American Airlines to hire 2,500 pilots

American Airlines pilots protesting the concession contract being imposed on them in September. Despite the ongoing contract dispute, the airline says it will hire 2,500 pilots over the next five years.

NEW YORK (CNNMoney) -- The iconic, but troubled, American Airlines says it intends to hire 2,500 pilots over the next five years.

The airline's parent AMR (AAMRQ, Fortune 500) filed for bankruptcy protection in November, and has been locked in a contentious battle with its pilots union over its efforts to cut labor costs.

In a letter to employees Wednesday, CEO Tom Horton said American Airlines will hire new pilots to staff new international and domestic routes. Company spokesman Bruce Hicks said about 1,500 of the new hires would replace retiring pilots, or jobs that open up due to attrition. American has about 7,500 active pilots today.

"The new American will be doing even more international flying, providing greater opportunities for career advancement and increased income for our people," Horton said in the letter.

The airline unveiled plans Wednesday to add new flights from Dallas/Fort Worth to Seoul, South Korea and Lima, Peru; from Chicago to Dusseldorf, Germany; and from JFK airport in New York to Dublin, Ireland. It also said it would increase domestic service from its hubs in Chicago and Dallas.

Tom Hoban, spokesman for the Allied Pilots Association, said the union is skeptical about Horton's statement.

"We once had over 13,000 pilots," he said. "It's been the incredible shrinking airline ... unless they ink it in the contract, it doesn't have a lot of credibility with the pilots."

American had previously announced it would hire about 1,500 flight attendants starting later this year to replace the 2,200 flight attendants who took a $40,000 buyout package.

Related: World's longest flight being grounded

AMR has been struggling with losses from high labor and fuel costs. The company said it filed for bankruptcy to remain competitive with key rivals like Delta Air Lines (DAL, Fortune 500), United Continental (UAL, Fortune 500) and US Airways (LCC, Fortune 500), all of which had have undergone bankruptcy restructuring.

AMR had said it needed to make deep cuts in staffing and reduce related labor costs to emerge from bankruptcy. The airline's ground workers and flight attendants have worked out deals with the company.

But members of the Allied Pilots Association in August rejected a deal, which included having more flights flown by partner airlines, longer work hours and a possible end to the union's pension plan.

Last month, the company's management won an approval in bankruptcy court to impose terms of that unpopular deal on pilots. But American says pilots began calling in sick and filing frivolous maintenance reports that caused flight cancellations and delays to soar, chasing away some of its key business customers.

Related: Maximize your frequent flier miles

Management and the union have since returned to the bargaining table. The pilots union reported to its members Tuesday that progress is being made on a new labor deal.

-- CNN's Joe Sutton contributed to this report

First Published: October 25, 2012: 11:08 AM ET

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Amazon: Buying growth at a price

Amazon's Kindle Fire is sold virtually at cost.

(Money Magazine) -- Ever since it was founded in 1994, Amazon.com has been all about transformation.

The Seattle-based online retailer started off by reinventing the way books were sold. Then it redefined itself by hawking everything from furniture to electronics -- in the process challenging giant retailers such as Wal-Mart head-on.

More recently, the company doubled down on its dotcom roots through tablets, streaming video, and cloud computing. Transformation, though, comes at a steep price.

Can Amazon (AMZN, Fortune 500) afford to keep being so daring?

Tech 2.0

Amazon is re-embracing its inner nerd. The company struck a blow against Netflix by signing an agreement with Epix, giving Amazon Prime subscribers access to thousands of additional streaming videos.

EC2, the firm's cloud-computing unit, leads Google and Microsoft in market share. And with the Kindle Fire, which controls 22% of the U.S. tablet market, Amazon is taking direct aim at the iPad and Apple's iTunes platform.

Related: Contrarian fund bets on Europe - and wins big

The stock is already reaping benefits -- investors are valuing it like an Internet startup circa 1999.

Morningstar analyst R.J. Hottovy says, "Amazon's P/E shouldn't scare investors off because its profitability is still being sacrificed for investments in rapid expansion." Of course, you've probably heard that one before.

Reinventing retail

The e-tailer, which accounts for almost 2% of retail industry sales, is growing rapidly and poses a threat to traditional big-box stores. To keep up with the company's expansion, Amazon is building 18 new fulfillment centers, which will further speed up delivery times.

"Amazon is already testing out pilot programs in certain cities which would allow for same-day delivery service," says Wells Fargo analyst Matt Nemer. "If successful, the online behemoth could pose an even greater threat to brick-and-mortar stores."

The threat could be slightly muted, though, by new laws forcing Amazon to collect sales tax on behalf of states where it previously hadn't, shrinking the online seller's price advantage.

Big sales, little profits

While revenues are thriving, reaching $48 billion last year, profits have seen better days, as the company is in spending mode.

Amazon recently paid $775 million for Kiva Systems, makers of warehouse robots. That followed last year's acquisition of U.K.- based LOVEFiLM to help compete against Netflix (NFLX) globally.

And in an effort to gain market share, Amazon's new Kindle Fire 2 will be sold virtually at cost.

"Amazon isn't trying to make money on hardware," says Morningstar's Hottovy. "It's using devices to lure consumers into spending more on e-books, digital content, and Prime subscriptions."

