Adobe Systems posts 4Q loss

NEW YORK (AP) -- Adobe Systems Inc. said Tuesday that although it booked a loss in the fiscal fourth quarter, consumer demand improved and allowed the maker of Photoshop and Flash software to post an optimistic outlook for the current period.

The recession has dampened demand for Creative Suite 4, the latest version of the software package targeting professional designers and developers that brings in the bulk of Adobe's revenue. It happened to launch in the fall of 2008, right as the financial meltdown hit.

But the company said Tuesday it saw demand pick up in the fourth quarter, especially in its final month. Chief Financial Officer Mark Garrett said this November uptick -- across many of the company's product lines, mainly in North America and Europe -- was more than what the company had expected. Even so, CS4 will likely end up with sales about 20 percent below its predecessor.

Adobe on Tuesday reported a loss of $32 million, or 6 cents per share, for the three months that ended Nov. 27, compared with a profit of $245.9 million, or 46 cents per share, in the same period a year earlier.

Stripping out special items such as restructuring charges and an income tax adjustment related to its October acquisition of Omniture Inc., Adobe earned 39 cents per share, surpassing Wall Street analysts' expectations.

The quarter's revenue fell 17 percent to $757.3 million, but still topped the $752.5 million expected by analysts polled by Thomson Reuters.

Adobe CEO Shantanu Narayen said he expects Creative Suite 5, which will launch sometime in the current fiscal year, to be a "must-have upgrade" for customers. Creative Suite includes many of Adobe's applications, including Photoshop, Illustrator, Flash and the Web design software Dreamweaver.

Because of the timing of CS4's launch, many customers put off buying the costly package, opting to save money and wait for the next version. Garrett said this group represents pent-up demand, not only because it's difficult to be two versions behind in software but also because many companies will be upgrading their computers and operating systems next year. This benefits Adobe because software upgrades generally follow hardware upgrades.

Adobe hasn't said when CS5 will come out, though Sasa Zorovic, an analyst with Janney Capital Markets, expects it to launch in May.

For the current quarter, Adobe is forecasting a profit of 34 cents to 39 cents per share, excluding items, on sales of $800 million to $850 million. Analysts are predicting earnings of 37 cents per share on revenue of $798.9 million, on average.

Adobe's first-quarter revenue forecast includes about $78 million to $83 million from Omniture, the Web analytics software maker it acquired for $1.8 billion in October. Omniture expands the company's product offerings because it provides a way for businesses to measure the effectiveness of the Web content they create using Adobe's software.

For the full year, the company earned $386.5 million, down 56 percent from a year earlier. Revenue fell 18 percent, to $2.95 billion. Over the past year, Adobe reduced its work force by about 1,300, though it gained some from the Omniture acquisition.

Adobe's shares fluctuated in after-hours trading as investors digested the news. The stock climbed 6 cents to $36.42 in extended trading after closing up 58 cents at $36.36.

Credit Suisse expects to pay $536 million

SAN FRANCISCO (AP) -- Credit Suisse Group said Tuesday that it expects to pay $536 million to settle a five-year Justice Department investigation into business it did with countries subject to U.S. economic sanctions between 2002 and 2007.

The bank said it is in advanced settlement talks with the Justice Department, Federal Reserve, Manhattan district attorney's office and the Treasury Department's Office of Foreign Assets Control. Credit Suisse expects to book a fourth-quarter charge of 445 million euros ($649.2 million) related to the deal.

The Manhattan District Attorney's office confirmed Tuesday it was negotiating with the bank, but spokeswoman Alicia Maxey Greene said there was no final agreement. The DA's office has scheduled a news conference on the subject Wednesday.

The bank said it had previously disclosed the investigation and undertook an internal review of some U.S. dollar payments that involved countries, people or entities who could be subject to U.S. economic sanctions. That review has been completed.

Credit Suisse also said it exited the business in question in December 2005 and conducted an independent investigation into payment activity in Zurich. The company added that in 2006 it stopped doing business with all parties sanctioned by the Office of Foreign Assets Control, and as part of this move shuttered an office in Tehran.

Countries under economic sanction by the U.S. include North Korea, Cuba and Iran.

Wells Fargo stock offering to raise $12.25B

NEW YORK (AP) -- Wells Fargo & Co. said Tuesday that a stock offering planned for later this week should raise $12.25 billion that will be used to help repay its government bailout loan.

The offering price of $25 a share was announced a day after Wells Fargo said it would repay the $25 billion it received as part of the Troubled Asset Relief Program.

The stock sale is expected to close on Friday, Wells Fargo said. It will raise $10.65 billion from selling 426 million shares of common stock, and another $1.6 billion from selling another 63.9 million shares to underwriters, bringing the total offering to 489.9 million shares.

The bank's shares outstanding will increase by about 10.4 percent from 4.69 billion shares of common stock outstanding as of Oct. 30. Wells Fargo's shares rose 17 cents to close at $25.66 on Tuesday.

"We are very pleased with the positive reception for this equity offering, and we appreciate the confidence investors have demonstrated in Wells Fargo's strength and future prospects," Chief Financial Officer Howard Atkins said in a prepared statement.

Wells Fargo was the last of the initial eight big banks that received TARP money to announce it would repay the government. The San Francisco-based bank's announcement on Monday came just hours after Citigroup Inc. said it would repay $20 billion in TARP money and the government would sell its nearly 34-percent stake in the bank.

By repaying TARP, Wells Fargo escapes restrictions like caps on executive compensation and dividends. It will also save the bank $1.25 billion annually in interest payments it had to pay the government for the money.

Aside from the stock sale, Wells Fargo also is issuing $1.35 billion in stock to employees instead of giving them cash bonuses. The TARP compensation restrictions affected the size of cash salary and bonuses banks could award their executives.

The size of the stock offering means Wells Fargo will no longer need to raise $1.5 billion through asset sales by the end of 2010, the bank said.

Separately Tuesday, Wells Fargo said it will pay $4.5 billion in cash for Prudential Financial Inc.'s stake in the companies' retail brokerage joint venture, which includes Wells Fargo Advisors LLC. Wells Fargo will buy the noncontrolling stake by Dec. 31.

"Wells Fargo considered the cost of Prudential's put in the assumptions for the Wachovia merger and we are pleased to take this next step pursuant to the agreement between Wachovia and Prudential," Wells Fargo Chief Financial Officer Howard Atkins said. Wells Fargo purchased Wachovia Corp. at the height of the financial market crisis last year.

