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Thursday
Feb242011

Toyota Recalls More Than Two Million Cars

Photo Courtesy - PRNewsFoto/Toyota Media Relations(NEW YORK) -- Toyota is recalling more than two million cars to fix a problem related to unintended acceleration. 

Toyota is worried gas pedals could get stuck in the floor mat or carpeting of two million vehicles.  In some models, a plastic pad in the carpet needs to be reshaped.  In other models, the floor mat needs to be properly secured to prevent the accelerator from sticking. 

These latest recalls resolve a government investigation into whether Toyota recalled enough vehicles to address sudden acceleration.

Copyright 2011 ABC News Radio

Thursday
Feb242011

401(k) Accounts Reach a 10-Year High, but Not High Enough

Photo Courtesy - Getty Images(BOSTON) -- There's good news about your 401(k) -- and bad.

Right now the average 401(k) balance stands at a 10-year high. That's according to Beth McHugh, vice president of Fidelity Investments, which administers some 17,000 retirement plans for 11 million would-be retirees. 401(k)s, which have been around for 30 years, are the most widely-used vehicle for saving for retirement.

By the end of 2010, says McHugh, the average account balance had risen to $71,500. Savers who've been actively contributing to an account for 10 years saw their average balance hit $183,100, up from $59,100 at the end of 2000. Those increases are attributable in part to the rebound of the stock market and to the fact that 401(k) participants are saving more: For seven straight quarters, Fidelity says, participants have been increasing the part of their paychecks that they're saving, from 3 percent to a little over 6 percent.

Contrary to myth, says McHugh, most employers did not suspend making matching contributions to employee 401(k)s during the recession. A few high-profile companies, including FedEx, did suspend them, earning headlines. But even during the very worst of the recession, between 2008 and 2009, only 8% of employers reduced or eliminated their matching contributions. And since then, she says, more than half of those have reinstated their matching contributions or have said they plan to do so in the next 12 months. Bigger companies—ones with 5,000 or more employees—are in the vanguard of that trend, with over 70% saying they've already reinstated matching funds or intend to do so.

McHugh refutes another misconception: During the recession, she says, most people did not cash out or take loans against their accounts. Only one out of five participants took out a loan. Even seven out of ten employees who lost their job, were laid off, or otherwise separated from an employer resisted the temptation to cash out their account.

While 401(k)s on average have emerged from the recession in surprisingly good health, many savers on the cusp of retirement are finding that good isn't good enough.

A study commissioned by the Wall Street Journal from the Center for Retirement Research at Boston College finds that the median household headed by a person aged 60 to 62 with a 401(k) has less than one-fourth the amount of savings in that account that he needs, if he wants to maintain his current standard of living in retirement.

The amount of income needed, said the study, is a little over $74,000. The median household can expect to get income of slightly more than $9,000 from a 401(k) and about $35,000 more from Social Security. That leaves a shortfall of almost $30,400.

Even if the householder is lucky enough to have a pension to boot, he's still short by almost $4,000, according to the Boston College study.

Fidelity's McHugh said savers are hardly blind to these facts. They're all too aware of them and are taking steps to compensate.

Copyright 2011 ABC News Radio

Thursday
Feb242011

Heinz to Use Coca-Cola "PlantBottle" for Ketchup

Photo Courtesy - Justin Sullivan/Getty Images(BOCA RATON, Fla.) -- H.J. Heinz Co. announced plans to use more environmentally-friendly bottles Wednesday.

Heinz will start using Coca-Cola's trademarked "PlantBottle" system, which requires less petroleum. It plans to produce 120 million ketchup bottles with the new system, thereby altering a fifth of Heinz's global products.  

The eco-conscious PlantBottles are made with sugarcane ethanol grown in Brazil. Coca-Cola and Heinz intend to diversify the technology over the coming years.

