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Apple Inc. said in a report posted on its Web site Saturday that an audit of its suppliers found that three hired 11 underage workers to help build its iPhone, iPod and Macintosh computer in 2009.

“Apple discovered three facilities that had previously hired 15-year-old workers in countries where the minimum age for employment is 16,” the company said about its onsite audit of 102 factories.

The full report can be viewed by clicking here.

Apple (NASDAQ:AAPL) said the underage workers were “no longer in active employment at the time of our audit easy payday loans.”

The company said it also found eight cases where excessive recruitment fees were paid, three situations involving hazard waste disposal and three involving falsified records.

The company didn't name the suppliers where violations were found.

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Provides fast cash advance payday loans nationwide with no credit checks required.

Manufacturing will remain at the forefront of a U.S. economic recovery that’s likely to extend at least through the middle of the year as companies invest in new equipment, reports today indicated.

The New York-based Conference Board’s measure of the outlook for the next three to six months increased 0.3 percent in January. The Federal Reserve Bank of Philadelphia’s general economic index rose to 17.6 in February from 15.2 as a measure of orders surged to the highest level in more than five years. Readings greater than zero signal growth.

The gains in production aimed at rebuilding inventories and satisfying increased global demand are leading to higher producer prices, a separate report showed. The strength in manufacturing has yet to translate into the hiring necessary to provide more impetus to the economic expansion.

“The manufacturing sector continues to be the sole bright spot in the economic recovery,” said Thomas Simons, an economist at Jefferies & Co. Inc. in New York. “Until employment picks up, the consumer will still be reluctant to make major purchases.”

U.S. stocks rose for a third day as a rally in commodity shares and the improvement in manufacturing offset disappointing sales at Wal-Mart Stores Inc. and a rise in jobless claims. The Standard & Poor’s 500 Index gained 0.7 percent to 1,106.75 at 4:10 p.m. in New York. The 10-year Treasury note fell, pushing up the yield six basis points to 3.8 percent.

Jobless Claims

The number of Americans filing first-time claims for unemployment insurance unexpectedly rose last week, indicating improvement in the labor market will be uneven. Initial jobless claims rose by 31,000 to 473,000 in the week ended Feb. 13, the Labor Department in Washington said today.

Economists forecast claims would fall to 438,000, according to the median of 42 projections in a Bloomberg News survey.

Prices paid to factories, farmers and other producers accelerated more than anticipated in January, Labor Department figures showed. The 1.4 percent rise in the producer price index followed a 0.4 percent increase in December and reflected in part higher energy costs.

Raw materials prices surged 9.6 percent in January, the biggest increase since November 2006. Intermediate goods prices, such as lumber and steel mill products that require further processing, also rose.

Economists forecast the Philadelphia Fed’s factory gauge would rise to 17, according to the median of 58 projections in a Bloomberg survey. Estimates ranged from zero to 23.

The Fed bank’s gauge of factory employment rose to 7.4, the highest level since October 2007, while its new orders measure rose to the highest level since September 2004.

Sentiment Gauge

The overall index number isn’t composed of the individual measures, so some economists consider it a gauge of sentiment among manufacturers.

“Business is back in business,” Caterpillar Inc. Chief Executive Officer James Owens said Feb. 11 at a news conference for the Business Council’s survey on CEO sentiment. “While we may be expecting a bit of a sluggish recovery, at least solid economic growth, stability in compensation and maybe some growth there, and increasing investment,” is occurring.

Five of the 10 indicators in the Conference Board’s leading index contributed to the gain, led by the yield curve, supplier deliveries and the factory workweek. Four of the components fell. Higher jobless claims, a drop in the money supply and fewer building permits weighed on the index.

Helping fuel the gain in the leading index last month was an increase in hours worked at U.S. factories, to 40.8 in January, from 40.6 in December, according to data from the U.S. Labor Department. That was the highest since August 2008.

Manufacturing Jobs

Manufacturers added 11,000 jobs in January, the first increase in three years, Labor Department figures showed on Feb. 5. Overall payrolls declined by 20,000 during the month as construction companies and state and local governments cut back.

The world’s largest economy will probably expand at a 3 percent annual rate this quarter and 2.8 percent from April through June, according to the median estimates of economists surveyed by Bloomberg earlier this month.

Eaton Corp. is seeing demand increase in its auto and trucks unit, which Chief Executive Officer Sandy Cutler said is typical early in an economic cycle. The global recovery will be a more muted rebound with higher-than-normal growth from underdeveloped countries, he said.

