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SAN DIEGO – Investigators are confronted with a series of nagging questions as they try to unravel the case of a California real estate agent who said his Toyota Prius turned into a runaway death trap after the gas pedal became stuck.

Why didn’t the driver simply throw the transmission into neutral as officers urged him to do? Why didn’t a safety mechanism activate that was supposed to cut power to the engine in such situations? And could he have made the story up in pursuit of fame and money?

Each question is getting scrutiny from the Internet-consuming public as they question the motives of the driver, a 61-year-old real estate agent named James Sikes. Some skeptics have even invoked the infamous “balloon boy hoax” in expressing doubts about the story.

No evidence has emerged to suggest that Sikes was dishonest when he called 911 on Monday to report that the accelerator of his 2008 Prius was jammed during a trip home from his lawyer’s office.

Sikes and his car emerged unscathed, but the incident has been another major headache for the Japanese automaker amid questions over the safety and reliability of its vehicles.

The California Highway Patrol has repeatedly said it has no reason to suspect a hoax. It does not plan to investigate the incident or perform a mechanical inspection because there were no injuries or property damage. Investigators from Toyota and the federal government are also looking into the incident.

“There is no factual information that I’m aware of, or the highway patrol is aware of, that would discredit his story,” agency spokesman Brian Pennings said Friday.

Sikes spoke to throngs of reporters twice this week about his ordeal, but he has but he has not sought out attention or talk show interviews like others have done during their 15 minutes of fame. Pennings said he urged Sikes to speak with reporters the first time, on Monday, after the white-knuckled journey down Interstate 8 to avoid getting besieged later by the media.

And a law firm representing Sikes during the investigation said its client does not intend to take legal action against the automaker.

Doubters have asked why Sikes didn’t put the car in neutral as a California Highway Patrol dispatcher and an officer repeatedly urged him to do. Sikes said he considered going into neutral but worried he might go into reverse or flip.

“I had never played with this kind of transmission, especially when you’re driving, and I was actually afraid to do that,” he said Tuesday. “I was afraid to do anything out of the normal.”

Toyota has said all Priuses are equipped with a computer system that cuts power to the wheels if the brake and gas pedals are depressed at the same time, as Sikes was doing.

“It’s tough for us to say if we’re skeptical. I’m mystified in how it could happen with the brake override system,” Don Esmond, senior vice president of automotive operations for Toyota Motor Sales, said Thursday.

Raj Rajkumar, an electrical and computer-engineering professor at Carnegie Mellon University in Pittsburgh who studies auto electronics, said the Prius could still have acceleration malfunctions even with the fail-safe system.

Toyota says the fail-safe and the engine are controlled by a central computer that contains two independent microprocessors that communicate and must agree with each other free business cards. If there’s a disagreement, power would be cut to the wheels.

But Rajkumar said the two engine control unit microprocessors could still receive common erroneous signals from sensors or experience software errors that could cause the throttle and the fail-safe mechanism to malfunction.

Sikes came to a stop after a Highway Patrol officer blared instructions from a loudspeaker, telling him to push the brake pedal to the floor while applying the emergency brake. Sikes apparently did this, allowing him to slow the car to 50 mph and shut off the engine.

At one point during the 911 call, the dispatcher asks if he can press the ignition button for five seconds and she gets no response. Sikes said later that he struggled to hold the phone and keep his hands on the wheel.

Todd Neibert, the officer who gave instructions to Sikes over a loudspeaker, said he smelled burning brakes when he caught up with the Prius. He examined the car when it came to a stop.

“The brakes were definitely down to hardly any material,” he told reporters. “There was a bunch of brake material on the ground and inside the wheels.”

Sikes said afterward that he was “embarrassed” by the incident, suggesting that he wished he would have handled it differently. “I’m just embarrassed about that,” he said. “You have to be there. That’s all I can say.”

Kurt Bardella, a spokesman for Rep. Darrell Issa, R-Calif., said Friday that investigators are best positioned to determine if there was a hoax, but no evidence has emerged.

A representative of Issa’s office was at a California Toyota dealership when investigators from the National Highway Traffic Safety Administration and Toyota examined Sikes’ blue Prius on Wednesday and Thursday.

“Where are these suggestions coming from?” he said. “It would be irresponsible to assert it’s a hoax without having facts.”

Joan Claybrook, a former NHTSA administrator, said Sikes’ refusal to shift to neutral, is understandable.

“It’s such a horrifying experience to be completely out of control,” she said. “It’s the kind of thing you dream about when you’re really upset and you wake up in sweats.”

The same firm handling Sikes’ case also represents the family of California Highway Patrol Officer Mark Saylor, which sued Toyota last week in San Diego Superior Court.

Saylor was killed in August along with his wife, her brother and the couple’s daughter after their Lexus accelerator became trapped by a wrong-size floor mat on a freeway in La Mesa, near San Diego. Their loaner car hit a sport utility vehicle and burst into flames.

Representatives of the firm did not respond to phone messages seeking additional comment Friday.