Copyright 2011 ABC News Radio

Thursday
Feb242011

Google Chastises Overstock in Search Results

Photo Courtesy - JOHANNES EISELE/AFP/Getty Images(SALT LAKE CITY) -- Google Inc. has punished Overstock.com for tampering with Google's sophisticated search algorithms.

The search-engine mammoth pushed Overstock.com down in search results, meaning fewer consumers are likely to visit their site after searching for products like vacuum cleaners, according to The Wall Street Journal.

Overstock.com reportedly manipulated search results by promising discounts to college students with .edu addresses who posted links to Overstock.com.

The Salt Lake City-based purveyor of cheap merchandise has since put a stop to the program.

Copyright 2011 ABC News Radio

Thursday
Feb242011

Hewlett-Packard Reports Dismal Growth

Photo Courtesy - Ralph Orlowski/Getty Images(PALO ALTO, Calif.) -- Hewlett-Packard Co. released a statement Tuesday showing disappointing growth in the face of poor consumer demand.

The Palo Alto-based computer giant reported a $1.21 per share profit, which disappointed investers hoping for $1.26. HP stock fell 9.6. percent at the New York Stock Exchange Tuesday afternoon in spite of reported 3.5 percent growth this year.

The report comes as an unfortunate close to Leo Apotheker's first quarter as chief executive officer. Apotheker is slated to present a renewed vision for the company at a strategy conference in San Francisco on March 14.

Apotheker took the helm of the company from Mark Hurd, whose resignation last August was prompted by a sexual harrassment scandal.

Copyright 2011 ABC News Radio

Wednesday
Feb232011

Supreme Court: Mazda Can Be Sued for Lap-Only Safety Belts 

Photo Courtesy - Mazda Motor of America Inc.(WASHINGTON) -- The Supreme Court ruled Wednesday that a lawsuit against Mazda Motor of America charging that the car manufacturer should have installed lap and shoulder belts in the rear aisle seats of some of its minivans can go forward in California courts.

The case was brought by the family of Thanh Williamson, who in 2002 was sitting in her 1993 Mazda minivan in the second-row seat, her lap belt firmly attached, when the van collided with a Jeep. She was thrown into a jackknife position and died from internal bleeding.

Her family wants to sue Mazda, believing that the lap-only seat belt was insufficient and that the company was negligent for not installing a lap and shoulder belt in that rear seat. Williamson’s husband and daughter were also riding in the van, but were sitting in seats equipped with both shoulder and lap belts. They both survived the accident.

Mazda argued that federal regulations at the time allowed the company the choice of which belt to install and therefore the car manufacturer was immune from such state lawsuits.

But a unanimous 8-0 court ruled Wednesday that federal regulations did not prohibit the state lawsuit from going forward.

Copyright 2011 ABC News Radio 

Wednesday
Feb232011

Goldman Sachs: House Spending Cuts Will Hurt Economic Growth

Photo Courtesy - Getty Images(WASHINGTON) -- A confidential new report prepared by Goldman Sachs for its clients says spending cuts passed by the House of Representatives last week would be a drag on the economy, cutting economic growth by about two percent of GDP.

“Under the House-passed spending bill [which cut spending by $61 billion],” says the report, which was obtained by ABC News, “the drag on GDP growth from federal fiscal policy would increase by 1.5pp to 2pp in Q2 and Q3 compared with current law.”

The report, which is signed by Goldman economist Alec Phillips, goes on to predict that the House-passed bill is unlikely to become law because it won’t pass the Senate and, in any case, the president threatened to veto it.

More likely, the report says, is a deal to cut spending by $25 billion this year, followed by a cut of $50 billion next year. Even those more modest spending cuts, Goldman Sachs predicts, will cut economic growth rates by one percent of GDP.

Copyright 2011 ABC News Radio 

Wednesday
Feb232011

Apple Event: Will iPad 2 Be Unveiled March 2?

Photo Courtesy - Apple(SAN FRANCISCO) -- Is Apple's newest iPad on its way?

