Whole Foods Market Inc. said Wednesday that its fiscal fourth-quarter profit rose 31 percent, beating analysts' expectations as sales rose.
But the company's outlook for next year's profit fell just short of what analysts forecast on average, and its shares fell after hours.
The natural and organic grocery store chain reported net income of $75.5 million, or 42 cents per share, up from $57.5 million, or 33 cents per share, a year earlier. Its revenue rose 12 percent to $2.35 billion.
Analysts expected net income of 41 cents per share but higher revenue -- the $2.36 billion -- according to FactSet.
For the next fiscal year, which began in the current period, the Austin, Texas-based grocer expects to earn $2.21 to $2.26 per share and revenue growth of 13 percent to 15 percent over 2011, which implies a range of $11.4 billion to $11.6 billion. Analysts were expecting $2.26 per share and revenue of $11.6 billion.
Whole Foods' shares dropped $3.14, or 4.5 percent, to $67.42 after hours. They had closed up $1.05 at $70.56.
Many analysts were worried the weak economy would crimp Whole Foods' sales both because it sells some higher-priced items that consumers can do without in tough times and because rising food costs are holding back demand. The USDA estimates food costs will rise about 4 percent for 2011 overall.
Whole Foods Chief Operating Officer A.C. Gallo said the company's costs had risen, particularly in the meat and dairy aisles.
"We've realized that we've had to be really careful ... because we don't feel like we really want to push those (prices) very much farther (onto consumers)," Gallo told investors during a conference call Wednesday.
The recession slammed Whole Foods, but it revamped its operation by cutting costs, slowing expansion and offering more lower-priced options. The strategy worked: Whole Foods' sales have risen.
That success is partly to blame for investors' disappointment with the company's most recent results, said Matt Arnold, an analyst with Edward Jones.
"Investors have become accustomed to this company blowing out the current quarter and raising the bar for the next one," Arnold said.
For all of fiscal 2011, Whole Foods reported net income of $342.6 million, or $1.93 per share, compared with $245.8 million, or $1.43 per share, in fiscal 2010. Revenue in 2011 was $10.1 billion, compared with $9 billion in 2010.
The results met analysts' expectations for net income but fell just below the $10.12 billion in revenue analysts anticipated, according to FactSet.
Whole Foods also said it boosted its dividend 40 percent to 14 cents per share and would buy back $200 million worth of its stock.
News Corp 1Q profit falls on charges from scandal
News Corp. said its first-quarter net income dropped 5 percent due to the cost of closing a scandal-wracked tabloid and dropping its takeover bid for British Sky Broadcasting.
The media conglomerate, controlled by CEO Rupert Murdoch, is under fire for hacking phones in Britain.
Its net income for July through September fell to $738 million, or 28 cents per share, from $775 million, or 30 cents per share, a year ago.
Absent about $221 million in special charges, including $91 million in restructuring costs linked to the U.K. newspaper business, adjusted earnings came to 32 cents per share, beating the 29 cents per share that analysts expected on average, according to FactSet.
Revenue grew 7 percent to $7.96 billion, helped by higher fees for pay TV channels like Fox News and the successful movie "Rise of the Planet of the Apes." That also beat the $7.63 billion expected by analysts.
Advertising revenue at its domestic pay TV channels such as FX grew 13 percent for the quarter. That topped the 9 percent advertising growth at media rival Time Warner Inc.'s Turner networks and the 11 percent adjusted growth at Discovery Communications Inc., which operates channels such as Discovery and Animal Planet.
"It's in line with Discovery, some of the best companies in the group," said media company analyst Vasily Karasyov with Susquehanna Financial Group. "It's a good quarter, definitely."
The company said Wednesday that it remains on track for higher adjusted operating income in the fiscal year that ends next June by "low to mid-teen" percentages from the $4.98 billion it posted last year.
News Corp.'s shares rose 30 cents, or 1.8 percent, to $17.20 in after-hours trading following the release of its earnings. The shares had closed up 21 cents, or 1.3 percent, at $16.90 in the regular session.
Murdoch, the 80-year-old CEO who controls News Corp. through a family trust that owns nearly 40 percent of the voting shares, did not participate in a conference call to take questions from analysts and journalists.
Earlier Wednesday, Vanity Fair previewed an article which said Rupert Murdoch had asked his son James, the company's heir apparent, to take a leave amid the phone hacking scandal this summer, before changing his mind after a sleepless night. The story appears in Vanity Fair's December issue, which hits newsstands on Thursday.
Chief Operating Officer Chase Carey said Wednesday that the company had no plans to oust James Murdoch, who is currently the No. 3 at the company as its deputy chief operating officer.
"We have great confidence in James," Carey said. "James has done a good job and we are not contemplating any changes."
Carey said, however, that the board takes "seriously" a protest vote by a majority of voting shareholders not affiliated with the family against the re-election of Murdoch's sons James and Lachlan to the board.
"The board continues to evolve," he said. "We're proactively looking for feedback from our shareholders."
James Murdoch, as former head of News Corp.'s European and Asian operations, has come under increasing pressure over his handling of the affair and is due to testify before British lawmakers for a second time on Nov. 10.
Analyst Thomas Eagan with Collins Stewart said investors have learned to shrug off a string of damaging headlines related to the scandal and pointed to the company's improved TV channel profit margins, especially compared to decreased TV profits at Time Warner.
Any management shake-up would benefit Carey, a Wall Street darling who helped build DirecTV into a satellite TV powerhouse, Eagan said.
Carey re-joined News Corp. as COO in 2009 and since then, he's helped the company quickly sell money-losing social networking site Myspace and institute a $5 billion share buyback plan that is more than one-third complete.
"He's already changed management's perspective at News Corp. in the short time he's been there," Eagan said. "If there's any change in the management structure, it'll likely be a positive for Chase Carey, which the Street would like."
The media conglomerate, controlled by CEO Rupert Murdoch, is under fire for hacking phones in Britain.
Its net income for July through September fell to $738 million, or 28 cents per share, from $775 million, or 30 cents per share, a year ago.
Absent about $221 million in special charges, including $91 million in restructuring costs linked to the U.K. newspaper business, adjusted earnings came to 32 cents per share, beating the 29 cents per share that analysts expected on average, according to FactSet.
Revenue grew 7 percent to $7.96 billion, helped by higher fees for pay TV channels like Fox News and the successful movie "Rise of the Planet of the Apes." That also beat the $7.63 billion expected by analysts.
Advertising revenue at its domestic pay TV channels such as FX grew 13 percent for the quarter. That topped the 9 percent advertising growth at media rival Time Warner Inc.'s Turner networks and the 11 percent adjusted growth at Discovery Communications Inc., which operates channels such as Discovery and Animal Planet.
"It's in line with Discovery, some of the best companies in the group," said media company analyst Vasily Karasyov with Susquehanna Financial Group. "It's a good quarter, definitely."
The company said Wednesday that it remains on track for higher adjusted operating income in the fiscal year that ends next June by "low to mid-teen" percentages from the $4.98 billion it posted last year.
News Corp.'s shares rose 30 cents, or 1.8 percent, to $17.20 in after-hours trading following the release of its earnings. The shares had closed up 21 cents, or 1.3 percent, at $16.90 in the regular session.
Murdoch, the 80-year-old CEO who controls News Corp. through a family trust that owns nearly 40 percent of the voting shares, did not participate in a conference call to take questions from analysts and journalists.
Earlier Wednesday, Vanity Fair previewed an article which said Rupert Murdoch had asked his son James, the company's heir apparent, to take a leave amid the phone hacking scandal this summer, before changing his mind after a sleepless night. The story appears in Vanity Fair's December issue, which hits newsstands on Thursday.
Chief Operating Officer Chase Carey said Wednesday that the company had no plans to oust James Murdoch, who is currently the No. 3 at the company as its deputy chief operating officer.
"We have great confidence in James," Carey said. "James has done a good job and we are not contemplating any changes."
Carey said, however, that the board takes "seriously" a protest vote by a majority of voting shareholders not affiliated with the family against the re-election of Murdoch's sons James and Lachlan to the board.
"The board continues to evolve," he said. "We're proactively looking for feedback from our shareholders."
James Murdoch, as former head of News Corp.'s European and Asian operations, has come under increasing pressure over his handling of the affair and is due to testify before British lawmakers for a second time on Nov. 10.
Analyst Thomas Eagan with Collins Stewart said investors have learned to shrug off a string of damaging headlines related to the scandal and pointed to the company's improved TV channel profit margins, especially compared to decreased TV profits at Time Warner.
Any management shake-up would benefit Carey, a Wall Street darling who helped build DirecTV into a satellite TV powerhouse, Eagan said.
Carey re-joined News Corp. as COO in 2009 and since then, he's helped the company quickly sell money-losing social networking site Myspace and institute a $5 billion share buyback plan that is more than one-third complete.
"He's already changed management's perspective at News Corp. in the short time he's been there," Eagan said. "If there's any change in the management structure, it'll likely be a positive for Chase Carey, which the Street would like."
In or out: Europe heaps pressure on Greece
European leaders drew a line in the sand for Greece on Wednesday, saying its referendum on a hard-won bailout deal will decide whether it stays in the eurozone -- and vowing Athens will not get new aid until the result is in.
