U.S. stocks moved higher Friday, capping a weekly gain, as upbeat corporate results outweighed a weaker-than-expected report on first-quarter economic growth.
The Dow Jones industrial average () rose 28 points, or 0.2%, to end at 13,228. Procter & Gamble (, Fortune 500) was the biggest drag on the Dow after the consumer staple company lowered its outlook for full-year earnings. The stock fell 4%.
The S&P 500 () rose 4 points, or 0.3%, to 1,403. The Nasdaq () added 18 points, or 0.6%, to 3,069.
Stocks started the week on a sour note, with a sharp selloff on Monday. But the Dow & S&P 500 have climbed for four days in a row, driven mainly by better-than-expected corporate earnings.
For the week, the Dow gained 1.5%. The S&P 500 advanced 1.8% and the Nasdaq is 2.3% higher for the week.
On Friday, the top performers on both the S&P 500 and Nasdaq were Expedia () and Amazon (, Fortune 500). Expedia surged 23% after the travel booking website reported strong earnings late Thursday. Amazon jumped 15% after its results beat expectations and eased concerns about the online retailer’s expansion.
Ford Motor (, Fortune 500) shares fell 2% after it reported a 45% plunge in quarterly profit, because of losses in Europe and a slight dip in sales. But the automaker still managed to beat expectations.
As of Thursday, 300 companies in the S&P 500 had reported earnings, and 70% of them beat estimates, according to Capital IQ.
Overall, Capital IQ expects earnings to grow 6.6% in the first quarter, or 4.5% excluding the profit machine that is Apple (, Fortune 500).
While that would be down from the fourth quarter, such earnings growth would still suggest that "the world isn’t ending," said Jack Ablin, chief investment officer at Harris Private Bank.
"The market is trading at distrust discount, and increased confidence should allow stock prices to move higher, even if earnings don’t," Ablin added.
Meanwhile, the U.S. government said first-quarter gross domestic product — the broadest measure of the nation’s economic health — rose at an annual rate of 2.2%.
The report was weaker than expected. Economists surveyed by CNNMoney forecast that GDP grew at a 2.5% rate in the first quarter, down from 3% in the fourth quarter of 2011.
"While the economy continued to grow in the first quarter, the expansion remains modest in pace and subpar from a historical perspective," said Jim Baird, chief investment strategist for Plante Moran Financial Advisors credit reports free.
After Thursday’s closing bell, the S&P announced that it was downgrading Spain’s credit rating from "A" to "BBB+," citing numerous drags on growth and an ailing banking sector that might require further government support.
Fixing China’s banks
On Friday, the Spanish government said unemployment rose to 24.4% in the first quarter.
U.S. stocks ended with gains Thursday as hopes for more Federal Reserve stimulus and positive housing data overtook worries about the job market and mixed corporate earnings.
Companies: Dow component Procter & Gamble (, Fortune 500) reported quarterly earnings of 93 cents per share, which beat expectations by one cent. Sales rose by 2% to $20.2 billion.
But the company, which makes everything from batteries to laundry detergent, lowered its forecast for full-year profits.
P&G now expects 2012 earnings per share to be in the range of of $3.63 to $3.74, down from a range of $3.85 to $4.08.
Behind Apple’s App Store curtain
The drug giant Merck (, Fortune 500) reported that its quarterly earnings jumped 8% to 99 cents per share, excluding certain charges. But the company fell short of forecasts by Thomson One Analytics projecting earnings of $1.03 per share.
Economy: A measure of consumer sentiment inched up to 76.4 in April, roughly in line with estimates. The University of Michigan Consumer Sentiment Index stood at 76.2 in March.
World markets: European stocks closed higher. London’s FTSE 100 () rose 0.5%, the CAC 40 () in Paris gained 1.1% and the DAX () in Frankfurt rose 0.9%.
Asian markets lost ground, despite steps by the Bank of Japan to further ease monetary policy there by announcing ¥5 trillion of additional asset purchases. The Shanghai Composite () shed 0.4%, while the Hang Seng () in Hong Kong slipped 0.3% and Japan’s Nikkei () fell 0.4%.
