NEWS AT A GLANCE

Toyota profits rise, growth slows

Toyota, locked in a race to overtake GM as the world's top automaker by sales, reported a 7.5 percent rise in quarterly profits, to $4.3 billion, but warned of slowing growth. The quarter's profit was Toyota's largest ever for a third quarter, but the percentage gain was the smallest in a year. Looking ahead, Toyota said that increased sales from China, Russia, and other emerging markets would only partly make up for slowing U.S. demand and the strengthening yen. "Cars sold in India and China are cheap and have smaller profit margins," said Yuuki Sakurai at Fukoku Mutual Life Insurance in Tokyo.

BP misses target, raises dividend

Oil giant BP, Europe's second largest company, reported a 53 percent rise in fourth-quarter profits, to $4.4 billion, which fell short of analysts' expectations. Refining outages and rising costs dragged BP's full-year profit down 5.5 percent, but oil output rose for the first time since 2005, as new fields in Angola, Trinidad, and the Gulf of Mexico came online, and the firm raised its dividend by 31 percent. BP shares rose in London early today. "The numbers are disappointing," said analyst Peter Hitchens at Seymour Pierce, "but I think that is more than made up for by the fact that we have got a step change in the dividend."

United adds bag-check fee

United Airlines said it is adding a $25 fee to check a second piece of luggage on domestic flights, becoming the first large carrier to charge for the service. United Milage Plus frequent fliers with at least "premium" status won't be charged, nor will passengers on most international flights. The fee, attributed to rising fuel costs, applies on flights leaving May 5 and beyond. Analysts say other airlines will likely follow suit. (Bloomberg) "Everybody is chiseling away at everything that you thought you deserve," said Bestfares-dot-com CEO Tom Parsons. "But people shouldn't be upset because we still want to fly coast to coast for $199."

Green habits, not greenbacks

A growing number of consumers are looking to cut back on their "carbon footprint," and that means buying less. But by trying to reduce their greenhouse gas emissions -- and lower their expenses as they weather the hangover at the end of the cheap-credit binge -- green consumers might also be hampering efforts to fend off an economic slowdown. The new frugality could render ineffective the stimulus package wending its way through Congress, for example, which relies on free spending. "You know there's a shift, when drinking tap water is cooler than drinking Pellegrino or Evian," says trend forecaster Faith Popcorn.

The subprime drawing board

Plans to fix our mortgage mess "are like belly buttons," says David Weidner in "Everybody's got one, and they're all pretty much useless." But some recent plans have emerged that could "have positive effects for everyone." The Center for American Progress, apparently "hell-bent on appeasing everyone," wants the government to extend interest-only loans to troubled homeowners and buy and sell existing subprime debt. More promising, Punk Zeigel analyst Richard Bove would offer 1 percent subsidized loans to many subprime borrowers, at a "reasonable" taxpayer cost of $150 billion. Either way, "it won't be pretty," but doing nothing would be uglier still.

Paradise isn't easy

Retiring overseas may sound attractive, says Jeff Opdyke in but it "can have its logistical headaches." Because most countries have lower costs of living, retiring baby boomers assume they can move abroad to "stretch their nest egg." Before pulling up anchor, though, make sure you figure out banking, health care, and housing. The Internet makes banking easier, and Social Security checks will be sent almost anywhere. But dealing with local banks and real estate laws can be tricky. And while some countries will "lure" you with retiree tax incentives, remember, the IRS taxes your income "no matter where it's earned in the world."

GOOD DAY FOR: Trees, after the White House scaled back the number of printed copies of its four volume, 2,000-page-plus 2009 budget, saving an estimated 20 tons of paper, 480 trees, and $1 million over five years. The reduced paper count stems from a decision to charge the public, congressional offices, and the media for copies of the budget.

BAD DAY FOR: Looking into the future, after Singapore-based securites-broker-turned-astrologer Tony Tan is predicting that the Chinese Year of the Rat will be characterized by losses. Tan successfully predicted that the Year of the Pig last year would see "peak performances" in Asian stocks. "Just like a rat, investors will have to be nimble" this lunar year, which begins Feb. 7, Tan says.

NOTED: Last Sunday's Giants-Patriots matchup was the most-viewed Super Bowl ever, and the second-largest TV event in U.S. history. According to Neilsen Media Research, an average of 97.5 million viewers watched the game, second only to the "MASH" series finale, which drew 106 million. Fox, which aired the game, charged $2.7 million for 30-second commercial spots. TiVO said more people watched the commercials than the game.

