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NEW YORK (MarketWatch) — U.S. stocks ended with a slight gain Tuesday after being whipsawed by bets in the financial sector and a rally in telecommunications, which benefited from Cisco Systems Inc.’s unveiling of a new router.

The Dow Jones Industrial Average moved between gains and losses late in the day before ending 11.86 points higher, or 0.1%, at 10,564.38. The Nasdaq Composite Index was the strongest of the major indexes, with a gain of 0.4%.

S&P 500 (1 YEAR)

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The S&P 500 rose 0.2%, led by a 1.2% gain in its telecommunications sector, which benefited from hopes that Cisco’s new device will help alleviate congestion on mobile data networks.

Sprint Nextel Corp. shares jumped 6.5%, while Verizon Communications shares rose rose 0.9%. Read Telecom Stocks

The S&P 500’s financial sector finished with a small gain overall, up just 0.3%. See Financial Stocks.

But there was extremely heavy volume in just four of its names: American International Group leapt 12.6%, Fannie Mae jumped 5.9%, Freddie Mac leapt 7.6%, and Citigroup was up 7.3%. Read more on Citi, AIG stocks.

Citi was helped by a a report on Fox Business that the government is discussing plans to sell its 27% stake in the bank, perhaps within the next three months. That in turn spurred buying in some of the other names that are still subject to the heaviest government involvement in the wake of the recent financial crisis, though no moves had been announced by the Treasury or other agencies as of Tuesday’s market close.

AIG surged as a debt sale by an important unit went well, the Wall Street Journal reported Tuesday. A $1.3 billion loan offering by International Lease Finance Corp. has met with strong investor demand, which will enable the aircraft-leasing unit of AIG to raise fresh funds to repay some of its maturing debt, the newspaper said.

In general, traders and analysts said Tuesday’s session saw an increase in speculative betting, which added volatility and underscored the lack of confidence that has developed on trading floors since the market hit its bear-market lows exactly one year ago.

Digits: The Push for 3-D TV

Sony, Panasonic and Samsung have recently announced new TV models that feature 3-D. But the rush to manufacture products hides the fact that there is little content to showcase, the Digits panel reports.

“The main thing the market has going for it at this point is cheap money,” thanks to low borrowing costs from central banks around the world, said Darren Chervitz, research director at Jacob Asset Management auto loan interest rates. “We’re positioning ourselves for the day when fundamentals will matter again, but we haven’t reached that point yet.”

The Dow is now up 61% from its 12-year low hit on March 9, 2009, marking the depths of the financial crisis. The S&P 500 is up 69% over that timeframe, while the Nasdaq Composite is up 85%. Read about best and worst stocks since bear-market bottom.

The technology and telcom names that dominate the Nasdaq have often benefited over the past year from optimism that an early wave of capital investment will fuel a broader U.S. economic recovery, even as consumer spending and employment lag.

This week, Cisco’s announcement regarding its new router, dubbed the CRS-3, has meshed nicely with that broader investment theme. The device would function as part of the backbone of networks that carriers assemble to deliver information to large swaths of customers, not an at-home device for individuals to set up for personal use.

Cisco, which hit a 52-week high on Monday in anticipation of the router announcement, ended flat on Tuesday. Read more about Cisco’s new router plans.

Rex on Techs: Cisco’s Router Hype

Networking giant borrows a page from Apple’s marketing manual to promote a fast new router, and the market yawns. Rex Crum reports.

But some of its potential customers showed big gains, including a 1.1% gain in AT&T, which said it has tested the new Cisco device and found it to move data at 10,000 times the speed of a typial residential broadband connection.

“Even during the recession, people were demanding more and more data, which was incredible to see,” said portfolio manager Kim Caughey, of Fort Pitt Capital Group. “It’s become one of these trends that’s not going away.”

Elsewhere, the industrial sector benefited from a 0.8% rise in Boeing Co. after Northrop Grumman Corp. said it would drop out of a protracted quest to win a $40 billion contract to build the U.S. Air Force’s next generation of aerial-refueling planes, leaving Boeing as the only competitor left standing. Northrop shares slipped 0.3%. Read more on Boeing, Northrop.

General Growth Properties shares climbed 3.8% after the shopping-center operator got a proposal to help it emerge from bankruptcy from two of its biggest creditors.

UAL Corp. shares climbed 3.7% after its United Airlines said February unit revenue — the amount taken in for each passenger flown a mile on its planes and those of its affiliates — jumped 17% to 19% over the same month a year earlier. Read Airline Stocks.

In other markets, the dollar weakened against the yen but gained ground versus the euro. Crude-oil futures slipped 38 cents to $81.49 a barrel, while gold futures also moved lower. Treasurys edged higher.

Market Snapshot: U.S. stock end up, with financials in spotlight

NEW YORK – Tim Burton and Johnny Depp’s trip down the rabbit hole drew huge crowds, as “Alice in Wonderland” earned a whopping $116.3 million in its opening weekend — a record for a 3-D film.