Prudential Chairman and CEO John Strangfeld said in a statement that the deal will substantially enhance the company's capital position and financial flexibility going forward.

The purchase price is based on the value of Wells Fargo Advisors (then known as Wachovia Securities) at Jan. 1, 2008, prior to the contribution of the retail securities businesses of A.G. Edwards & Sons. Wells Fargo was advised by Greenhill & Co. LLC and Prudential was advised by Barclays Capital Inc. in determining the valuation.

Cobalt International Energy IPO prices below range

DENVER (AP) -- Cobalt International Energy Inc. hoped investors would contribute more than $1 billion to its search for oil miles beneath the ocean even though it has no proven reserves and it expects no revenue for at least another two years.

But the Houston-based company fell short of its goal Tuesday evening, raising $850.5 million in its initial public offering as it priced 63 million shares at $13.50 each -- below the $15 to $17 range it had expected. Proceeds could reach $978.1 million if the offering's underwriters exercise an option to buy 9.45 million more shares.

Cobalt is a risky bet, say analysts who research IPOs.

Founded in 2005 by a group of private equity investors and longtime oil industry executives, including Chairman and CEO Joseph H. Bryant, whose resume includes stints at Unocal Corp., BP and Amoco, Cobalt has posted losses throughout its history and no one really knows where volatile oil prices will be in three years.

When the company strikes oil, it will take Cobalt additional time to get a well in production, analysts said.

"IPO buyers are looking for financials that are tangible, a revenue stream that's visible and profits. They're not looking for concepts right now," said Scott Sweet, senior managing partner of IPOBoutique in Tampa, Fla., comparing Cobalt to an early-stage biotech firm that still needs to go through four phases of testing to get federal approval.

In 2008, the company had a loss of $71.6 million, compared with a loss of $108.9 million the previous year. The company has lost $322.1 million since its inception.

It is unusual for an oil and gas company to go to the public markets without reserves in place or production under way, said research analyst Nick Einhorn of Renaissance Capital based in Greenwich, Conn.

"There's a lot of risks but I think for an investor who kind of believes in this deepwater opportunity, it is a good way to get 100 percent exposure to that," he said.

Cobalt has developed a proprietary method for exploration that involves analyzing geophysical information, including seismic data. It has purchased leases in the Gulf of Mexico, and off the coast of Angola and Gabon, regions where many major oil companies operate.

It has invested about $1 billion and expects to spend $1.4 billion over the next two years on exploration, Einhorn said.

Cobalt is reaching out to the public markets as the oil industry is recovering from the recession. Oil prices have hovered in the $70 range since early October, up from a low of $32.70 per barrel in January. But supplies have remained high and demand has diminished.

The company aims to raise money to finance drilling and exploration through 2011, capital spending and for general corporate purposes.

Cobalt shares will begin trading under the symbol "CIE" on the New York Stock Exchange on Wednesday.

No real consensus on bank overhaul

WASHINGTON (AP) -- After meeting with bank executives, President Barack Obama noted "a big gap" between the CEOs and their lobbyists on his campaign to rewrite the rules governing the financial industry. The CEOs "support reform," Obama said, but their lobbyists have been sending a different message.

Appearing separately after the meeting, the bankers seemed to agree. "We're going to do a better job ... to work with the lobbyists" to address that disconnect, US Bancorp CEO Richard Davis said.

But the "gap" Obama said he discovered is an illusion. The bankers not only are well aware of their lobbyists' efforts, they direct them. They have supported parts of Obama's financial agenda since long before the financial crisis, when they proposed the same measures.

In striking the appearance of agreement, both sides glossed over a dispute on one key proposal: the creation of a new agency to protect consumers from bank abuses. The proposed agency would have rule-writing authority and onsite examiners.

That proposal is the core of Obama's proposed changes, and U.S. banks and their representatives oppose it unanimously. Monday's meeting didn't change that.

"The bankers (in the meeting) said they support consumer protection, but there's no reason as far as I can tell to believe they support" the new consumer protection agency, said Ed Yingling, president of the American Bankers Association.

That bankers support many other items on Obama's agenda should come as no surprise. Many of the president's key provisions track closely with a 2007 report overseen by the CEO of JPMorgan Chase & Co. and the chairman of Wells Fargo & Co., and released by the Financial Services Roundtable, which represents the 100 largest financial firms.

Roundtable lobbyist Scott Talbott said his group supported much of Obama's plan before it was announced. But he said his group and other industry groups have been consistent in opposing the proposed consumer agency.

By suggesting the opposition comes from lobbyists rather than bankers, Obama could be giving his White House guests room to soften their position. It's also a populist tactic that takes aim at a group he has often vilified -- those who play Washington's lucrative influence game.

He also may be attempting to neutralize the U.S. Chamber of Commerce, which has spent millions of dollars on a high-profile campaign to defeat the proposed consumer agency. The Chamber already won key concessions in the version of the bill that passed the House this month.

Obama's own poll numbers have been sagging, and he has little to lose from tapping the vast reservoir of public anger at banks. On Sunday night, the day before meeting with them, he was on TV calling bankers "fat cats" who "don't get it."

Monday's meeting let Obama sharpen his get-tough message, then claim to have discovered common ground.

He criticized the banks' lavish executive pay practices -- even though they have made progress in tying compensation to long-term performance. He pressed them to lend more money to consumers and businesses -- then acknowledged banks are hamstrung by the rough economy and regulators are cracking down on risky lending.

Asked about the supposed gap between bank CEOs and their lobbyists, White House spokeswoman Jennifer Psaki said, "We expect the CEOs to say the same thing in public and in private to members of Congress that they said to the president in person yesterday."

And that gap Obama discovered between the bankers' support for the rules rewrite and their lobbyists' rhetoric? Davis, the bank CEO who promised to close the gap between CEOs and lobbyists, is the incoming chairman of the Financial Services Roundtable. The Roundtable has been among the proposed consumer agency's most strident opponents, saying it "would actually harm consumers."

Davis spent the hours after Monday's White House meeting at the Roundtable's offices. The lines of communication between bank executives and their lobbyists remain open.

Aside from the rhetoric, there's no evidence they ever were closed.