Currencies and commodities: The dollar fell against the euro, the Japanese yen and the British pound.
Oil for June delivery rose 38 cents to $104.93 a barrel.
Gold futures for June delivery rose $4.30 to $1,664.80 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury edged higher, pushing the yield down to 1.95%.
Jeffery Smisek helped put together the world’s largest airline with the merger of United and Continental, and the company rewarded him by more than tripling his compensation last year to $13.4 million.
More than half the compensation for the airline’s CEO came from stock awards, including incentives for the merger that created United Continental Holdings Inc.
Smisek’s 2011 compensation was disclosed in a proxy statement that the Chicago-based company filed Friday with the U.S. Securities and Exchange Commission. An analysis by The Associated Press calculates the value that the company put on compensation awarded to the CEO in that year and excludes changes in pension value, so it differs from the total that the company reports to the SEC.
Smisek, 57, was the CEO of Houston-based Continental Airlines and helped negotiate the combination with United. He was paid compensation valued at nearly $4.4 million in 2010.
Last year, Smisek was given stock awards that were valued at $7.53 million when they were granted in February 2011, including $4.4 million in merger incentives.
Smisek was paid a salary of $975,000, up from $791,250 in 2010; $4.41 million in separate incentive payments, up from $3.56 million in 2010; and $454,918 in other compensation, up from $9,766 the year before.
The other-compensation column included $241,457 for travel and relocation help, as well as $67,947 for insurance premiums paid by the company.
Other top United executives also got merger incentives that could become very valuable. The awards for Chief Financial Officer Zane Rowe, Chief Operations Officer Peter McDonald and Chief Revenue Officer James Compton were valued at $1.65 million apiece. Rowe announced this month he is leaving for Apple Inc.,
For Smisek to get his merger payoff, the company must hit revenue and cost-saving targets over a three-year period ending in December 2013 and achieve merger milestones saving account pay day loan. Some of those milestones have already been met.
One milestone was combining the United and Continental computerized reservations systems. The switchover last month, however, didn’t go smoothly, and many customers endured long waits on hold to fix ticketing problems. Smisek apologized this week, saying the airline had failed to deliver adequate customer service.
United Continental and rivals such as Delta Air Lines Inc. have benefited from consolidation that has reduced the number of U.S. airlines and made it easier for the survivors to raise fares. United earned $840 million in 2011 and $253 million in 2010 after losing $6 billion the previous two years combined.
But lately, even fare increases and a slew of extra fees charged to passengers haven’t been enough to offset sharply higher jet fuel prices. This week, United Continental reported that it lost $448 million in the first three months of the year, although the loss was smaller than analysts had feared.
Even as United Continental earned money last year, stockholders didn’t share in the bounty. The airline’s shares lost 26 percent of their value during 2011, although they have gained most of it back this year.
The AP’s calculation of executive compensation includes salary, bonuses, perks and the estimated value of stock and stock options awarded during the year. The amount that Smisek or other CEOs eventually get can differ, depending on the performance of the company’s stock after awards are granted. Most companies require an executive to wait a certain amount of time before getting stock grants or exercising options.
TORONTO
The pioneering use of technology during President Obama’s 2008 campaign gave rise to a batch of Silicon Valley startups that are commercializing tools created for politics. This article is the second in a series, "America’s Choice 2012: The Data Edge," covering those startups and the role they’re playing in the 2012 presidential election.
NEW YORK (CNNMoney) — In the past few months, the Mitt Romney campaign has been using Optimizely, a startup that hatched during President Obama’s 2008 election campaign.
Former Google (, Fortune 500) employee Dan Siroker joined Obama’s campaign in 2008 and became the director of analytics, coming up with the idea for the technology that would better target voters during the campaign.
But while the idea was launched during Obama’s campaign, Siroker commercialized the technology following the 2008 election, giving anyone the chance to test it out. As a result, Optimizely is now being used by a number of companies, and one of its most recent customers is Obama’s presumptive competitor, Romney.