The surprisingly huge total easily surpassed all other films in release and gave Walt Disney Studios an even bigger opening than that of the hugely popular 3-D film “Avatar.” It also marked the biggest opening weekend for a non-sequel.

“This is just one of those cultural phenomenons that has caught everybody’s interest,” said Chuck Viane, Disney’s president of distribution. “They don’t come like this very often.”

The film beat forecasts that ranged between $65 million-$75 million, and the surprising results added some intrigue to Oscar Sunday. Before the weekend, Disney and 20th Century Fox competed over the available 3-D ready screens; screens outfitted for 3-D are rapidly rising, but still amount to fewer than 4,000 in the U.S. and Canada.

Before “Alice,” many of those screens were still dedicated to Fox’s box-office behemoth, “Avatar,” which is up for nine Academy Awards on Sunday, including best picture.

In its 12th week of release, “Avatar” earned $7.7 million over the weekend, bringing its cumulative domestic total to $720.2 million.

Asked whether fewer 3-D and IMAX screens hurt “Avatar,” Chris Aronson, head of distribution for Fox, said, “No question.”

“Are we disappointed? Sure,” said Aronson. “But there are certain market forces that are beyond anything we can do. To have an 11-week window is pretty much unheard of. It certainly allowed this movie to be discovered and witnessed by so many people.”

“Avatar” isn’t disappearing, though, and it can be expected to regain 3-D and IMAX screens, especially if it wins best picture.

“We’ll have that negotiation tomorrow morning with exhibition, without a doubt,” said Aronson.

It also seemed likely that “Alice” benefited from the “Avatar”-effect in galvanizing audiences for 3-D movies. “Alice in Wonderland” is the first film released in 3-D since James Cameron’s epic. “Alice” was shot in 2-D, but transferred to 3-D in post-production.

“In the wake of the impact of `Avatar,’ there’s a whole new audience that’s been indoctrinated to 3-D,” said Paul Dergarabedian, box-office analyst for Hollywood.com. “That paid off big for `Alice in Wonderland.’”

The weekend’s second best performer at the box-office was Overture’s “Brooklyn’s Finest,” Antoine Fuqua’s gritty police thriller, which earned $13.5 million in its first weekend, according to studio estimates.

Martin Scorsese’s “Shutter Island” for Paramount followed closely with $13.3 million in its third week of release, bringing its cumulative total to $95.8 million. Warner Bros.’s comedy “Cop Out” came in fourth, adding $9.1 million for a two-week total of $32.4 million.

But “Alice” thoroughly dominated the weekend, surprising even Disney. Worldwide, it took in $210.3 million.

It was a record release for the first quarter of the year, typically a time of lower box-office expectations and critically acclaimed Oscar contenders. The previous first quarter record was Mel Gibson’s “Passion of the Christ,” which opened with $83.8 million in Feb. 2004.

“We went into Friday thinking that we really had a big hit with us, and then all of a sudden the numbers started to roll in,” said Viane inferred heaters. “Alice” went on to make $41 million on Friday alone.

“We said, `Oh my gosh. This is bigger than any of us could have anticipated,” said Viane.

Though reviews were mostly respectfully negative, much of the film’s draw was surely in teaming director Burton and his frequent collaborator, Depp, who plays the Mad Hatter. It also presented moviegoers with a 3-D updating of Lewis Carroll’s beloved classic. Though at times dark, it gained a PG rating from the MPAA (for, among other things, “a smoking caterpillar”), which meant a large number of kids could attend.

But it proved once again how significant the draw of 3-D is to moviegoers. The technology repeatedly has inflated box-office grosses for everything from “Avatar” to “Cloudy with a Chance of Meatballs.”

“Alice” also played across 188 IMAX screens in North America and gave IMAX its best opening ever, with $11.9 million domestically. That beat the previous record of $9.5 million set by “Avatar.”

IMAX chairman and president Greg Foster said the huge success of “Alice” was unexpected, but that “Avatar” would regain some of those IMAX screens, whether or not it wins best picture.

“The momentum on 3-D is so massive right now,” said Foster. “They were ready for a new movie. They were ready for a new, cool 3-D experience.”

Though most of the Oscar contenders weren’t a big factor at the box-office Sunday, the boffo performance of “Alice” proved the good health of Hollywood, said Dergarabedian.

Estimated ticket sales for Friday through Sunday at U.S. and Canadian theaters, according to Hollywood.com. Final figures will be released Monday.

1. “Alice in Wonderland,” $116.3 million.

2. “Brookyn’s Finest,” $13.5 million.

3. “Shutter Island,” $13.3 million.

4. “Cop Out,” $9.1 million.

5. “Avatar,” $7.7 million.

6. “The Crazies,” $7 million.

7. “Percy Jackson & the Olympians: The Lightning Thief,” $5.1 million.

8. “Valentine’s Day,” $4.3 million.

9. “Crazy Heart,” $3.4 million.

10. “Dear John,” $2.9 million.

