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PC sales didn’t have a happy holiday sales season, but you wouldn’t know it from the strong earnings posted by Microsoft and Intel.

The PC is struggling — last quarter, shipments fell 6% from the year-ago period, according to research firm Gartner — as tablets and smartphones grab market share.

But both computing giants reported earnings that beat Wall Street estimates. They chalked up softness in PC sales not to obsolescence, but to a worldwide hard drive shortage caused by massive floods in Thailand in November.

The good news on earnings boosted shares of both companies early Friday. Microsoft’s stock rose 2.6% in premarket trading, while shares of Intel edged up 0.7%.

Microsoft earned a record 78 cents per share on record sales of $20.89 billion for the second quarter of its fiscal year.

Despite the strong overall showing, Microsoft (, Fortune 500) felt the pain of the lackluster PC market in its Windows division. Its sales fell 6% over the year to $4.74 billion.

"It’s difficult to say with any sort of certainty" whether PC sales will pick back up when the hard drive supply recovers, said Lisa Nelson, Microsoft’s investor relations director. "But the market should benefit from it."

On a conference call after the earnings release, Microsoft executives said the hard drive shortage will affect sales at least through the current quarter.

The call also revealed that netbooks — essentially small, low-powered laptops — now represent just 2% of the PC market. A year ago, they comprised 8%.

Executives dodged most questions about the upcoming, tablet-optimized Windows 8. The company revealed at a trade show earlier this month that a beta version will be released in late February.

Strength in Microsoft’s other sectors made up for PC weakness.

The Microsoft unit with the strongest sales remains the business software division, which includes Microsoft Office and other software. The sector accounted for $6.28 billion of the company’s revenue, though it gained only 3% over the year.

Office 2010 has sold more than 200 million licenses in the 18 months since its launch easy payday loans.

Gaming systems were also a bright spot, as Microsoft’s "entertainment and devices" sales jumped 15% over the year to $4.24 billion. To date, Microsoft has sold about 66 million Xbox 360 consoles and 18 million sensors for its motion-controlled Kinect system.

Nelson said Xbox now commands 46% of market share for gaming consoles.

But Microsoft said on the conference call that the overall console market "is softer than previously expected."

The "server and tools" area also did well, posting a sales increase of 11% to $4.77 billion. That’s the seventh consecutive quarter of double-digit growth, Nelson said.

Intel beats the street: Intel beat Wall Street estimates with fourth-quarter earnings of 68 cents on sales of $13.9 billion — in line with its own downgraded forecast.

Intel (, Fortune 500) sharply cut its sales forecast last month because of the hard drive shortage. Left without that supply, PC makers scaled back their inventories — which meant they were buying fewer semiconductors from Intel.

But sales at Intel’s "PC client group" were strong, rising 17% over the year to $9 billion. Growth in emerging markets was the main driver.

CEO Paul Otellini cited ultrabooks as one of the company’s biggest opportunities for growth in a press release. Ultrabooks are extremely light-weight notebook PCs that have long battery life and almost as much power as a full-sized laptop.

At the Consumer Electronics Show in Las Vegas earlier this month, Intel showcased several upcoming ultrabooks that will run on its "Ivy Bridge" 22-nanometer chips.

In other tech earnings news on Thursday, Google (, Fortune 500) announced profit and sales that rose from year-ago results but badly missed Wall Street’s forecasts. IBM (, Fortune 500) posted earnings that topped estimates. 

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Sales (RSTAMOM) at U.S. retailers rose less than projected in December, confirming forecasts for a slowdown in consumer spending at the start of 2012.

The 0.1 percent gain in purchases last month followed a 0.4 percent increase in November, according to figures from the Commerce Department released today in Washington. The median estimate in a Bloomberg News survey called for a 0.3 percent rise. Another report showed more Americans than projected filed claims for jobless benefits last week.

Merchants like Williams-Sonoma Inc. (WSM) cut prices during the most important shopping season of the year amid concern stagnant wages and lower property values would hold customers back. The slowdown in demand means households are looking to rebuild savings after spending jumped early in the fourth quarter, showing further job gains are needed to fuel purchases.

- Despite an upswing in hiring during 2011, the jobs crisis could last many more years as millions of Americans struggle to find work.

In Orlando, Florida, Brenda Solomon lost her retail job last May at a department store and was unable to find even temporary work during the holiday season.

“I’ve tried and tried and tried,” Solomon, 58, said on Friday while visiting a job center.