Claybrook, the former federal administrator, noted that drivers often come under heavy scrutiny for reporting unintended acceleration.

“Attacking the driver has long been the answer that not just Toyota, but the entire industry, has had,” she said. “Blaming the driver is old hat.”

___

AP Auto Writer Tom Krisher in Troy, Mich., contributed to this report.

Runaway Prius case presents nagging questions

Despite fears that snowstorms in February would dampen sales, the nation’s stores posted their strongest results on Thursday since late 2007, suggesting the beginnings of a broad recovery in retailing.

Nearly every major chain turned in robust figures, beating analysts’ expectations and recording the sixth consecutive monthly sales increase. Even long-struggling stores and sectors came back from the dead.

“If anybody was wondering about the real state of the consumer, this is their answer,” said John D. Morris, a retailing analyst with BMO Capital Markets. “The consumer is coming back.”

The results provoked a measure of skepticism, however. A major reason they looked so good was that they were being compared with the deep declines of February 2009. That tempered industry professionals’ enthusiasm, as did the continuing high rate of unemployment, which strongly correlates with consumer spending.

Moody’s Investors Service said in a research note on Thursday that while retailers reported “modestly positive results, we remain unconvinced that this is evidence of a sustainable trend.”

Analysts at Moody’s said that in the year ahead, many consumers would be forced to increase their savings to pay off debt, and that the weak credit market would continue to squeeze consumers.

With February always a slow sales month, retailing analysts said the major test of the nascent recovery in retailing would come at the end of April. Over the next two months, they will be looking to see whether consumers are willing to open their wallets for spring clothes and Easter-related treats and decorations.

But for now, the February results are the best news in retailing in many months.

Comparing this February to last, the industry reported a 4 percent increase in sales at stores open at least a year, according to Thomson Reuters. Analysts polled by the company had expected stores to do well, in contrast to last year’s 4.7 percent decline. Even so, the results exceeded their expectations by more than 1 percent.

The International Council of Shopping Centers, a trade group, published its own figure, saying the industry had a 3.7 percent increase — the strongest since November 2007, when sales grew 4.9 percent by that group’s measure.

Had the weather been better, the results would probably have been even more robust. Retailers have a tendency to blame snow and rain for lackluster sales. But Michael McNamara, vice president for research and analysis at SpendingPulse, an information service of MasterCard Advisors, said this time the retailers’ lament was justified. He pointed out that sales in the Northeast and Middle Atlantic states — hit by repeated storms — account for about 25 percent of all retailing in the United States.

Macy’s, for instance, reported a 3.7 percent increase at stores open at least a year but said that its February increase would have been about 5 percent if not for the storms.

The retailing industry’s 4 percent increase in February was the best monthly percentage jump that the chains had collectively posted since the end of 2007. But that does not mean the stores have returned to the sales levels they hit at the peak of the boom. Sales fell so far in the recession that stores have climbed only part of the way back fast payday loans.

Still, the improvement last month was not only pervasive, it included categories of merchandise that had been hurt most by the downturn.

For example, sales of luxury goods not including jewelry peaked in 2007, and while they have yet to climb back to that level, they rose by double digits last month. Sales of luxury goods increased 15.2 percent year-over-year, according to SpendingPulse. “You’re just growing off of an absolutely tiny sales base last year,” Mr. McNamara said.

The February results continue a positive trend for the sector. Sales were up 8.1 percent in January and 5.5 percent in December, compared with the same months the previous year.

February sales at Saks stores open at least a year, a measure of retail health known as same-store sales, increased 2 percent. Same-store sales in the specialty retail segment of Neiman Marcus, which includes Neiman Marcus and Bergdorf Goodman stores, increased 5.1 percent. At Nordstrom, which offers a wider range of prices than Saks and Neiman Marcus, sales rose 10.3 percent.

As expected, stores that sell brand names at a discount thrived. Analysts said that while luxury retailing was enjoying an uptick, value was still king. Same-store sales rose 11 percent at Ross Stores and 10 percent at TJX Companies, which owns chains like TJ Maxx, Marshalls and Home Goods.

Other clothing purveyors showed improvement. Same-store sales climbed year-over-year at nearly every major department store chain, a long-struggling sector, including Macy’s and Kohl’s (both up 3.7 percent), Dillard’s (up 2 percent), J. C. Penney (up 1.2 percent) and Bon-Ton (up 0.5 percent). Stein-Mart was an exception, posting a 9.3 percent decline.

There were also increases at most specialty clothing stores and retailers that cater to teenagers, including Aeropostale (up 7 percent), American Eagle Outfitters (up 6 percent), Buckle (up 5.1 percent), Wet Seal (up 4.7 percent) and Gap (up 3 percent).

Abercrombie & Fitch, the worst-performing chain for much of the recession, reported a 5 percent same-store sales increase.

Same-store sales rose by double digits at Zumiez (up 11.2 percent) and Limited, which owns chains like Victoria’s Secret and Bath & Body Works (up 10 percent). Hot Topic was an exception, with sales sinking 7 percent.

