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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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Stocks struggled Wednesday as investors weighed the Greek debt situation, a strong dollar and Fed chairman Ben Bernanke’s plan for eventually withdrawing some of the trillions of dollars used to bolster the nation’s financial system.

The Dow Jones industrial average (INDU) lost 20 points, or 0.2%. The S&P 500 index (SPX) lost 2 points, or 0.2% and the Nasdaq composite (COMP) lost 3 points, or 0.1%.

Stocks rallied Tuesday as growing bets that the European Union will rescue Greece from its debt problems reassured investors after a four-week selloff. But stocks were choppy Wednesday on concerns that Greece is just the first of many countries that is feeling the pressure of a growing deficit.

Stocks also remain vulnerable to a retreat in the aftermath of 2009’s big rally, in which the S&P 500 gained 23%. In the last nine months of 2009, it gained 65%, bouncing off 12-year lows hit in March.

"Greece’s issues will get addressed, but I wouldn’t be surprised to see a bigger market pullback in the weeks ahead anyway," said Tim McCandless, senior equity analyst at Bel Air Investment Advisors.

However, he said that a larger retreat would probably be met with buyers stepping in at lower levels. Since hitting a rally high on Jan. 19, the S&P 500 is down almost 7%, as of Wednesday’s close.

Bernanke’s comments on the Fed’s plans to wind down its extraordinary measures to bolster lending and the strengthening of the dollar versus the euro were also in play Wednesday.

Bank shares bounced up after several down sessions, countering some of the broader weakness in the market. The KBW Bank (BKX) index gained 1%.

Thursday brings reports on January retail sales, December business inventories and weekly jobless claims.

Bernanke: The Federal Reserve chairman said that while the U.S. economy continues to require the support of emergency programs the Fed enacted at the height of the financial crisis, "at some point the Federal Reserve will need to tighten financial conditions."

He said that the Fed will pull cash from the system before it lifts interest rates, and that its decision to boost the emergency "discount" rate is not the same as a shift in policy. The prepared testimony was meant to be delivered at a House Financial Services Committee hearing that was postponed due to snow.

Debt crisis: Reports late Wednesday said France and Germany may present a rescue plan for Greece at Thursday’s meeting of euro zone countries. Meanwhile, Greece has vowed to press forward with cutbacks, despite an ongoing worker strike.

Although Greece’s impact is small, the threat of a default there has intensified worries about other debt-challenged European countries, including Spain, Portugal, Ireland and Italy paydayloans. A crisis overseas would set back the still-fragile global economic recovery and hurt U.S. financial institutions. Investors are also keeping an eye on the growing U.S. budget deficit.

"Even if the EU comes in and stabilizes the debt issue in Greece, my concern is that we still have so much debt around the globe that hasn’t been addressed," said Dean Barber, president at Barber Financial Group.

The debt crisis has sparked something of a flight from risk over the last few weeks, with investors choosing government bonds and the dollar over stocks. Investors have fled the euro in favor of the greenback and have sold dollar-traded commodities, commodity stocks and a broad swath of securities in other sectors.

The Dow, S&P 500 and Nasdaq have all declined the past four weeks, despite improved quarterly earnings and revenues, and some positive signs in the economic reports.

Despite Tuesday’s rally, the market is likely to stay a "choppy mess" for a while, Barber said.

Economy: The December trade gap widened to $40.2 billion in December from a revised $36.4 billion in November, the government reported Wednesday morning. Economists surveyed by Briefing.com thought it would narrow to $35.8 billion. The widening reflected a pick-up in imports amid the recovering economy.

Walt Disney: The media behemoth reported higher-than-expected quarterly earnings and revenue in a report released after the close of trading Tuesday. Disney (DIS, Fortune 500) shares rose 0.6%.

World markets: European markets mostly ended higher, while Asian markets ended with strong gains.

The dollar and commodities: The U.S. dollar rallied versus the euro and the Japanese yen.

U.S. light crude oil for March delivery rose 77 cents to settle at $74.52 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery fell 90 cents to settle at $1,076.30.

Bonds: Treasury prices fell, raising the yield on the 10-year note to 3.68% from 3.64% late Tuesday. Treasury prices and yields move in opposite directions.

