGate Mastech Ltd., the Canadian staffing division of IGate Corp. of Pittsburgh. Shares in the Toronto-based company were a dime improved to $1. -Shares in forestry products firm Tembec declined 13 cents to $1.84 after the company swung to a fourth quarter loss of $134.9 million from a year-ago profit of $90.7 million, reported M. Morisson.

INDUSTRY: CARS

Chrysler announces new incentives in Detroit price war with GM and Ford

DaimlerChrysler AG's Chrysler Group said Thursday it will give two years of free gas to customers who buy a 2005 or 2006 vehicle before Jan. 3, following announcements of new discounts by rivals General Motors Corp. and Ford Motor Co. Chrysler will also kick in two years of free scheduled maintenance and increase the warranty on mechanical parts to five years or about 96,500 kilometres. Chrysler now offers a three-year, 58,000-kilometre warranty. The offer, called the Miles of Freedom plan, begins Monday. "The combination of free gasoline, free scheduled maintenance and a full warranty puts our customers' mind at ease and allows them to fully experience the joy of driving one of our vehicles," said Joe Eberhardt, Chrysler's executive vice-president of global sales, marketing and service. The company said the free gas will come in the form of a $2,400 US debit card that can be used for anything. Alan Helfman, manager of River Oaks Chrysler Jeep in Houston, said the free maintenance is worth $200 to $300 and the extended warranty is worth $600 to $700. "It's a great tool for marketing," Helfman said. DaimlerChrysler shares rose $2.03, or 4.1 per cent, to $51.18 in afternoon trading on the New York Stock Exchange. For the rest of November, customers will be able to choose between the new incentive or cash-back plans already in place that expire Nov. 30. Helfman said some customers might still choose the cash, although the new plan could be a better deal. The 2006 Jeep Commander, which starts at $27,290, currently has a $1,500 rebate, Helfman said. Under the new plan, that would double. Chrysler is excluding some of its hottest-selling vehicles from the plan, including the Dodge Viper, Chrysler 300, Dodge Magnum, Dodge Charger, Dodge Sprinter and SRT8. Chrysler is the latest of the Big Three to announce new incentives to boost anemic sales. After a summer of heavily promoted employee-pricing discounts, the Big Three's sales fell a combined 17.6 per cent in October, according to Autodata Corp. Chrysler fared better than GM and Ford, with flat sales compared to October 2004. Automakers typically offer discounts over the holidays, but GM jump-started those promotions earlier than usual when it announced its Red Tag discount this week. GM's plan allows buyers to pay a fixed maximum price advertised on red tags at dealerships. Ford's rebate offer has a similar no-haggle aspect. Under its Keep It Simple Plan, customers are given one consistent, maximum price that will be printed on vehicles' window stickers. Chrysler isn't the first to offer free gas. Mitsubishi Corp. since September has been offering one year of free gas for customers who buy a 2005 vehicle. U.S. automakers have a love-hate relationship with incentives, which boost sales but can cheapen a brand's image. Deane Dourbin said, Asian automakers also use incentives, but they're generally much lower. GM, Ford and Chrysler have all tried to pull back on incentives but returned to them when sales slowed. As soon as October sales were released, Chrysler slapped a $1,000 discount on all 2005 and 2006 vehicles. Chrysler had the highest incentives of any major automaker in October at $3,075 per vehicle, according to Autodata. Honda Motor Co. spent the least, at $618 per vehicle.