Wall St. awaits another rally

This week, Wall Street hopes economic, earnings data keeps rally going

The stock market has been on the upswing, but few investors are relaxing just yet. This week's data on housing, retailers and labor costs will give Wall Street an idea of whether the economy is weakening or inflation is accelerating - or both.

Wall Street had a case of the winter blues in January, and understandably. With banks reporting huge losses, uncertainty brewing about whether the economy is in recession, and Americans struggling to keep up with their debt payments, there was nowhere to go but down. The Standard & Poor's 500 index recorded its worst January since 1990.

But the stock market has bounced back - last week, the Dow Jones industrial average jumped 4.39 percent, the Standard & Poor's 500 index added 3.75 percent, and the Nasdaq composite index rose 4.87 percent.

The Dow remains 10 percent below the record close of 14,164.53 it reached on Oct. 9, but has recovered nearly 10 percent from the 15-month lows it hit in January.

There were many factors that helped buoy the market last week. The Federal Reserve met the market's hopes for another big rate cut by slashing key rates a half-point. Banks and regulators indicated they are working to help out the distressed companies that insure mortgage-backed bonds. And Microsoft Corp.'s (MSFT, Fortune 500) bid for the struggling Internet provider Yahoo Inc. (YHOO, Fortune 500) reassured Wall Street that although the credit markets are tight, deals are being pitched.

Recent government reports have not painted a rosy picture of the economy, but they haven't indicated the nation is in the midst of a deep recession, either.

The Labor Department's employment report last week showed a net job loss in January for the first time in four years, but a report from the Institute for Supply Management said the manufacturing sector expanded. The Commerce Department said personal spending is growing at the weakest pace in more than a year, but it also reported a solid gain in orders of big-ticket, durable goods.

The markets are angling for more rate cuts to stoke the economy, but what could tie the Fed's hands is inflation. High food, energy and healthcare costs are a reason consumers - particularly homeowners with tough-to-pay mortgages - are cutting back on discretionary spending. Those high prices may also be the only reason readings on personal spending are in positive territory.

The Commerce Department's index last week for personal consumption expenditures, a gauge of inflation, rose 0.2 percent in December from November levels. This week, the Labor Department reports on productivity and labor costs; the market is expecting labor costs to decline, and could be disappointed if they end up being higher.

"The worst of all possible worlds is stagflation," said Janna Sampson, director of portfolio management at Oakbrook Investments. Stagflation happens when the economy weakens at the same time prices are rising. It's a problem that can't be solved with rate moves; rate cuts spur inflation but boost growth, while hikes control inflation but also dampen growth.

This week, economists surveyed by Thomson/IFR are preparing for more signs that the economy is still growing, but very slowly because of a weak consumer.

They expect the Commerce Department's December factory orders index on Monday to tick up and the Institute for Supply Management's Tuesday report on January service sector growth to show a slight slowdown. They also expect the weekly ICSC-UBS chain store sales index on Tuesday to post a decline.

Meanwhile, the National Association of Realtors will release on Thursday its index on pending sales of existing homes, and economists predict a modest increase. And that same day, retailers are releasing their sales results for January.

Investors will also be paying close attention to speeches from Fed officials for insight into their thoughts on the economy and inflation, and whether the central bank is leaning toward lowering rates again when it meets March 18. Atlanta Fed President Dennis Lockhart, Richmond Fed President Jeffrey Lacker, Fed Governor Randall Kroszner, Philadelphia Fed President Charles Plosser and San Francisco Fed President Janet Yellen are all making public appearances this week.

The bulk of the earnings season is over, but there are some big names left to release their quarterly results. Companies reporting this week include media names such as News Corp. (NWS, Fortune 500), Walt Disney (DIS, Fortune 500) and Time Warner Inc. (TWX, Fortune 500); food sellers like Wendy's International Inc. (WEN) and Yum Brands Inc. (YUM, Fortune 500); and the homebuilder D.R. Horton (DHI, Fortune 500).

Toyota Falls Short of GM in Global Sales Thursday January 24, 1:26 am ET

Toyota Still No. 2 After Falling About 3,000 Vehicles Short of GM in Global Vehicle Sales

TOKYO -- General Motors, a symbol of American industrial might and the world's top seller of motor vehicles since Herbert Hoover was president, has been all-but-overtaken by a foreign rival.