According to a document filed with the Federal Election Commission, Romney’s campaign started using Optimizely in February, paying $399 per month of use. Obama’s last FEC filing shows the campaign paid $2,000 for the service in March. Romney’s campaign had no comment about their use of Optimizely.
The appeal of Optimizely is that it allows candidates to perform "A/B" testing, using live Web trials to find out how people react to different website colors, messages and pictures payday loans for bad credit. That information can lead to a boost in donations and volunteer sign-ups.
According to Siroker, it helped Obama’s campaign raise millions of dollars in extra donations. And in an election where experts are saying Internet data will play a huge role, Romney’s campaign is jumping onboard.
"The 2008 campaign was a great first example of how technology and engineering could have a big impact on something that’s typically old school like politics," Siroker said.
Campaign 2012: Can Obama raise $1 billion?
And while Obama’s campaign utilized technology in 2008, Siroker says the playing field is beginning to level.
"In 2008, Barack Obama had a disproportionate advantage because it happened to be that the people who were supporting the campaign were young and tech savvy," he said.
But many more people have signed on to social networks in the past four years. As a result, there’s a treasure trove of data and more opportunities for more targeted messages.
"In 2012 Facebook is ubiquitous," Siroker added. "Everybody is using it and I think every campaign has the same opportunity that the Obama campaign had in 2008 to use the data to help them be more effective."
CNNMoney’s Charles Riley contributed to this story.
Workers for three American Airlines unions have agreed to support a potential merger with US Airways Group, according to a US Air document filed with the Securities and Exchange Commission on Friday.
The unions - the Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union - represent 55,000 employees, US Airways said in the filing.
But the airline also pointed out that a deal has not gone through yet.
"Today’s news does not mean we have agreed to merge with American Airlines," wrote US Airways (, Fortune 500) Chief Executive Douglas Parker in a letter to his employees. "It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality."
Parker outlined the things that need to occur in order for a merger to become a reality.
Merger hangover continues to pain United
"To get to an actual merger, many more things must happen, including gaining the support of AMR’s creditors, its management team and its Board of Directors," he wrote. "But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen."
US Airways stock dipped more than 2% on the news.
American Airlines, which is owned by AMR, could use some help. The airline went into bankruptcy last year. In February, the carrier announced that it was cutting 13,000 jobs.
On Thursday, American Airlines reported dismal results for the first quarter: a net loss of $1.7 billion. That’s more than quadruple its losses of $405 million from the year-ago quarter, before the carrier filed for bankruptcy last Nov. 29.
The airline blamed reorganization costs, including $1 billion stemming from the rejection of aircraft leases, and also a 17% spike in fuel prices personal loans for people with bad credit.
Laura Glading, president of the Association of Professional Flight Attendants, released a statement complaining about the "excessive demands" made by American Airlines since filing for bankruptcy, which was part of the reason why the union was supporting the idea of a merger.
"Not only were their demands unreasonable, but their business plan was uninspired and not viable," said Glading, in a prepared message, referring to American. "My fellow union leaders and I had no choice but to evaluate alternatives."
Airline employees aren’t the only stressed workers
"This agreement puts flight attendants in a far better position than any proposal American Airlines management has made," she said.
She said that a merger between American Airlines and US Airways will "eliminate the competitive advantage" of Delta Air Lines (, Fortune 500) and United Continental Holdings (, Fortune 500).
James Little, president of the Transport Workers Union, said in a letter to union members that he was supporting the potential merger on two conditions: that "US Airways’ restructuring plan for labor concessions is clearly less drastic that what AMR has demanded" and that the U.S. Bankruptcy Court allows US Airways to take AMR out of bankruptcy.
The last big airline merger was the formation of United Continental Holdings, a $3.2 billion all-stock deal that was finalized on Oct. 1, 2010.
Other prominent U.S. competitors include Southwest Airlines (, Fortune 500) and JetBlue Airways ().
Myanmar
For aficionados of American Girl dolls, this weekend’s opening of the chain’s newest location in Chesterfield couldn’t come soon enough.
Countless moms, grandmas and their daughters have made the treks to Chicago or Kansas for the closest American Girl stores.