Yet even as some consumers bought discretionary items like shirts and sneakers, they continued to be frugal-minded, driving sales at stores that sell food and other necessities at low prices.

Same-store sales were strong at discount chains like Costco (up 9 percent), BJ’s Wholesale Club (up 7.5 percent), and Target (up 2.4 percent). Wal-Mart, the nation’s largest retailer, does not report monthly sales. Costco said in a statement that customer traffic increased by about 3 percent and that the average transaction amount rose 1 percent.

The International Council of Shopping Centers expects the industry to post a 2.5 percent same-store sales increase in March. Easter, which is a week earlier this year than last, will most likely help increase sales. So might tax refunds.

Despite Storms, Stores Beat Expectations With Relatively Strong Gains

NEW YORK (AFP) – Embattled US automaker General Motors on Wednesday announced its vice chairman Robert Lutz would retire in May.

"Lutz will retire effective May 1, 2010, capping a 47-year career in the global auto industry that included senior leadership positions at four of the world?s leading automakers," GM said in a statement personal business card.

GM says vice chairman to step down in May

NEW YORK – An industry trade group says the manufacturing sector expanded in February for the seventh straight month, but at a slower pace than in the previous month.

The Institute for Supply Management said Monday its manufacturing index read 56.5 last month, slightly slower than the 58.4 growth in January. It was also slower than the 58 level expected by economists polled by Thomson Reuters.

A reading above 50 indicates expansion guaranteed approval cash loans. It was the seventh consecutive month of growth.

ISM says its employment measure grew for the fourth time in five months.

A pickup in business investment in equipment and software, increases in exports and slower cutbacks of inventories is helping drive production gains.

Manufacturing grows in Feb., but at slower pace

JOB PICTURE STILL BLEAK: New claims for jobless benefits rose sharply last week, the Labor Department said Thursday. Most of the rise resulted from state agencies processing a backlog of claims left over from two weeks ago when snowstorms closed government offices.

IMPROVEMENT STALLS: Still, a steady drop in claims in the second half of last year has stalled, a sign layoffs are no longer declining cheap business cards. More layoffs could weaken consumer spending and slow the recovery.

WEAK ECONOMY: Other recent economic reports have also been disappointing, evidence that economic growth may weaken later this year.

Summary Box: Jobless claims rise in weak recovery

LONDON (MarketWatch) — The European Commission on Monday denied reports that a European Union plan was in the works to provide 20 billion to 25 billion euros ($27 billion to $33.8 billion) in aid to Greece as uncertainty lingers over how Athens’ European partners plan to ensure the nation will meet its debt obligations.

The Focus Will Be On Greek Bond Yields This Week

An expected bond offering will gauge investor appetite for Greek paper. If yields rise too far the country’s debt problems will get worse and the euro will suffer.

A weekend report in Germany’s Der Spiegel magazine and a story reported by the Financial Times Deutschland on Monday said Germany was working with its E.U. partners on a package.

“There is no such plan because Greece has not requested a single euro in financial aid,” a spokesman for the European Commission, the E.U.’s executive arm, told a news conference in Brussels, according to Reuters.

A spokesman for the German Finance Ministry said no decision had been made regarding aid for Greece, reports said.

The euro saw choppy trade and changed hands in recent action at $1.3610, little changed versus the U.S. dollar. The single currency has been under heavy pressure amid sovereign-default worries, dropping around 10% versus the dollar since November.

It remains unclear what authorities plan to do if investor confidence takes another hit, said Kenneth Broux, market economist at Lloyds TSB.

“I think the ECB and the E.U. are still very unclear about what the assistance would look like. And I think that is weighing on the market,” he said.

European Union leaders earlier this month pledged to support Greece, but offered no details of how an aid package would work. E.U. finance ministers last week said Greece must show progress toward slashing its budget deficit in a report due on March 16, or have further deficit-reduction measures imposed on top of the government’s austerity program.

Toe-dipping

Greece, meanwhile, is expected to put forward a 3 billion to 5 billion euro syndicated 10-year-bond issue as early as this week, the Financial Times reported on Saturday.

Such a move would allow Greece to “dip its toe in the water” and could prove to be a decisive moment for market sentiment, said Peter Dixon, economist at Commerzbank.

“Either it would confirm the view from Athens that the government should comfortably be able to raise the required funds, or it would trigger the need for support from other euro-zone countries,” he said.

Greek Prime Minister George Papandreou on Sunday told the BBC in a television interview that the country isn’t looking for an E personal humidifier.U. bailout, saying that the nation instead needs political support as it attempts to slash its deficit.

“Give us the time, give us the support — and I’m not talking about financial but political support — in order to show you that what we’re saying is being implemented and we are credible again,” Papandreou said.

Global Dow

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“We don’t have at this point a need for borrowing. Our borrowing needs are covered until mid-March. What we’re saying is simply that we need the help so we can borrow at the same rate as other countries, not at the high rates that undermine the possibility for” cutting the deficit, he said.

Greek government bonds have come under heavy pressure since late last year after it was revealed the nation’s 2009 deficit was near 13% of gross domestic product, more than four times the euro-zone’s 3% limit.