Earlier, the U.S. Labor department said employers added 200,000 jobs during December, many more than expected by Wall Street. In 2011 as a whole, 1.64 million jobs were created, well above the 940,000 in 2010 and the best showing since 2006.

But the amount of jobs in the economy is still about 6.1 million lower than before the brutal 2007-2009 recession. At December’s pace of gains, it would take about 2 1/2 years just to get back to pre-recession levels of employment.

That means many people will be in for an agonizing wait.

In December, 5.6 million of the nation’s unemployed had been out of work for at least six months, the Labor Department data showed, only slightly lower than the previous month.

Laquanda Carmichael has been without work for just over a year and has seen no improvement in the labor market.

“It’s been the same to me. I have a lot of discouraging days,” the 39 year-old former science teacher and hospital worker said.

“I’m looking for anything right now. Warehouse processing, hospitality, anything.”

While jobs creation certainly picked up in the United States during the end of the year, economists point out that even a gain of 200,000 underwhelms considering constant growth in the population and the still-high 8.5 percent unemployment rate.

Princeton University economist Paul Krugman said that at December’s pace it could take a decade for the labor market to recover from the recession.

In a back-of-the-envelope calculation, Krugman was considering that the country’s growing population adds at least 100,000 people to the workforce every month.

“We need much faster job growth,” he wrote on his blog. “It says something about how beaten down we are that this (jobs report for December) is considered good news.”

The unemployment numbers reflect a persistent difference between those with a higher education and those without - especially in certain sectors like engineering.

Nearly 90 percent of 2011 graduates from Worcester Polytechnic Institute in Massachusetts got jobs or attended graduate school - almost the same level as before 2008.

Jeanette Doyle, director of the school’s Career Development Center, said there was a 7 percent uptick in late 2011 in the number of companies at the school’s fall recruiting event, and 17 companies were on a wait list to get in.

For lower-paid Americans, the picture is very different.

Construction worker Richard White, also at the job center in Orlando, has not had steady work in the last three years, and gets by on occasional stints doing electrical work or carpentry.

In December, the construction industry added 17,000 jobs. But that sector, devastated by a burst housing bubble that helped trigger the last recession, has even farther to go than the rest of the economy before it can recover.

There were still almost a third fewer construction jobs in December than at the industry’s pre-recession peak in August 2006.

As for the December’s advance, White said: “I’m not seeing it.”

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Wall Street is heading higher on the last day of trading at the end of a raucous year on positive signals this week about jobs and, depending how you look at it, housing.

Oil prices edged higher in the absence of any major economic data Friday.

The government said Thursday that the number of people applying for unemployment benefits each week has dropped by 10 percent since January and pending home sales jumped to their highest point in a year and a half.

Still, investors will wait to see if those home sales actually close and also for a raft of data next week on manufacturing.

Dow futures rose 0.07 percent, to 12,225 and S&P 500 futures added 0.17 percent to 1,259.50. The Nasdaq composite rose 0.13 percent to 2,280.25.

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The former chief executive of Olympus Corp. spoke with Japanese investigators Thursday, reiterating his determination to get to the bottom of one of Japan’s biggest financial scandals involving a cover-up of massive investment losses.

Michael Woodford, 51, plans to confront the board of the Japanese camera and medical equipment maker at a meeting Friday _ a day after speaking with the Tokyo District Public Prosecutors Office, the Tokyo Metropolitan Police Department and the Securities and Exchange Surveillance Commission.

Woodford, who was fired last month after questioning dubious accounting at Olympus, remains on the board and can only be removed by shareholders. He declined comment on what he was going to tell prosecutors. He returned to Japan on Wednesday.

Under intense pressure, the embattled company has admitted that a $687 million payment to an obscure Wall Street firm for financial advice and expensive acquisitions were used to cover up investment losses dating to the 1990s.

The board abruptly ousted Woodford last month for questioning the deals and payment. At the time, Olympus said Woodford was sacked because his management style was incompatible with the company’s culture.

The scandal has cast a harsh light on corporate governance in Japan, which has been repeatedly criticized as falling behind global standards. Recent media reports have also pointed to possible ties between Tokyo-based Olympus and organized crime.

A third-party panel created by Olympus to investigate its accounting has said it has so far found no evidence of any ties with the underworld.

Woodford told the throngs of media gathered at Narita International on Wednesday that he is not afraid to be back in Japan and would press for answers during his stay.

“This isn’t going to go away, the truth will come out,” he said. “Please now have the dignity, at least the dignity, to accept that the game is up.”

Woodford went public with his concerns after his sacking, and has become a hero among circles hopeful for better corporate governance in Japan payday advances.