Minutes before 10 a.m. Thursday, managers and employees gathered near the front entrance in the new American Girl store at Chesterfield Mall for a pep talk, clapping and bracing for the onslaught of shoppers.
Dozens of preteen girls, their moms and grandmas then streamed inside to get a look at store, awash in pink, that sells dolls and an array of accompanying items, including books and doll outfits.
“I might get my granddaughter a shirt,” said Robin Ables of Springfield, Mo., who drove several hundred miles for the store’s soft opening this week. Ables, who has seven American Girl dolls of her own, says she likes that the brand encourages reading for children. “I like it better than them playing Nintendo,” she said.
She said she’s also traveled to Chicago, New York and Los Angeles to visit American Girl stores.
But calling it a mere store understates the experience, more akin to an amusement park. In one corner of the new 10,850-square foot space, a bistro serves an array of milk shakes, pizza, tea and cocoa. Elsewhere, customers can sidle up to a doll hair salon, where the dolls get a good brushing, new hair ribbons and a facial. At another corner, kids can get T-shirts made to match their dolls and watch the screening process through a window.
As many as 10,000 people are expected to visit the new Chesterfield Mall store during its grand opening on Saturday and Sunday. The store is the 12th store for the 26-year-old American Girl chain, which is based in Middleton, Wis., and is a subsidiary of Mattel. The store is expected to attract between 700,000 and a million people annually, said Wade Opland, American Girl’s vice president of retail.
“Customers spend two hours in the store, versus 20 minutes at other stores,” Opland said. “A lot of girls who grew up on American Girl now have their own girls.”
A take-a-number system will be in place for the weekend, so consumers can browse other stores while they wait to get into the front door of the crammed store. Tickets will be handed out between 9 and 10 p business cards.m. Friday for the following day, and again Saturday morning beginning at 6 a.m.
“We’ve had people stand in line for 24 hours prior to opening,” Opland said.
Richard Gottlieb, a toy industry analyst and CEO of New York-based Global Toy Experts, said American Girl store’s array of activities keep customers coming back and help explain the brand’s longevity. Most buyers see the $100-plus for each 18-inch doll as worth the price.
“It’s a 360-degree experience,” he said. Many of American Girl’s dolls feature historical characters with clothing and hairstyles set in previous decades and centuries. Other dolls tackle weighty subjects, such as bullying and reading comprehension difficulties, in books that come with dolls.
“Barbie lives in a fantasy world of perfection, whereas American Girl is historically based, and the dolls live challenging and sometimes flawed lives,” Gottlieb said. “The bottom line is authenticity.”
Doll sales are weathering the post recession recovery better than other toys. Doll sales totaled $2.66 billion in the U.S. in 2011, a 7 percent increase from 2010, according to Toy Industry Association, a trade association, using data from market research firm The NPD Group. Overall, toy sales as a whole declined 2 percent in the same time period, dropping to $21.23 billion.
Sisters Paige, 9, and Faith, 8, of Chesterfield came to the store Thursday with their mom, Renee O’Daniel, and both girls were considering getting their dolls’ hair styled at the salon.
Paige said she enjoys taking her American Girl doll, Kit Kittridge, to a place where she’s welcomed. She also identifies with Kit, whose character is set in 1934 and writes newspaper articles.
“She likes writing, and I do, too,” Paige said as she took a break from peering at rows upon rows of dolls for sale.
Ronda Coleman of Des Peres plans to bring her four-year-old daughter this weekend, but she came in for a sneak peak to avoid the crowds. Her daughter has an American Girl Bitty Baby, which sells for $50, and already is a fan of the brand, she said. “She gets to pretend,” Coleman said, “and play like a grown up.”
Stocks in Europe and the U.S. faltered Wednesday after two days of gains, but Asian markets jumped on speculation Japan might take new measures to spur its economy.
Markets in Europe and the U.S. had been bolstered this week by solid U.S. corporate earnings, a surprise improvement in German investor sentiment and relatively well-received Spanish bond auctions. An upward revision to the International Monetary Fund’s global growth forecast also underpinned confidence.