Market breadth was negative. On the New York Stock Exchange, losers narrowly edged winners on volume of 1 billion shares. On the Nasdaq, decliners beat advancers on volume of 2.04 billion shares.  

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Sales of existing U.S. homes plunged more than anticipated in December, showing the dependence of the housing market on a government tax credit.

Purchases slumped 17 percent the month after a government tax credit was originally due to expire, the biggest decline since records began in 1968, to a 5.45 million annual rate, the National Association of Realtors said today in Washington. The median sales price increased for the first time in two years.

First-time buyers rushed to complete deals before the $8,000 government incentive was due to end, pushing sales up 28 percent in the three months to November. The subsequent extension and expansion of the credit to include closings through June signal demand will strengthen in the first half of 2010, while raising the risk the market will then slow anew should jobs remain scarce.

“We’ll see a pickup in existing home sales in the next couple of months,” said Adam York, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who forecast a 5.4 million sales pace. Although “we’re past the bottom,” he said, “I don’t think there’s going to be a lot of buyers out there looking for a home outside of the tax-induced effects until they feel more comfortable with the labor market.”

Stocks trimmed earlier gains following the report. The Standard & Poor’s 500 Index rose 0.5 percent to close at 1,096.78. The S&P Supercomposite Homebuilder Index was up 0.2 percent.

Less Than Forecast

Economists forecast existing home sales would fall to a 5.9 million rate in December from a 6.54 million pace the prior month, according to the median of 61 projections in a Bloomberg News survey. Estimates ranged from 5.4 million to 6.75 million.

For all of 2009, existing home sales rose 4.9 percent to 5.16 million, the first gain in four years, from 4.91 million in 2008. The median price last year was $173,500, down 12 percent from 2008, the biggest annual drop on record and probably the largest since the Great Depression, NAR chief economist Lawrence Yun said in a news conference.

The median value in December was $178,300, up 1.5 percent from the same month in 2008. The increase was the first since August 2007 and the biggest since May 2006, the agents’ group said. A decline in the number of first-time buyers, who usually purchase less expensive houses, helped push up the median value last month, Yun said.

First-Time Buyers

The share of homes sold to first-time buyers fell to 43 percent in December from 51 percent the prior month, Yun said, indicating the expected end of the tax credit played a role in the drop in sales no fax payday loans.

President Barack Obama and Congress extended the first-time buyer credit in early November to cover deals signed by April 30 and closed by June 30, and expanded it to include current homeowners. Even so, some economists believe the original measure pulled sales forward, restraining demand for a few months.

Yun said he was “generally pleased” with the December outcome since he feared an even larger drop following the expected expiration of the tax credit. “There is an increase in home-buyer confidence,” he said, adding “there is some sustainable momentum” in sales. Even with the decline, sales were still up 15 percent from the same month last year, signaling a general improvement, he said.

The number of previously owned homes on the market decreased 6.6 percent to 3.29 million, the lowest level since March 2006. At the current sales pace, it would take 7.2 months to sell those houses, compared with 6.5 months at the end of November.

Fed Action

The end of Federal Reserve purchases of mortgage-backed securities aimed at keeping borrowing costs low represents a challenge for the industry. The program is scheduled to expire by March 31.

Policy makers are scheduled to meet this week to discuss the direction of the benchmark lending rate between banks. The emergency programs were being wound down “in light of ongoing improvements in the functioning of financial markets,” central bankers said in their Dec. 16 statement.

Joblessness and foreclosures are other concerns. Unemployment is forecast to average 10 percent this year, the highest level in seven decades. A record 3 million U.S. homes will be repossessed by lenders this year, RealtyTrac Inc. forecast on Jan. 14. That is up from 2.82 million in 2009, the most since the company began compiling data in 2005.

Competition with foreclosures has been especially daunting for homebuilders. KB Home, the Los Angeles-based homebuilder that sells to first-time buyers, said Jan. 12 that fourth- quarter revenue dropped 27 percent.

KB Home’s orders rose 12 percent to 1,446 from 1,296 in the year-earlier quarter, while completed sales dropped 22 percent to 3,042. The company is “not going to make money in the first quarter” and plans to “restore profitability” in the second half of 2010, Chief Executive Officer Jeffrey Mezger said Jan. 12 in a conference call with analysts and investors.