Tsuyoshi Kikukawa resigned as president on Oct. 26 and was replaced by Shuichi Takayama. The company blamed the accounting scheme on Kikukawa, former executive vice president Hisashi Mori and ex-auditor Hideo Yamada.

Prosecutors are questioning the executives, according to Kyodo news agency.

Olympus now risks being delisted from the Tokyo Stock Exchange unless it can rectify past filings with regulators by reporting revised earnings by Dec. 14.

The company’s shares lost four-fifths of their value after the scandal erupted in mid-October, but have since recovered on optimism that Olympus will avoid removal from the stock exchange.

The issue gained 17 percent Thursday, its maximum gain allowed for a single day, to finish at 1,019 yen.

The Tokyo Stock Exchange was closed Wednesday for a national holiday. Olympus shares surged 20 percent Tuesday after the panel said it had found no evidence of links to organized crime.

The practice of hiding investment losses through funny bookkeeping and paper companies has surfaced before in Japan, especially in the 1990s, when mergers and acquisitions became a way for companies to survive in the depressed economy that followed the bursting of Japan’s real estate bubble.

Such scandals have previously ensnared other major names in Japan Inc., such as Yamaichi Securities Co., which went bankrupt in 1997, and cosmetics maker Kanebo, which was forced to undergo a government-backed bailout in 2005.

Woodford is speaking on a panel and with reporters Thursday evening, and has a press conference Friday at the Foreign Correspondents’ Club of Japan in Tokyo.

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Phone hacking by the media cost me my job advising Elle Macpherson, a business adviser told a U.K. inquiry Tuesday, describing how the Australian supermodel wrongly blamed her for leaking intimate secrets to the press.

Mary-Ellen Field told an inquiry into British media ethics that the leaks cast a shadow of suspicion over her, with Macpherson becoming convinced that Field was an alcoholic and ordering her to an American rehabilitation clinic. Field said she was shocked by the allegations that she was a drunk who’d been blabbing about her employer, but went along with Macpherson’s recommendation because she needed her job.

“I have a severely disabled child who can never look after himself so walking away from a high-paying position is not a good idea,” Field said.

The rehab was grueling _ she described it as being “like one of those CIA renditions, except they don’t put you in chains” _ but it didn’t do her much good.

Even though staff at the clinic said she was not an alcoholic, Macpherson fired her anyway, and Field lost her job at her firm shortly afterward. She told the inquiry there was no doubt the sacking was the result of what happened with Macpherson.

Field said her employer told her that “I’d been indiscreet, that the clients didn’t trust me.”

Although it has since emerged that the media leaks were the result of phone hacking not indiscretion, Field said she has not heard from fellow Australian Macpherson in years.

Field was one of several victims of press intrusion testifying Tuesday at Britain’s Royal Courts of Justice. The inquiry was set up after the scandal over phone hacking and other underhanded tactics used at the News of the World, which was closed in July amid allegations of widespread criminality no credit check payday loans.

Among those due to testify Tuesday were British comedian Steve Coogan, soccer player Garry Flitcroft, and Margaret Watson, whose daughter Diane was stabbed to death at her Scottish school two decades ago.

The parents of murdered British schoolgirl Milly Dowler and film star Hugh Grant were the first victims to testify on Monday, with Grant being particularly scathing.

He described mysterious break-ins, leaked medical details and hacked voice mails. Grant attacked the Mail on Sunday tabloid, accusing it of spying on his conversations. The paper denies the charge, but lawyers at the inquiry said Tuesday the tabloid’s response smacked of an attempt to intimidate witnesses.

David Sherborne and Neil Garnham pointed to an article on the Mail’s website describing Grant’s allegations as “mendacious smears driven by his hatred of the media.”

“(Is) everyone who has the temerity to give evidence critical of the press is going to face this the following morning?” Garnham asked.

Sherborne also invoked the Mail article when he said many witnesses were worried about “the sort of intimidatory tactics that we’ve seen in the press this morning.”

The Mail’s lead counsel was not at the hearing but was expected to reply later Tuesday.

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Greece’s new prime minister will present his policy platform in parliament Monday, ahead of a midweek confidence vote in his coalition government that is tasked with implementing crucial reforms and securing the country’s international loan lifeline.

Lucas Papademos, a former central banker picked by broad party consensus last week after the previous Socialist government imploded, is expected to easily win Wednesday’s confidence vote.

His interim coalition administration is backed by Greece’s two biggest parties and a small right-wing nationalist party. It has a mandate to coast the austerity-fatigued country over the next three months, with national elections tentatively scheduled for February.