Greek debt was downgraded by all three major ratings agencies in December and the yield demanded by investors to hold Greek 10-year debt over benchmark 10-year German bunds remains above three percentage points.

Eurostat still waiting for swaps info

Separately, Eurostat didn’t receive information from Greece regarding its use of currency swaps and its impact on the country’s deficit figures by a Feb 19 deadline, a spokeswoman for the European Union statistical agency said Monday in an email.

Eurostat received information from Greek authorities regarding a previous request from Jan. 21, but were told by Greek authorities that the requested swap-related information could not be sent due to a four-day strike by workers at the Ministry of Finance.

Eurostat on Sunday requested the information be sent “as soon as possible,” the spokeswoman said.

Olli Rehn, the E.U.’s top economic affairs official, last week ordered Greece to provide the data after news reports said Goldman Sachs had helped the government use currency swaps and other instruments designed to hide debt levels in the past.

Greek authorities have insisted the measures were allowed at the time under Eurostat rules, which were subsequently tightened.

E.U. denies Greek-aid details in the works

SAN FRANCISCO (Reuters) – Wal-Mart Stores Inc (WMT.N) reported a higher quarterly profit on Thursday but said sales at its existing U.S. namesake stores fell during the holiday quarter and forecast earnings for the current quarter that could miss Wall Street estimates.

Profit for the fourth quarter that ended January 31 rose to $4.63 billion, or $1.21 per share, from $3.79 billion, or 96 cents per share, a year earlier.

The company said earnings per share excluding a charge of 4 cents per share for restructuring and a tax benefit of 10 cents per share were $1.17.

Analysts, on average, were expecting earnings of $1.12 per share, according to Thomson Reuters I/B/E/S easy fast payday loans.

Sales in the quarter rose 4.6 percent to $112.82 billion.

Total U.S. same-store sales fell 1.6 percent, with sales rising 0.7 percent at its Sam's Club warehouse division and falling 2 percent in its Walmart stores. It had forecast U.S. same-store sales to be flat, plus-or-minus 1 percent.

For the first quarter it expects earnings per share from continuing operations to range from 81 cents to 85 cents. Analysts were expecting 85 cents.

(Reporting by Nicole Maestri; editing by John Wallace)

Wal-Mart profit rises but forecast light

Filed at 2:33 a.m. ET

YOKOHAMA, Japan, Feb 9 (Reuters) - Nissan Motor Co (NASDAQ:NSANY) , Japan’s No.3 carmaker, said it returned to profit in the third quarter from a year earlier and raised its annual forecast for the second time this financial year, boosted by brisk sales globally.

Nissan, in which France’s Renault SA holds a 44 percent stake, reported on Tuesday an operating profit of 134.07 billion yen ($1.5 billion) for the October-December quarter, swinging from a loss of 99.19 billion yen a year earlier.

The result beat the average estimate of 80 billion yen from three analysts.

For the year ending in March, Nissan now expects an operating profit of 290 billion yen, up from the 120 billion yen profit it forecast in November. That compared with the average 210 billion yen estimate in a poll of 19 analysts by Thomson Reuters (NYSE:TRI) (TSX:TRI) I/B/E/S short term personal loan.

Nissan had initially projected a second straight year of losses this financial year, but it revised its outlook to a profit three months ago as government incentives helped rev up sales in China.

Bigger Japanese rivals Toyota Motor Corp (NYSE:TM) and Honda Motor Co (NYSE:HMC) also upgraded their annual forecasts last week. [IDs:nSGE61209G]

Shares of Nissan have risen 8.7 percent in the last three months, outperforming the Nikkei stock average’s 1.7 percent gain.

Nissan shares closed up 2.4 percent at 731 yen before the results announcement, against a 0.2 percent fall in the Nikkei.

Nissan Returns to Profit and Lifts Forecast

WASHINGTON/BEIJING (Reuters) – China said on Friday it will slap heavy anti-dumping duties on U.S. chicken parts, a move likely to aggravate trade ties between two of the world's most important economies at a time of strained political relations.

The Chinese Commerce Ministry's initial investigation showed that U.S. companies had dumped chicken products into the Chinese market, according to the ministry's website (www.mofcom.gov.cn).

The preliminary tariffs were announced a day after Beijing requested a World Trade Organization ruling on European Union duties on shoes made in China in the latest case demonstrating China's use of the WTO to keep markets open to the exports on which it depends.

The United States Trade Representative was muted in its response, saying it would consult with U.S. producers as it analyzed China's move.

"USTR is following the investigation closely, and we will want to ensure that MOFCOM follows the applicable WTO rules," . spokeswoman Carol Guthrie said in a statement.

The United States and China are embroiled in a series of economic and political disputes, ranging from the value of the Chinese currency to Internet control, Taiwan and Tibet.

President Barack Obama this week vowed to get tough in dealing with complaints that U.S. exports are disadvantaged by China's artificially cheap yuan, drawing a sharp rebuke from China that its currency was set at "reasonable" levels.