Boeing's 787 jetliner finally takes to the air

EVERETT, Wash. (AP) -- The first flight of Boeing's new 787 jetliner brought no surprises -- exactly what pilots, engineers and company officials had anxiously sought for the long-delayed aircraft.

"The airplane responded just as we expected," Randy Neville, one of the two pilots, said after touchdown Tuesday at Seattle's Boeing Field. "It was a joy to fly."

Boeing has billions of dollars and its reputation riding on the sleek, blue-and-white aircraft that lifted off from Everett's Paine Field on a flight over western Washington, beginning the extensive flight testing program needed to obtain Federal Aviation Administration certification.

The widebody jet, the first commercial airplane made mostly of lightweight composite materials, is more than two years behind schedule because of parts problems and labor trouble. Chicago-based Boeing was determined the plane would fly before the end of the year to prove the program was back on track.

Neville and chief pilot Mike Carricker performed a variety of basic system checks, including testing the landing gear and the flaps, before landing about three hours later. Deteriorating but typical Northwest winter weather -- rain, cold and wind -- brought the plane back about an hour earlier than planned.

Before takeoff, the 186-foot-long aircraft paused for several minutes at the end of the runway for final checks, adding to the tension for Boeing employees, customers and airline executives standing on the tarmac. Loud cheers and applause built as the plane started its takeoff roll and took to the sky, its two huge engines kicking up clouds of mist.

"It's very historical. I can't think of a thing about it that I'm not impressed with," said Joe Bierce, a flight instructor for Delta Connection in Jacksonville, Fla., who was among the 25,000 people who gathered to watch the takeoff.

The 787 is a radical departure in aircraft design. Where other passenger jets are made mostly from aluminum and titanium, nearly all of the 787's fuselage and wings are made of lightweight composite materials such as carbon fiber, accounting for about 50 percent of the aircraft by weight.

Those materials have long been used on individual parts such as rudders, and on military planes, but the 787 is the most ambitious use of the technology aboard a passenger plane.

Boeing says the aircraft will be quieter, produce lower emissions and use 20 percent less fuel than comparable planes, while giving passengers a more comfortable cabin with better air quality and larger windows.

Officials cut the flight a little short after rain reduced visibility at Boeing Field and the aircraft ran into poor weather off the Washington coast.

Carriker said there was a "very, very aggressive plan" for tests on the initial flight and that he and Neville were able to accomplish about half those goals. The weather prevented them from flying the long straight stretches they expected, he said, but did allow them to test the plane in turbulence and icing, things not normally encountered on a first flight.

"There were no major issues with the plane, which considering the complexity is a huge statement," he said.

The plane is the first of six 787s Boeing will use in the nine-month flight-test program that will subject the aircraft to conditions well beyond those found in normal airline service, including temperature extremes, flying on one engine and slamming on the brakes at takeoff speed.

Boeing, which has orders for 840 of the jets, plans to make the first delivery to Japan's All Nippon Airways late next year. The 787 remains Boeing's best-selling new plane to date, though some airlines have been forced to cancel or postpone purchases because of the weak economy.

For the first time, Boeing has relied on suppliers around the globe to build nearly all components of the plane, which are then assembled in Everett. But that approach has proved problematic, with ill-fitting parts and other glitches hampering production.

The first flight was supposed to be in 2007, with deliveries the following year. Boeing was forced to push that back five times -- delays that have cost the company credibility, sales and billions of dollars.

Most recently, Boeing needed to reinforce the area where the wings join the fuselage. Tests were completed on that fix just two weeks ago.

An eight-week strike last year by Seattle-area production workers also caused problems and factored into Boeing's decision in October to create a second 787 assembly line in North Charleston, S.C.

Scott Fancher, vice president and general manager of the 787 program, said he believes both the 200-day flight test program and efforts to ramp up 787 production will go as planned. The next test flight for the first 787 is expected in about a week, Carriker said.

The version being tested will be able to fly up to 250 passengers about 9,000 miles. A stretch version will be capable of carrying 290 passengers and a short-range model up to 330.

Boeing rival Airbus has developed the A350 XWB as the main competitor to the 787 line. Like Boeing's jetliner, the Airbus plane also features composite materials, including in the fuselage and wings.

Airbus says it had received 505 orders for the A350 from 32 customers as of November. The European company is aiming to deliver the first plane in 2013.

Tuesday's flight "was very mundane on takeoff and very mundane on the landing, and that's exactly what you want on the first flight of an experimental airplane," said analyst Scott Hamilton of Leeham Co., an aviation consulting firm in Issaquah, east of Seattle. "Boring is good in aviation."

But the significance, he said, lies in the 787's cutting-edge design and the way it's being manufactured.

"All of this is going to set the stage for all Boeing planes in the future," Hamilton said. "It's a very important milestone in the history of the company."

Associated Press Writer Manuel Valdes contributed to this report from Seattle.

Boeing 787 First Flight Web site, including link to flight Webcast: http://787firstflight.newairplane.com

CarMax reports 3Q results Friday

RICHMOND, Va. (AP) -- Car dealership chain CarMax Inc. is scheduled to report earnings for its fiscal third quarter on Friday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: The company based in Richmond, Va., said in September that its profit surged more than six-fold to $103 million for its second quarter ended Aug. 31 on a 13 percent rise in sales and a one-time gain related to its auto financing business.

The company predominantly sells used vehicles. While used cars didn't qualify under the federal Cash for Clunkers program that gave rebates for junking older cars and buying more fuel-efficient vehicles, CEO Tom Folliard said the program resulted in a spike in traffic in late July and August. But analysts said some of the sales volume was pulled forward and could likely hurt third-quarter results.

Folliard said he was encouraged by the company's sales execution, solid gross profit and an improved performance from its financing arm. He also said the Clunkers program had a positive effect on improving consumer mindset about the auto industry.

CarMax, which operates 100 stores, also has been focused on eliminating waste and improving execution to weather the weak automotive market and better position it for future growth. For the first half of the year, the company has lowered its expenses by 9.4 percent, or $43.8 million, compared with the year-ago period.

Last year, CarMax said it swung to a $21.9 million loss in the third quarter due to slumping sales and store traffic, and loan loss write-downs in its auto finance arm. Sales fell 23 percent to $1.46 billion in the quarter.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters, on average, expect a third-quarter profit of 15 cents per share on $1.65 billion in revenue.