The acknowledgment that the vote -- which will likely take place on Dec. 4 -- could see Greece leaving the currency union is the first official admission that such an exit is possible and follows almost two years of pledges to the contrary.
The move to tie the vote to the fate of the euro is a huge gamble that could endanger the future of the currency union, the centerpiece of Europe's postwar unity, and potentially push the world economy into another recession.
"The referendum ... in essence is about nothing else but the question, does Greece want to stay in the eurozone, yes or no?" German Chancellor Angela Merkel said at a news conference together with French President Nicolas Sarkozy.
The leaders of the two biggest eurozone economies spoke to the press after emergency talks with Greek Prime Minister George Papandreou in Cannes, France. The discussion also included International Monetary Fund head Christine Lagarde and other top EU and eurozone officials.
By turning the referendum into a popular vote on whether Greece wants to remain in the eurozone -- the currency union that gave it access to the club of Europe's richest countries but also allowed it to pile up a massive debt mountain -- leaders are taking a risky bet.
The exit of the eurozone's weakest member could trigger a dangerous domino effect that could quickly see Ireland and Portugal, the other two countries that have received bailouts, also leave the currency bloc and cause the financial collapse of Italy and Spain, which are barely hanging on.
Papandreou said that he was forced to call a referendum after it became clear that there was no "broad support" from opposition parties for a bailout deal reached with the rest of the eurozone and big banks just a week ago.
That deal would supply Greece with an extra euro100 billion ($138 billion) in rescue loans from the rest of the eurozone and the IMF -- on top of the euro110 billion it was granted a year ago -- and would see banks forgive Athens 50 percent of the money it still owes them.
However, in return Greece had to accept another painful round of austerity measures and privatizations -- harboring years of more pain for a people already reeling from two years of deep cuts.
"I felt that it was important that the Greek people make a decision on these important developments," Papandreou said. "It is their democratic right and the Greek people, I believe, are mature and wise to make the decision that is to the benefit of the Greek people and the country."
The alternative to the new rescue deal would be a hard default by Greece within days after the referendum, potentially toppling banks across Europe and further undermining an already slowing economic recovery.
Europe's increasingly shaky condition is the center of attention at a summit of the Group of 20 leading world economies in Cannes on Thursday and Friday. The United States, China and other nations are looking to Europe to get its house in order and avoid harming the global recovery. The United States has an important role to play but it is ultimately Europe's problem to solve, the White House said Wednesday as President Barack Obama headed for Cannes.
Merkel and Sarkozy said that a crucial euro8 billion ($11 billion) loan installment to Greece that was due to be paid out by mid-November won't be transferred until after the vote.
Eurozone finance ministers had already signed off on their part of the payment two weeks ago, but leaders said that without the second bailout assured there was no point in carrying on with the first one.
"We want to continue with the Greeks but there are rules and it's unacceptable that these rules are not followed," Sarkozy told journalists.
Papandreou said that Greece would be able to stay afloat until after the referendum -- Greek officials had previously said that Athens would run out of money by mid-November -- but acknowledged that the schedule was tight.
"If everything goes well -- which we hope everything will go well in the referendum -- it's quite a few days before the 6th tranche is needed to pay up salaries and pensions and so on," he said on his way out of the meeting.
While eurozone leaders tried to display a concerted front, with Merkel and Sarkozy briefing the press in their now habitual tandem, the referendum is uncovering growing cracks in the eurozone's unity.
"This did not happen in a coordinated fashion," she said of Papandreou's sudden decision to call a vote on the bailout deal. Merkel said that because of the referendum, the rest of the currency union now had to build up its defenses more quickly.
To make progress in that direction the finance ministers of France and Germany will meet with the EU's Monetary Affairs Commissioner Olli Rehn Thursday to work on a plan to boost the firepower of the region's bailout fund to euro1 trillion ($1.4 trillion).
That was one of the commitments of last week's eurozone summit, but investors remained unconvinced by the promise of a larger rescue fund as many questions on how it will work were left unanswered.
In Rome on Wednesday, Italy's Cabinet proposed legislation to sell off government-owned real estate, encourage investment in infrastructure and privatize local public companies in a bid to avoid becoming the next victim of Europe's debt crisis.
While Merkel and Sarkozy both stressed the democratic right of the Greek people to decide its own destiny, Jean-Claude Juncker, the prime minister of Luxembourg and chairman of the Eurogroup, was more direct.
"Greece had 8 billion -- Greece has lost 8 billion after having made a decision to put all these questions to a referendum," he told journalists. "That's a pity."
The acknowledgment that the vote -- which will likely take place on Dec. 4 -- could see Greece leaving the currency union is the first official admission that such an exit is possible and follows almost two years of pledges to the contrary.
The move to tie the vote to the fate of the euro is a huge gamble that could endanger the future of the currency union, the centerpiece of Europe's postwar unity, and potentially push the world economy into another recession.
"The referendum ... in essence is about nothing else but the question, does Greece want to stay in the eurozone, yes or no?" German Chancellor Angela Merkel said at a news conference together with French President Nicolas Sarkozy.
The leaders of the two biggest eurozone economies spoke to the press after emergency talks with Greek Prime Minister George Papandreou in Cannes, France. The discussion also included International Monetary Fund head Christine Lagarde and other top EU and eurozone officials.
By turning the referendum into a popular vote on whether Greece wants to remain in the eurozone -- the currency union that gave it access to the club of Europe's richest countries but also allowed it to pile up a massive debt mountain -- leaders are taking a risky bet.
The exit of the eurozone's weakest member could trigger a dangerous domino effect that could quickly see Ireland and Portugal, the other two countries that have received bailouts, also leave the currency bloc and cause the financial collapse of Italy and Spain, which are barely hanging on.
Papandreou said that he was forced to call a referendum after it became clear that there was no "broad support" from opposition parties for a bailout deal reached with the rest of the eurozone and big banks just a week ago.
That deal would supply Greece with an extra euro100 billion ($138 billion) in rescue loans from the rest of the eurozone and the IMF -- on top of the euro110 billion it was granted a year ago -- and would see banks forgive Athens 50 percent of the money it still owes them.
However, in return Greece had to accept another painful round of austerity measures and privatizations -- harboring years of more pain for a people already reeling from two years of deep cuts.
"I felt that it was important that the Greek people make a decision on these important developments," Papandreou said. "It is their democratic right and the Greek people, I believe, are mature and wise to make the decision that is to the benefit of the Greek people and the country."
The alternative to the new rescue deal would be a hard default by Greece within days after the referendum, potentially toppling banks across Europe and further undermining an already slowing economic recovery.
Europe's increasingly shaky condition is the center of attention at a summit of the Group of 20 leading world economies in Cannes on Thursday and Friday. The United States, China and other nations are looking to Europe to get its house in order and avoid harming the global recovery. The United States has an important role to play but it is ultimately Europe's problem to solve, the White House said Wednesday as President Barack Obama headed for Cannes.
Merkel and Sarkozy said that a crucial euro8 billion ($11 billion) loan installment to Greece that was due to be paid out by mid-November won't be transferred until after the vote.
Eurozone finance ministers had already signed off on their part of the payment two weeks ago, but leaders said that without the second bailout assured there was no point in carrying on with the first one.
"We want to continue with the Greeks but there are rules and it's unacceptable that these rules are not followed," Sarkozy told journalists.
Papandreou said that Greece would be able to stay afloat until after the referendum -- Greek officials had previously said that Athens would run out of money by mid-November -- but acknowledged that the schedule was tight.
"If everything goes well -- which we hope everything will go well in the referendum -- it's quite a few days before the 6th tranche is needed to pay up salaries and pensions and so on," he said on his way out of the meeting.
While eurozone leaders tried to display a concerted front, with Merkel and Sarkozy briefing the press in their now habitual tandem, the referendum is uncovering growing cracks in the eurozone's unity.
"This did not happen in a coordinated fashion," she said of Papandreou's sudden decision to call a vote on the bailout deal. Merkel said that because of the referendum, the rest of the currency union now had to build up its defenses more quickly.
To make progress in that direction the finance ministers of France and Germany will meet with the EU's Monetary Affairs Commissioner Olli Rehn Thursday to work on a plan to boost the firepower of the region's bailout fund to euro1 trillion ($1.4 trillion).
That was one of the commitments of last week's eurozone summit, but investors remained unconvinced by the promise of a larger rescue fund as many questions on how it will work were left unanswered.
In Rome on Wednesday, Italy's Cabinet proposed legislation to sell off government-owned real estate, encourage investment in infrastructure and privatize local public companies in a bid to avoid becoming the next victim of Europe's debt crisis.
While Merkel and Sarkozy both stressed the democratic right of the Greek people to decide its own destiny, Jean-Claude Juncker, the prime minister of Luxembourg and chairman of the Eurogroup, was more direct.
"Greece had 8 billion -- Greece has lost 8 billion after having made a decision to put all these questions to a referendum," he told journalists. "That's a pity."
Syms and Filene's unit seek bankruptcy protection
Discount retailer Syms Corp. and its subsidiary Filene's Basement have filed for bankruptcy protection and plan to close all 46 of their stores.