CHINESE PRODUCERS CRY FOUL

The various disputes following placid ties during Obama's first year in office have alarmed the business community.

"The world needs strong U.S.-China economic engagement now, not a ratcheting up of trade tensions," said Michael Barbalas, president of the American Chamber of Commerce in China.

Chicken feet and wing tips, virtually worthless in the U.S. market, are a delicacy in southern China. Many U.S. poultry producers count on the Chinese market to round out their profits.

Chicken feet and wing tips fetch about 2 U.S. cents per pound in the United States, but land in China at about 42 U.S. cents - a figure that Chinese rivals say represents the cost of the freight only.

"Chicken feet and wings are not wanted in the U.S. so they sell them to China, they dump them below cost," said Wang Xiulin, president of the Chinese Poultry Association.

"For over a decade, the U.S. has sent big volumes of chicken to the Chinese market, hurting producers here. Last year, the Chinese poultry industry was really hurting so we asked for this investigation no teletrek payday advance."

Tyson Foods, an active investor and lobbyist in China, got the lowest duty of 43.1 percent. Pilgrim's Pride Corp was hit with an 80.5 percent duty. Most other firms, including Sanderson Farms, face a 64.5 percent duty.

Those that did not appeal the finding would pay duties of 105.4 percent, the ministry said.

China began its investigation of U.S. chicken parts after the U.S. imposed safeguard duties on Chinese-made tires, which China is fighting at the WTO [ID:nLDE60I1H8].

DALAI LAMA ROW LOOMS

The latest flare-up in Sino-U.S. ties comes against a backdrop of disagreements over human rights after Beijing jailed a top dissident and over Internet freedoms after search engine Google Inc threatened to pull out of China over censorship and hacking attacks.

U.S. senators have taken up the Google case, backing the search engine with unanimous resolution. a Congressional panel will hold a high-profile hearing on Google on February 10.

China has been warning Obama against meeting the Dalai Lama, reviled by Beijing as a separatist for seeking self-rule for Tibet. The meeting may happen as early as this month.

Beijing is also upset with Washington over a $6.4 billion U.S. weapons package for Taiwan, the self-ruled island that Beijing deems a breakaway province. China has said it will impose unspecified sanctions on U.S. firms selling weapons to the island.

U.S. officials have voiced frustration that the issues roiling ties now were all discussed directly by Obama and Chinese President Hu Jintao just last November in Beijing.

The Eurasia Group said in analysis published on Friday that China's government is reacting to nationalistic pressures at home and to resistance from foreign countries who want more Chinese action in correcting huge global imbalances.

"Beijing's amped up rhetoric was likely driven by domestic insecurities and an external environment that is less conducive to perpetuating its export-led economic model," it said.

Damien Ma, a China analyst at the Eurasia Group in Washington, said there are still many bilateral working relationships that can help defuse U.S.-China tensions.

"Just because there's a lot of issues and a lot of headline risk, doesn't mean these things won't be worked out through back channels," he said.

(Additional reporting by Niu Shuping in Beijing; Writing by Paul Eckert; Editing by Eric Walsh)

Chicken parts join menu of U.S.-China disputes

In another blow to Google’s plan to create a giant digital library and bookstore, the Justice Department on Thursday said that a class-action settlement between the company and groups representing authors and publishers had significant legal problems, even after recent revisions.

In a 31-page filing that could influence a federal judge’s ruling on the settlement, the department said the new agreement was much improved from an earlier version. But it said the changes were not enough to placate concerns that the deal would grant Google a monopoly over millions of orphan works, meaning books whose right holders are unknown or cannot be found.

The department also indicated that the revised agreement, like its predecessor, appeared to run afoul of authors’ copyrights and was too broad in scope.

The revised agreement “suffers from the same core problem as the original agreement: it is an attempt to use the class-action mechanism to implement forward-looking business arrangements that go far beyond the dispute before the court in this litigation,” the department wrote.

The department asked the court to encourage the parties to continue discussions on further changes to the settlement, which it said had many public benefits.

While the Justice Department did not explicitly urge the court to reject the deal, as it had the previous version, its opposition on copyright, class action and antitrust grounds represented a further setback for Google and the other parties to the deal.

The settlement stems from copyright lawsuits filed by the Authors Guild and the Association of American Publishers over Google’s plan to digitize books from major libraries personal business card. The settlement, introduced in October 2008, would allow Google to make millions of books available online and commercialize them, while creating new ways for authors and publishers to earn money from digital copies of their works.

But the deal faced a chorus of critics who argued that it would give Google a monopoly on millions of out-of-print books and had failed to take into account the interests of many authors.

In a statement on behalf of Google and the author and publisher groups, a Google spokesman, Gabriel Stricker, said the Justice Department’s filing “recognizes the progress made with the revised settlement, and it once again reinforces the value the agreement can provide in unlocking access to millions of books in the U.S.” He said Google looked forward to the court’s review of the department’s views and those of the deal’s supporters.

Critics of the agreement include Amazon, Microsoft and a range of authors, academics and public interest groups.