ANALYST TAKE: Following its second-quarter results, Goldman Sachs analyst Matthew J. Fassler upgraded shares of CarMax, citing increasingly easy credit plus robust margins.

"Through a stellar August quarter, CarMax, virtually uniquely among cyclical retailers, is running margins above 'normal' levels," he wrote in a client note.

He cited strong selling prices that reflect a shortage of trade-ins. He said the company's strong cost controls will keep boosting profits.

William Blair analyst Sharon Zackfia said increasingly easy monthly sales comparisons to year-earlier figures also should also help the stock.

WHAT'S AHEAD: Wall Street will be looking to see when CarMax will resume its long-term plan of growing its store base at annual rate of about 15 percent. Over the past year, the company has curtailed its store growth in response to the weak ecconomic environment.

STOCK PERFORMANCE: During the quarter ended Nov. 30, shares of CarMax rose about 18 percent to end the period at $19.88. Over the past 52 weeks, the stock has traded between $6.92 and $23.07.

EU drops Microsoft browser charges

BRUSSELS (AP) -- The European Union said Wednesday it is dropping antitrust charges against Microsoft Corp. after the company agreed to give Windows users a choice of up to 12 other Web browsers.

Under the terms of the deal with regulators, Microsoft will avoid further EU fines if it provides a pop-up screen that lets European users -- from March -- replace Microsoft's Internet Explorer or add another browser such as Mozilla's Firefox or Google's Chrome.

This will also allow computer manufacturers to ship PCs without Internet Explorer in Europe.

Neelie Kroes, the EU's competition commissioner, said it was an "early Christmas present for more than hundreds of millions of Europeans" who stood to benefit from having "effective and unbiased choice" between Microsoft's Internet Explorer and competing browsers.

"The (European) Commission has resolved a serious competition concern for a key market for the development of the Internet," she told reporters.

"It is as if you went to the supermarket and they only offered you one brand of shampoo on the shelf, and all the other choices are hidden out the back, and not everyone knows about them," she said. "What we are saying today is that all the brands should be on the shelf."

Microsoft general counsel Brad Smith said the company was pleased with "final resolution of several long-standing competition law issues in Europe" and looked forward to building "on the dialogue and trust that has been established between Microsoft and the Commission."

Microsoft is not out of the woods yet though, as it was warned it can still be fined up to 10 percent of yearly global turnover without regulators having to prove their case if it doesn't stick to this commitment for the next five years.

The deal comes after more than a decade of EU antitrust action against the world's biggest software company that has already seen it pay euro1.7 billion in fines.

Kroes also warned that she was still looking at complaints from software rivals that the company wasn't sharing key information that help others make products compatible with Microsoft software.

In January, the EU charged Microsoft with monopoly abuse for tying its browser, Internet Explorer to the Windows operating system software used on most desktop computers -- this, they said, was an "artificial distribution advantage" that rivals didn't have.

Kroes said since Internet Explorer was present "on virtually every PC in Europe," a lot of Internet content was specially adapted to Internet Explorer. Other software makers complain that this caused technical problems that made it hard to use other browsers.

The EU said Monday that a pop-up choice screen would eliminate those concerns when it is downloaded as an automatic update to all users of Windows XP, Windows Vista and Windows 7 in Europe who have Internet Explorer set as their default browser. Other users will be asked if they want it.

The choice screen will list the 12 most-widely used Web browsers running on Windows -- listing five prominently. Users can pick and download one or several of them, choosing from Apple's Safari, Chrome, Internet Explorer, Firefox, Opera, AOL, Maxthon, K-Meleon, Flock, Avant Browser, Sleipnir and Slim Browser.

Some 100 million computers will likely display the screen by mid-March and around 30 million new computers will show it over the next five years, the EU said.

People can keep Internet Explorer if they want -- but they will for the first time be exposed to other browsers, providing a massive new audience to many smaller browser makers.

The choice of browsers will be updated every six months on the basis of several independent sources of market share information.

Microsoft will report back regularly to the European Commission, starting in six month's time, on how the rollout of the screen is going -- and could make changes if the EU asks. The EU is also able to review the entire deal at the end of 2011.

Microsoft will also provide more information to help software developers make products compatible with Windows, Windows Server, Office, Exchange and SharePoint and will publish what the EU says is an "improved version" of an offer that Microsoft first made in July.

The EU says it is still investigating whether Microsoft is holding back some of the key data that developers need to make products that work with its software.

Regulators said they welcomed Microsoft's move but that the offer was still "informal" and wouldn't end their probe. But they offered some hope saying they would "carefully monitor the impact" of the deal on the market.

Thomas Vinje, a lawyer for browser company Opera and the European Committee for Interoperable Systems, said it was "not yet clear" that Microsoft's offer would create "a more level competitive playing field where open source software is not subject to Microsoft patent fear uncertainty and doubt."

Vinje helped file the complaints to EU regulators that triggered the investigations into Microsoft's browsers and interoperability sharing.

Bank Fees

Banks are cutting overdraft fees, but there are other hidden charges.

In the wake of the uproar over bank fees charged to debit card holders--and the looming threat of congressional action--banking giants Bank of America, JPMorgan Chase, and Wells Fargo have announced drastic changes to their overdraft policies.

What banking customers might be missing is that debit card overdraft fees are the tip of the iceberg. Banks nickel and dime their customers in numerous other ways that can easily cost the average person $100 or more per year. Adding insult, many of the fees are poorly disclosed and levied regardless of any action the customer does--or doesn't--take.

"There is a long list of fees that people pay that doesn't require any type of acknowledgment on the part of the consumer," said Greg McBride, a senior financial analyst at Bankrate.com. Here are five major areas of hidden bank revenues.

Balance Transfer Fees

Cash Advances

Consumers who take cash advances from their credit cards will also be hit with a transaction fee that they might not have been expecting. As with balance transfers, cash advances often come with a fee that ranges between 3% and 5%. That's not all.

"If cash advances weren't costly enough with interest rates in the high teens, there's no grace period, and the interest clock starts ticking right away," McBride said.

Foreign Currency Surcharges

Using a debit or credit card while traveling overseas is wonderfully convenient. Perhaps too convenient. Over the past few years, banks have commonly started charging a 3% fee for any purchases made in foreign currencies. That means if you go to Paris on vacation and buy presents in euros, the charges will show up on your statement in dollars--with the 3% fees built in.