“I think 2010 in many ways is a transitional year,” Cutler said in an interview. In the U.S., “part of what we are seeing now is the early cycle businesses are recovering.”

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When faced with a financial crisis, consumers more often are opting to pay their credit-card bills first before turning to their mortgage payments, according to a report released by Trans Union Wednesday.

In the past, strapped consumers typically would let their credit cards slide and make sure their mortgages were covered, said Sean Reardon, the study’s author and a consultant at the Chicago-based credit bureau. But those priorities flipped in the first quarter of 2008, according to the study, and the trend has been picking up steam.

In fact, 6.6% of consumers were delinquent on their mortgages, but current on their credit cards in the third quarter of 2009, according to the most recent data available. Meanwhile, just 3.6% were behind on their credit cards and current on their mortgages.

Why the change? A "perfect storm" of deteriorating housing prices and rising unemployment is likely the reason, Reardon said. It’s much easier for consumers to walk away from mortgage payments when their homes aren’t building equity, he said, than to neglect their credit cards when that may be the only way they’re covering daily expenses.

Just two years earlier, in the third quarter of 2007, the situation was reversed: 3.95% of consumers were delinquent on their mortgages, and current on their credit cards, while 4.6% were behind on their credit cards and current on their mortgages.

In California and Florida — two of the states hit hardest by the burst housing bubble — consumers were even more likely to pay their credit cards before their mortgages.

In California, 10.2% were delinquent on their mortgages but current on their credit cards in the third quarter of 2009, vs. 2.7% in the reverse situation. In Florida, 12.4% were behind on their mortgages and current on their credit cards, compared to 3.9% in the opposite situation.

Trans Union conducted the study among consumers that had at least one credit card and one mortgage, and examined 30-day credit card and mortgage delinquency data between the second quarter of 2008 and the third quarter of 2009.  

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Consumer spending in the U.S. probably rose in November for the sixth time in seven months as households took advantage of holiday discounting.

Purchases increased 0.7 percent for a second consecutive month, according to the median estimate of 72 economists surveyed by Bloomberg News. The report may also show incomes grew by the most in six months. Confidence and new-home sales probably also climbed, other reports may show.

Retailers such as Best Buy Co. are cutting prices on some items to help Americans overcome the worst employment slump in the post-World War II era and mounting foreclosures. Growing sales indicate consumers will contribute to, rather than hold back, the economic expansion in coming months.

“The U.S. consumer is mounting a comeback.,” said Chris Low, chief economist at FTN Financial in New York. “Despite a 10 percent unemployment rate, credit restrictions and political uncertainty, spending is growing again.”

The Commerce Department’s report is due at 8:30 a.m. in Washington. Estimates in the Bloomberg survey ranged from gains of 0.4 percent to 0.9 percent.

The report may also show incomes rose 0.5 percent last month, the biggest gain since May, according to the survey median. Estimates ranged from increases of 0.2 percent to 0.8 percent.

Auto dealers are among retailers seeing demand improve long after the government’s so called cash-for-clunkers plan expired. Cars and light trucks sold at a 10.9 million unit annual pace last month, up from a 10.5 million pace in October. Sales slumped in September, the month after the trade-in incentive ended.

More Discounting

Best Buy, the largest U.S. electronics retailer, is promoting notebook computers and $299 flat-screen televisions to lure consumers. As a result, the Richfield, Minnesota-based company will see its gross margin decline by as much as 1 percentage point in the fourth quarter, Chief Executive Officer Brian Dunn said on a Dec. 15 conference call with analysts.

The labor market remains a hurdle. The jobless rate is projected to exceed 10 percent through the first half of next year. Payrolls fell by 11,000 last month, bringing total job losses to 7.2 million since the recession began in December 2007, the most of any contraction since the Great Depression.

Consumer Confidence

Stock-market gains are boosting optimism among Americans. The Reuters/University of Michigan final reading on consumer sentiment for December, due about 10 a.m., is projected to climb to 73.8, its highest level since January 2008.

The Standard & Poor’s 500 Index yesterday closed at the highest level in almost 15 months after existing home sales in November topped forecasts. The National Association of Realtors said sales of previously owned houses rose 7.4 percent from the prior month to an annual pace of 6.54 million, the highest level in almost three years.

Another report from the Commerce Department today, due at 10 a.m., is forecast to show purchases of new homes rose 1.9 percent to a 438,000 annual pace last month, the highest level since August 2008, according to the survey median.

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Americans are inking a lot of deals to buy homes.