Auto-industry watchers: Renault's surprise profit warning intensifies challenge to CEO Carlos Ghosn

Auto-industry watchers knew Carlos Ghosn was setting himself a tough task when he took up the Renault chief executive job and stayed on as head of Nissan as well. But a surprise profit warning from the French carmaker, hit by flagging sales at home and a tired model line, has made that challenge clearer than ever. Shares in Renault SA fell 4.9 per cent to 66.00 euros, or $77.07, in Paris on Thursday, after the company warned that weak sales in its home markets will hit 2005 profits. With its most profitable vehicles now in decline - western European sales of the aging Megane fell 24 per cent in the year to October - and no new models scheduled for at least another year, all eyes are on Ghosn. Ghosn, whose 12-month turnaround of Nissan Motor Co. became a management case study, is expected to unveil a major new strategy for Renault in February, 10 months after he began his new job - and the 16,000-kilometre commute to the old one. Ghosn then promised to spend a little more time in Paris than in Tokyo, while retaining full managerial control of Nissan, 44 per cent-owned by Renault. But some observers say Renault's current difficulties could alter that balance. "Maybe he'll have to have less of a controlling hand because he'll have his hands full back in Europe," said Edmund Shing, a Paris-based auto analyst with Kepler Equities. "It may be that Renault shareholders put some pressure on him to spend more time at Renault and less time at Nissan." At 5.1 per cent, Renault's operating profit margin was half of Nissan's last year, and former CEO Louis Schweitzer had warned of a slide to four per cent this year before he handed over to Ghosn in April, while staying on as chairman. Amid high oil prices, weak demand for cars - particularly larger, higher-margin vehicles - and tough competition from a leaner, restructured Volkswagen AG and others, Renault lowered its sights further late Wednesday, saying its full-year operating margin would be "closer to three per cent than to four per cent." Some analysts said the warning was expected after rival PSA Peugeot Citroen SA lowered its full-year guidance, but Renault has been hit particularly hard as the gap in its product line exacerbates weak European auto market conditions.

 

INDUSTRY AND BUSINESS

At age 30, Microsoft tries to untangle bureaucratic snags with a shakeup

SEATTLE, Washington - Microsoft Corp. promises its software will make people better workers - more productive, more profitable, more able, as the company likes to say, to achieve their potential. Yet some wonder why the software behemoth isn't taking more of its own medicine. As Microsoft hits 30, critics reel off a list of complaints that sounds like, well, a Microsoft commercial: stifling bureaucracy, frustrating miscommunication, different units working on overlapping technology without adequate co-operation. In short, the very ills Microsoft promises to cure with its software. Growing pains have delayed products, leaving the door open for Microsoft to be beaten to market by younger, more nimble competitors led by Google Inc. and Yahoo Inc. Meanwhile, Microsoft shares have been trading at about the same level for several years. As it gears up to release a slew of new products, Microsoft is trying to untangle bureaucratic snags with a corporate shakeup meant to get the best ideas to market faster and increase the company's push toward over-the-Internet software and services. Of course, no one would argue that the company co-founded by Bill Gates is in dire straits. Microsoft continues to earn billions from its flagship Windows and Office products, and the company is steadily making inroads in markets including cellphones, video game consoles and server software. But it isn't just Google and Yahoo that should worry Microsoft. It's also up-comers big and small that offer products as Internet-based services. Salesforce.com, which manages customer relations, is a big one. Writely and gOffice, which provide web-based word processing, and e-mail application Zimbra are among the small. Web-based offerings give users easy online access to products and services, sometimes for free. The threat to Microsoft is that such products, by their very nature, could decrease the importance of Windows or Office. Google and Sun Microsystems Inc. announced a partnership last week that, while still vague, could eventually yield tools that provide, cheaply or for free over the Internet, an alternative to pricey Microsoft software such as Word or Excel. "What you've actually got going here between Google and Sun is their own personal version of the film Kill Bill," said David Garrity, director of research for Investec's U.S. operations. Microsoft insists it is in a strong position to fight its competitors. Kevin Johnson, recently named co-president of a new Microsoft unit that includes Windows, servers and its MSN online division, said chief executive Steve Ballmer spoke about software as a service as long as six years ago. The company was forecasting some of these potential markets a decade ago, he added. "We've provided the vision of where these things were going." Still, Microsoft now lags in some high-profile areas, although Johnson said there are plans afoot to help the company to expand further and quicker into the field. Its competitors were the first to provide web-based tools for finding things more easily on Windows-based desktops. Microsoft also has played catch-up on developing its own online search engine, the technology that formed the basis for Google's explosive success. And while Microsoft was a pioneer in offering free, web-based e-mail with Hotmail, Google and Yahoo have been quicker to improve their products recently.