___

On the Net:

http://www.hollywood.com/boxoffice

___

Universal Pictures and Focus Features are owned by NBC Universal, a unit of General Electric Co.; Sony Pictures, Sony Screen Gems and Sony Pictures Classics are units of Sony Corp.; Paramount and Paramount Vantage are divisions of Viacom Inc.; Disney’s parent is The Walt Disney Co.; Miramax is a division of The Walt Disney Co.; 20th Century Fox, Fox Searchlight Pictures and Fox Atomic are owned by News Corp.; Warner Bros. and New Line are units of Time Warner Inc.; MGM is owned by a consortium of Providence Equity Partners, Texas Pacific Group, Sony Corp., Comcast Corp., DLJ Merchant Banking Partners and Quadrangle Group; Lionsgate is owned by Lions Gate Entertainment Corp.; IFC Films is owned by Rainbow Media Holdings, a subsidiary of Cablevision Systems Corp.; Rogue Pictures is owned by Relativity Media LLC; Overture Films is a subsidiary of Liberty Media Corp.

‘Alice’ opens with $116.3 million, a 3-D record

Hot News: Congressional estimates show grim deficit picture

The 70-28 roll call Wednesday by which the Senate passed a jobs bill offering tax breaks to companies that hire unemployed workers.

A “yes” vote is a vote to pass the bill.

Voting yes were 55 Democrats, 13 Republicans and 2 independents.

Voting no were 1 Democrat and 27 Republicans.

ALABAMA

Sessions (R), No; Shelby (R), No.

ALASKA

Begich (D), Yes; Murkowski (R), Yes.

ARIZONA

Kyl (R), No; McCain (R), No.

ARKANSAS

Lincoln (D), Yes; Pryor (D), Yes.

CALIFORNIA

Boxer (D), Yes; Feinstein (D), Yes.

COLORADO

Bennet (D), Yes; Udall (D), Yes.

CONNECTICUT

Dodd (D), Yes; Lieberman (I), Yes.

DELAWARE

Carper (D), Yes; Kaufman (D), Yes.

FLORIDA

LeMieux (R), Yes; Nelson (D), Yes.

GEORGIA

Chambliss (R), No; Isakson (R), No.

HAWAII

Akaka (D), Yes; Inouye (D), Yes.

IDAHO

Crapo (R), No; Risch (R), No.

ILLINOIS

Burris (D), Yes; Durbin (D), Yes.

INDIANA

Bayh (D), Yes; Lugar (R), No.

IOWA

Grassley (R), No; Harkin (D), Yes.

KANSAS

Brownback (R), No; Roberts (R), No.

KENTUCKY

Bunning (R), No; McConnell (R), No.

LOUISIANA

Landrieu (D), Yes; Vitter (R), No.

MAINE

Collins (R), Yes; Snowe (R), Yes.

MARYLAND

Cardin (D), Yes; Mikulski (D), Yes.

MASSACHUSETTS

Brown (R), Yes; Kerry (D), Yes.

MICHIGAN

Levin (D), Yes; Stabenow (D), Yes.

MINNESOTA

Franken (D), Yes; Klobuchar (D), Yes.

MISSISSIPPI

Cochran (R), Yes; Wicker (R), Yes pay day loan lenders.

MISSOURI

Bond (R), Yes; McCaskill (D), Yes.

MONTANA

Baucus (D), Yes; Tester (D), Yes.

NEBRASKA

Johanns (R), No; Nelson (D), No.

NEVADA

Ensign (R), No; Reid (D), Yes.

NEW HAMPSHIRE

Gregg (R), No; Shaheen (D), Yes.

NEW JERSEY

Lautenberg (D), Not Voting; Menendez (D), Yes.

NEW MEXICO

Bingaman (D), Yes; Udall (D), Yes.

NEW YORK

Gillibrand (D), Yes; Schumer (D), Yes.

NORTH CAROLINA

Burr (R), Yes; Hagan (D), Yes.

NORTH DAKOTA

Conrad (D), Yes; Dorgan (D), Yes.

OHIO

Brown (D), Yes; Voinovich (R), Yes.

OKLAHOMA

Coburn (R), No; Inhofe (R), Yes.

OREGON

Merkley (D), Yes; Wyden (D), Yes.

PENNSYLVANIA

Casey (D), Yes; Specter (D), Yes.

RHODE ISLAND

Reed (D), Yes; Whitehouse (D), Yes.

SOUTH CAROLINA

DeMint (R), No; Graham (R), No.

SOUTH DAKOTA

Johnson (D), Yes; Thune (R), No.

TENNESSEE

Alexander (R), Yes; Corker (R), No.

TEXAS

Cornyn (R), No; Hutchison (R), Not Voting.

UTAH

Bennett (R), No; Hatch (R), Yes.

VERMONT

Leahy (D), Yes; Sanders (I), Yes.

VIRGINIA

Warner (D), Yes; Webb (D), Yes.

WASHINGTON

Cantwell (D), Yes; Murray (D), Yes.