In October the National Association of Realtors recorded an unprecedented ninth consecutive month of increases in the number of signed contracts.

Although these are not closed sales, and some deals can fall through, signed contracts are a good indicator of where the housing market is headed.

Between September and October NAR’s Pending Home Sales Index rose 3.7% to 114.1 from 110 in October. But the index is 31.8% higher than a year ago, when it was 86.6. That’s the biggest year-over-year gain in the history of the index.

The PHSI is also at its highest level since March 2006, and the rise confounded expert expectations. A panel of industry analysts put together by Briefing.com had forecast a 1% drop in new contracts.

NAR’s chief economist, Lawrence Yun, gives much of the credit for increased sales to the homebuyer’s tax credit, which first-time homebuyers could claim to reduce their taxes by up to $8,000.

"The tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future," Yun said in a prepared statement.

The credit had been due to lapse on Dec. 1, so many October buyers may have acted to get in under the wire.

However, the credit has been extended through the middle of 2010 and expanded to include many move-up buyers. The housing industry hopes that will keep sales perking until the economy picks up and markets return to a more normal condition.

In a related story, the Census Bureau reported that private residential construction spending surged 3.9% during October.

Yun cautioned, however, that housing market indicators, such as pending sales, may weaken over the next few months.

"The expanded tax credit has only been available for the past three weeks, but the time between when buyers start looking at homes until they close on a sale can take anywhere from three to five months," he said.

"Given the lag time, we could see a temporary decline in closed existing home sales from December until early spring when we get another surge," he added. "But the weak job market remains a major concern and could slow the recovery process."

The good news is that number of homes on the market has declined, removing some of the bloat that has depressed prices. There is now a seven month supply of homes on the market at the current rate of sale. which is down from 10.2 months a year ago. Yun predicted that housing conditions could return to near normal and home prices firm up by mid-2010.

"That would mean broad wealth stabilization for the vast number of middle-class families," he said. 

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White House economic adviser Lawrence Summers disputed the idea of a “new normal” of slower growth and higher unemployment popularized by Pacific Investment Management Co.

“It will take time, it will take step-by-step a lot of different elements creating jobs,” Summers said at a forum in Washington last night. “But I see no reason why there should be some new normal idea of the potential growth of the country.”

Summers, director of the White House’s National Economic Council, spoke at a conference on innovation and economic growth co-sponsored by Intel Corp. and the Aspen Institute, a non- partisan policy research organization. He was asked about the “new normal” investment analysis in an interview by Judy Woodruff, host of a Bloomberg Television news show and a senior correspondent for PBS’s “The NewsHour with Jim Lehrer.”

Newport Beach, California-based Pimco, which runs the world’s largest bond fund, has forecast what it termed a “new normal” for the global economy that will include heightened government regulation, lower consumption, slower growth and a shrinking role for the U.S. economy.

Summers said that while he anticipates it taking some time for the U.S. economy to recover from the recession, he sees no erosion of the growth potential once an expansion matures amid the right mix of government policies.

“It will take assuring that there are adequate flows of finance, that there is adequate work on the infrastructure of the country, making sure that businesses have the right kind of incentives,” said Summers, who turned 55 yesterday. “There are a lot of things that need to be done. So it will take time to have this expansion mature.”

‘Rebalancing’

Summers also called for a “rebalancing” of the world economy in which U.S. consumers play a less significant role.

“There is no way our import-led growth is going to be the driving force for the rest of the world’s export-led growth going forward,” Summers said.

President Barack Obama and the Democratic congressional majorities in Congress currently face conflicting pressures to stimulate jobs growth and reduce the federal budget deficit. Obama is to host a “jobs summit” with economists, business leaders and union officials on Dec. 3 to discuss ideas for spurring employment.

Summers said attacking unemployment is an essential element in reducing the deficit.

“Putting people back to work, bringing employment back to normal levels, that’s also going to be the single largest factor in bringing down the federal budget deficit,” Summers said.

The unemployment rate rose to 10.2 percent in October, the highest level since 1983.

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Some positive American economic data and higher commodity prices pushed the Toronto stock market higher Wednesday.

The S&P/TSX composite index was up 52.8 points to 11,592.4 after across the board weakness pushed the main index down 84 points on Tuesday.

The U.S. Commerce Department reported that consumer spending rose a brisk 0.7 per cent last month, following a 0.6 per cent pullback in September.

Incomes, the fuel for future spending, rose 0.2 per cent for the second straight month.