How markets close out the week will depend on Spain’s ten-year bond auction on Thursday _ if demand is weak, investors will likely fret again about the country’s ability to get a handle on its debts. Europe’s crisis will likely be discussed in a meeting this weekend of the finance ministers of the Group of 20 leading industrial and developing nations.
“A good test of investor’s confidence in Spain will come tomorrow with the sale of ten year bonds,” said Louise Cooper, markets analyst at BGC Partners. “However despite rising fear, we are not at crisis yet, with 10-year yields on Spanish and Italian debt still 1-2 percent below the unsustainable 7-7.5 percent yields of last autumn.”
Spain has become the main source of concern in Europe’s debt crisis as investors worry about the government’s ability to push through a raft of austerity measures at a time when unemployment stands at a startling 23 percent and the economy is in recession.
The yield on the country’s ten-year bond on Monday spiked above 6 percent. In the past two days, however, it has edged back down to more manageable levels below 6 percent.
Despite the modest drop in the yield, Spanish stocks continued to oscillate wildly. On Wednesday, the main IBEX index down 2.3 percent after the Bank of Spain reported that the total amount of bad loans on the books at the nation’s banks rose to an 18-year high in February.
Elsewhere in Europe, the FTSE 100 index of leading British shares was 0.2 percent lower at 5,753 while Germany’s DAX fell 0.8 percent to 6,749. The CAC-40 in France was 1.4 percent lower at 3,247.
The euro was also faring poorly in the risk-averse environment, trading 0.3 percent lower at $1.3074.
In the U.S., the Dow Jones industrial average was down 0.5 percent at 13,052 while the broader Standard & Poor’s 500 index fell 0.4 percent to 1,386.
Earlier in Asia, sentiment was buoyed by indications that the Bank of Japan may do more to prop up the economy. Kyodo news agency reported that Deputy Governor Kiyohiko Nishimura’s suggested the central bank might take additional stimulus steps to tackle deflation.
That helped the Nikkei 225 index in Tokyo to soar 2.1 percent to 9,667.26 and the dollar to rise 0.4 percent to 81.33 yen.
Other stock markets were up too, including Hong Kong’s Hang Seng, which gained 1.1 percent to 20,780.73.
Mainland Chinese shares rose on hopes for financial reforms aimed at regulating private lending and creating new institutions to serve private borrowers better, analysts said. The benchmark Shanghai Composite Index rose 2 percent to 2,380.85. The Shenzhen Composite Index gained 2.1 percent to 956.49.
Oil markets were subdued, with the benchmark New York rate down 40 cents at $103.80 a barrel.
____
Pamela Sampson in Bangkok contributed to this report.
Viasystems Group expects net sales to have increased about 10 percent in the first quarter, boosted by double-digit growth in sales of its printed circuit boards to the automotive, computer and data communications industries.
Clayton-based Viasystems estimates first quarter net sales of $262 million versus $238.7 million a year earlier. The company, which won’t release its full financial results until May 9, didn’t provide an estimate of net income or earnings per share for the first quarter.
The company also estimates that its operating profit was $5 million in the first quarter, which includes $7 million in restructuring costs related to the closure of two factories in China high risk personal loans. It posted a operating profit of $11.9 million in first quarter of 2011.
Meanwhile, Viasystems announced it plans to sell $550 million in senior secured notes, due in 2019, to redeem $220 million in existing notes and fund the company’s acquisition of DDi Corp.
A European diplomat close to nuclear talks between six world powers and Iran described the negotiations as “very constructive,” saying a second round looks likely after a morning session between the two sides Saturday.
The diplomat said Iran’s nuclear program was discussed _ which means progress over the last talks more than a year ago that broke up after Tehran refused to talk about concerns that it could use its atomic activities to develop weapons.
“The principle seems there for future negotiations,” said the diplomat. He demanded anonymity for discussing Saturday’s meeting because his information was confidential.
The six powers and Iran are meeting in an attempt to find common ground over concerns over Tehran’s nuclear activities.
Iran insists it has no nuclear weapons ambitions, but the international community fears it could use its uranium enrichment program not only to make reactor fuel but also the fissile core of nuclear weapons.
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