WEST VIRGINIA

Byrd (D), Yes; Rockefeller (D), Yes.

WISCONSIN

Feingold (D), Yes; Kohl (D), Yes.

WYOMING

Barrasso (R), No; Enzi (R), No.

Senate roll call on tax breaks for new hires

TOKYO/WASHINGTON (Reuters) – A document claiming Toyota Motor Corp saved over $100 million by getting U.S. regulators to agree a cheap fix for unintended acceleration problems raised pressure on the company's president as he arrived in Washington to prepare for a grilling from congress.

Akio Toyoda is set to testify before the U.S. lawmakers this week in an effort to contain a safety crisis that threatens the reputation and continued success of the automaker in the market that made it a global powerhouse.

Toyota has recalled over 8.5 million vehicles globally in recent months for problems including sticky accelerators, accelerators that can be pinned down by loose floormats and a braking glitch affecting its hybrid models.

The company said on Monday it had received a federal grand jury subpoena for documents related to unintended acceleration that led to the recall of millions of cars in the United States.

Regulators believe five deaths are associated with floor mats and are reviewing up to 29 other fatality reports to see if they are related to unintended acceleration.

A 2009 internal document turned over to lawmakers and made available on Sunday shows Toyota's Washington D.C. staff trumpeting savings of more than $100 million by convincing regulators to end a 2007 investigation of sudden acceleration complaints with a relatively cheap floormat recall.

The document seems certain to add to the high-stakes debate about whether Toyota missed or ignored complaints about sudden acceleration in its vehicles and whether U.S. safety regulators were tough enough.

Toyota shares rose as much as 3 percent earlier on Monday, lifted by a rally in exporters after the yen slipped against the dollar, but pared gains to close up 1.2 percent.

"Investors remain reluctant to buy up Toyota, given uncertainty over how the congressional hearings will go," said Fumiyuki Nakanishi, head of the investment information department at SMBC Friend Securities.

"We are likely to see more selling of Toyota shares and buying of Honda shares," he said.

Toyota stock has lost 19 percent over the past month but has steadied over the past 10 trading sessions.

"VERY TELLING" DOCUMENT

Toyota on Sunday reiterated that it was conducting a top-to-bottom review of all its operations.

"Our first priority is the safety of our customers and to conclude otherwise on the basis of one internal presentation is wrong," the company said home kerosene heaters.

But the U.S. Department of Transportation said the document highlighted Toyota's slow response to the safety problems.

"Unfortunately, this document is very telling," said department spokeswoman Olivia Alair in an emailed statement.

Toyota Motor Sales U.S.A. said General Manager Bob Carter would provide an update on its recall actions later on Monday.

Toyota has launched a publicity campaign to convince current and prospective customers that the company is addressing the problems. Its U.S. sales plummeted 16 percent in January and the company has estimated the recalls will cost it $2 billion at the operating level in the fiscal year ending March.

Toyota said it would temporarily halt production in France over the next two months due to soft sales, although it did not specify the number of idle days.

Last week, it had announced a similar stoppage at its factory in Britain for an extra week after Easter, on top of recent and planned output cuts in North America and Japan.

Japanese rival Mazda Motor Corp said it would not launch a special marketing campaign to draw customers away from Toyota, shunning a strategy used by other car makers keen to capitalize on Toyota's recall woes.

TOYODA TESTIMONY KEY

Toyoda, who is set to testify Wednesday after initially ruling out such an appearance, has acknowledged that the automaker founded by his grandfather let its standards slip during fast growth over the past decade.

The company has been tight-lipped about Toyoda's schedule, with a spokesman declining to confirm whether its president was already in the United States. Japanese media reported he had arrived in Washington and television showed images of his private jet.

Analysts said Toyoda's appearance in Washington will be a defining moment in whether and how quickly it can move beyond its safety crisis.

"Congress is doing him a favor. He can be apologetic and be contrite and take responsibility and acknowledge that there have been some stress points in growth of the company," said Jeffrey Sonnenfeld, a Yale School of Management senior associate dean and an expert on corporate leadership.

(Additional reporting by David Bailey and Soyoung Kim in Detroit and Chang-Ran Kim, Yumiko Nishitani and Yoshifumi Takemoto in Tokyo; Editing by Lincoln Feast and Jon Loades-Carter)

Toyota memo raises stakes for chief’s U.S. hearings

LONDON (MarketWatch) — U.S. stock futures were stronger Tuesday after a three-day break, with investors returning to a rally in commodity prices, notably gold.

S&P 500 futures rose 4.4 points to 1,083.50 and Nasdaq 100 futures added 8.25 points to 1,791.50. Futures on the Dow Jones Industrial Average rose 31 points.

Global Dow

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U.S. stocks rose last week, with the S&P 500 rising 0.9% to snap a four-period losing run.

Investors are returning to a rally in gold prices — up some $26 an ounce in electronic trade — and firmer commodity prices across the board. In euro terms, gold rose to an all-time high of 818 euros an ounce.