Syms acquired Filene's Basement out of bankruptcy protection in the spring of 2009 for $62.4 million, but struggled to turn the chain around. This is the third bankruptcy protection involving the Filene's Basement chain.
Syms and Filene's Basement stores are located mostly in the Eastern U.S. and employ about 2,450 people, the company said.
It's an indicator of the tough economic times as the retailer struggled to stay afloat amid tough competition and consumers who have curbed their spending.
Company CEO Marcy Syms said in statement the two discount chains were burdened by increasing competition from department stores offering the same brands at similar discounts and by a rising number of private label discounters. She also said there was less overstock for her company to buy as businesses continue to manage their inventory carefully during the tough economy.
Syms said the bankruptcy filings capped "a process that has taken place for several months."
The company, based in Secaucus, N.J., announced in May that it was exploring strategic options, including a potential sale.
CEO Syms said the company's board decided that the Chapter 11 bankruptcy filing and liquidation was the best way to maximize value for those with a stake in the company such as suppliers that are owed money.
"Blame the economy, blame the world," said St. John's University business professor Anthony Michael Sabino. "I wouldn't call it expected, but I wouldn't call it surprising. "
The filing before the key holiday season could be a bad sign for retailers, Sabino said. He said even distressed retailers wait until after Christmas to file for bankruptcy, as the holiday season is their last chance to make some money. A filing in anticipation of the peak shopping season is a sign that consumers are still not spending and could mean bad news for other retailers.
Founder Sy Syms started the company in 1959, buying excess merchandise directly from manufacturers at a discount. Off-price retailers did well during the recession as consumers traded down and spent less money, but the category has been weaker in the recovery as some shoppers are returning to luxury goods.
Filene's Basement was started in 1909 in Boston by William Filene, initially as a place for the Filene's department store to sell excess merchandise. It may be best known for its "Running of the Brides" sales event, where eager brides-to-be would wait in line for hours for a chance at buying deeply discounted bridal gowns.
The liquidation is anticipated to run through about January.
The petitions were filed in the U.S. Bankruptcy Court for the District of Delaware.
Syms and Filene's will be jointly administered during the bankruptcy. The companies are seeking court approval to hire someone to handle the merchandise liquidation and conduct sales.
Shares of Syms rose $2.05, nearly 27 percent, to close Wednesday at $9.72.
Syms acquired Filene's Basement out of bankruptcy protection in the spring of 2009 for $62.4 million, but struggled to turn the chain around. This is the third bankruptcy protection involving the Filene's Basement chain.
Syms and Filene's Basement stores are located mostly in the Eastern U.S. and employ about 2,450 people, the company said.
It's an indicator of the tough economic times as the retailer struggled to stay afloat amid tough competition and consumers who have curbed their spending.
Company CEO Marcy Syms said in statement the two discount chains were burdened by increasing competition from department stores offering the same brands at similar discounts and by a rising number of private label discounters. She also said there was less overstock for her company to buy as businesses continue to manage their inventory carefully during the tough economy.
Syms said the bankruptcy filings capped "a process that has taken place for several months."
The company, based in Secaucus, N.J., announced in May that it was exploring strategic options, including a potential sale.
CEO Syms said the company's board decided that the Chapter 11 bankruptcy filing and liquidation was the best way to maximize value for those with a stake in the company such as suppliers that are owed money.
"Blame the economy, blame the world," said St. John's University business professor Anthony Michael Sabino. "I wouldn't call it expected, but I wouldn't call it surprising. "
The filing before the key holiday season could be a bad sign for retailers, Sabino said. He said even distressed retailers wait until after Christmas to file for bankruptcy, as the holiday season is their last chance to make some money. A filing in anticipation of the peak shopping season is a sign that consumers are still not spending and could mean bad news for other retailers.
Founder Sy Syms started the company in 1959, buying excess merchandise directly from manufacturers at a discount. Off-price retailers did well during the recession as consumers traded down and spent less money, but the category has been weaker in the recovery as some shoppers are returning to luxury goods.
Filene's Basement was started in 1909 in Boston by William Filene, initially as a place for the Filene's department store to sell excess merchandise. It may be best known for its "Running of the Brides" sales event, where eager brides-to-be would wait in line for hours for a chance at buying deeply discounted bridal gowns.
The liquidation is anticipated to run through about January.
The petitions were filed in the U.S. Bankruptcy Court for the District of Delaware.
Syms and Filene's will be jointly administered during the bankruptcy. The companies are seeking court approval to hire someone to handle the merchandise liquidation and conduct sales.
Shares of Syms rose $2.05, nearly 27 percent, to close Wednesday at $9.72.
Like a Rock: Chevy celebrates 100th anniversary
We saw the USA in them. We drove them to the levee. We even worked on our night moves in their back seats.
For a century, Chevrolets won America's love with their safety, convenience, style and speed -- even if sometimes they were clunky, or had problems with rust or their rear suspensions.
Chevy, which lays claim to being the top-selling auto brand of all time, celebrates its 100th birthday on Thursday.
For most of its life, Chevy stayed a fender ahead of the competition by bringing innovations like all-steel bodies, automatic shifting, electric headlamps and power steering to regular folks at a low cost.
Chevy also embedded itself in American culture, sometimes changing it by knowing what people wanted to drive before they did. Snappy jingles and slogans dominated radio and television, and bands mentioned Chevys in more than 700 songs. No other automotive brand has come close to the adoration that Chevy won from customers, especially in the 1950s and `60s.
"The American car from the mid-1930s to the end of the `60s was a Chevrolet," said John Heitmann, an automotive history professor at the University of Dayton and author of a book about the automobile's impact on American life. "It was the car of the aspiring American lower and middle classes for a long period."
On the way to selling more than 204 million cars and trucks, Chevy invented the sport utility vehicle and an electric car with a generator on board to keep it going when the batteries die.
But it also helped ruin General Motors Co.'s reputation for many. In the 1970s, it began cranking out rust-prone, nondescript cars with gremlin-infested motors and transmissions. Now it's in the midst of a comeback, selling better-quality vehicles as a global brand with 60 percent of its sales coming outside the United States.
Chevrolet Motor Co., was launched on Nov 3, 1911, in Detroit when Louis Chevrolet, a Swiss-born race car driver and engineer, joined ousted GM founder William "Billy" Durant to start a new brand.
Their first car was the stylish and speedy Series C "Classic Six." It had a powerful six-cylinder engine at a time when most cars had only four. And it came with an electric starter and headlamps, which were a rarity. But at $2,150 ($50,000 today, when adjusted for inflation), it was out of reach for most people.
Their next car, the "Little," was smaller and less-expensive, with a reliable four-cylinder engine. It was far more successful.
But the founders clashed over the future of the company. Chevrolet wanted to pursue his dream of building high-performance cars, while Durant was determined to cater to the masses. In 1915, Durant bought out Chevrolet, who returned to auto racing.
A year after Chevrolet's departure, the company sold about 70,000 cars, giving Durant enough cash to take control of GM. He later made Chevy a separate division of the company.
While Fords were made of wood and canvas, Chevys were steel, giving drivers more comfort and safety. Chevy had independent suspensions for each wheel that made cars ride and handle better. And it mass-produced modern hydraulic brakes, which stopped cars with less effort and didn't pull to one side like the mechanical brakes used by Ford, according to Heitmann.
By 1927, Chevy overtook Ford as the country's most popular brand, selling more than 1 million cars that year.
Through a combination of innovation and affordability, Chevy was the top U.S. brand for 52 of the next 83 years.
In 1950, Chevy became the first low-priced brand with an automatic transmission. But while most Chevys were practical, cheap and cost little to maintain, these vehicles also lacked a stylistic distinction from other brands.
That all changed in 1955, when Legendary GM design head Harley Earl created a car known for its beauty and speed. The Bel Air had chrome accents and was powered by a small, V-8 engine. For those who couldn't afford a Bel Air, Chevy made plainer, low-cost versions, the 210 and the 150.
Through Earl, Chevy gave cars personalities, and made style as important as mechanics. The Bel Air was among the first car models that could be customized. Two-tone paint, four-barrel carburetors and AM radios with rear speakers were all available -- for a price.
Chevy's timing was good. The Bel Air hit the marketplace in the flush years after World War II, just as American culture was becoming more car-centric.
"Because of its design, it really woke up the culture," said Jim Mattison, a Chevrolet sales executive in the 1960s who often speaks about the brand's history.
Chevy sold 1.49 million or more of the cars from 1955 through 1957, the period that many consider GM's finest.
As a 17-year-old high school student in South St. Paul, Minn., Kirby Lawrence borrowed $2,000 to buy a 210 hardtop and repaid the loan with the money he earned working at his father's plumbing business.
"It was the most powerful thing around, and it was very reasonably priced," said Lawrence, now 74 and the historian for a Minnesota-based club called Chevy's Best, made up mainly of people who have restored 1955-57 Chevys.