Tough work lies ahead. Papademos’ government must pass the 2012 austerity budget, approve a new euro130 billion ($177 billion) international bailout cobbled together last month, and see through lagging reforms that will include thousands of public sector layoffs.

Most crucially, it must secure the next euro8 billion ($11 billion) installment of the rescue loans without which the country will go bankrupt before Christmas.

Greece depends on loans from a euro110 billion ($150 billion) rescue package agreed in 2010, when huge borrowing costs blocked the debt-crippled country from international markets. That bailout later proved inadequate, forcing the new bailout agreed on Oct. 26 that will also see the reduction of the country’s privately held debt by some euro100 billion, or 50 percent.

Athens is expected to officially launch talks in the next few days with banks and other private bond holders on the debt writedown.

Finance Minister Evangelos Venizelos has said he hopes the next loan installment can be approved by his 16 eurozone colleagues in a Thursday teleconference. Greece’s eurozone partners are first seeking a written commitment from Athens to support the second bailout, signed by Papademos, the leaders of the main Socialist and conservative parties, the central bank governor and finance minister low fee pay day loans.

But conservative leader Antonis Samaras insisted Monday that he would not sign, arguing that he has already pledged to back the deal and his word should suffice.

“Some say that to unblock the (euro8 billion) installment we need to sign a joint statement with all the parties that support this new transitional government,” Samaras told his New Democracy party lawmakers. “I said it before and I say it now: I will not sign such statements.”

Samaras pledged to back the interim government but said elections must be held as initially agreed on Feb. 19, and promised, if elected, to cut taxes.

Greeks have suffered some 20 months of harsh austerity, with repeated pension and salary cuts compounded by a spate of tax increases. Unions have reacted with a wave of general strikes and demonstrations, many of which led to riots. A small left-wing party has called an anti-austerity protest just ahead of Papademos’ speech in parliament, while civil servants will hold work stoppages Tuesday.

However, Greeks appear relieved by the formation of the new government last Friday, after ten days of political wrangling triggered by the resignation of Socialist prime minister George Papandreou amid a party revolt halfway through his four-year term.

Some 73 percent back Papademos’ selection according to a survey in Sunday’s To Vima newspaper, and 78 percent approved the coalition government. But only 26 percent said they expected the three parties to support the government’s work, with 56 percent voicing fears that the parties will focus on campaigning for February’s elections. The Nov. 11 poll of 1,000 people gave a 3 percent margin of error.

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The dollar has jumped against the yen after Japanese monetary authorities intervened in the currency market to weaken the yen, whose recent appreciation has hurt the country’s vital exporters.

Monday’s action, confirmed by Finance Minister Jun Azumi, came after the Japanese currency had surged to a post-World War II high of 75.32 yen against the dollar earlier Monday bad credit unsecured personal loans.

By 11:45 a.m., Tokyo time, the dollar has risen sharply to 79.19 yen.

The strong yen erodes overseas earnings for Japanese exporters.

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An agreement to contain the European debt crisis electrified the stock market Thursday, driving the Dow Jones Industrial average up nearly 340 points and putting the Standard & Poor’s 500 index on track for its best month since 1974.

Investors were relieved after European leaders crafted a deal to slash Greece’s debt load and prevent the crisis there from engulfing larger countries like Italy. The package is aimed at preventing another financial disaster like the one that happened in September 2008 after the collapse of Lehman Brothers.

But some analysts cautioned that Europe’s problems remained unsolved.

“The market keeps on thinking that it’s put Europe’s problems to bed, but it’s like putting a three-year old to bed: You might put it there but it won’t stay there,” said David Kelly, chief market strategist at J.P. Morgan Funds.

Kelly said Europe’s debt problems will remain an issue until the economies of struggling nations like Greece and Portugal grow again.

Commodities and Treasury yields soared as investors took on more risk. The euro rose sharply against the dollar.

Stronger U.S. economic growth and corporate earnings also contributed to the surge. The government reported that the American economy grew at a 2.5 percent annual rate from July through September on stronger consumer spending and business investment. That was nearly double the 1.3 percent growth in the previous quarter.

Banks agreed to take 50 percent losses on the Greek bonds they hold. Europe will also strengthen a financial rescue fund to protect the region’s banks and other struggling European countries such as Italy and Portugal.

“This seems to set aside the worries that there would be a massive contagion over there that would have brought everything down with it,” said Mark Lamkin, head of Lamkin Wealth Management.