The dollar index fell 0.2%. The euro recovered somewhat as European finance ministers demanded fresh budget cuts from Greece if a review of the country’s debt-slashing measures doesn’t meet approval next month.

The New York Federal Reserve’s Empire State Index for February, along with the National Association of Home Builders’ housing market index, also for February, will be released Tuesday, as will securities inflows for December easy pay day loans.

Earnings also are due from companies including Merck & Co. , Kraft Foods and Qwest Communications .

Terra Industries on Monday accepted a $4.1 billion takeover bid from Norway’s Yara. See full story.

Barclays reported a surge in profit as the U.K. bank said 2010 has started out more strongly than 2009. See full story.

Virgin Calls On Europe To Be Tougher On BA, AA

Virgin Atlantic CEO Steve Ridgway shares his views on DOT’s decision to tentatively approve antitrust immunity to British Airways and American Airlines and what Virgin’s game plan is going forward.

AMR may advance as the American Airlines parent received tentative approval for antitrust immunity on transatlantic flights with partners British Airways and Iberia, with the airline only forced to divest four slots at London’s Heathrow Airport.

Rigel Pharmaceuticals may advance after reaching a deal to license its rheumatoid arthritis drug to AstraZeneca for as much as $1.25 billion before royalties.

The pan-European Dow Jones Stoxx 600 rose 0.6%, and strong results from Westpac helped the Australian S&P/ASX 200 rise 0.5%. China, Hong Kong, Taiwan and Singapore were closed for Lunar New Year.

Indications: U.S. stock futures stronger after three-day break

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

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

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

WASHINGTON – The Senate Tuesday rejected a plan backed by President Barack Obama to create a bipartisan task force to tackle the federal deficit this year despite glaring new figures showing the enormity of the red-ink threat.

The special deficit panel would have attempted to produce a plan combining tax cuts and spending curbs that would have been voted on after the midterm elections. The measure went down because anti-tax Republicans joined with Democrats who were wary of being railroaded into cutting Social Security and Medicare.

The Senate vote to kill the deficit task force came just hours after the nonpartisan Congressional Budget Office predicted a $1.35 trillion deficit for this year as the economy continues to slowly recover from the recession.

“Yet another indication that Congress is more concerned with the next election than the next generation,” said Sen. Judd Gregg, R-N.H., a sponsor of the plan.

The budget deficits facing Obama and Congress are large and intractable, and the CBO prediction for 2010 is roughly equal to last year’s record $1.4 trillion ocean of red ink. That means the government is borrowing to cover 40 percent of the cost of its programs.

The report predicts a sluggish economic recovery and continued high unemployment — which presages big political problems for President Barack Obama and his Democratic allies heading into the midterm elections.

The report sees unemployment averaging 10.1 percent this year as the economy grows by just over 2 percent. It would grow only slightly more next year with an unemployment rate of 9.5 percent.

“CBO expects that the pace of economic recovery will be slow,” said agency chief Douglas Elmendorf.

The latest estimates also project that the deficit will drop to $980 billion next year and $480 billion in five years — but only if a host of tax cuts enacted under President George W. Bush are allowed to expire. Most budget experts see deficits nearing or exceeding $1 trillion each year over the next decade once tax cuts and other policies are factored in.

It’s a sobering reminder of the fundamental imbalance of the federal government’s budget that comes just days before Obama’s Feb. 1 budget submission. The White House says Obama will propose a three-year freeze on domestic agency budgets, though the savings would barely make a dent. It hasn’t said whether Obama will proposes tax hikes or cuts to spiraling benefit programs such as Medicare, Medicaid and Social Security no fax pay day loans.

The 2010 deficit figure is in line with previous estimates and would be less, marginally, than last year’s $1.4 trillion shortfall. But plans afoot on Capitol Hill for a new jobs bill and a coming Obama request for war funds would add to the total.

The spending freeze, expected to be proposed by Obama during the State of the Union address on Wednesday, would apply to a relatively small portion of the federal budget, affecting a $477 billion pot of money available for domestic agencies whose budgets are approved by Congress each year. Some of those agencies could get increases, others would have to face cuts; such programs got an almost 10 percent increase this year. The federal budget total was $3.5 trillion.

The freeze on so-called discretionary programs would have only a modest impact on the deficit. The steps needed to really tackle such huge deficits include tax increases and curbs on benefit programs like Medicare, Medicaid and Social Security.

That was the idea behind the Obama-backed plan to pass a law to create a special task force to come up with a plan to curb the spiraling budget deficit. Now, Obama may create a weaker version by a presidential order. But unlike the plan rejected Tuesday, there’s no way to force a Senate vote.

Supporters actually garnered 53 votes for the plan co-sponsored by Gregg and Budget Committee Chairman Kent Conrad, D-N.D. But 60 votes were required under special floor rules. Thirty-six Democrats and independent Joe Lieberman of Connecticut voted for the plan as did 16 Republicans.