The company continues to struggle with the issue of helping computer users instantly find what they need. When Vista, Microsoft's first significant Windows upgrade since 2001, is released next year after serious delays, it will initially lack a hotly anticipated data management system called WinFS that would let people swiftly find documents, pictures or e-mails. Microsoft also is tailing its competitors in developing the money-making engine behind Google - paid search. This month, Microsoft begins U.S. testing of its own system for selling sponsored links next to its regular search results, which are based on a formula that ranks web pages according to such factors as relevance. Microsoft currently outsources that job to Yahoo, which has a contract with Microsoft through June 2006. Microsoft also was in talks with Time Warner Inc. about a potential deal with its America Online unit that could help raise Microsoft's profile against Google. One potential option was some sort of online advertising partnership. It's unclear where those talks stand now. Johnson acknowledges that the company has sometimes been slower than some of its competitors. He says that's partly because Microsoft is focused on "the big, bold challenges," such as folding useful technologies into products instead of just rushing something out to market. And analysts note Microsoft's track record of quickly playing catch-up and marshalling the forces necessary to stay ahead. Johnson says the company's reorganization - which groups its seven business groups under three large units - is designed in part to streamline decision-making and make Microsoft more agile. If successful, such changes could help alleviate complaints that employee productivity is being slowed by management hoops that require too many layers of approval. In one of the most high-profile cases, former executive Kai-Fu Lee complained in court of groups working autonomously that should be collaborating, and of being forced to report to too many people. Lee defected to Google and Microsoft sued, alleging violation of a non-compete agreement. The case is ongoing. Microsoft also is seeing the downside of a longtime corporate culture that allowed several groups to work on the same technology, sometimes even in competition with one another. That philosophy hasn't been as successful as hoped with search technology, where despite multiple efforts many analysts say the company still has work to do. Johnson said Microsoft is trying to find ways to re-evaluate that approach while still encouraging individual groups to develop fresh ideas. "Bottoms-up innovation is a great thing," he said. But, he added, "At a certain point in that innovation life cycle you have to make decisions so you avoid duplicative or competitive work." Microsoft is facing the classic dilemma that befalls a company that grows from a small startup to a major corporation, said the analyst Garrity. There's really no way to manage thousands of employees without a strong corporate structure, but that structure will inevitably alienate some workers who remember the freewheeling early days. "They're all victims of their own past success," he said. Microsoft's reorganization appears to be an attempt to tackle the size problem - to teach the elephant to dance, said Garrity, alluding to a popular corporate problem-solving book by James Belasco. "I don't know if we can teach the elephant to dance, but they certainly look as if they are getting their tutu on, reported Alison Lyn

Magellan Aerospace and CAW reach new contract deal, ending three-week strike at Winnipeg plant

WINNIPEG - The Canadian Auto Workers union and Magellan Aerospace Corp. have agreed to a new contract that could soon end a three-week strike at the company's Winnipeg manufacturing plant. The Toronto-area based aircraft parts maker said Saturday it had reached a new three-year agreement with the union, which represents 400 workers at the Manitoba plant. Details of the agreement with CAW local 3005 were not released pending a ratification vote by unionized workers Tuesday. The 400 workers have been on a legal strike since Sept. 15. Mississauga, Ont.-based Magellan (TSX:MAL) is an aerospace industry supplier that designs, engineers and manufactures engine and aircraft assemblies and components for aerospace, military and space markets. The company employs 3,500 people and operates through subsidiaries such as Bristol, Orenda and other units in Canada, the United States and the United Kingdom.