Judge Denny Chin of the United States District Court for the Southern District of New York, who will rule on the settlement, scheduled a hearing on the agreement for Feb. 18.

Justice Dept. Criticizes Latest Google Book Deal

Hot News: MarketWatch First Take: SEC settlement no tonic for shareholders

BERLIN — The soaring glass and iron Siemens factory here opened almost exactly a century ago. At first, it churned out turbines to generate electricity, then switched to munitions during World War II before being looted by the Soviets, which required it to be rebuilt at the dawn of the Cold War.

Today, it is manufacturing turbines again — except the models being made now are among the most advanced in the world, each one able to power all the homes in this city of three million people by itself.

“It’s not a museum; it’s a workshop,” said Michael Schwarzlose, a project manager at the Berlin plant.

The same might be said for much of Europe itself, despite American suspicions to the contrary. European companies may not be as nimble as their U.S. counterparts, but in moving to preserve jobs in the midst of the worst global downturn since the end of World War II, they have forged a different path toward recovery.

In doing so, they are making old plants more modern and effective rather than starting over elsewhere or shifting jobs to less expensive locales.

“American companies have been faster to adjust their work forces and quicker in protecting profit margins,” said Gilles Moëc, a senior economist at Deutsche Bank. Indeed, while overall profit margins have fallen for both European and American companies, European firms have been willing to accept lower profit and productivity in the short term.

But that does not mean companies on the Continent have fallen behind in innovation, experts say, especially when it comes to green technology, despite increasing pressure from China.

Instead, Europe relies on its large companies to maintain a cutting edge in key industries, a sharp contrast to the American pattern of turning to newer, smaller companies to drive innovation and create jobs.

“The large incumbents in Europe, which might have been considered technological laggards, have used green technology and sustainability as a core new element of growth,” said Luc Soete, a professor of international economics at Maastrict University, in the Netherlands.

They are also remarkably resilient. The Siemens factory added 500 workers here during the depths of the economic crisis last year, beginning production of new gas-burning turbines that are the most powerful Siemens makes but emit substantially less carbon dioxide than older models.

Barbara Kux, the chief sustainability officer at the company, points to the state-of-the art products made by the century-old factory as an example of green innovation.

“It’s part of sustainability and it shows you think long term and are there to stay,” she said. “It gives you the chance to keep experienced people, to keep their knowledge in-house and develop a high level of loyalty and trust so they feel like part of a family rather than just doing a job.”

The varying responses to the economic downturn come amid a fierce intellectual debate in the United States about whether the country is headed toward a more European economic model, given Washington’s nationalization of big banks and intervention in the auto industry, as well as President Barack Obama’s proposal to overhaul the health care system.

“The end result would be an America much closer to the European model of a social-welfare state, which prioritizes cohesion over innovation,” warned a recent article in National Affairs quarterly by Jim Manzi, a former software executive who is now a senior fellow at the Manhattan Institute, a conservative research group.

While unemployment has soared into the 20 percent range in hard-hit countries on the periphery of Europe like Spain and Latvia, the relative success of other European countries in avoiding deep job cuts adds a new wrinkle to a long-standing trans-Atlantic argument.

When it comes to jobs, the most powerful political issue in the United States today, “companies in Europe are probably much more aware of the social limits in which they operate,” Mr. Soete said.

The overall European unemployment rate of 10 percent matches that of the United States, but northern and central Europe have fared much better, with joblessness at 4 percent in the Netherlands and 5.4 percent in Austria, for example.

Germany’s economy contracted by 5 percent last year, yet its unemployment rate of 7 cashadvance.5 percent is actually down from where it was two years ago. By contrast, the U.S. economy shrank 2.4 percent last year as unemployment doubled to 10 percent over the period.

The ability of the German economy, the biggest in Europe, to stanch job losses despite a markedly deeper recession than in the United States is “something of an economic miracle,” contends Jorg Kramer, chief economist for Commerzbank in Frankfurt.

Much of the attention on saving jobs has focused on the government’s short-work program, in which taxpayers and companies share the cost of furloughing workers. But Mr. Kramer said the government-financed program of shorter work weeks, or Kurzarbeit, was responsible for saving only about 20 percent of jobs.

“Half of this miracle can be explained because firms allowed workers to do less; they tolerated a 2.5 percent drop in productivity,” he added. “You can either cut workers or cut hours.”

In the more flexible U.S. labor market, where industrial unions are weak and contracts far less rigid, companies responded more often by letting workers go, sharply cutting costs and preserving profit margins.

German companies not only reduced hours on the job, they also made a decision to accept lower profit margins in the short term, Mr. Kramer said, a practice he called “labor-hoarding.”

In Germany, profit margins have fallen from 6.26 percent in the first quarter of 2008 to just 0.58 percent in the latest quarter, according to Thomson Reuters Datastream. Similarly, French profit margins have dropped from 6.5 percent to 1.2 percent. By contrast, corporate profitability in the United States have shrunk from 7.8 percent to 3.6 percent.

The choices may have fateful consequences. As the recovery picks up steam, European competitors will be well situated to take advantage of new growth opportunities while American companies are required to rebuild their work forces.