The task force was rejected after the powerful seniors lobby, led by AARP, objected to a potential fast-track debate of cuts to Social Security and Medicare. Anti-tax activists and GOP-friendly editorial pages pressed Republicans to oppose it. It would have tried to reveal a deficit reduction blueprint after the November elections for a vote before the new Congress convenes.

The plan was offered as an amendment to a deeply unpopular bill to permit the government to borrow an additional $1.9 trillion to finance its operations and prevent a first-ever default on U.S. obligations.

___

On the Net:

Congressional Budget Office: http://cbo.gov/

Senate rejects bipartisan task force to tackle deficit

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

NEW YORK (Reuters) – Profits from top U.S. technology companies like IBM (IBM.N) and financial companies like Goldman Sachs Group Inc (GS.N) next week could help stocks gain as long as investors see room for more profit growth.

Stronger-than-expected results late Thursday from tech bellwether Intel Corp (INTC.O) failed to excite investors on Friday, while steep loan losses reported by JPMorgan Chase & Co. (JPM.N) dragged down the market.

The benchmark Standard & Poor's 500 index (.SPX) rose 23.5 percent last year, with information technology the top-performing sector. It jumped 60 percent, raising questions about whether the sector may have become too expensive.

"It's all about how fast they can grow earnings to catch up to those valuations," said Jeff Kleintop, chief market strategist at LPL Financial in Boston.

"This is a business spending-led recovery rather than consumer recovery … so I think earnings growth will remain above average and justify those valuations."

Fourth-quarter results are expected to show a sharp improvement compared with 2008's last quarter, when the economic downturn took a heavy toll on corporate profits.

S&P 500 earnings for the quarter are forecast up 186 percent versus a year ago, according to Thomson Reuters estimates. It would be the first quarter that S&P 500 company earnings grew year over year since the second quarter of 2007.

Next week the earnings period accelerates, with some 57 S&P 500 companies reporting.

International Business Machines Corp is scheduled to post results on Tuesday while Google Inc (GOOG.O) is expected on Thursday. Among financials, Goldman Sachs is expected on Thursday, while Bank of America (BAC.N) and Morgan Stanley (MS.N) should report on Wednesday.

STOCKS END DOWN FOR WEEK

For the second week of the new year, the three major indexes lost ground. The Dow Jones industrial average (.DJI) was down 0.1 percent, while the S&P was down 0.8 percent and Nasdaq (.IXIC) was down 1.3 percent.

The S&P 500 is still up 68 percent since its early March lows, largely because of stronger-than-expected earnings and economic data.

On the economic front, data that could influence stocks next week includes reports on housing starts, producer prices and leading indicators easy payday loans.

Data on December housing starts, expected on Wednesday, is forecast to show 580,000 new units from 574,000 in November.

More than 70 percent of companies beat estimates in recent reporting periods, and investors are eager to see if the fourth-quarter will produce similar results. The last quarter of 2008 was the worst earnings period in the history of the index.

"I think we're going to get decent numbers relative to estimates," said Fred Dickson, market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon.

"Valuations have gone up, but so have earnings."

Intel, which fell 3.2 percent to $20.80 on Friday, "had such a good run on the margin front that I think a lot of people are a little bit leery that there's going to be any further improvement in margins," said Owen Fitzpatrick, head of U.S. Equity Group, Deutsche Bank Private Wealth Management, said.

FINANCIALS KEY TO MARKET

IBM shares have risen almost 60 percent in the past year as the company cut costs and changed its business mix. Analysts expect the company to report fourth-quarter revenue of about $27 billion, about even with a year earlier, and profit per share of $3.47 versus $3.27 a year earlier.

Financials, which were up 14.8 percent as an S&P sector last year, could benefit from gains in investment banking and other factors, Kleintop said.

"Financials still remain the sore spot in the market. If financials are going down, the whole market is going down," he said.

Financials, materials and consumer discretionary companies are expected to have the highest earnings growth for the fourth quarter, Thomson Reuters estimates showed. Energy and industrials are expected to have the lowest.

Also set to report next week: General Electric (GE.N), McDonald's Corp (MCD.N) and American Express Co (AXP.N).

(Editing by Kenneth Barry)

Earnings growth takes center stage

NEW YORK (Reuters) – Billionaire investor Wilbur Ross on Thursday said he was not considering buying American International Group's (AIG.N) mortgage insurance unit United Guaranty.

"It is certainly the case that we're not buying the division," Ross said in an interview with Reuters Insider. "We do think the mortgage insurance space is an interesting one and we hope to be in it at some point, but we have no transaction right now."

Ross, chairman and chief executive of private equity and turnaround firm WL Ross & Co, said the firm's latest fund was around 60 percent invested, and he expects it to be fully invested long before the end of the year payday cash loan.

Ross also said he was "quite possibly" interested in teaming up with Richard Branson's Virgin Money to bid for state-owned British bank Northern Rock.

Ross was part of a group led by Virgin that bid for Northern Rock in 2008.