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Consumer credit in the U.S. dropped a record $17.5 billion in November as unemployment close to a 26- year high discouraged borrowing and banks limited access to loans.

The slump in credit to $2.46 trillion was more than anticipated and followed a revised $4.2 billion drop in October, Federal Reserve figures showed today in Washington. The median estimate of economists surveyed by Bloomberg News projected a decrease of $5 billion. The figures track credit card debt and non-revolving loans, such as those to buy autos.

A labor market that’s shed 7.2 million jobs since the recession started in December 2007 is restraining consumer spending that accounts for about 70 percent of the economy. Fed policy makers have said tighter bank lending standards and reductions in credit lines are hampering the recovery.

“Double-digit unemployment is eroding consumer confidence and the uncertainty is prompting consumers to pay down their credit card debts,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “We have not seen such a wholesale reduction in consumer credit since the last time we had double-digit unemployment rate following the early ‘80s recessions.”

The series of 10 straight declines in consumer credit was the longest since record-keeping began in 1943.

Treasury two-year notes gained the most in three weeks after the Labor Department said today that companies reduced payrolls in December by 85,000 workers after adding 4,000 a month earlier. The unemployment rate held at 10 percent.

Stocks, Yields

Two-year Treasury yields dropped below 1 percent, to 0.97 percent at 4:52 p.m. in New York, from 1.02 percent late yesterday.

Consumer credit in October was revised from a previously reported $3.5 billion decline, and the forecast for November was based on the median of 32 estimates in a Bloomberg News survey. Projections ranged from decreases of $2 billion to $10 billion. Credit dropped at an 8.5 percent annual rate in November.

Revolving debt, such as credit cards, plunged by a record $13.7 billion in November, the Fed’s statistics showed. Non- revolving debt, including loans for autos and mobile homes, declined by $3.8 billion. The Fed’s report doesn’t cover borrowing secured by real estate.

Auto sales in the U.S. climbed in November to a seasonally adjusted annual rate of 10.92 million, up from 10.45 million in October. The pace increased to 11.23 million in December, the strongest since 14.09 million in August, when Americans took advantage of government incentives.

Consumer Spending

Consumer spending increased in November for the sixth time in seven months as Americans took advantage of discounts during the holidays, Commerce Department figures showed Dec fast payday loans. 23. Faster growth in sales and improvement in households’ balance sheets depends on job creation.

“U.S. consumer credit quality remains under considerable stress due to persistently weak labor market conditions,” said Michael Dean, managing director at Fitch Ratings. A report from Fitch on Jan. 5 showed delinquent balances on credit cards at a record level.

At American Express Co., defaults and delinquencies fell to 2009 lows. AmEx was the only one of the “Big 6” credit-card issuers to post November declines in write-offs and delinquencies, the New York-based lender said in a Dec. 15 regulatory filing.

Bank of America Corp. Chief Executive Officer Brian T. Moynihan has said the largest U.S. lender needs to reduce the loss rate on credit cards, which ranked highest among the nation’s six biggest card companies in November. Bank of America’s card defaults are “still very high,” Moynihan, 50, said.

‘Significant Bubble’

“As an industry, we over-lent and customers over-borrowed, and that led to a fairly significant bubble,” Moynihan said Jan. 4 in an interview on Bloomberg Television in Raleigh, North Carolina. “We have to help lead the economic recovery. At the same time, we have to be responsible lenders.”

Banks have responded by tightening credit standards, for consumers and companies. Fed Governor Elizabeth Duke said in a Jan. 4 speech that total loans on banks’ books fell at an annual rate of more than 11 percent in the third quarter. While banks are reducing lines of credit and tightening lending standards, small businesses are also losing their business relationships with banks as firms fail, merge or reduce their loan portfolios, Duke said.

Broken Relationships

“When existing lending relationships are broken, time may be required for other banks to establish and build such relationships, allowing lending to resume,” Duke said.

Britt Beemer, chairman of consumer polling firm America’s Research Group, said in a Dec. 21 interview that if lenders weren’t cutting customer spending limits and rejecting more credit-card applications, holiday sales would have been stronger.

December same-store sales climbed 3 percent, the biggest gain since April 2008, Retail Metrics Inc. said yesterday in an e-mailed statement.