As the cars caught on, Chevy's advertising did, too. The "Dinah Shore Chevy Show" made its television debut in 1956, featuring Shore singing "See the USA in your Chevrolet" at the end of every one-hour show. Chevy used the song in its ads after the show ended in 1963. The ads got even bigger as Chevy sponsored singer Pat Boone's variety show and the popular western series "Bonanza." Chevy even arranged for the Corvette to star in the early 1960s series "Route 66," about two men finding themselves while driving across the country.
With the 1960s came another Chevy sales boom, led by the Corvette Sting Ray, the Impala family car and the muscular Camaro. The Sting Ray, the second generation of the Corvette, came with hidden headlights and jet-like looks. Even though relatively few Sting Rays were sold, it cemented Corvette as a cool brand.
But in the mid-'60s, Chevy's hot streak went cold.
Safety problems surfaced with the Corvair, a compact car with the engine in the rear, a feature previously found only in Volkswagens and exotic race cars. On early models, the suspension couldn't handle the rear weight, and the car could spin out of control. Consumer advocate Ralph Nader publicized its problems in his book "Unsafe at any Speed."
Throughout the 1970s, a variety of Chevy models, including the Vega, gained notoriety for their reliability problems. The timing couldn't have been worse. It coincided with the rise of Toyota and Honda, which earned kudos for reliability.
Don McLean's hit song "American Pie" in 1971("Drove my Chevy to the levee, but the levee was dry") and Bob Seger's "Night Moves" in 1976 ("Out in the back seat of my '60 Chevy ...") kept the brand on many lips, as did the jingle "Baseball, hot dogs, apple pie and Chevrolet."
A catchy 1980s ad proclaimed Chevy the "Heartbeat of America." But for most people, it wasn't.
"The Chevy car moved from something that at one time captured the spirit of Americans to something so unexciting that only an old person with no interest in automobiles would buy one," Heitmann said.
Cheap gas and a robust economy in the 1990s gave birth to a truck and SUV boom, and this helped Chevy regain some prominence. A 1991 ad campaign featuring Seger's hit song "Like a Rock" bolstered truck sales by showing the rugged Silverado pickup at work climbing over rocks and running through mud. The campaign was so successful that Chevy stuck with it for 13 more years.
Chevy, which invented the SUV in 1935 with the Suburban Caryall wagon, sold more than 3.8 million SUVs in the 1990s alone, led by the S-Blazer, Tahoe and supersized Suburban, according to Ward's AutoInfoBank.
But Chevy's lackluster lineup of cars later proved to be a problem. When gas prices spiked in 2008, truck sales plummeted. Buyers looking for gas mileage found little in Chevy's long-neglected car lineup. Battling a financial crisis and a recession, GM found itself weighed down by expensive union contracts and too much debt. GM, and its rival Chrysler, had to be saved by a government bailout and bankruptcy-court reorganization.
GM shed its Hummer, Pontiac, Saturn and Saab brands during bankruptcy so that it could focus precious marketing dollars on Chevy. The gambit paid off.
A leaner GM is making billions again, led by Chevrolet models like the compact Cruze, the crossover SUV Equinox and the electric Volt.
More than 4 million Chevys were sold last year, or half of GM's total sales. Worldwide, it ranks fourth behind Toyota, Volkswagen and Ford.
Heitmann said it's unlikely that any car brand will be admired again like Chevy was in the `50s and `60s, but GM is trying to recapture the magic. New ads with the slogan "Chevy Runs Deep" feature the brand's history, and marketing head Chris Perry says new products are fueling the comeback.
He points to the Cruze, which replaced the slow-selling Cobalt in 2010 and became the top-selling compact in the U.S. this year. "We went from an also-ran last year in that segment to a very, very competitive product," he said. "When we put that product out, I think the passion for the Chevy brand comes through."
For a century, Chevrolets won America's love with their safety, convenience, style and speed -- even if sometimes they were clunky, or had problems with rust or their rear suspensions.
Chevy, which lays claim to being the top-selling auto brand of all time, celebrates its 100th birthday on Thursday.
For most of its life, Chevy stayed a fender ahead of the competition by bringing innovations like all-steel bodies, automatic shifting, electric headlamps and power steering to regular folks at a low cost.
Chevy also embedded itself in American culture, sometimes changing it by knowing what people wanted to drive before they did. Snappy jingles and slogans dominated radio and television, and bands mentioned Chevys in more than 700 songs. No other automotive brand has come close to the adoration that Chevy won from customers, especially in the 1950s and `60s.
"The American car from the mid-1930s to the end of the `60s was a Chevrolet," said John Heitmann, an automotive history professor at the University of Dayton and author of a book about the automobile's impact on American life. "It was the car of the aspiring American lower and middle classes for a long period."
On the way to selling more than 204 million cars and trucks, Chevy invented the sport utility vehicle and an electric car with a generator on board to keep it going when the batteries die.
But it also helped ruin General Motors Co.'s reputation for many. In the 1970s, it began cranking out rust-prone, nondescript cars with gremlin-infested motors and transmissions. Now it's in the midst of a comeback, selling better-quality vehicles as a global brand with 60 percent of its sales coming outside the United States.
Chevrolet Motor Co., was launched on Nov 3, 1911, in Detroit when Louis Chevrolet, a Swiss-born race car driver and engineer, joined ousted GM founder William "Billy" Durant to start a new brand.
Their first car was the stylish and speedy Series C "Classic Six." It had a powerful six-cylinder engine at a time when most cars had only four. And it came with an electric starter and headlamps, which were a rarity. But at $2,150 ($50,000 today, when adjusted for inflation), it was out of reach for most people.
Their next car, the "Little," was smaller and less-expensive, with a reliable four-cylinder engine. It was far more successful.
But the founders clashed over the future of the company. Chevrolet wanted to pursue his dream of building high-performance cars, while Durant was determined to cater to the masses. In 1915, Durant bought out Chevrolet, who returned to auto racing.
A year after Chevrolet's departure, the company sold about 70,000 cars, giving Durant enough cash to take control of GM. He later made Chevy a separate division of the company.
While Fords were made of wood and canvas, Chevys were steel, giving drivers more comfort and safety. Chevy had independent suspensions for each wheel that made cars ride and handle better. And it mass-produced modern hydraulic brakes, which stopped cars with less effort and didn't pull to one side like the mechanical brakes used by Ford, according to Heitmann.
By 1927, Chevy overtook Ford as the country's most popular brand, selling more than 1 million cars that year.
Through a combination of innovation and affordability, Chevy was the top U.S. brand for 52 of the next 83 years.
In 1950, Chevy became the first low-priced brand with an automatic transmission. But while most Chevys were practical, cheap and cost little to maintain, these vehicles also lacked a stylistic distinction from other brands.
That all changed in 1955, when Legendary GM design head Harley Earl created a car known for its beauty and speed. The Bel Air had chrome accents and was powered by a small, V-8 engine. For those who couldn't afford a Bel Air, Chevy made plainer, low-cost versions, the 210 and the 150.
Through Earl, Chevy gave cars personalities, and made style as important as mechanics. The Bel Air was among the first car models that could be customized. Two-tone paint, four-barrel carburetors and AM radios with rear speakers were all available -- for a price.
Chevy's timing was good. The Bel Air hit the marketplace in the flush years after World War II, just as American culture was becoming more car-centric.
"Because of its design, it really woke up the culture," said Jim Mattison, a Chevrolet sales executive in the 1960s who often speaks about the brand's history.
Chevy sold 1.49 million or more of the cars from 1955 through 1957, the period that many consider GM's finest.
As a 17-year-old high school student in South St. Paul, Minn., Kirby Lawrence borrowed $2,000 to buy a 210 hardtop and repaid the loan with the money he earned working at his father's plumbing business.
"It was the most powerful thing around, and it was very reasonably priced," said Lawrence, now 74 and the historian for a Minnesota-based club called Chevy's Best, made up mainly of people who have restored 1955-57 Chevys.
As the cars caught on, Chevy's advertising did, too. The "Dinah Shore Chevy Show" made its television debut in 1956, featuring Shore singing "See the USA in your Chevrolet" at the end of every one-hour show. Chevy used the song in its ads after the show ended in 1963. The ads got even bigger as Chevy sponsored singer Pat Boone's variety show and the popular western series "Bonanza." Chevy even arranged for the Corvette to star in the early 1960s series "Route 66," about two men finding themselves while driving across the country.
With the 1960s came another Chevy sales boom, led by the Corvette Sting Ray, the Impala family car and the muscular Camaro. The Sting Ray, the second generation of the Corvette, came with hidden headlights and jet-like looks. Even though relatively few Sting Rays were sold, it cemented Corvette as a cool brand.
But in the mid-'60s, Chevy's hot streak went cold.
Safety problems surfaced with the Corvair, a compact car with the engine in the rear, a feature previously found only in Volkswagens and exotic race cars. On early models, the suspension couldn't handle the rear weight, and the car could spin out of control. Consumer advocate Ralph Nader publicized its problems in his book "Unsafe at any Speed."
Throughout the 1970s, a variety of Chevy models, including the Vega, gained notoriety for their reliability problems. The timing couldn't have been worse. It coincided with the rise of Toyota and Honda, which earned kudos for reliability.