 

INDUSTRY LATEST NEWS

Sony Corp. and NEC Corp. to boost competitiveness

Sony Corp. and NEC Corp. agreed to set up a joint venture combining their optical disc drive operations to boost competitiveness, the two Japanese electronics companies said Thursday. The new joint venture will start operations on April 1, 2006, producing DVD drives and CD drives for use in personal computers and other electronics devices, the two companies said in a joint statement. In one possible problem, however, Sony and NEC support different, rival formats for next-generation DVDs. Sony is promoting a DVD format called "Blu-ray Disc," while NEC is promoting the "HD DVD" format it and Toshiba Corp. jointly developed. The two formats are incompatible. Yoshibumi Yashiro, a NEC spokesman, said the joint venture will design and make DVD drives and CD drives that can be used with both the Blue-ray Disc and HD DVD formats "for the time being." Whether NEC will continue promoting its HD DVD format in the future will be decided by watching market trends, Yashiro said. Sony, meanwhile, will promote its Blue-ray Disc format, but it does not intend to interfere in the other partner's format business, according to company spokesman Taro Takamine. Under a memorandum of understanding, signed Thursday, the new joint company is 55 per cent owned by Sony and 45 per cent owned by NEC. The two companies will continue talks to strike an official contract, the statement said. Global shipments of DVD drives are growing as demand for digital consumer gadgets equipped with the drives expands, including DVD players and recorders, and PCs with enhanced audiovisual features. But price competition is also intense. Prices of these digital products are falling steadily, and there are many DVD drive suppliers. Through the joint venture, the two companies intend to "bolster the business by combining each other's strength," such as Sony's optical pickup device technology and NEC's strength in system chips, Sony spokesman Jerald Cavanagh said. In the last fiscal year ended March 31, their combined sales in the optical disc drive business totaled around $1.85 billion US. Sony shares rose 1.75 per cent to finish at 4,060 yen ($34.12 US) on the Tokyo Stock Exchange on Thursday, while NEC closed at 634 yen ($5.33 US), up 0.80 per cent. Both Sony and NEC are based in Tokyo.

 