The company announced Wednesday it will hold a special media event March 2 in San Francisco, and industry watchers widely believe the topic of the day will be Apple's iPad 2.

The text on the event's invitation merely says, "Come see what 2011 will be the year of." But the artwork hints at a bit more: designed to look like a calendar page, the invitation boasts a giant "2."

The number no doubt refers to the date of the event, but may also tease the second-generation iPad. The upper right corner of the calendar image also peels back to reveal the corner of what could only be an iPad.

Speculation about Apple's newest iPad has been running high for weeks and the announcement of the media event only adds fuel to the fire.

Given CEO Steve Jobs' medical leave and recurring reports of his ailing health, Apple followers will also be watching for an appearance by Jobs or even a mention of the elusive CEO during the event.

When Apple unveiled its first iPad last January, it was the first to market in the tablet computer field. But the iPad 2 will face competition, as Motorola, BlackBerry's Research in Motion and others unveil their own attempts at tablet-like mobile devices.

Rob Enderle, principal analyst at Enderle Group, previously told ABCNews.com that he expected the new iPad to feature a faster dual-core processor and full 4G support on AT&T and Verizon.

He also said the new device is expected to be flatter, lighter and sturdier than the original and include a front-facing camera to enable video conferencing.

Earlier this month, rumors started to fly that Apple might release not just one, but two, iPads this year.

After reports that Apple's iPad 2 was already in production, two popular tech blogs wrote about the possibility of an iPad 3 hitting the market later this year. 

Copyright 2011 ABC News Radio

Wednesday
Feb232011

Cost of a Barrel Oil Exceeds $100 for First Time in Two Years

Photo Courtesy - Getty Images(NEW YORK) -- Unrest in Libya is driving up oil and gasoline prices in the United States.

For the first time in more than two years the price of oil touched $100 a barrel at the New York Mercantile Exchange and the Energy Department said gasoline hit $3.19 a gallon, the highest it has ever been for a February. 

Those increasing costs threaten economic recovery so the stock market was down throughout much of Wednesday.  Libya is the prime concern but there's also fear what's happening there could spread to other major oil producers.

Copyright 2011 ABC News Radio

Wednesday
Feb232011

FDIC: 'Problem List' on the Rise to 884 Institutions

Photo Courtesy - ABC News(WASHINGTON) -- At a press conference Wednesday, the FDIC released its fourth quarter and year-end 2010 earnings report for FDIC-insured institutions. 

The FDIC reported 157 insured commercial banks and savings institutions failed in 2010, marking the largest annual number of bank failures since 1992 when the FDIC saw 182 failed institutions.  In the fourth quarter of 2010, the FDIC added 24 institutions to the “Problem List,” raising the number of institutions on the list to 884.

Despite this increase in troubled financial institutions, FDIC Chairman Sheila Bair called 2010 a “turnaround year” for the industry after it experienced four straight quarters of positive earnings. The full-year net income for banks tallied at $87.5 billion, the highest full-year earnings since 2007. 

“While earnings in 2010 remain well below pre-crisis levels, the past year marked a significant milestone on the road to recovery,” Bair said. 

The FDIC reported banks earned $21.7 billion in the fourth quarter of 2010, compared to a $1.8 billion net loss in the fourth quarter of 2009.

Revenue growth was consistent compared to previous years but remained sluggish due to a lack of “upward momentum.”  Net operating revenue in 2010 was $163.5 billion, only $2.8 billion higher than the previous year.

“A key reason why revenues haven’t grown faster is that loans have not been growing,” Bair said.

Bank lending decreased for the ninth time in 10 quarters.  Total loan and lease balances fell $13.6 billion in the final quarter of 2010 with lending in real estate construction and development, non-credit card consumer loans, and home equity lines of credit shrinking.  Banks cut loan-loss provisions by $31.6 billion in the fourth quarter.

Copyright 2011 ABC News Radio







ABC News Radio