But if the fears of a “double-dip recession” turn out to be true, the leaner profile of big U.S. companies could help them hold up better in a renewed downturn.

Whatever the outcome, European experts say that the varying strategies of companies during the financial crisis, and the different ways they treated their workers, ought to prompt a revision of the traditional American view that Europe’s social democracies are condemned to slow growth and high unemployment.

“It’s not true that there is a correlation between how much you spend on social policy and welfare and economic growth,” said Paolo Guerrieri, a professor of international economics at the University of Rome I.

“The best performing group — Denmark, Sweden, Holland, Germany — are exactly the kind of countries that shouldn’t be doing well according to the U.S. stereotype of high taxes and high welfare benefits.”

Siemens is an example of the kind of European company that is leading the way.

Although its global work force has shrunk over the past five years as it exited businesses like telecommunications and auto parts, that has not stopped it making advances in facilities like its Berlin factory, even if the setting resembles Fritz Lang’s 1927 film “Metropolis.”

The 163-year old company spent €500 million, or $700 million, to develop the new turbines being built at the Berlin factory as part of a push into green technology, which it broadly defines to include low carbon-dioxide-emitting turbines and locomotives, solar paneling and wind technology, as well as air and purification equipment.

With revenue increasing 11 percent from 2008 to 2009, Siemens’ broad green portfolio is now growing faster than the company’s other businesses, Ms. Kux added.

And it managed to save its customers an estimated 210 million tons in carbon dioxide emissions last year, the equivalent of the amount generated by New York, Tokyo, London and Berlin put together.

“The global economic crisis has actually allowed us to increase our green advantage,” she said. “It’s an opportunity to jump ahead, cut costs, and improve our own resources.”

Europe Takes Its Own Path Toward Economic Recovery

FRANKFURT (AFP) – The German chemical and cosmetics group Henkel, maker of Persil soap powder, reported on Friday that its core earnings jumped last year and that the 2010 outlook was good as well.

Henkel's earnings before interest and tax (EBIT) surged by 38 percent to 1.08 billion euros (1.51 billion dollars) in 2009, even though sales slipped by 3.5 percent to 13.57 billion euros according to preliminary figures.

The final figures are to be published on February 25, and the results were noticeably better than expected in the group's adhesives and laundry and home care product units, a statement said no fax cash advance.

For 2010, Henkel said it "is confident of again outperforming its relevant markets in terms of organic sales growth," after allowing for foreign exchange effects and acquisitions or divestments.

The group also expects core earnings "to improve noticeably compared to the prior-year figures."

German Henkel reports surge in 2009 core earnings

HONG KONG – Asian stock markets dropped sharply Friday as disappointing company forecasts and growing concerns about debt-laden European nations shook investor hopes for a quicker global recovery. European markets opened higher.

Steep falls across Asia followed strong gains the day before, marking a return to heavy selling that’s pulled markets worldwide lower in the past week. The dollar continued to strengthen as investors looked for safer bets, pulling down prices for commodities.

Lackluster outlooks from major U.S. technology companies Qualcomm Inc. and Motorola Inc. exacerbated worries that global demand and corporate earnings, after improving in 2009, could prove weaker than expected this year.

Investors are also increasingly unnerved by rising debt levels in European countries like Greece and Portugal — focusing the market’s worries on the huge amounts of government borrowing and its ultimate effects on the financial system. Moody’s ratings agency added to fears that have dragged the euro to multi-month lows with a warning that Portugal’s credit rating could suffer unless its deficit was reduced.

Mark Tan, fund manager at UOB Asset Management in Singapore, said uncertainty surrounding U.S. bank regulation plans, Chinese lending curbs and other problems were being used as an excuse to book profits after last year’s rally. He expected the markets to resume an upward trend soon.

“We believe this correction will be short and sharp,” said Tan, who helps manage more than $10 billion in assets. “There’s a lot of confusion in the market at the moment. But the liquidity and economic fundamentals are still good, so this is a correction in a relatively positive market.”

Early going in the Europe, Britain’s FTSE 100 added 0.7 percent, Germany’s DAX was up 0.8 percent and France’s CAC-40 rose 0.7 percent. Wall Street futures pointed to a slightly higher open in the U.S. Friday. S&P futures gained 0.9 point, or 0.1 percent, to 1,08.40.

In Japan, the Nikkei 225 stock average tumbled 216.25, or 2.1 percent, to 10,198.04. Hong Kong’s Hang Seng index slid 234.38, or 1.2 percent, to 20,121.99, and South Korea’s Kospi fell 40 points, or 2.4 percent, to 1,602.43.

India’s market shed 0.4 percent and Shanghai was down 0.2 percent. Australia’s benchmark tumbled 2.2 percent, its resource-heavy market dragged lower by easing commodity prices fast payday loans.

Adding to investors’ unease was an initial report, to be released Friday, on U.S. gross domestic product in the fourth quarter. American GDP, a measure of the country’s economic output, is expected to rise 4.5 percent.