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Hawaii Gov. Linda Lingle on Monday released two lists of judicial nominees given to her by the Judicial Selection Commission to fill one vacancy each on the state Intermediate Court of Appeals and 1st Circuit Court in Honolulu.

The nominees for associate judge of the Intermediate Court of Appeals are Sabrina S. McKenna, 1st Circuit Court judge; Steven M. Nakashima, partner, Marr Jones & Wang; Karen T. Nakasone, deputy public defender in Honolulu; Lawrence M. Reifurth, director of the state Department of Commerce and Consumer Affairs; and Michael K. Tanigawa, adjunct professor, Kapiolani Community College.

The nominees for circuit judge in Honolulu are R saving account pay day loan. Mark Browning, district family court judge; Colette Y. Garibaldi, district judge; Ed Kubo Jr., former U.S. Attorney; Lanson K. Kupau, partner, Kobayashi Sugita & Goda; Steven M. Nakashima, partner, Marr, Jones & Wang; and Dean E. Ochiai, vice president and managing attorney, First Insurance Company of Hawaii.

Lingle has 30 days to make her choice, which still must be confirmed by the state Senate.

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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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Faced with shrinking market shares, fragmenting audiences, disappearing brick-and-mortar recorded music retailers and a continued double-digit decline in compact disc sales, Canadian independent record labels that exclusively sold and distributed CDs until a few years ago are acting as agents and booking concert tours for their artists.

They have formed in-house management companies, and bought ticket agencies and digital download retailers.

"The entire music industry is changing, and nobody knows what it’s changing into, so everyone’s trying to create new strategies that work for them," says Lloyd Nishimura, president of Toronto’s Outside Music, whose company has expanded into artist management with a roster that includes sibling songwriters Matthew and Jill Barber and the Hylozoists.

"I don’t think it’s that much of a stretch if you’re a management company to have in-house booking or other music-related businesses. Everybody will be looking at a whole bunch of opportunities in the future."

"It’s a necessity," adds Geoff Kulawick, president of Burlington-based Linus Entertainment, True North Records and The Children’s Group.

Kulawick, who launched a booking agency under the True North banner in 2008 to promote such developing label artists as Lynn Miles, Catherine MacLellan and Madison Violet, says a hands-on approach to careers is essential these days.

"We can’t be operating in the music space and sell only one aspect of it," he says. "We’re moving from being a record company to becoming a music experience company, and anything that’s connected to the music experience that we can monetize, we want to be there."

Kulawick says his company isn’t about to go toe-to-toe with established agents, or infringe on their territory.

"It’s becoming more difficult for developing artists to find booking agents and concert promoters who are willing to take a risk on booking them, so that’s where we’re stepping in and actively performing that booking/management role for our artists," he says.

Nishimura, whose company has expanded to include a stake in digital retailer Zunior.com and handle the business affairs of musicians, says the Internet has fragmented audiences to a point where marketing can be a challenge.

"With the Internet, people have exposure to every single artist around the world all at the same time, so it is just difficult to stand out from the crowd," says Nishimura.

At the same, Nishimura says the potential opportunities through the still-evolving digital market are limitless: "There are so many different ways that digital revenue comes in – you get money from streams and single download sales, album download sales – and even though you don’t have physical distribution around the world, you can still get digital revenue from around the world."

These companies aren’t alone. In July, publicly traded Somerset Entertainment Income Fund, a Toronto-headquartered specialty music label formed on the backbone of the late Dan Gibson’s groundbreaking nature recordings, purchased digital music retailer Puretracks for $3 million.

Earlier this month Toronto’s MapleCore Ltd., home to the e-commerce site MapleMusic.com, the record labels Maple Music and Open Road Recordings and distribution arm Fontana North, announced the purchase of TicketBreak Corp., a full-service ticketing company.

The good news is these strategies seem to be working. Three of the four companies have experienced cumulative double-digit growth since 2005, with MapleCore president and CEO Grant Dexter claiming a "100 per cent revenue increase" for his umbrella of companies.

"We’ve added staff and it’s been a great run over the last three or four years," says Dexter, whose MapleMusic.com website sells merchandise, CDs and digital downloads for more than 800 Canadian artists.