(Reporting by Michael Erman, editing by Maureen Bavdek)

Investor Wilbur Ross not buying AIG unit

Hot News: Fed makes the case for keeping its power intact

McDonald’s, the fast-food company, said on Monday that it had promoted Don Thompson, the head of its United States division, to become its No. 2 executive.

Mr. Thompson succeeds Ralph Alvarez, who retired unexpectedly last month, citing health concerns. Like Mr. Alvarez, Mr. Thompson will have the dual titles of president and chief operating officer.

He becomes the third person to hold the No. 2 post at McDonald’s since 2004, when the company lost two chief executives to fatal illnesses. Since then the company has stressed the importance of succession planning, and the No. 2 executive has been widely viewed as a chief executive in waiting.

James A. Skinner, the chief executive, said Mr. Thompson would oversee operations at McDonald’s nearly 32,000 restaurants worldwide. The company operates in more than 117 countries.

Despite the importance of its international markets — revenue from outside the United States made up nearly two-thirds of the company’s total of $23.5 billion in 2008 — a company press release and profile of Mr. Thompson showed little evidence of foreign experience.

Walt Riker, a company spokesman, said that Mr. Thompson had worked with the company’s international restaurants when he was executive vice president of restaurant systems in 2004, a job that included involvement with such things as modernized drive-throughs, new cooking systems, cashless payment systems and new menu items.

McDonald’s has a long history of choosing its top executives from within unsecured personal loans.

Mr. Thompson, 46, started working at McDonald’s in 1990 as an electrical engineer in the restaurant systems group. He then moved into restaurant operations and rose to executive posts in its West and Midwest divisions. In 2006 he was named president of the company’s United States division, when Mr. Alvarez was promoted from that post to the No. 2 spot.

Mr. Alvarez’s predecessor, Michael J. Roberts, also left the company abruptly, reportedly over frustrations that Mr. Skinner, who became chief executive in 2004, had failed to step down as quickly as anticipated.

McDonald’s has been a success story during the global recession, reporting strong sales and generally outperforming its fast-food rivals. Possible signs of weakness began to show in the United States business late last year, however. Same-store sales in the United States for the month of November were down 0.6 percent compared with the same period the previous year, the company reported. But year-to-date same-store sales for the period that ended Nov. 30 were up 2.8 percent in the United States and 3.9 percent companywide.

The company also announced on Monday that Jan Fields would succeed Mr. Thompson as president of its United States division. Ms. Fields had previously been the executive vice president in the division.

McDonald’s Names U.S. Chief as Its No. 2 Executive

Hot News: JAL lenders to cave in to bankruptcy plan-sources

LONDON (MarketWatch) — European shares closed slightly higher Thursday in a shortened final trading session of 2009 as the region wrapped up its best trading year in a decade.

The FTSE Eurofirst 100 rose 0.2% to 3,345.58, in thin trading, with gains for miners and some banks helping tip the region higher.

Among the biggest movers, Lloyds Banking Group rose 1.7 and miner Antofagasta added 1.8% in London, while BT Group dropped 1.6%.

Europe Week Ahead

Europe’s Week Ahead: German cosmetics giant Beiersdorf reports earnings, fashion retailer Next releases its latest trading update and an interest-rate decision from the Bank of England is due. Aude Lagorce reports.

The Dow Jones Stoxx 600 index wasn’t calculated Thursday as some markets, including Germany and Italy, remained closed.

However, 2009 was the index’s strongest year since 1999 as it posted a 27.6% rise following the sharp drop in 2008. In 1999 the index rose around 36%.

Austrian property group Immoeast was the biggest gainer in the Stoxx 600 for the year, rising around 737%, while the common shares of German car maker Volkswagen were the worst performer, shedding 69% of their value since the end of 2008.

Among regional markets, the French CAC 40 index closed up 0.02% at 3,936.33 Thursday easy payday loans.

Over the year, the main French index has risen 22.3%, with oil and gas services group Technip posting the biggest gain, 127%, over that period. The worst performer was GDF Suez , which declined 14.3% over the year. In total, just four stocks in the CAC 40 declined during the year.

The U.K.’s FTSE 100 index ended 0.3% higher at 5,412.88. Since the start of 2009 the index has gained 22.1%, with the mining sector showing the strongest rise.

The year’s biggest individual gainer on the index was Kazakhmys , with a 475% rise in its share price.

Royal Bank of Scotland was the worst performer, dropping 40.9% over the course of the year after the bank needed a further bailout from taxpayers that will take the government’s stake to around 84%. See London Markets for more.

In total, 17 of the FTSE 100 component stocks declined over the course of 2009.

The German market was closed Thursday, but at Wednesday’s close the DAX 30 index was up nearly 24% for the year, with Infineon Technologies surging 353% over the period, while Commerzbank brought up the rear with an 11.4% decline.

Europe Markets: Europe closes higher to end decade-best year

HO CHI MINH CITY, Vietnam — More than many countries, Vietnam has been buffeted by the ups and downs of globalization.