Don McLean's hit song "American Pie" in 1971("Drove my Chevy to the levee, but the levee was dry") and Bob Seger's "Night Moves" in 1976 ("Out in the back seat of my '60 Chevy ...") kept the brand on many lips, as did the jingle "Baseball, hot dogs, apple pie and Chevrolet."
A catchy 1980s ad proclaimed Chevy the "Heartbeat of America." But for most people, it wasn't.
"The Chevy car moved from something that at one time captured the spirit of Americans to something so unexciting that only an old person with no interest in automobiles would buy one," Heitmann said.
Cheap gas and a robust economy in the 1990s gave birth to a truck and SUV boom, and this helped Chevy regain some prominence. A 1991 ad campaign featuring Seger's hit song "Like a Rock" bolstered truck sales by showing the rugged Silverado pickup at work climbing over rocks and running through mud. The campaign was so successful that Chevy stuck with it for 13 more years.
Chevy, which invented the SUV in 1935 with the Suburban Caryall wagon, sold more than 3.8 million SUVs in the 1990s alone, led by the S-Blazer, Tahoe and supersized Suburban, according to Ward's AutoInfoBank.
But Chevy's lackluster lineup of cars later proved to be a problem. When gas prices spiked in 2008, truck sales plummeted. Buyers looking for gas mileage found little in Chevy's long-neglected car lineup. Battling a financial crisis and a recession, GM found itself weighed down by expensive union contracts and too much debt. GM, and its rival Chrysler, had to be saved by a government bailout and bankruptcy-court reorganization.
GM shed its Hummer, Pontiac, Saturn and Saab brands during bankruptcy so that it could focus precious marketing dollars on Chevy. The gambit paid off.
A leaner GM is making billions again, led by Chevrolet models like the compact Cruze, the crossover SUV Equinox and the electric Volt.
More than 4 million Chevys were sold last year, or half of GM's total sales. Worldwide, it ranks fourth behind Toyota, Volkswagen and Ford.
Heitmann said it's unlikely that any car brand will be admired again like Chevy was in the `50s and `60s, but GM is trying to recapture the magic. New ads with the slogan "Chevy Runs Deep" feature the brand's history, and marketing head Chris Perry says new products are fueling the comeback.
He points to the Cruze, which replaced the slow-selling Cobalt in 2010 and became the top-selling compact in the U.S. this year. "We went from an also-ran last year in that segment to a very, very competitive product," he said. "When we put that product out, I think the passion for the Chevy brand comes through."
Fed foresees far weaker growth than it had earlier
The Federal Reserve sketched a bleaker outlook Wednesday for the economy, which it thinks will grow much more slowly and face higher unemployment than it had estimated in June.
The Fed's gloomier forecast shows that the recovery from the recession has continued to fall short of expectations. Some economists said it makes the Fed more likely to act further to try to boost the economy, though probably not until early next year.
One option would be a program similar to the Fed's $600 billion in Treasury bond purchases, which it completed in June. Some economists think the Fed could buy mortgage-backed securities instead, which could more directly support the depressed housing market by lowering loan rates.
Speaking at a news conference Wednesday, Chairman Ben Bernanke said that if conditions worsen, the Fed would consider buying more mortgage-backed securities . He declined to specify what would trigger such a move.
"Bernanke did not go out of his way to dampen growing expectations" that another round of purchases is coming, said Dana Saporta, an economist at Credit Suisse. "If anything, he stoked those expectations."
Still, a more aggressive effort to boost the economy would likely face resistance within the Fed. Ian Shepherdson of High Frequency Economics said the economy would have to deteriorate before the Fed would launch another round of purchases.
The Fed now predicts the economy will grow no more than 1.7 percent for 2011. For 2012, it foresees growth of about 2.7 percent. Both forecasts are roughly a full percentage point lower than its June forecast.
The Fed sees unemployment averaging 8.6 percent by the end of next year. In June, it had predicted unemployment would drop next year to as low as 7.8 percent. The rate is now 9.1 percent.
The Fed's gloomier outlook is similar to many private economists' forecasts. Bank of America Merrill Lynch, for example, expects only 1.8 percent economic growth this year and 2.1 percent in 2012.
Those growth rates are far too low to drive down unemployment.
At his news conference, his third this year, Bernanke acknowledged that the pace of growth will likely remain "frustratingly slow."
"We remain prepared to take action as appropriate to make sure the recovery continues," he said.
Even so, the Fed said the economy had improved since nearly stalling in the spring. As a result, it's putting off any new actions so it can gauge the impact of steps it's already taken.
Fed policymakers made the announcement after a two-day meeting.
In a statement, the officials said consumers have stepped up spending. Still, they said the economy continues to face significant risks, including the debt crisis and risk of recession in Europe.
At his news conference, Bernanke cited Europe's debt crisis as a particular concern. He said the crisis could threaten confidence and hold back growth.
The vote on the Fed's policy statement was 9-1. Charles Evans, the president of the Chicago Federal Reserve Bank, dissented. The statement said Evans wanted to take stronger action to try to boost the economy.
The vote was a shift from the previous two Fed meetings, when three members had dissented for the opposite reason: They opposed the Fed's continued efforts to keep rates at super-lows, for fear it could ignite inflation. Those three members, known as inflation "hawks," dropped their opposition this time.
"The view of the hawks is that once the decision has been made by the majority, it just causes confusion if they continue to vote to roll back action that has already been taken," said Paul Ashworth, chief U.S. economist at Capital Economics.
Some analysts said they expected the Fed to take further action to support the economy at coming meetings, given their expectation that growth will remain sub-par.
"Policymakers are keeping the door open because the unemployment rate remains high, and there are clear downside risks from the economic situation in Europe," said Sal Guatieri, senior economist at BMO Capital Markets.
After their September meeting, the policymakers said they would shuffle the Fed's investment portfolio to try to further reduce long-term interest rates. And in their previous meeting in August, they had said they plan to keep short-term rates near zero until at least mid-2013, unless the economy improved.
The Fed repeated the mid-2013 target in its statement Wednesday. It also said it was continuing its program to rebalance its portfolio to try to lower long-term rates.
The Fed has kept its key short-term interest rate at a record low since December 2008. This is the rate that banks charge on overnight loans. It serves as the benchmark for millions of business and consumer loans.
The Fed noted that growth strengthened over the summer, in part because temporary factors that had weighed on the economy in the spring had eased. Consumers are able to spend a little more because gas prices have declined from their May peak of roughly $4 a gallon. And auto sales and production have picked up now that supply chains disrupted by the March earthquake in Japan are flowing more freely.
But the Fed said the job market remains weak. And it suggested that the troubles in Europe could hurt U.S. growth.
The Greek prime minister's surprise move to call a referendum on the country's latest rescue plan sparked fears that the debt deal could unravel, that Greece could default on its debt and that the crisis could infect the global financial system.
Even if Europe dodges a financial catastrophe, many economists think it's headed for a recession that would affect the U.S. and global economies. The Fed expressed such concerns after its August meeting.
Still, the Fed remains deeply divided over what, if any, action to take next.
AP Economics Writer Daniel Wagner contributed to this report.
The Fed's gloomier forecast shows that the recovery from the recession has continued to fall short of expectations. Some economists said it makes the Fed more likely to act further to try to boost the economy, though probably not until early next year.
One option would be a program similar to the Fed's $600 billion in Treasury bond purchases, which it completed in June. Some economists think the Fed could buy mortgage-backed securities instead, which could more directly support the depressed housing market by lowering loan rates.
Speaking at a news conference Wednesday, Chairman Ben Bernanke said that if conditions worsen, the Fed would consider buying more mortgage-backed securities . He declined to specify what would trigger such a move.
"Bernanke did not go out of his way to dampen growing expectations" that another round of purchases is coming, said Dana Saporta, an economist at Credit Suisse. "If anything, he stoked those expectations."
Still, a more aggressive effort to boost the economy would likely face resistance within the Fed. Ian Shepherdson of High Frequency Economics said the economy would have to deteriorate before the Fed would launch another round of purchases.
The Fed now predicts the economy will grow no more than 1.7 percent for 2011. For 2012, it foresees growth of about 2.7 percent. Both forecasts are roughly a full percentage point lower than its June forecast.
The Fed sees unemployment averaging 8.6 percent by the end of next year. In June, it had predicted unemployment would drop next year to as low as 7.8 percent. The rate is now 9.1 percent.
The Fed's gloomier outlook is similar to many private economists' forecasts. Bank of America Merrill Lynch, for example, expects only 1.8 percent economic growth this year and 2.1 percent in 2012.
Those growth rates are far too low to drive down unemployment.
At his news conference, his third this year, Bernanke acknowledged that the pace of growth will likely remain "frustratingly slow."
"We remain prepared to take action as appropriate to make sure the recovery continues," he said.
Even so, the Fed said the economy had improved since nearly stalling in the spring. As a result, it's putting off any new actions so it can gauge the impact of steps it's already taken.
Fed policymakers made the announcement after a two-day meeting.
In a statement, the officials said consumers have stepped up spending. Still, they said the economy continues to face significant risks, including the debt crisis and risk of recession in Europe.
At his news conference, Bernanke cited Europe's debt crisis as a particular concern. He said the crisis could threaten confidence and hold back growth.