If you plan to use a debit or credit card abroad, consider opening an account with Capital One or Charles Schwab, whose foreign currency exchange fees run as low as 1%. If you are going to be taking money out of an ATM in another country (another place where banks ring up additional charges), Wells Fargo and PNC offer some of the lowest fees.

Balance Requirements

Many banks offer to waive monthly service fees on checking or savings accounts if customers maintain a collective balance above a set minimum. Dip below it, and you could be hit with a charge of $8 or more every time your balance falls below the minimum.

"These requirements are really a lose-lose proposition," McBride says. "If you don't maintain the balance, you get socked with a fee. If you do maintain it, you have the opportunity costs of stranding money in a low-yielding account when you could be earning a more competitive return in an online savings account."

ATM Fees

Bank of America and other banks now charge customers from other banks $3 to withdraw money from its ATMs. But at least you have to agree to pay the fee at the terminal. What some customers may not realize that is that their own bank often levies a $2 fee every time they use a competitor's ATM as well. Adding up all the bank fees, it may cost $5 to take out $20 of your own money. That's a 25% commission, and the bank didn't have to do a thing.

Banks commonly mail out ads pitching low interest rates for customers willing to transfer credit card balances from another institution. What many don't advertise is that there is often a balance transfer fee of between 3% and 5% hidden in the fine print.

"If you're transferring a balance from a card with a rate of 15% to a card with a rate or 13%, but you're paying a 3% admission fee, you're not saving any money," McBride said. Moving a balance of $5,000 from one credit card to another with a slightly lower interest rate could result in a $150 charge being added to the balance that you owe and pay interest on.

If you're thinking about switching to a card with a lower interest rate, ask the bank what type of transfer fees it charges. These fees are separate from the annual interest rate that you pay.

Digital Realty Trust, Inc. Schedules 3rd Quarter 2009 Earnings Release

SAN FRANCISCO, Sept. 11 /PRNewswire-FirstCall/ -- Digital Realty Trust (NYSE: DLR - News) today announced that it will hold a conference call on Thursday, October 29, 2009 at 1:00 pm ET/10:00 am PT to discuss its third quarter 2009 financial results and operating performance. The conference call will feature Chief Executive Officer, Michael Foust and Chief Financial Officer and Chief Investment Officer, A. William Stein. The Company will release its financial results for the third quarter 2009 before the market opens on Thursday, October 29, 2009.

To participate in the live call, investors are invited to dial +1 (877) 941-8609 (for domestic callers) or +1 (480) 629-9818 (for international callers) and quote the conference ID #4159375 at least five minutes prior to start time. A live webcast of the call will be available via the Investors section of Digital Realty Trust's website atwww.digitalrealtytrust.com. Please go to the website at least 15 minutes early to register and download and install any necessary audio software. If you are unable to listen to the live conference call, a telephone and webcast replay will be available after 12:00 pm PT on Thursday, October 29, 2009 until 11:59 pm PT on Wednesday, November 4, 2009. The telephone replay can be accessed by dialing 800-406-7325 (for domestic callers) or 303-590-3030 (for international callers) and using the access code #4159375. A replay of the webcast will also be archived on Digital Realty Trust's website.

About Digital Realty Trust, Inc.

Digital Realty Trust, Inc. owns, acquires, redevelops, develops and manages technology-related real estate. The Company is focused on providing Turn-Key Datacenter(SM) and Powered Base Building(SM) datacenter solutions for domestic and international tenants across a variety of industry verticals ranging from information technology and internet enterprises, to manufacturing and financial services. Digital Realty Trust's 75 properties, excluding one property held as an investment in an unconsolidated joint venture, contain applications and operations critical to the day-to-day operations of technology industry tenants and corporate enterprise datacenter tenants. Comprising approximately 13.0 million rentable square feet as of July 30, 2009, including 1.1 million square feet of space held for redevelopment, Digital Realty Trust's portfolio is located in 27 markets throughout North America and Europe. For additional information, please visit Digital Realty Trust's website at http://www.digitalrealtytrust.com.

Brady Corporation Reports Earnings for Fiscal 2009

MILWAUKEE--(BUSINESS WIRE)--Brady Corporation (NYSE:BRC - News) today reported results for its fiscal 2009 fourth quarter and fiscal year ended July 31, 2009.

Sales in the fiscal 2009 fourth quarter were $287.2 million compared to $396.8 million in the fourth quarter of fiscal 2008. Organic sales declined 23 percent, acquisition growth was flat, and foreign currency translation reduced sales by 5 percent. Regionally, organic sales were down 25 percent in Europe, 24 percent in the Americas, and 15 percent in Asia/Pacific.

Net income for the fiscal 2009 fourth quarter was $19.2 million or $0.37 per diluted Class A Common share, compared to $34.8 million or $0.64 per share in the fourth quarter of fiscal 2008. Results included after tax restructuring charges of $3.4 million in the quarter or $0.06 per share.

Brady’s fiscal 2009 net sales were $1.209 billion compared to $1.523 billion in sales in fiscal 2008. Organic sales were down 16 percent, acquisitions added 1 percent to sales results, and foreign currency translation reduced sales by 5 percent. Net income for fiscal 2009, including after-tax restructuring charges of $20.2 million or $0.38 per share, was $70.1 million or $1.33 per share compared to $132.2 million or $2.41 per share in fiscal 2008.

“After a strong first quarter, the global economic downturn caused a 27 percent drop in our sales over the balance of the year. Despite this, we earned $90 million in net income excluding restructuring charges and generated $127 million in cash flow from operations,” said Brady President and CEO Frank M. Jaehnert. “Beginning in the second quarter, we took quick and aggressive actions to adjust our cost structure, including a significant workforce reduction. We also continued to invest in our future and position the company for growth going forward by focusing on new product development, acquisition strategy, e-business opportunities and productivity improvement initiatives like the Brady Business Performance System (BBPS). We believe that these strategic investments along with our reduced cost structure position us well for the current economic climate as well as for future economic recovery.”

“We expect that the challenges of the global recession will continue into the first half of fiscal 2010. As a result, we expect current fiscal year net income to be between $85 and $95 million and earnings per diluted share of between $1.60 and $1.80. This guidance is based on current exchange rates and a constant tax rate. It also assumes that sales will continue at or near current levels through the first half of our fiscal year, followed by modest growth in the second half of the year,” said Brady Chief Financial Officer Thomas J. Felmer. “Our guidance excludes additional expected pretax restructuring charges of approximately $15 million or $0.20 per share, which would result in annualized pretax savings of approximately $15 million, of which $10 million are expected to be realized in fiscal 2010.