Global markets have gotten off to a rough start in 2010, with most down sharply for the year. Developing countries have been hit especially hard in the latest downdraft.

China and Indian benchmarks are now off about 9 percent and 7 percent for the year, respectively, as investors scale back their investments in riskier assets like equities in so-called emerging markets.

Overall, investors pulled more money out of developing market investment funds than they put into them during the week ending Jan. 27, according to a survey by EPFR Global, a Boston-based firm that tracks global fund flow data. It was the first time emerging market funds had suffered outflows of money in about 3 months.

Asian tech stocks felt part of the brunt of Friday’s selling as sentiment toward the industry continued to sour. South Korean tech giant Samsung Electronics Co. lost 3 percent even as it posted a fourth quarter profit. Japanese memory chip maker Elpida tanked 9 percent.

Also slammed were resource companies, with mining giant Rio Tinto down nearly 5 percent as a stronger greenback brought down prices for commodities, which are priced in dollars.

Meanwhile, Toyota Motor Corp. fell another 2 percent. The world’s largest automaker is struggling to salvage its safety reputation in the wake of massive recalls in the U.S., Europe and China.

Another bout of selling in the U.S. further weakened sentiment.

The Dow fell 115.70, or 1.1 percent, to 10,120.46. The Standard & Poor’s 500 index fell 12.97, or 1.2 percent, to 1,084.53, while the Nasdaq fell 42.41, or 1.9 percent, to 2,179.00.

In currencies, the euro continued to slide, falling to $1.3967 from $1.3976. The dollar was higher at 90.25 yen from 89.87 yen.

Oil prices lingered near a six-week low below $74, with benchmark crude for March delivery fluctuating before rising 26 cents to $73.90 a barrel. The contract lost 3 cents to settle at $73.64 on Thursday, the lowest since Dec. 14 when crude dropped to $73.46.

Asian markets resume slide; Europe stocks gain

PORT ARTHUR, Texas – About 450,000 gallons of crude oil spilled in a southeast Texas port Saturday after two vessels collided, the U.S. Coast Guard said. No injuries have been reported, but part of the port has been closed.

U.S. Coast Guard Petty Officer Renee Aiello told The Association Press that the crude spilled at the Port of Port Arthur when a 600-foot tanker carrying oil collided with a towing vessel pushing a loaded barge. The Coast Guard was notified of the collision around 9:50 a.m., she said.

The crash left a 15-by-8-foot hole in the tanker, Aiello said low fee pay day loans. The towing vessel then ricocheted and hit another tanker that was tied to a pier. Aiello didn’t know what damage was caused to that ship.

Aiello said a portion of the oil in the damaged tank has been moved to another holding tank on the ship.

Port Arthur is about 90 miles east of Houston.

Oil spilled at east Texas port as ships collide

Crude oil followed the stock market up on Tuesday, settling higher for the first time in five sessions.

Investors boosted health stocks, watching a Massachusetts election to fill the seat of the late Sen. Edward M. Kennedy. Some hoped for a Republican victory that would make it more difficult for Senate Democrats to pass a health care bill. The Dow Jones Industrial Average was up nearly 100 points in afternoon trading.

Wholesale gasoline prices also moved higher after the MasterCard SpendingPulse report for the week ended Friday showed gasoline consumption rose 3.2 percent with the week before and 2.3 percent from the same week a year ago. Traders have been looking for signs that gasoline demand is starting to pick up to justify oil prices that have more than doubled in the past year.

SpendingPulse is a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash.

But last week’s falling oil prices started to bring down prices at the gas pump. Gasoline prices fell for the fourth straight day, though the declines have been modest so far.

Prices of $2.74 per gallon Tuesday were less than 2 pennies under the 15-month peak of $2.7543 hit on Thursday, according to AAA, Wright Express and Oil Price Information Service.

Prices still are up 15 cents in the past month and 89.8 cents from a year ago, as motorists dig deeper into their wallets to pay for fuel just as Christmas bills start to come in payday loans with low fees.

Tuesday’s gasoline prices matched the Energy Information Administration survey that showed prices averaged $2.739 per gallon nationwide Monday, down 1.2 cents from the week before.

A typical motorist using about 50 gallons a month is paying about $140 for gasoline, $45 more a month than a year ago.

Gasoline prices have spiked in the past month on a jump in oil prices.

Analyst Tom Kloza said to look for larger declines in gasoline prices over the next few weeks. January and February are typically a period of poor demand for transportation fuels.

Benchmark crude for February delivery rose $1.02 to settle at $79.02 Tuesday on the New York Mercantile Exchange.

In other Nymex trading in February contracts, heating oil fell 0.06 cent to settle at $2.0454 a gallon, while gasoline added 1.37 cents to settle at $2.0591 a gallon. Natural gas futures shed 13.4 cents to settle at $5.557 per 1,000 cubic feet.

In London, Brent crude for March delivery rose 53 cents to settle at $77.63 a barrel on the ICE Futures exchange.

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Associates Press writers Pablo Gorondi in Budapest and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.

Crude settles higher as stocks climb