A relatively new player in the global economy, it benefited from a flood of Western capital and interest in the 1990s and early this decade, only to be devastated by the reverberations of the latest economic crisis in the United States, 7,500 miles away.

Vietnam’s strategy for competing in the global arena — and a relatively successful one until recently — had been to carve out niche markets where it could deliver, say, quality products like handicrafts or specialized clothing that China could not.

But all of Vietnam’s main export industries are heavily dependent on sales to the United States. In 2009, the United States was the biggest importer of Vietnamese goods, absorbing about a fifth of the country’s exports.

Furniture companies, to take one industry, have had a huge drop in orders after the rapid downward spiral in sales of new homes in the United States. “A lot of the smaller factories have had a very, very difficult time,” said Michael Gunther, a manager at Honai Furniture, a 900-employee company about 20 miles outside of Ho Chi Minh City that makes a range of items from bedroom dressers to parts for bows and arrows.

About 20 to 25 percent of Honai’s production goes to the United States while the rest is exported to other parts of the world, particularly Europe. Mr. Gunther said the company had not had to lay off anyone even as smaller competitors went out of business, a trend that has allowed Honai to at least sustain itself.

“We’ve had customers ask us to increase our capacity but we can’t because we’re at full capacity,” he said.

Vietnam’s economy grew 4.6 percent for the first nine months of 2009, compared with the same period in 2008, according to the World Bank, in part because of government stimulus measures. While a developed country like the United States would be happy with such growth, Vietnam in recent years had been able to sustain an average growth rate above 7 percent.

At the same time, the country has seen a strong retrenchment in exports. In the first 10 months of 2009, Vietnamese exports declined 13.8 percent compared with the period in 2008, the World Bank said.

Though that drop is less than declines in most other developing countries, it could make 2009 the first year with a decline in exports since the beginning of Vietnam’s economic reforms, the World Bank said.

The pullback is a significant growing pain for Vietnam, one of the world’s newer export economies. Compared with others in the region like Thailand and Malaysia, Vietnam is still an infant in its experiences with globalization.

For decades after the Vietnam War, the economy limped along, sustained largely by its agriculture. Until President Bill Clinton and the Senate lifted the United States trade embargo in 1994, Vietnam was a bit player in the export market. Even after that shift, it took years for the country’s manufacturing sector to be competitive, particularly given its location near more mature exporting countries like China.

In order to square off against China, many manufacturers try to rely on niche industries and specialties rather than competing solely on price or low labor costs payday loan.

Dai Viet Garment Ltd., based in Ho Chi Minh City, has been able to sustain its business because it specializes in making the thoub, a man’s tunic, for Saudi Arabia and other Middle Eastern markets.

Demand is pretty stable for the garments, which has allowed the company to keep its work force of 500 direct employees busy as well as 300 more through subcontractors.

Many factory owners say that labor costs make up about 20 to 30 percent of the cost of manufacturing, so cutting workers, overtime or wages does not help much in response to lower demand. In addition, the shipping and transportation networks are much more robust in China, which can put Vietnam at a disadvantage.

“What makes the difference is the labor cost and delivery time,” said Diep Thanh Kiet, chairman of Dai Viet Garment.

As Vietnam’s tourism market grows, particularly attracting new golf resorts and vacationers from other nearby countries in Southeast Asia and elsewhere, furniture manufacturers like Sadaco are turning to supply such new resorts.

Tran Quoc Manh, chairman of Sadaco, says he has also sought to diversify his customer base by finding clients in China and in growing areas of Vietnam, like Dalat City, where new villas are being built. But the local market cannot substitute for the huge potential of the global consumer.

“The local market is still very small compared to the U.S. market, and overall exports to the U.S. continue to grow, though not as much as pre-crisis projections would have had it,” said Frederick R. Burke, a managing partner in the Vietnam office of the law firm Baker & McKenzie, who advises exporters.

Accurate government statistics on job losses in Vietnam are hard to come by, and even business people here say they believe that the government is playing down the cutbacks.

The World Bank said there was abundant anecdotal evidence of increased hardship in the first half of the year.

“Job losses were widespread in industrial parks in late 2008 and early 2009. But few took the form of open layoffs,” Viet Tuan Dinh and Martin Rama wrote in a report in June for the World Bank. “Nonrenewals of contracts and incentives for voluntary departures were more common.”

Corporate enterprise is still guided by the hands of the officially socialist government of Vietnam, a country where the hammer-and-sickle flag flies alongside the red Vietnamese flag at many government office buildings and where socialist motivational banners are a common sight at factories.

The Vietnamese government tried several measures to force factories to keep their employment levels up during the economic downturn, and it adopted a sizable fiscal stimulus package as well.

But many economic experts are optimistic that a global recovery will help the country regain its growth track.

“The government is learning through experience,” said V. Bruce J. Tolentino, chief economist at the Asia Foundation, a nonprofit group based in San Francisco. “They are pragmatic, and that pragmatism is serving them well.”

Vietnam Is Refining Its Role on the Global Stage