Toyota said Thursday it sold 9.366 million vehicles last year globally, about 3,000 vehicles fewer than the tally from General Motors Corp., just barely allowing the U.S. automaker to retain its crown as the world's No. 1 automaker.

All year long, the two automakers raced neck-and-neck in global sales, highlighting Toyota's phenomenal growth and the struggles facing GM and other American automakers.

Toyota had said as late as Wednesday that its annual total was 9.37 million vehicles, up 6 percent from 2006. GM said Wednesday in Detroit its global sales had risen 3 percent to 9,369,524 vehicles, making for a race that appeared too close to call.

But Toyota Motor Corp. spokesman Paul Nolasco in Tokyo confirmed the extra digit in Toyota's sales Thursday, showing that GM's total was narrowly higher. GM has been the world's top seller for 77 years.

Toyota executives have repeatedly expressed worries about a possible backlash if they dethrone GM, an American icon. The Japanese automaker has been setting up more plants in North America and has tried to show it's a good U.S. corporate citizen.

Nolasco refused to comment on GM's retention of the No. 1 title. But he said Toyota sees sales growth as a reflection of how people recognize its products "We would like to become No. 1 in quality in product offerings and services, carefully making good products, and give true happiness to our customers," he said.

In Detroit, GM wasn't gloating. The company's global strategy hasn't changed, said company spokesman John McDonald. "We're not as concerned about who's winning," he said. "We're just really focused on what we need to do to have a growing business, getting our business right in North America."

Overall, GM's worldwide sales in 2007 were the second-best in its 100-year history

It's biggest sales growth has come outside the U.S. It set a sales record in China by selling more than a million vehicles, set a record in Brazil with nearly 500,000 and doubled sales in Russia.
Still, GM has struggled in recent years with job cuts, earning losses and plant closures.

Toyota has seized the lead in ecological hybrids with its hit Prius, which runs on a gas engine and electric motor, selling more hybrids than any other automaker. And that edge came at a good time when consumers were looking for good mileage amid soaring gas prices.

Earlier this month, Toyota deposed Ford Motor Co. as the No. 2 auto seller in the U.S. for 2007. Toyota sold 2.6 million vehicles in the U.S. for a 16 percent share of the market -- and more than double from what it sold in 1990.

GM, third on the Fortune 500 list of U.S. corporations, remains the auto sales leader in the U.S. But its market share has dropped dramatically from about 35 percent in 1990 to about 24 percent in 2007. GM sold 3.8 million vehicles in the United States last year.

Aaron Bragman, an analyst with the consulting firm Global Insight, said GM and Toyota have expanded almost evenly in most emerging global markets, but GM has been hurt by sales declines in North America. "A lot of that volume reduction has come here," Bragman said. "They did very well in every other market except North America."

He said much of GM's U.S. sales decline comes as the company has intentionally cut incentives and reduced low-profit sales to rental car companies. GM's U.S. sales last year were down 6 percent from 2006, due largely to a reduction in fleet sales -- those to large, bulk buyers.
"If they had kept that fleet volume up, it wouldn't even be a competition," Bragman said.

Still, it was in new markets such as China that GM still led Toyota, managing to come out ahead for the time being. And the competition in such markets is likely to determine the winner in the long run.

While more mature auto markets, such as the U.S. and Japan, are stagnating, China and India are booming. Toyota, which is aggressively expanding overseas production, is forecasting robust growth for this year at selling 9.85 million vehicles, up 5 percent from this year.
GM does not give comparable sales forecasts.

In a typical comment for a Toyota executive, Shoichiro Toyoda, a member of the founding family and former president, told The Associated Press earlier this month that gaining the top spot in the auto industry could be fleeting. "We are not No. 1," he said. "We need to just keep working harder."

General Motors Corp.: http://www.gm.com

Toyota Motor Corp. http://www.toyota.com

Market Update Wed, Jan 23, 2008, 4:25AM ET - U.S. Markets closed.

4:25 pm : There are volatile markets and then there are volatile markets. Wednesday's session was the latter variety, which is to say it was truly volatile. To wit, the swing in the S&P 500 between its low of the day, reached around 12:45 p.m. ET, and its high of the day, reached around 3:50 p.m. ET, was 69 points or 5.4%.