Delphi Corp., the largest U.S. auto supplier, files for bankruptcy

DETROIT- Delphi Corp., the largest U.S. auto supplier, filed for bankruptcy Saturday, sending shock waves through the country's auto industry, which already is weakened by high labor costs and falling market share. Delphi's bankruptcy, which is expected to result in plant closures and layoffs, is one of the largest in U.S. history. Delphi filed to reorganize its U.S. operations in federal bankruptcy court in New York, where hearings are scheduled to begin next week. Delphi's non-U.S. operations were not included in the filing. Delphi Chairman and CEO Robert Miller said the company hopes to emerge from Chapter 11 in early to mid-2007. "We will make every effort to make this as quick as possible," Miller told The Associated Press on Saturday. Miller, a restructuring expert who was hired in July, had threatened to take the company into bankruptcy if he failed to reach a restructuring agreement with Delphi's former parent, General Motors Corp., and its largest union, the United Auto Workers. Miller set a deadline of Oct. 17, when U.S. bankruptcy laws are scheduled to change. Miller said Delphi will continue negotiating with GM and the UAW to lower its labor costs. Miller said the three parties agreed to continue their discussions after a bankruptcy filing. "We mutually concluded there was still too much of the complex work yet to be done," Miller said. "It was not going to be efficient to work right up to the midnight deadline to the change in the law." Miller said nothing will change immediately. Delphi will continue to pay its 50,000 U.S. employees and suppliers and will ship its products on schedule. Delphi has 31 plants in 13 states, including Michigan, Ohio, Alabama and California. The company has 185,000 employees worldwide. "We are not going to adversely affect our customers," he said. "Our people will get their pay checks and will still have their health benefits. Retirees will continue to get their checks. Any changes to that will be dealt with in an orderly way." Delphi will finance its operations with $4.5 billion US in loans, including up to $2 billion in debtor-in-possession financing from a group of lenders led by JPMorgan Chase Bank and Citigroup Global Markets Inc. Delphi, based in the Detroit suburb of Troy, has struggled to make a profit since GM spun it off in 1999. It lost $4.8 billion in 2004 and nearly $750 million in the first half of this year. Delphi, No. 63 on the 2005 Fortune 500 list of the country's largest corporations, had $16.5 billion in total assets as of June 30, the most recent figure available, and has total debt of $6 billion, Standard & Poor's said Thursday. The company had $4.3 billion in unfunded pension liabilities at the end of 2004, according to a company filing with the U.S. Securities and Exchange Commission. Also Saturday, Robert Dellinger was named executive vice-president and chief financial officer. The former Sprint Corp. official succeeds acting CFO John Sheehan, who was named Delphi's vice-president and chief restructuring officer. The largest corporate bankruptcy in the U.S. was WorldCom Inc., which had $103.9 billion in pre-bankruptcy assets. Like Tower Automotive Inc. and other auto suppliers who have recently declared bankruptcy, Delphi has struggled with the high cost of steel and other raw materials as well as U.S. production cuts. But Delphi also blamed its spinoff agreement with GM for saddling it with high labour costs. Under the agreement, Delphi is required to pay GM wages of $27 an hour to most of its 24,000 UAW-represented workers. That's double the level of competing suppliers, according to Standard & Poor's Ratings Services. Delphi also had to pay full wages and benefits to 4,000 laid-off workers in jobs banks, which cost it $400 million each year. Delphi has a total of 30,000 U.S. hourly employees and 12,000 hourly retirees. About 6,000 hourly employees are represented by other unions, including the International Union of Electronic Workers/Communications Workers of America. Under a bankruptcy filing, Delphi could shift at least some of its pension liabilities to the federal government's Pension Benefit Guaranty Corp. and could get the court to order lower wages and benefits for the UAW and higher costs for its parts. Under the spinoff agreement, GM also is liable for some of Delphi's pension obligations if Delphi is in bankruptcy. In a note to investors, Merrill Lynch analyst John Casesa said GM could be liable for $4.4 billion to $6.7 billion worth of pension and health care benefits. Delphi and GM have been tightlipped about the negotiations. But a letter sent from UAW leaders to union members in Kokomo, Ind., earlier this week said Delphi asked the UAW to accept wage cuts of more than 50 per cent, to $10-$12 an hour, and eliminate the jobs bank. Delphi also called for a reduction in health care benefits and vacation time. Delphi also has been plagued by an accounting scandal that the FBI and the SEC are now investigating. Six people have resigned because of the investigation, including Delphi's former chief financial officer Alan Dawes.

 

U.S. Attorney General indicts Conrad Black and others on criminal fraud charges

Conrad Black

The U.S. government has charged fallen Canadian media baron Conrad Black and three other former executives of Hollinger International with fraud, in connection with an alleged scheme to steal more than $80 million US from the media company. The allegations stem from Hollinger's $3.2 billion sale of hundreds of Canadian newspapers to CanWest Global Communications Corp., and the misuse of corporate perks. Criminal charges against Black have been anticipated since August, when two of his associates - including longtime business partner David Radler - and his former Ravelston Corp. holding company were indicted. On Thursday, a warrant was issued for the arrest of Black, as well as former Hollinger executives John Boultbee and Peter Atkinson. If they do not turn themselves in at a yet-to-be-scheduled court date in Chicago, the U.S. Attorney will seek their extradition. In addition, two new charges have been laid against former Hollinger lawyer Mark Kipnis, who was indicted seven counts of fraud this summer. Both Black and Boultbee are facing eight counts of mail and wire fraud, while Atkinson is facing six counts. Each count could mean five years in jail and a $250,000 fine. If the 61-year-old Black is found guilty, he could go to prison for up to 40 years. Through his lawyer Eddie Greenspan, Black insisted he is innocent and will fight the fraud charges, but he did not say whether he will go to Chicago to face his accusers. "Conrad Black asserts his innocence without qualification with respect to each and every one of the charges set forth in the indictment," said a brief statement from Greenspan released late Thursday. "It will be shown that he has, at all times, acted within the law.