The Dow Jones industrial average soared 339.51 points, or 2.9 percent, to 12,208.55. That was its largest jump since Aug. 11, when it rose 423.

All 30 stocks in the Dow rose, led by Bank of America Corp. with a 9.6 percent gain. It was the first time the Dow closed above 12,000 since Aug. 1.

Even with Thursday’s gains, the Dow remains 4.7 percent below the high for the year it reached April 29. The Dow has fallen every month since then due to a combination of a slowdown in the U.S. economy, a worldwide parts shortage after the earthquake and tsunami in Japan, and concerns about the European debt crisis. The Dow is now at approximately the same level it traded at on July 28.

Stocks fell for much of August in the wake of a last-minute deal to prevent the U.S. government from defaulting on its debt.

But anticipations of a solution to Europe’s debt problems and signs that the U.S. economy is not in another recession have lifted stocks higher throughout October.

The Dow is up 11.9 percent for the month so far. With only two full days of trading left in the month, the Dow could have its biggest monthly gain since January 1987.

The S&P 500 rose 42.59, or 3.7 percent, to 1,284.59. Those gains turned the S&P positive for the year for the first time since Aug. 3, just before the U payday loans.S. government’s debt was downgraded. The index is up 13.5 percent for the month, its best performance since a 16.3 percent gain in October 1974.

The Nasdaq composite leaped up 87.96, or 3.3 percent, to 2,738.63.

Small-company stocks rose more than the broader market. That’s a sign investors were more comfortable holding assets perceived as being risky but also more likely to appreciate in a strong economy. The Russell 2000 index jumped 5.3 percent.

Raw materials producers, banks and stocks in other industries that depend on a strong economy for profit growth led the way. Copper jumped 5.8 percent to $3.69 a pound and crude oil jumped 4.2 percent to $93.96 a barrel.

The euro rose sharply, to $1.42, as confidence in Europe’s financial system grew. The euro was worth $1.39 late Wednesday and had been as low as $1.32 on Oct. 3. European stock indexes also soared. France’s CAC-40 rose 6.3 percent and Germany’s DAX jumped 6.1 percent.

Investors sold U.S. Treasury notes and bonds, an indication they were moving away from safer investments. The yield on the 10-year Treasury note, which moves in the opposite direction of its price, rose to 2.39 percent from 2.21 percent late Wednesday.

European leaders still have to finalize the details of their latest plan. French President Nicolas Sarkozy spoke with Chinese President Hu Jintao amid hopes that countries with lots of cash like China can contribute to the European rescue.

Past attempts to contain Europe’s two-year debt crisis have proved insufficient. Greece has been surviving on rescue loans since May 2010. In July, creditors agreed to take some losses on their Greek bonds, but that wasn’t enough to fix the problem.

Worries about Europe’s debt crisis and a weak U.S. economy dragged the S&P 500 down 19.4 percent between April 29 and Oct. 3. That put it on the cusp of what’s called a bear market, which is a 20 percent decline.

Since then, there have been a number of more encouraging signs on the U.S. economy. Despite the jitters over Europe, many large American companies have been reporting strong profit growth in the third quarter.

Dow Chemical rose 8.2 percent after its profit last quarter rose 59 percent on strong sales growth from Latin America. Occidental Petroleum Corp. jumped 9.7 percent after reporting a 50 percent surge in income.

Citrix Systems Inc. rose 17.3 percent. The technology company’s revenue rose 20 percent last quarter, and it forecast growth of up to 13 percent for 2012. Akamai Technologies Inc., whose products help speed the delivery of online content, jumped 15.4 percent after the company reported earnings that beat analysts’ expectations.

Avon Products Inc. fell 18 percent, the most in the S&P 500, after the company said the Securities and Exchange Commission is investigating its contacts with financial analysts and Avon’s own probe into bribery in China and other countries.

Nine stocks rose for every one that fell on the New York Stock Exchange. Volume was heavy at 6.5 billion shares.

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The speaker of Britain’s House of Commons says a pie attack on media mogul Rupert Murdoch at a parliamentary committee hearing could lead to permanent security changes.

An activist launched a shaving foam pie at Murdoch, 80, inside the Houses of Parliament in July as Murdoch testified about Britain’s tabloid phone hacking scandal.

Speaker John Bercow said Monday the incident had exposed inadequate security arrangements.

Visitors in the future may face new restrictions during high profile events, including restrictions on the type of items they can bring into Parliament my credit score. Bercow said officials will also consider creating a new post of director of security.

Jonathan May-Bowles pleaded guilty to assaulting Murdoch and was sentenced to six weeks in jail.

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