The Canadian dollar was up 0.98 of a cent to 95.5 cents US. Currency analysts at Scotiabank said the rise was due to news that the Russian central bank is preparing to invest some of its foreign exchange reserves in the loonie. No amount has been confirmed.

The gold sector was the best TSX performer, up almost one per cent as the December bullion contract on the Nymex continued to head higher into record territory, up $13.50 to US$1,179.30 an ounce. Barrick Gold Corp. (TSX: ABX) rose 72 cents to C$46.29.

The base metals sector rose 0.73 per cent amid a three-cent rise in December copper to US$3.14 a pound. Teck Resources (TSX: TCK.B) advanced 38 cents to $36.67.

The financials sector also lent support, up 0.5 per cent. Bank of Montreal (TSX: BMO) rose 41 cents to $53.55 after handing in an earnings report Tuesday that beat expectations.

The energy sector was little changed with the January crude contract on the New York Mercantile Exchange off two cents to US$76 a barrel after losing ground Tuesday in the wake of soft U.S. economic growth and consumer sentiment data.

The TSX Venture Exchange moved up 19.55 points to 1,427.96.

New York indexes were little changed as investors took in other economic data ahead of the U.S. Thanksgiving holiday.

The Dow Jones industrial average climbed five points to 10,438.7 after drifting 17 points lower.

The Nasdaq composite index moved 5.4 points higher to 2,174.58 while the S&P index added 0.7 of a point to 1,106.35 as orders for big-ticket factory goods fell unexpectedly by 0.6 per cent in October. But much of the weakness came from an 18.4 per cent drop in orders for goods related to defence. Excluding those, orders for other types of manufactured goods rose 0.4 per cent in October.

Still, the performance was weaker than economists expected. They were forecasting orders for durable goods to grow 0.5 per cent.

Also, the Labour Department said new claims for unemployment insurance fell by 35,000 to 466,000. That's the fewest claims since the week ending Sept. 13, 2008, and was far better than the 500,000 that economists had expected cash advance loans.

Later in the day, the University of Michigan's final report on consumer sentiment for November in expected to be revised up to 67 from a preliminary reading of 66, but will still be below the October reading of 70.6.

Comments from the U.S. Federal Reserve Tuesday also drove investor sentiment as the central bank said the economy's contraction for all of this year won't be as deep as it thought in a forecast released in the summer. Growth next year should turn out slightly better than the Fed previously projected and it also expects slightly lower unemployment.

On the corporate front, farm equipment maker Deere and Co. says big charges and lower sales of farm and construction equipment amid the economic downturn left it with a US$223 million loss for the fourth quarter. Deere says worldwide revenue dropped 28 per cent to US$5.33 billion. Its shares lost 62 cents to US$51.67.

Cossette Inc. (TSX: KOS) is recommending that shareholders reject the latest hostile takeover offer from Cosmos Capital Inc. The Quebec City-based advertising agency says it's not in company's best interests. The amended bid offers $7.87 per Cossette share and is subject to a due diligence condition which Cossette says cannot be satisfied. Its shares were unchanged at $8.02.

QLT Inc. (TSX: QLT) has agreed to pay US$20 million to settle a legal dispute with Massachusetts General Hospital, which had been seeking higher royalty payments from the sale of the Visudyne treatment for age-related blindness. In return for QLT's payment, the Boston-based hospital has agreed to dismiss its claims against the Vancouver-based drug developer. QLT shares ran up 25 cents to $4.23.

Fairfax Financial Holdings Limited (TSX: FFH) said Tuesday that it has received preliminary regulatory approval to establish of a new property and casualty insurance company in Brazil. The company plans to carry out its operations across Brazil, in all lines of commercial business, with a primary focus on property, energy, casualty, surety, marine, financial lines, special risks, hull and aviation. Fairfax shares dipped $1.23 to $373.77.

Overseas, Japan's Nikkei 225 stock average advanced 0.4 per cent, Hong Kong's Hang Seng index advanced 0.8 per cent, and China's Shanghai benchmark rebounded from a big retreat the day before, closing up 2.1 per cent.

London's FTSE 100 index gained 0.74 per cent, Frankfurt's DAX was up 0.73 per cent and the Paris CAC 40 rose one per cent.

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The country's third-largest supermarket chain said sales and profit both grew in its latest three-month period.

Metro Inc., which operates the former Dominion and A&P stores in Ontario, as well as Metro stores in Quebec, said profit rose 16.4 per cent to $84.4 million while sales grew 2.3 per cent to $2.5 billion.

Both profit and sales beat analysts' forecasts.