The vote on the Fed's policy statement was 9-1. Charles Evans, the president of the Chicago Federal Reserve Bank, dissented. The statement said Evans wanted to take stronger action to try to boost the economy.
The vote was a shift from the previous two Fed meetings, when three members had dissented for the opposite reason: They opposed the Fed's continued efforts to keep rates at super-lows, for fear it could ignite inflation. Those three members, known as inflation "hawks," dropped their opposition this time.
"The view of the hawks is that once the decision has been made by the majority, it just causes confusion if they continue to vote to roll back action that has already been taken," said Paul Ashworth, chief U.S. economist at Capital Economics.
Some analysts said they expected the Fed to take further action to support the economy at coming meetings, given their expectation that growth will remain sub-par.
"Policymakers are keeping the door open because the unemployment rate remains high, and there are clear downside risks from the economic situation in Europe," said Sal Guatieri, senior economist at BMO Capital Markets.
After their September meeting, the policymakers said they would shuffle the Fed's investment portfolio to try to further reduce long-term interest rates. And in their previous meeting in August, they had said they plan to keep short-term rates near zero until at least mid-2013, unless the economy improved.
The Fed repeated the mid-2013 target in its statement Wednesday. It also said it was continuing its program to rebalance its portfolio to try to lower long-term rates.
The Fed has kept its key short-term interest rate at a record low since December 2008. This is the rate that banks charge on overnight loans. It serves as the benchmark for millions of business and consumer loans.
The Fed noted that growth strengthened over the summer, in part because temporary factors that had weighed on the economy in the spring had eased. Consumers are able to spend a little more because gas prices have declined from their May peak of roughly $4 a gallon. And auto sales and production have picked up now that supply chains disrupted by the March earthquake in Japan are flowing more freely.
But the Fed said the job market remains weak. And it suggested that the troubles in Europe could hurt U.S. growth.
The Greek prime minister's surprise move to call a referendum on the country's latest rescue plan sparked fears that the debt deal could unravel, that Greece could default on its debt and that the crisis could infect the global financial system.
Even if Europe dodges a financial catastrophe, many economists think it's headed for a recession that would affect the U.S. and global economies. The Fed expressed such concerns after its August meeting.
Still, the Fed remains deeply divided over what, if any, action to take next.
AP Economics Writer Daniel Wagner contributed to this report.
World stocks down as Greece uncertainty swirls
World stocks fell Thursday for the fourth straight day as a European deal to bail Greece out of its financial mess appeared to be on the verge of unraveling.
Markets in Europe were down in early trading following another session of losses in Asia. Britain's FTSE 100 dropped 1.4 percent to 5,405.19 and France's CAC-40 lost 1.6 percent. Germany's DAX slid 2.2 percent to 5,833.69.
Wall Street also appeared to be headed lower, with Dow Jones industrial futures slipping 1.1 percent to 11,641. Broader S&P 500 futures fell 1.2 percent to 1,219.60. Oil prices fell to near $91 per barrel, while the dollar rose against the euro but slipped against the yen.
Markets have been gripped by uncertainty since Greece's prime minister unexpectedly announced Monday that he would call a national vote on the European bailout plan that entails painful tax increases and drastic welfare cuts in exchange for massive aid to keep his debt-ridden nation solvent.
European leaders then drew a line in the sand, saying the referendum that is expected in early December will determine whether Greece stays in the 17-nation grouping that uses the euro common currency -- and vowing Athens will not get new aid until the result is in.
"The whole thing has become a mess and will certainly keep risk assets shackled in the short term, on the premise that there is a real possibility that Greece may vote against the revised bailout and austerity and subsequently find themselves having to fund their massive deficit," Stan Shamu of IG Markets in Melbourne said in a report.
Should Greek voters reject the austerity plan, it could lead to a messy default on the country's debt that would likely cause massive losses for banks that hold Greek bonds -- and possibly spark a wider financial crisis that could send Europe into recession.
Papandreou is scheduled to explain his stance when he meets with leaders of the Group of 20 nations at a summit in France on Thursday and Friday.
In Asia, Hong Kong's Hang Seng retreated 2.5 percent to close at 19,242.50. South Korea's Kospi lost 1.5 percent to 1,869.96 and Australia's S&P/ASX 200 shed 0.3 percent to 4,171.80.
Benchmarks in Singapore, Taiwan, Malaysia, Indonesia and Thailand were also lower.
Japanese markets were closed for a national holiday. Mainland Chinese shares rose, with the benchmark Shanghai Composite Index gaining 0.2 percent to 2,508.09. The Shenzhen Composite Index gained 0.4 percent to 1,064.62.
The uncertainty about what lies ahead for the European Union -- the world's largest economic grouping -- as well as the subset of nations that use the euro common currency, hit energy stocks hard.
Hong Kong-listed PetroChina Co., the country's biggest oil and gas company, fell 3.8 percent. State-owned coal miner China Shenhua Energy lost 3.3 percent. Energy Resources of Australia was down 2.4 percent.
South Korea's LG Electronics plummeted 13.7 percent following news reports that the world's No. 3 mobile phone maker was seeking to issue new shares, Yonhap News Agency said.
Hong Kong-listed shares of Lenovo Group, a world leader in personal computer manufacturers, rose 3.2 percent a day after reporting that its profit in the first half of the year nearly doubled on strong emerging market sales.
Among mainland Chinese shares, food-related companies gained on expectations of higher demand ahead of upcoming festivals, analysts said. VV Food & Beverage Co. Ltd. gained 2 percent.
"While there might be more profit-taking in the next few days, the trend of rising in the long term won't change," said Peng Yunliang, an analyst based in Shanghai.
In the U.S., Wall Street ended higher after an increase in hiring by private companies helped lift stock prices.
Automatic Data Processing said company payrolls rose by 110,000 in October, more than economists had expected. ADP also revised its survey results for September higher. Investors see ADP's report as a precursor to the government's broader employment report, which is due out Friday.
The Federal Reserve said Wednesday the economy was likely to expand modestly over the next two years. But Fed Chairman Ben Bernanke cautioned that the pace of economic growth will likely be "frustratingly slow." The Fed said it would not take any more steps to help the economy for now, but it left open the possibility of more steps later.
The Dow Jones industrial average gained 1.5 percent to close at 11,836.04. The Standard and Poor's 500 rose 1.6 percent to 1,237.90. The Nasdaq composite gained 1.3 percent to 2,639.98.
Benchmark crude for December delivery was down $1.33 at $91.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 32 cents to settle at $92.51 in New York on Wednesday.
In currencies, the euro fell to $1.3698 from $1.3765 late Wednesday in New York. The dollar slipped slightly to 78.03 yen from 78.06 yen.
Markets in Europe were down in early trading following another session of losses in Asia. Britain's FTSE 100 dropped 1.4 percent to 5,405.19 and France's CAC-40 lost 1.6 percent. Germany's DAX slid 2.2 percent to 5,833.69.
Wall Street also appeared to be headed lower, with Dow Jones industrial futures slipping 1.1 percent to 11,641. Broader S&P 500 futures fell 1.2 percent to 1,219.60. Oil prices fell to near $91 per barrel, while the dollar rose against the euro but slipped against the yen.
Markets have been gripped by uncertainty since Greece's prime minister unexpectedly announced Monday that he would call a national vote on the European bailout plan that entails painful tax increases and drastic welfare cuts in exchange for massive aid to keep his debt-ridden nation solvent.
European leaders then drew a line in the sand, saying the referendum that is expected in early December will determine whether Greece stays in the 17-nation grouping that uses the euro common currency -- and vowing Athens will not get new aid until the result is in.
"The whole thing has become a mess and will certainly keep risk assets shackled in the short term, on the premise that there is a real possibility that Greece may vote against the revised bailout and austerity and subsequently find themselves having to fund their massive deficit," Stan Shamu of IG Markets in Melbourne said in a report.
Should Greek voters reject the austerity plan, it could lead to a messy default on the country's debt that would likely cause massive losses for banks that hold Greek bonds -- and possibly spark a wider financial crisis that could send Europe into recession.
Papandreou is scheduled to explain his stance when he meets with leaders of the Group of 20 nations at a summit in France on Thursday and Friday.
In Asia, Hong Kong's Hang Seng retreated 2.5 percent to close at 19,242.50. South Korea's Kospi lost 1.5 percent to 1,869.96 and Australia's S&P/ASX 200 shed 0.3 percent to 4,171.80.
Benchmarks in Singapore, Taiwan, Malaysia, Indonesia and Thailand were also lower.
Japanese markets were closed for a national holiday. Mainland Chinese shares rose, with the benchmark Shanghai Composite Index gaining 0.2 percent to 2,508.09. The Shenzhen Composite Index gained 0.4 percent to 1,064.62.
The uncertainty about what lies ahead for the European Union -- the world's largest economic grouping -- as well as the subset of nations that use the euro common currency, hit energy stocks hard.
Hong Kong-listed PetroChina Co., the country's biggest oil and gas company, fell 3.8 percent. State-owned coal miner China Shenhua Energy lost 3.3 percent. Energy Resources of Australia was down 2.4 percent.