“While most of the cost reductions we made in fiscal 2009 are permanent, we expect up to $40 million of fiscal 2009 pretax savings to be non-recurring and will impact fiscal 2010 starting in the first quarter. We also expect capital expenditures in fiscal 2010 of approximately $25 million, with depreciation and amortization consistent with fiscal 2009 levels.”

A Webcast regarding fiscal 2009 results will be available at www.investor.bradycorp.com beginning at 9:30 a.m. Central Daylight Time today.

Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Its products include high-performance labels and signs, safety devices, printing systems and software, and precision die-cut materials. Founded in 1914, the company has more than 500,000 customers in electronics, telecommunications, manufacturing, electrical, construction, education, medical and a variety of other industries. Brady is headquartered in Milwaukee and employs approximately 7,000 people at operations in the Americas, Europe and Asia/Pacific. More information is available on the Internet at www.bradycorp.com.

Brady believes that certain statements in this news release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements related to future, not past, events included in this news release, including, without limitation, statements regarding Brady's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations are forward-looking statements. When used in this news release, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements by their nature address matters that are, to different degrees, uncertain and are subject to risks, assumptions and other factors, some of which are beyond Brady's control, that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For Brady, uncertainties arise from the length or severity of the current worldwide economic downturn or timing or strength of a subsequent recovery; future financial performance of major markets Brady serves, which include, without limitation, telecommunications, manufacturing, electrical, construction, laboratory, education, governmental, public utility, computer, transportation; difficulties in making and integrating acquisitions; risks associated with newly acquired businesses; Brady's ability to retain significant contracts and customers; future competition; Brady's ability to develop and successfully market new products; changes in the supply of, or price for, parts and components; increased price pressure from suppliers and customers; interruptions to sources of supply; environmental, health and safety compliance costs and liabilities; Brady's ability to realize cost savings from operating initiatives; Brady's ability to attract and retain key talent; difficulties associated with exports; risks associated with international operations; fluctuations in currency rates versus the US dollar; technology changes; potential write-offs of Brady's substantial intangible assets;Brady’s ability to maintain its debt covenants; unforeseen tax consequences; risks associated with obtaining governmental approvals and maintaining regulatory compliance for new and existing products; business interruptions due to implementing business systems; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature contained from time to time in Brady's U.S. Securities and Exchange Commission filings, including, but not limited to, those factors listed in the "Risk Factors" section located in Item 1A of Part I of Brady's Annual Report on Form 10-K for the period ended July 31, 2008, as updated by subsequently filed reports. These uncertainties may cause Brady's actual future results to be materially different than those expressed in its forward-looking statements. Brady does not undertake to update its forward-looking statements.

Campbell Soup profit falls 22 percent

CAMDEN, N.J. (AP) -- The Campbell Soup Co. says its fourth-quarter profit declined 22 percent. But excluding one-time items, profit was up 11 percent.

The company says its profit was hurt by the exchange rate and helped by higher retail prices.

The company reported Friday that it earned $69 million, or 20 cents per share, for the three months ended Aug. 2. That's down from $89 million, or 24 cents per share, in the same period a year ago.

Excluding one-time items such as commodity hedging and a charge related to European trademarks, profit was $107 million, or 30 cents a share. Analysts expected 26 cents per share.

Sales for the quarter were $1.53 billion, down from $1.7 billion in the year-ago period.

FedEx First Quarter Earnings to Exceed Guidance

MEMPHIS, Tenn.--(BUSINESS WIRE)--FedEx Corporation (NYSE: FDX - News) today announced that it expects to report earnings of $0.58 per diluted share for the first quarter ended August 31, down 53% from $1.23 per diluted share a year ago. The company’s guidance for the quarter was $0.30 to $0.45 per diluted share.

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Symbol	Price	Change
FDX	72.66	0.00

FedEx expects earnings to be $0.65 to $0.95 per diluted share in the second quarter, which reflects the current outlook for fuel prices and a continued modest recovery in the global economy. A substantial decline is expected from $1.58 per diluted share a year ago, as the company significantly benefited from rapidly declining fuel prices and the timing lag that exists between when fuel prices change and when indexed fuel surcharges automatically adjust.

“FedEx first quarter financial performance exceeded our guidance thanks to better-than-expected FedEx International Priority^®volume, strict cost management and solid execution of our strategy,” said Alan B. Graf, Jr., FedEx Corp. chief financial officer. “Despite some encouraging signs in the global economy, it is difficult to predict the timing and pace of any economic recovery. Revenue per shipment declined year over year in each of our transportation segments, as fuel surcharges declined significantly and we continue to face a very competitive pricing environment combined with significant overcapacity in the LTL freight market.”

FedEx will release the details of its first quarter earnings on September 17, 2009.

Corporate Overview

FedEx Corp. (NYSE: FDX - News) provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. With annual revenues of $35 billion, the company offers integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 280,000 team members to remain "absolutely, positively" focused on safety, the highest ethical and professional standards and the needs of their customers and communities. For more information, visit news.fedex.com.

Certain statements in this press release may be considered forward-looking statements, such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the global markets in which we operate, legal challenges or changes related to FedEx Ground’s owner-operators, new U.S. domestic or international government regulation, the impact from any terrorist activities or international conflicts, our ability to effectively operate, integrate and leverage acquired businesses, changes in fuel prices and currency exchange rates, our ability to match capacity to shifting volume levels and other factors which can be found in FedEx Corp.'s and its subsidiaries' press releases and filings with the SEC.

Ex-Ireland envoy, EMC chairman Egan dies in Boston

Richard Egan, former ambassador to Ireland, EMC data storage firm co-founder, dies in Boston

BOSTON (AP) -- Richard Egan, who rose from street kid to the U.S. ambassador to Ireland after making millions of dollars founding data storage giant EMC Corp., died Friday after a battle with lung cancer.

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Symbol	Price	Change
EMC	16.13	+0.09

His family issued a statement Friday night saying the longtime suburban Hopkinton resident died at his Boston home after being diagnosed with Stage IV lung cancer in May. The family said he also suffered from emphysema, diabetes and high blood pressure.