The quarter, which is also Metro's year-end, was the fourth in which the company posted record net earnings, president and chief executive officer Eric La Fleche noted in a statement.

“I congratulate all our employees and retailers for their great work,” La Fleche said. “Despite the challenging economic environment, we are confident that we will continue to grow in the coming year.”

For the quarter, Metro said same-store sales grew 2 per cent. The key retail performance measure excludes the impact of new stores.

Sales for the year, which ended Sept. 26, rose 4.4 per cent to $11.2 billion, the company said. Profit grew 21.3 per cent to $354.4 million.

Both the quarter and the year were negatively affected by the non-renewal of a convenience store supply chain contract, the company said bad credit cash loans.

However, the company's profits benefited from its stake in Quebec-based convenience store operator, Alimentation Couche-Tarde. Metro said its share of the profits more than doubled to $11.7 million in the quarter and to $37.4 million for the year.

The grocery retailer also announced the creation of dunnhumby Canada, an exclusive joint venture with dunnhumby, an international consulting and marketing service organization known for converting customer data into business strategies.

The joint venture's mission is to better satisfy customers' needs and improve customer loyalty, Metro said.

Metro's results come a day after the country's leading supermarket operator, Loblaw Cos. Ltd., reported higher profit on flat sales, citing lower inflation as a factor.

Metro's share price closed up 4.5 per cent at $31.60 on the Toronto Stock Exchange on Tuesday a day ahead of the news.

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Wal-Mart Stores Inc on Monday announced its second round of price cuts on toys as the world’s biggest retailer backs up its intention to be the “price leader” this holiday shopping season.

U.S. Walmart stores are cutting prices on 100 toys, like the Buzz Lightyear talking action figure and Star Wars light sabers, by roughly 20 percent to 30 percent.

The cuts are in addition to ones the retailer implemented at the end of September, when it began selling 100 toys for $10 each.

The new prices will be available through December 25 or while supplies last.

Wal-Mart has vowed to be the “price leader” this holiday season, and announced plans on October 21 to cut prices every week until Christmas to fend off rivals and win over shoppers easy online payday loans.

After it reduced toy prices at the end of September, Target Corp responded with price cuts of as much as 50 percent on toys like Barbie and G.I. Joe.

Analysts said many of these holiday price cuts are planned in advanced, allowing retailers to protect their margins.

But such cuts can be damaging to manufacturers, because they train shoppers to expect lower prices for their goods. They can also hurt retailers’ profits if they must slash prices lower than expected to match competitors’ prices, or they can not sell enough goods to offset the lower prices.

(Reporting by Nicole Maestri, editing by Leslie Gevirtz)

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JPMorgan Chase & Co is moving to boost its market share in credit cards for wealthy customers and small businesses, threatening American Express Co’s longtime dominance of those clients.

American Express — the largest U.S. credit card company by purchases — has long enjoyed a leading position among affluent and corporate customers.

It widened its lead as the credit card industry was busy targeting subprime borrowers, which at the time seemed like a profitable niche given the chance of charging fees or increasing interest rates when customers fell behind in their payments.

That strategy backfired when credit card losses spiked to record highs.

A law to limit the ability to increase fees and interest rates will make subprime borrowers even less attractive, forcing card issuers to seek other customers to make money.

American Express also grew in recent years thanks to subprime customers, but that always remained a smaller part of its business compared with those of its rivals.

JPMorgan, the third-largest U.S. credit card issuer by purchases, is likely to emerge as a winner from the overhaul of the card industry, given its conservative expansion strategy and low default rates.

That could be threaten American Express’s dominance among wealthy customers and companies faxless pay day loans.

Other rivals pose less of a threat to American Express, as they are either smaller — like Discover Financial Services — or struggling with losses and government bailouts — like Citigroup Inc or Bank of America Corp BAC.N>.

“Chase is trying to identify attractive customers including the more affluent and small businesses, where there is potentially less credit risk, but still potentially attractive economics,” said Brad Ball, an analyst at Ladenburg Thalmann. “The Chase franchise could pose a competitive threat to the leadership of American Express.”

American Express executives downplayed the risk.

“They are trying to fish where the fish are, and we have been fishing in those waters for 50 years,” said Ralph Andretta, general manager of Membership Rewards at American Express. “We’ve got a lot of hooks in those waters.

“We are not afraid of competition,” said Andretta, adding that the company has eliminated some fees and increased rewards promotions to court customers.

STRENGTH OR LOYALTY

Earlier this year, AmEx said its growth strategy would focus on wealthy and corporate customers. 

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