The bearish mood that predominated for the first half of today's session was driven by a relatively disappointing earnings report and outlook from Apple (AAPL 139.07, -16.57) and a remark from ECB President Jean-Claude Trichet that left participants inclined to believe the ECB won't be following the Fed's lead and cutting its key bank rate.

The latter precipitated a widespread sell-off in European bourses, most of which dropped between 3.0% and 5.0% for the day. Their poor showing carried over to the U.S., which was already on the defensive amid consumer spending concerns that flowed from Apple's conservative outlook.

Briefly, Apple forecast fiscal second quarter sales of $6.8 billion and earnings of $0.94 per share versus analysts' expectations of $6.98 billion and $1.09, respectively.

Correspondingly, the tech sector led the early retreat along with the energy, telecom, and materials sectors, which traded down sharply on growth concerns. Those concerns were reflected in falling oil prices, which hit $86.65 a barrel at their low before rebounding some to $87.59 at the end of the trading session.

The energy sector declined as much 6.3% at its low today. Remarkably, it closed with a gain of 0.6% after participating in the afternoon rally.

How to Sell a Stock Short Monday January 21, 11:29 am ET

The most basic way to trade the short side of the market is to sell stocks short. While selling stocks short is in some ways just the opposite of buying stocks, there are some important differences. In order to sell a stock short, there must be shares of the stock available to your broker for you to borrow. When traders sell stock short, they essentially borrow stock from their broker and sell the stock in the market. Because the trader has sold something he or she does not own, eventually the trader will need to buy back the stock he or she sold.

The short seller believes that when the time comes to buy back the stock, that stock will be at a much lower price than it was originally sold for. This enables the short seller to buy back the stock at a cheaper price, return it to his or her broker, and pocket the difference as a profit.

For example, a trader wants to short stock Research in Motion (NasdaqGS:RIMM - News).
The trader borrows 100 shares of the stock from his broker and then sells it for the going price of $120 a share. RIMM does move lower as the trader expected, say to $90 a share. The trader would then buy the same amount of RIMM that he or she originally borrowed--100 shares--on the open market, and then returns the stock to his or her broker.

The trader sold 100 shares for $120, gaining $12,000. The trader then bought back or "covered the short" by buying 100 shares at $90 ($9,000). The difference between the amount earned by selling the shares and the amount it cost the trader to buy the shares back after they moved lower is the profit of the short trade, in this case $3,000

If the stock does not move lower and, instead, moves higher, then the trader selling the stock short will still have to "cover" or buy back the stock he or she borrowed. But the trader will be doing so at a loss.

For example, if RIMM advanced by 10 points instead of falling by 30 in the example above, the trader would have had to buy or cover his or her short position at $130. Having made $12,000 from the initial sale and then spent $13,000 buying the stock back when ABC went the wrong way, the trader would realize a loss of $1,000.

In order to sell a stock short, the trader typically must have a margin account set up with his or her broker. Because of the risks involved in selling an asset that the trader does not own--and the possibility that the stock will be at a significantly higher price when the time comes to cover or buy the stock back--a margin account is required to ensure that the trader has sufficient capital in order to buyback a position went against him or her.

The margin amount, which is set by the broker, serves as a sort of collateral in the event that the trade goes badly. This collateral may be in the form of cash or securities such as stocks. If the losses from the short sale trade grow larger than the amount held in margin, then the trader will get a "margin call" from his or her broker, requiring the trader to either liquidate the position immediately or provide additional capital. Additionally, the trader will have to pay interest on the margin--at least, to the degree it is used. The margin is essentially money borrowed from the broker, the interest paid in this sense is no different that the interest a trader might pay on a loan from a bank.

For many years, selling stock short was complicated by what was called the "uptick rule". This rule meant that traders could only sell a stock short if and when it's last trade was higher than the previous trade price (creating an "uptick"). This rule had been in force for decades, but was recently eliminated by the Securities and Exchange Commission effective July 2007. This has made it much easier for traders to sell stocks short.

Another phenomenon that traders looking to sell stocks short should be aware of is called the "short squeeze." A "short squeeze" occurs when a large number of traders who are short a stock begin covering or buying back the stock at the same time. This rush to cover can have a dramatically bullish impact on a stock, particularly one that has been heavily sold short. Being caught with a short position in a stock when a "short squeeze" occurs is one of the risks in selling stocks short that trader need to be aware of.