"This is a great loss for our family, and we are terribly saddened," the family said in a statement announcing his death.

Egan, 73, was an electrical engineer and a former U.S. Marine Corps helicopter pilot who worked at Lockheed Martin, Honeywell and Intel before he co-founded data storage technology provider EMC in 1979. He sold most of his shares in the tech boom, shortly before the bubble burst.

The self-made billionaire, who raised seed money for his business by selling office furniture, was a key fundraiser for the Republican party and former President George W. Bush, becoming a Pioneer fundraiser for the president in 2000.

He stepped down as EMC chairman in January 2001, about three months before Bush nominated him to be the U.S. ambassador to Ireland.

Former Gov. Paul Cellucci mourned Egan late Friday, describing him as a good friend who served his country with honor and distinction as ambassador.

"More importantly, he was one of the finest and most entrepreneurial business leaders our state has seen for some time, creating tens of thousands of jobs and helping lead the commonwealth's economic recovery in the mid-1990s," the Republican said. "Dick was a good friend to me, and I will always appreciate his support and miss him."

EMC's President, CEO and Chairman Joe Tucci lamented the death of his mentor and friend.

"The world lost a great man and a great leader today. On behalf of more than 40,000 EMC employees from around the world, we extend our deepest condolences to Mrs. Egan and the entire family," Tucci said. "His legacy will live on through the tens of thousands of lives he affected in so many positive ways."

Egan got a bachelor of arts in science degree from Northeastern University and a master of science degree from the Massachusetts Institute of Technology. He was part of the MIT team that developed the Apollo Guidance Computer, which provided reliable real-time control for the Apollo spacecraft that carried U.S. astronauts to the moon.

Egan never forgot his hardscrabble roots and was a major donor to Northeastern University, where a research center is named in his honor.

Egan leaves behind a wife and five children.

The family did not announce funeral plans.

For Stocks, September May Be the Cruelest Month

September is fewer than three weeks away. Feeling nervous? Maybe you should be. For investors, the period between Labor Day and Halloween is proving an annual fright show. And no one knows why.

It was, of course, in September last year that Lehman collapsed and everything fell apart. But then it was also September-October 2002 that the last bear market plunged to its lows.

The 1998 financial crisis? It began late August, and rolled on for two months.

The famous crash of 1987 came in October. But most people have forgotten that the market actually started sliding downhill in late August.

That's almost exactly what happened in 1929 too. The big crash came in October, but the market peaked just after Labor Day. Prices began falling through September, then tumbled further still.

The worst month of the Depression? September, 1931, when the Dow fell about 30 percent.

It was also in September, 2000, that the bear market really got going.

The 9/11 crisis, of course, came in September. That was hardly caused by investors. But what is forgotten is that the stock market was already looking wobbly. In the two weeks before the terrorist attacks, the Standard & Poor's 500-stock index fell 7 percent.

The great panic of 1907? October. The great crash of 1873? September.

Yikes.

So is there really a September, or a Halloween, effect?

Since 1926, investors have lost nearly one percent on average during September, according to market data tracked by finance professor Kenneth French at Dartmouth's Tuck School of Business. It's the only month with a negative average return.. For each of the other 11 months, investors gained nearly one percent on average.

Other research takes the idea of an autumn dip even further. Georgia Tech doctoral student Hyung-Suk Choi studied the so-called "September effect" as part of his recent Ph.D. thesis. He looked at data for 18 developed stock markets around the world spanning up to 200 years, and found that in 15 of those markets, September brought red ink for investors.

Fund manager Sven Bouman and finance professor Ben Jacobsen concluded that investors in most world markets have historically fared poorly from May through October each year. They made their money between November and April.

Hence the old British investors' saying, "sell in May and go away, don't come back till St Leger Day." (But since St. Leger Day is in the middle of September, even that date may be premature.)

Some of the September or Halloween effect is caused by a few really bad years. But that's not the whole story. To reduce the influence of outliers I looked instead at the median result since 1926 instead of the statistical mean. The performance gap between September and the other months shrank from 2 percent to 1.4 percent. That's smaller, but it's still a difference. The median September saw losses of just 0.07 percent. But the median month for the rest of the year gained 1.37 percent.

As for the causes of a possible September effect, most are stumped.

"There haven't been any good academic stories to explain it," admits Michael Cooper, finance professor at the University of Utah's David Eccles School of Business. "One credible explanation is just luck."

It's been suggested that mutual funds drive down the market by selling their losing stocks before their October 31 year end. Or that third quarter profit warnings come in early September, raising fears about full-year results. Or that these autumn crashes used to be related to the harvest, as Midwestern banks withdrew capital from New York.

(Still another theory cites seasonal affective disorder. Investors simply get more risk-averse, and more prone to sell, as the days get shorter. That's the case argued by York University finance professor Mark Kamstra and others.

So what, if anything, should you do?

In practical terms, maybe not that much. For most people, even a performance difference of one or two percentage points isn't going to cover the transaction costs of selling before the end of August and re-entering the market a month later. And stock market patterns aren't ironclad. The market may even jump in September, as it did in 2006 and 2007.

Perhaps the best you can do is brace for turmoil.

Stocks drop as investors worry about consumers

Stocks retreat after 2 days of gains as investors worry consumers will hurt economy's recovery

NEW YORK (AP) -- The fear on Wall Street is that nervous consumers are going to short-circuit the economic recovery.

Stocks fell sharply Friday, taking the major indexes down about 1 percent, after investors were disappointed by reports that the Reuters/University of Michigan index of consumer sentiment fell significantly short of expectations for the first part of August. That's a sign consumers may well keep cutting back their spending as they worry about losing their jobs. Consumer spending is crucial for the economy to emerge from recession as it accounts for two-thirds of all U.S. economic activity.

The discouraging reading came a day after the Commerce Department reported an unexpected decline in retail sales. Investors were able to shake that off, but Friday's consumer sentiment number had them bailing out of stocks, jeopardizing a summer rally that had lifted the Standard & Poor's 500 index more than 15 percent in about a month. Still, the indexes finished well off their lows of the day, a sign that the mood on Wall Street isn't all that grim, and light volume likely skewed price changes.

Investors also sold off oil and other commodities and moved their money into the relative safety of the dollar and government bonds. Treasury prices jumped, sending their yields lower, while the dollar rose against other major currencies.