Dexter says his company’s acquisition of TicketBreak allows him to offer touring artists such as Jann Arden "VIP packages for their core fan base, including meet-and-greets, exclusive seats and merchandise.

"Technology has allowed, for the first time, for that one-to-one relationship between fan and artist to be transactional," Dexter explains.

Andy Burgess, CEO of the Somerset Entertainment Income Fund – now in the midst of a supported $30.7 million takeover bid by Fluid Music – says strategic music-related deals like his company’s purchase of Puretracks will continue.

"The traditional business model is so very challenging that we have to be really innovative as business managers and figure out how to draw a profit," says Burgess, whose company employs more than 180 people around the world.

"If you have a relationship with an artist, it makes sense to see if you can then run their touring business. If we’ve got a relationship with a retailer, it makes sense to see if we can run their digital music gift cards, or put together music download promotions for their supplier.

"In a very difficult industry, it makes sense to leverage your core strength in different directions, and the smart guys will be able to do (so) in a way where there are endless possibilities."

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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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Japan’s Sony Corp has seen no sign of a recovery in the consumer electronics market, Chief Executive Howard Stringer said in an interview published on Sunday.

It was difficult to say if world economies have returned to solid growth, he told Il Sole 24 Ore, Italy’s leading business daily.

Sony posted its fourth consecutive quarterly loss last month but narrowed its full-year loss forecast.

“From my viewpoint, that of Sony and its consumer electronics products the picture for the time being has not improved very much,” Stringer said.

“There hasn’t been that turning point that many had hoped for. We are waiting for a signal that hasn’t arrived.”

In the crucial U.S. market, Sony is waiting for Christmas sales. It will have a better idea about them with Thanksgiving holiday discounts at the end of November, he said.

In Japan, the situation is the same, but with an aggravator.

“We’ve had a double blow. Demand remains weak and with the yen ever stronger, we’ve lost competitiveness with Korea and China. That’s bad for a country used to having exports be the driver for growth.”

The combination of U.S. joblessness, consumer caution and the psychological impact of the financial crisis “makes me think that the recovery will be neither a V nor a W, but an L”, Stringer said. (Reporting by Ian Simpson; Editing by Hans Peters)

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Nintendo Co Ltd reported a 52 percent slide in quarterly profit on Thursday and slashed its full-year earnings forecast, as its Wii console loses its place as the videogame platform to beat.

Demand for Nintendo’s family-friendly games has cooled as rivals Sony Corp and Microsoft Corp bolster their catalog of games that appeal to die-hard players.

Nintendo’s portable game machine, the DS, also faces increasing competition from Apple Inc’s iPhone, which has become a popular platform for handheld games. And like other Japanese exporters, Nintendo has been hit by the stronger yen, which eats into the value of overseas profits.

The group slashed its annual sales forecast for the Wii by nearly a quarter and in an attempt to reignite demand said it would roll out a large-screen version of the DS.

But that falls short of being a real product advance, said Hiroshi Kamide, an analyst at KBC Securities in Tokyo.

“A lot of what they’re doing seems to be old hat, and therefore what we need to hear is more information about their ideas going forward,” he said.

“There is still life in the current platforms with the content they can generate themselves, but there is a need for the company to demonstrate that there are new products no teletrek payday advance.”

Nintendo’s operating profit fell to 64 billion yen ($709 million) in July-September from 133 billion a year earlier, missing an average forecast of 90 billion in a poll of four analysts by Thomson Reuters I/B/E/S.

Reuters calculated the quarterly figure by subtracting Nintendo’s first-quarter results from the first-half figures released on Thursday.

LOWER FORECAST

Nintendo cut its operating profit forecast for the year to March 2010 by a quarter to 370 billion yen, ending a three-year run during which it booked a record profit.

Analysts were expecting a full-year profit of 442.8 billion yen, according to Thomson Reuters I/B/E/S.

(For a graphic of Nintendo’s quarterly results, click here)

Nintendo President Satoru Iwata told a news conference a lack of new, must-have titles had hurt sales of the Wii in the April-September period.

“We weren’t able to deliver the next thing, but now, at last, we have,” he said, referring to the “Wii Sports Resort” that went on sale a few months ago. 

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