 

U.S. lawsuit accuses tire maker of using slave labor in Liberia, West Africa

A U.S. federal lawsuit filed Thursday accuses tire maker Bridgestone Firestone of employing slave labor and child labor on its massive rubber plantation in Liberia. The suit, filed in U.S. District Court, seeks class action on behalf of 12 adult workers and 23 children who work and live on the Firestone Plantation in Harbel, Liberia.

 

 

 

 

 

The suit claims the workers are trapped in a "gulag of misery" and forced to work under conditions that have changed little since the plantation was founded in 1926. "The plantation workers are modern day slaves, forced to work by the coercion of poverty, with the prospect of starvation just one complaint about conditions away," the lawsuit states. The Japanese company, with North American headquarters in Nashville, Tenn., said it had not been served with the lawsuit, but said the claims were "completely without merit.' Bridgestone Firestone North American Tire is a unit of Bridgestone Corp. The company said its workers are represented by a labor union, are highly paid, and that no one under 18 is employed. The company also has a strict policy against child labor. "Firestone Liberia has a courageous and hard working leadership team comprised primarily of Liberians who are working to create hope and opportunity for the people of the Harbel community," the company said in a statement. The lawsuit claims workers get up at 4:30 a.m., then work 12 to 14 hours while using primitive tools to tap the rubber trees and collect raw latex.

The suit also claims that Bridgestone Firestone imposes impossible quotas on the laborers and cuts their pay by half if the daily quotas are not met. In order to meet their quotas, laborers routinely have their minor children join them, the lawsuit claims. Laborers are paid a daily wage of $3.19 US before deductions and must tap at least 1,125 trees per day. The court action was organized by the Washington, D.C.-based International Labor Rights Fund, which also helped organize a lawsuit in the 1990s against Unocal Corp. alleging human rights violations during the construction of a pipeline in Southeast Asia. Gary gentle states that the lawsuit claims the plaintiffs, identified only as John, James and Jane Roe, could not bring similar court actions in Liberia because of fear of retribution and corrupt court system. The lawsuit requests a jury trial and unspecified damages.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Most of the Google's revenue comes from advertising sales.

Shares in Google have risen above $400 each for the first time, capping a strong period of growth for the internet search firm. Google shares closed up $5.30, or 1.3%, at $403.45, giving the firm a higher market value than stalwarts Coca-Cola, Walt Disney and Cisco Systems. Google's shares were valued at $85 each when the company listed on the US Nasdaq stock market 15 months ago. Analysts have been excited by the growth potential of new products.

Growth strategy: The latest of these is Google Base - unveiled on Wednesday - which will enable people to search for different information collected from consumers and businesses. Other recent initiatives include a plan to supply miniature satellite maps to mobile phones as well as a controversial online library service providing digital prints of books. The market has also been encouraged by Google's financial performance. The company reported a sharp rise in profits in the last quarter, as net income rose to $381.2m (£215m) from $52m in the same period last year. Sales in the three months to the end of September totaled $1.57bn - 96% higher than the same period in 2004. Most of the Google's revenue comes from advertising sales.

 

Investors cheer Hewlett-Packard

Mr. Hurd's plan appears to be working

Investors cheered as the US computer giant Hewlett-Packard (HP) reported figures that suggest it is recovering. HP's $416m (£242m) profits for the August to October quarter fell far short of the $1.091bn made during the same period last year. But investors accepted HP's explanation that this was due to the $1.1bn cost of a restructuring announced in summer. Sales rose for all its units, so investors decided to ignore the 62% fall in profits. HP shares rose 6%. "The results look very, very positive pretty much across the board," said SG Cowen analyst Richard Chu. "Throughout the last six to nine months, HP has really been flexing its muscles." "We've been doing a lot of things in the company at the same time and we've been doing that well," said HP chief executive Mark Hurd. "HP delivered another strong quarterly performance, with balanced revenue growth, good cost discipline, improved margins in key businesses and strong cash flow," said Mr Hurd, who earlier this year replaced Carly Fiorina after she was ousted. Soon thereafter, Mr Hurd cut 14,500 jobs as part of a restructuring aimed at slashing costs by $1.9bn per year.