After rallying for months on expectations of an economic recovery, investors are worried that they have been too optimistic, given consumers' continuing reluctance to spend. Analysts are predicting that the market may be rocky for some time.

"Valuations were beginning to price in a sunnier a future, but not all the data is sunny yet," said Lawrence Creatura, portfolio manager at Federated Clover Capital Advisors, referring to stock prices. "There is still going to be a tug of war between good news and bad news as we move through the coming months."

The Dow Jones industrial average fell 76.79, or 0.8 percent, to 9,321.40 after falling as much as 165 points after the consumer sentiment survey was released.

The S&P 500 index fell 8.64, or 0.9 percent, to 1,004.09, while the Nasdaq composite index fell 23.83, or 1.2 percent, to 1,985.52.

The drop erased much of the market's advance of the last two days, and gave the big indexes their first losing week after four weeks of gains. The Dow was down 0.5 percent for the week, while the S&P 500 index fell 0.6 percent and the Nasdaq was off 0.7 percent.

About five stocks fell for every two that rose Friday on the New York Stock Exchange, where consolidated volume came to a light 5 billion shares, down from 5.3 billion a day earlier. Light volume can exaggerate the market's movements.

In other trading, the Russell 2000 index of smaller companies fell 11.29, or 2 percent, to 563.90.

Bond prices rose sharply. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.57 percent from 3.62 percent late Thursday. The drop in the 10-year yield is good news for consumers because it is closely tied to interest rates on mortgages and other loans.

On the New York Mercantile Exchange, gold and other metals prices fell, while oil prices sank $3.01 to $67.51 a barrel.

Stocks have had a difficult few days, falling in the early part of the week amid anxiety over what the Federal Reserve would say about the economy at the end of a two-day policy meeting. The market turned higher on Wednesday after the Fed reassured investors with a more positive stance on the economy than in the past. The market's gains spilled over into Thursday.

"This week was a great example of what will likely occur for the rest of the year," said Greg Reynholds, a vice president at Lenox Advisors. "Day by day, week by week, month by month we're going to have to try to find direction through this data jungle."

Investors have sent markets higher this summer encouraged by improvements in housing, manufacturing and corporate profits. But without the support of the consumer, the economy's recovery is in question.

"I think you're going to need to see a material stabilization in labor markets before you get meaningful and stable consumer confidence," said Stephen Wood, chief market strategist at Russell Investments. "And we're certainly not adding jobs and we're not even at a point where jobs are no longer being lost."

Stocks fell across the board Friday, with the biggest losses among financial, energy and material companies -- industries that posted some of the biggest gains in recent days. Losses weren't as steep in more defensive areas like consumer staples and utilities, which tend to hold up better when the economy is weak.

In other economic news Friday, the Labor Department said the Consumer Price Index was flat in July after a slight increase in June. That had little effect on stocks but did help bond prices. Wall Street also shrugged off a report showing a bigger-than-expected increase in industrial production as investors have come to expect an improvement in manufacturing.

Overseas, Asian markets were mostly higher, with Japan's main index hitting a ten-month high amid mounting optimism about a global economic recovery. The Nikkei stock average rose 0.8 percent.

European markets gave up early gains and finished lower. Britain's FTSE 100 dropped 0.9 percent, Germany's DAX index fell 1.7 percent, and France's CAC-40 lost 0.8 percent.

The Dow Jones industrial average closed the week down 48.67, or 0.5 percent, at 9,321.40. The Standard & Poor's 500 index fell 6.39, or 0.6 percent, to 1,004.09. The Nasdaq composite index fell 14.73, or 0.7 percent, to 1,985.52.

The Russell 2000 index, which tracks the performance of small company stocks, fell 8.50, or 1.5 percent, for the week to 563.90.

The Dow Jones U.S. Total Stock Market Index -- which measures nearly all U.S.-based companies -- ended at 10,240.52, down 175.74, or 1.7 percent, for the week. A year ago, the index was at 13,271.88.

U.S. Employers Grow More Optimistic

Major U.S. employers are growing more optimistic, with few planning additional layoffs and many planning to reverse course in coming months on cost-cutting initiatives such as salary freezes, according to a new survey. But recent cuts in health-care benefits may become permanent.

The survey of human-resource executives at 175 mostly midsize and large U.S. firms by consulting firm Watson Wyatt Worldwide Inc. found that 33% plan to unfreeze salaries within the next six months and 79% within the next year. In a similar June survey, only 17% of respondents planned to unfreeze salaries within six months. Roughly 60% of the companies responding to the new survey had frozen salaries.

Of the smaller group that cut salaries, 44% of respondents said they plan to restore those cuts in the next six months, and 66% in the next year. More than 70% of the employers with hiring freezes said they plan to resume hiring within the next year. Respondents said they plan to lay off fewer than 2% of their workers in the next year, down sharply from past surveys.

"This is further evidence that companies think the worst is behind them and they're starting to look forward again," says Laura Sejen, global practice director strategic awards at Watson Wyatt. "What we don't know is have they made firm commitments at the management level or have they communicated to employees they're going to unwind these programs. It could certainly change."

The survey, conducted online earlier this month, is in line with recent reports of slowing job losses. The U.S. Labor Department said Friday that employers eliminated 247,000 jobs in July, down from an average of 556,000 in the first six months of the year. The unemployment rate fell slightly to 9.4%, from 9.5%, though economists said that largely reflected a drop in the number of people looking for work.

The Watson Wyatt survey found employers will be slower to restore changes in benefit programs -- and many recent changes to health-care plans may become permanent. Roughly two-thirds of respondents that had increased employee health-care costs say they don't plan to reverse those increases. Forty-one percent of respondents increased deductibles, co-pays or out-of-pocket maximums, while 40% increased the percentage of premiums that employees pay. These changes are" looking more permanent," says Ms. Sejen.

The news for retirement programs was more mixed. Nearly half of respondents said they plan to restore cuts in company contributions to retirement programs in the next year, and 64% envision restoring those cuts within 18 months. Of those, 67% said they will restore contributions to their prior level, but 21% will vary contributions based on corporate profits.

Many employers see the recession as bottoming out, adds David Wise, a senior consultant at consulting firm Hay Group Inc. "Most companies want to go into fiscal 2010 with the layoffs and salary freezes behind them," he says. But he warns that companies will remain conservative. "The worst thing a company can do after tough times is loosen the reins before the horse is ready to run," he says.