South Korea's LG Electronics plummeted 13.7 percent following news reports that the world's No. 3 mobile phone maker was seeking to issue new shares, Yonhap News Agency said.
Hong Kong-listed shares of Lenovo Group, a world leader in personal computer manufacturers, rose 3.2 percent a day after reporting that its profit in the first half of the year nearly doubled on strong emerging market sales.
Among mainland Chinese shares, food-related companies gained on expectations of higher demand ahead of upcoming festivals, analysts said. VV Food & Beverage Co. Ltd. gained 2 percent.
"While there might be more profit-taking in the next few days, the trend of rising in the long term won't change," said Peng Yunliang, an analyst based in Shanghai.
In the U.S., Wall Street ended higher after an increase in hiring by private companies helped lift stock prices.
Automatic Data Processing said company payrolls rose by 110,000 in October, more than economists had expected. ADP also revised its survey results for September higher. Investors see ADP's report as a precursor to the government's broader employment report, which is due out Friday.
The Federal Reserve said Wednesday the economy was likely to expand modestly over the next two years. But Fed Chairman Ben Bernanke cautioned that the pace of economic growth will likely be "frustratingly slow." The Fed said it would not take any more steps to help the economy for now, but it left open the possibility of more steps later.
The Dow Jones industrial average gained 1.5 percent to close at 11,836.04. The Standard and Poor's 500 rose 1.6 percent to 1,237.90. The Nasdaq composite gained 1.3 percent to 2,639.98.
Benchmark crude for December delivery was down $1.33 at $91.15 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 32 cents to settle at $92.51 in New York on Wednesday.
In currencies, the euro fell to $1.3698 from $1.3765 late Wednesday in New York. The dollar slipped slightly to 78.03 yen from 78.06 yen.
Greek government teeters over bailout referendum
Greece's embattled Socialist government was on the point of imploding Thursday as a revolt against Prime Minister George Papandreou's planned referendum on the country's hard-won international bailout package gathered pace.
Several ministers and lawmakers called for an emergency meeting of the governing Socialists in parliament, where Papandreou has convened a cabinet session for noon.
The meltdown started after Finance Minister Evangelos Venizelos broke ranks with him on the referendum proposal, which horrified Greece's international partners and creditors, triggering turmoil in financial markets as investors fretted over the prospect of a disorderly debt default and the country's exit from the eurozone.
Alongside his referendum pledge on Monday, Papandreou said his government would face a confidence vote on Friday. With open rebellion among his ranks, it's unclear whether it can survive that long and many in Greece are calling on the establishment of a national unity government, incorporating the opposition.
Earlier Thursday, Socialist lawmaker Eva Kaili also said she would not support the government in the confidence vote. Without her support, the Socialists hold a single seat majority in the 300-member parliament.
"Right now, the country is headless," conservative opposition New Democracy party spokesman Yiannis Mihelakis said.
Finance Minister Venizelos said the country's attention should be focused on getting a crucial installment of bailout funds quickly, which has been delayed because of Papandreou's decision to back a referendum into a bailout package agreed just a week ago.
"Greece's position within the euro area is a historic conquest of the country that cannot be put in doubt," Venizelos said in a statement issued shortly after his return from Cannes in the early hours of Thursday, where he accompanied Papandreou.
Venizelos said Greece's participation in the eurozone and EU membership "cannot depend on a referendum" and that the next installment should be disbursed "without any distractions or delay."
Although he had defended Papandreou's decision to hold a referendum in a speech delivered immediately after the premier's announcement on Monday, an official close to the minister has said Venizelos had not been told in advance that Papandreou was to announce a public vote.
On Wednesday, French and German leaders told Papandreou any referendum should be on whether Greece wants to stay in the eurozone or not, adding that Athens would not get critical bailout funds until after the vote.
An initial date of Dec. 4 has been suggested for the vote. But Greece has said that without the next euro8 billion installment of its existing bailout fund, the country runs out of funds in mid-November.
Greece's new debt deal would give Greece an extra euro100 billion ($138 billion) in rescue loans from the rest of the eurozone and the IMF -- on top of the euro110 billion it was granted a year ago -- and would see banks forgive Athens 50 percent of the money it still owes them.
Other ministers and governing Socialist party deputies distanced themselves from the prime minister's referendum idea.
Development Minister Michalis Chrisohoidis issued a statement calling for unity, and saying the priority was for parliament to ratify the new debt deal.
"There can be no... return to the drachma and the past," Chrisohoidis said. "We must all assume our responsibilities."
Speaking in Cannes, Papandreou said he was forced to call the referendum after it became clear there was no "broad support" from opposition parties for the bailout deal reached with the rest of the eurozone and big banks just a week ago.
Turning the referendum into a popular vote on whether Greece wants to remain in the eurozone is a risky bet that could lead to turmoil throughout the bloc.
"We cannot permanently ride a rollercoaster on Greece; we have to know where things are going, and the Greeks have to tell us where they would like things to go," Jean-Claude Juncker, the Luxembourg prime minister who chairs eurozone finance ministers' meetings, told Germany's ZDF television Thursday.
"I am very decidedly of the opinion that everything must be done so that one euro country does not leave the 17 -- but if that were the wish of the Greeks, and I would find that wrong, we cannot force the Greeks," he added.
"If the Greeks make clear via a referendum that they would feel better outside the eurozone than inside the eurozone, then this is a Greek decision, then our Greek friends have to describe the way by which they want to get out of the eurozone," Juncker said.
In case Greece does leave, Juncker said Europe has to make plans so other eurozone countries don't suffer.
"We are absolutely prepared for the situation that I have described and do not want to see come about," Juncker said. "This is not just about Greece, it is also about possible dangers of contagion for others, and we will do everything ... to arrange the firewalls against the danger of contagion in such a way that the eurozone as a whole does not skid."
Associated Press writer Geir Moulson in Berlin contributed.
Several ministers and lawmakers called for an emergency meeting of the governing Socialists in parliament, where Papandreou has convened a cabinet session for noon.
The meltdown started after Finance Minister Evangelos Venizelos broke ranks with him on the referendum proposal, which horrified Greece's international partners and creditors, triggering turmoil in financial markets as investors fretted over the prospect of a disorderly debt default and the country's exit from the eurozone.
Alongside his referendum pledge on Monday, Papandreou said his government would face a confidence vote on Friday. With open rebellion among his ranks, it's unclear whether it can survive that long and many in Greece are calling on the establishment of a national unity government, incorporating the opposition.
Earlier Thursday, Socialist lawmaker Eva Kaili also said she would not support the government in the confidence vote. Without her support, the Socialists hold a single seat majority in the 300-member parliament.
"Right now, the country is headless," conservative opposition New Democracy party spokesman Yiannis Mihelakis said.
Finance Minister Venizelos said the country's attention should be focused on getting a crucial installment of bailout funds quickly, which has been delayed because of Papandreou's decision to back a referendum into a bailout package agreed just a week ago.
"Greece's position within the euro area is a historic conquest of the country that cannot be put in doubt," Venizelos said in a statement issued shortly after his return from Cannes in the early hours of Thursday, where he accompanied Papandreou.
Venizelos said Greece's participation in the eurozone and EU membership "cannot depend on a referendum" and that the next installment should be disbursed "without any distractions or delay."
Although he had defended Papandreou's decision to hold a referendum in a speech delivered immediately after the premier's announcement on Monday, an official close to the minister has said Venizelos had not been told in advance that Papandreou was to announce a public vote.
On Wednesday, French and German leaders told Papandreou any referendum should be on whether Greece wants to stay in the eurozone or not, adding that Athens would not get critical bailout funds until after the vote.
An initial date of Dec. 4 has been suggested for the vote. But Greece has said that without the next euro8 billion installment of its existing bailout fund, the country runs out of funds in mid-November.
Greece's new debt deal would give Greece an extra euro100 billion ($138 billion) in rescue loans from the rest of the eurozone and the IMF -- on top of the euro110 billion it was granted a year ago -- and would see banks forgive Athens 50 percent of the money it still owes them.
Other ministers and governing Socialist party deputies distanced themselves from the prime minister's referendum idea.
Development Minister Michalis Chrisohoidis issued a statement calling for unity, and saying the priority was for parliament to ratify the new debt deal.
"There can be no... return to the drachma and the past," Chrisohoidis said. "We must all assume our responsibilities."
Speaking in Cannes, Papandreou said he was forced to call the referendum after it became clear there was no "broad support" from opposition parties for the bailout deal reached with the rest of the eurozone and big banks just a week ago.
Turning the referendum into a popular vote on whether Greece wants to remain in the eurozone is a risky bet that could lead to turmoil throughout the bloc.
"We cannot permanently ride a rollercoaster on Greece; we have to know where things are going, and the Greeks have to tell us where they would like things to go," Jean-Claude Juncker, the Luxembourg prime minister who chairs eurozone finance ministers' meetings, told Germany's ZDF television Thursday.
"I am very decidedly of the opinion that everything must be done so that one euro country does not leave the 17 -- but if that were the wish of the Greeks, and I would find that wrong, we cannot force the Greeks," he added.
"If the Greeks make clear via a referendum that they would feel better outside the eurozone than inside the eurozone, then this is a Greek decision, then our Greek friends have to describe the way by which they want to get out of the eurozone," Juncker said.
In case Greece does leave, Juncker said Europe has to make plans so other eurozone countries don't suffer.
"We are absolutely prepared for the situation that I have described and do not want to see come about," Juncker said. "This is not just about Greece, it is also about possible dangers of contagion for others, and we will do everything ... to arrange the firewalls against the danger of contagion in such a way that the eurozone as a whole does not skid."
Associated Press writer Geir Moulson in Berlin contributed.
Oil near $91 amid fears Greece could leave euro
Oil prices fell to near $91 a barrel Thursday in Asia after Germany's leader said a Greek vote in December on a debt bailout package could lead to Greece leaving the euro zone.
Benchmark crude for December delivery was down $1.10 at $91.41 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 32 cents to settle at $92.51 in New York on Wednesday.
Brent crude was down 74 cents at $108.55 a barrel on the ICE Futures Exchange in London.
German Chancellor Angela Merkel said Wednesday that a vote likely to be held on December 4 will essentially be about whether Greece will stay in the European currency union. If Greek voters decide to reject the debt bailout package -- which includes fiscal austerity measures to help lower debt levels -- Greece could face a chaotic bond default that would undermine European banks.
Merkel made her comments at a news conference with French President Nicolas Sarkozy after the two held emergency talks with Greek Prime Minister George Papandreou in Cannes, France.
Analysts said oil prices could fall during the weeks leading up to the vote as investors mull the possible impact of Greek rejection of the debt plan.
"This move could leave a window of uncertainty during which the financial implications of a "no" vote could be priced into the market," J.P. Morgan said in a report.
However, J.P Morgan expects Brent to average $115 next year amid falling crude inventories and low spare production capacity of suppliers.
"The oil market is very tight and that means it can easily rally by $10 to $20 in a blink on seasonal demand or supply-side issues," the bank said.
In other Nymex trading, heating oil fell 2.1 cents to $2.98 per gallon and gasoline futures slid 3.1 cents at $2.60 per gallon. Natural gas added 2.4 cents at $3.77 per 1,000 cubic feet.
Benchmark crude for December delivery was down $1.10 at $91.41 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 32 cents to settle at $92.51 in New York on Wednesday.
Brent crude was down 74 cents at $108.55 a barrel on the ICE Futures Exchange in London.
German Chancellor Angela Merkel said Wednesday that a vote likely to be held on December 4 will essentially be about whether Greece will stay in the European currency union. If Greek voters decide to reject the debt bailout package -- which includes fiscal austerity measures to help lower debt levels -- Greece could face a chaotic bond default that would undermine European banks.
Merkel made her comments at a news conference with French President Nicolas Sarkozy after the two held emergency talks with Greek Prime Minister George Papandreou in Cannes, France.
Analysts said oil prices could fall during the weeks leading up to the vote as investors mull the possible impact of Greek rejection of the debt plan.
"This move could leave a window of uncertainty during which the financial implications of a "no" vote could be priced into the market," J.P. Morgan said in a report.
However, J.P Morgan expects Brent to average $115 next year amid falling crude inventories and low spare production capacity of suppliers.
"The oil market is very tight and that means it can easily rally by $10 to $20 in a blink on seasonal demand or supply-side issues," the bank said.
In other Nymex trading, heating oil fell 2.1 cents to $2.98 per gallon and gasoline futures slid 3.1 cents at $2.60 per gallon. Natural gas added 2.4 cents at $3.77 per 1,000 cubic feet.
401(k) matches resume for 75 percent of companies
Few areas are spared when it comes to corporate belt tightening. During the economic downturn, employees felt the impact of cutbacks in hiring, raises, and even contributions to their 401(k) plans.
The first wave of reductions in 401(k) plans began in 2008. The number of employers lowering or suspending their contributions accelerated in the first half of 2009 as the stock market fell to its lowest point after the financial meltdown.
In new research released Wednesday, business consultant Towers Watson analyzed the action of 260 mid- to large-sized companies. It shows that 75 percent of those that took the step to cut costs in their retirement plans have resumed making 401(k) contributions. Among those:
-- About 74 percent are continuing payments at the previous level;
-- About 23 percent resumed making contributions to their employees' accounts, but at a lower rate. Among these companies, the new contribution level was slightly more than half of the original amount; and
-- Just 3 percent resumed making contributions at a higher rate; however, in all but one case the increase was associated with the company freezing or ending its pension plan. The higher amount was intended to make up for some of the lost pension plan benefits.
"It's encouraging that employers are reinstating the match and are still committed to helping people save for retirement," said Robyn Credico, a senior retirement consultant at Towers Watson.
To be sure, companies also have an interest in encouraging workers to save enough. The stock market's impact on retirement savings has resulted in many workers being forced to stay on the job rather than retire. And that's not always in an employer's best interest, Credico said, because those workers often are there because they have to be, not because they want to be.
Employer matching contributions are a strong enticement to get workers to save money for retirement. A study by the Profit Sharing/401(k) Council of America, a Chicago-based trade group, indicated in 2009 that nearly 73 percent of 401(k) plan sponsors that suspended matching contributions in the recent recession experienced a drop in participation.
Although there was an increase in the number of employers that reduced or cut their matches during the financial crisis, they represent a minority of 401(k) plan sponsors. Another Towers Watson survey indicated that overall, about 13 percent of companies suspended their match during the recent downturn.
Most employers match 50 percent of employees' salary deferrals, up to 6 percent of pay, which amounts to a match of about 3 percent of pay. Companies save 1 to 2 percent of their payroll costs by cutting the 401(k) match.
The median amount of time contributions were suspended was 12 months.
Some industries have bounced back faster than others. Companies in manufacturing and health care resumed making contributions at the highest rate, some 88 percent.
With the exception of the publishing, financial and entertainment industries, the percentage of companies resuming payments exceeded 70 percent for all sectors.
The percentage of publishing companies reviving their 401(k) contributions was 62 percent; it was 53 percent in the financial sector. Companies in the entertainment industry trailed the pack, with just 50 percent resuming their payments.
Of the 260 companies surveyed, 29 reduced their match instead of suspending it outright. About a third of those have since reinstated their original match.
Towers Watson said the slow economic recovery prompted some employers to take their time to begin making 401(k) contributions again. Its analysts also believe recent economic turmoil and fears of a double-dip recession could result in more companies suspending the match again.
The first wave of reductions in 401(k) plans began in 2008. The number of employers lowering or suspending their contributions accelerated in the first half of 2009 as the stock market fell to its lowest point after the financial meltdown.
In new research released Wednesday, business consultant Towers Watson analyzed the action of 260 mid- to large-sized companies. It shows that 75 percent of those that took the step to cut costs in their retirement plans have resumed making 401(k) contributions. Among those:
-- About 74 percent are continuing payments at the previous level;
-- About 23 percent resumed making contributions to their employees' accounts, but at a lower rate. Among these companies, the new contribution level was slightly more than half of the original amount; and
-- Just 3 percent resumed making contributions at a higher rate; however, in all but one case the increase was associated with the company freezing or ending its pension plan. The higher amount was intended to make up for some of the lost pension plan benefits.
"It's encouraging that employers are reinstating the match and are still committed to helping people save for retirement," said Robyn Credico, a senior retirement consultant at Towers Watson.
To be sure, companies also have an interest in encouraging workers to save enough. The stock market's impact on retirement savings has resulted in many workers being forced to stay on the job rather than retire. And that's not always in an employer's best interest, Credico said, because those workers often are there because they have to be, not because they want to be.
Employer matching contributions are a strong enticement to get workers to save money for retirement. A study by the Profit Sharing/401(k) Council of America, a Chicago-based trade group, indicated in 2009 that nearly 73 percent of 401(k) plan sponsors that suspended matching contributions in the recent recession experienced a drop in participation.
Although there was an increase in the number of employers that reduced or cut their matches during the financial crisis, they represent a minority of 401(k) plan sponsors. Another Towers Watson survey indicated that overall, about 13 percent of companies suspended their match during the recent downturn.
Most employers match 50 percent of employees' salary deferrals, up to 6 percent of pay, which amounts to a match of about 3 percent of pay. Companies save 1 to 2 percent of their payroll costs by cutting the 401(k) match.
The median amount of time contributions were suspended was 12 months.
Some industries have bounced back faster than others. Companies in manufacturing and health care resumed making contributions at the highest rate, some 88 percent.
With the exception of the publishing, financial and entertainment industries, the percentage of companies resuming payments exceeded 70 percent for all sectors.
The percentage of publishing companies reviving their 401(k) contributions was 62 percent; it was 53 percent in the financial sector. Companies in the entertainment industry trailed the pack, with just 50 percent resuming their payments.
Of the 260 companies surveyed, 29 reduced their match instead of suspending it outright. About a third of those have since reinstated their original match.
Towers Watson said the slow economic recovery prompted some employers to take their time to begin making 401(k) contributions again. Its analysts also believe recent economic turmoil and fears of a double-dip recession could result in more companies suspending the match again.
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