The strategy is a gamble: Wal-Mart (WMT, Fortune 500) and Target (TGT, Fortune 500) have stopped selling Kindles for competitive reasons, potentially slowing Amazon's plans.

Send your questions about investing to The Help Desk.

First Published: October 25, 2012: 6:15 AM ET

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Higher yields on savings? It will be awhile

The Federal Reserve is targeting unemployment.

(Money Magazine) -- Waiting for higher yields on savings? Don't hold your breath.

The Federal Reserve said in September it would buy $40 billion of mortgage-backed securities a month until the labor market rebounds. The goal: to free up banks to lend more.

It's the Fed's third attempt since 2008 to use this tactic, called quantitative easing.

Targeting the 8%-plus jobless rate, QE3, as it's known, is likely to hold down mortgage rates which in October hit a 60-year low of 3.36%.

The Fed also plans to keep short-term rates near zero through mid-2015, so get used to current savings yields (recently averaging 0.12%).

And if you're looking to beef up bond fund income, Morningstar Investment Management economist Francisco Torralba suggests short-term corporates, which yield about 2% today. Though the risk of inflation is low, he says, a spike would hit higher-yielding long-term bonds harder.

Related: Bond investing basics

First Published: October 25, 2012: 6:02 AM ET

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Olympics help lift UK out of recession

The UK's service industry, which accounts for over 75% of GDP, registered growth of 1.3% in the quarter.

LONDON (CNNMoney) -- Britain emerged from recession in the third quarter, recording stronger than expected growth of 1% as the London Olympics gave a boost to activity in the service sector.

Economists were anticipating gross domestic product growth in the United Kingdom of around 0.6%, which would have represented a flat underlying performance after the impact of the Olympics and an extra working day are stripped out of the quarterly numbers.

Previously, UK GDP fell by 0.4% in the second quarter, the third consecutive quarter of contraction in the country's first double-dip recession since the 1970s.

Thursday's figures are the first estimate of growth in the July to September period. They suggest Europe's third biggest economy registered its strongest quarterly growth for five years.

The Office for National Statistics (ONS) said the figures were affected by the 2012 Olympic and Paralympic Games, but cautioned that the full impact could not be estimated at this point.

"In particular, sales of Olympic tickets increased GDP growth in the quarter by 0.2 percentage points and there may have been other effects, which are impossible to quantify," the ONS said in a statement.

Related: Do the Olympics cost too much for host cities

The country's service industry, which accounts for over 75% of GDP, registered growth of 1.3% in the quarter. The industry rebounded from a fall of 0.1% in the second quarter, and more than made up for another decline in construction activity.

Finance minister George Osborne said the economy was on the mend. "There is still a long way to go, but these figures show we are on the right track," he said.

But a gloomier outlook for the eurozone, a slowdown in China and the looming fiscal cliff in the U.S., make for an uncertain period ahead.

Related: Europe's manufacturing gets weaker

The Bank of England meets in two weeks to decide whether to increase its quantitative easing program beyond the 375 billion pounds already committed.

Central bank governor Mervyn King said earlier this week that the UK recovery was "slow and uncertain".

The GDP figures were released amid a political row over whether Prime Minister David Cameron had hinted at the positive data during an exchange in parliament.

A small group of senior politicians and officials are shown the data in advance, under strict conditions that they are not disclosed.

Cameron told parliament Wednesday that good news about the economy "will keep coming".

The UK Statistics Authority, which oversees the ONS, said it was looking into the remarks.

A spokesperson for Cameron's office told CNN: "The Prime Minister was referring to the statistics that he had raised earlier in the debate, and not the GDP figures."

First Published: October 25, 2012: 6:12 AM ET

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Fewer Americans file for unemployment benefits

Job seekers pick up applications at a career fair in Los Angeles.

NEW YORK (CNNMoney) -- First-time claims for unemployment benefits fell last week, but the broader trend remains choppy, making it difficult to get a clear reading on the job market in October.

About 369,000 people filed for first-time unemployment benefits in the week ended October 20, down 23,000 from the previous week, the Labor Department said Thursday.

The initial claims number has bounced around for the last five weeks, pointing to little improvement in the job market since September.

The four-week moving average, which smooths out some of the volatility, has risen for the last two weeks but overall, the story there has largely remained the same since July. Initial claims are stuck in a range that seems to point to job growth around 150,000 each month -- just enough to keep up with population growth, but not strong enough to point to robust improvement in the economy.

Related: Check the unemployment rate in your state

About 3.3 million Americans continued to file for their second week of unemployment benefits in the week ended October 13, the most recent data available.

First Published: October 25, 2012: 8:50 AM ET

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Stock headed for positive open

Click for more market data.

NEW YORK (CNNMoney) -- U.S. stock futures were higher Thursday, as investors sorted through the latest corporate results and economic data.

Dow component Procter & Gamble (PG, Fortune 500) reported mixed quarterly results, but maintained its outlook for the full year. Rival consumer products maker Colgate (CL, Fortune 500) said earnings rose in the past quarter, even as sales declined. Colgate also announced a restructuring plan that includes cutting its workforce by 6% over the next four years.

Unilever (UL), another consumer name, reported solid third-quarter results as growth in emerging markets offset weakness in developed economies.

ConocoPhillips (COP, Fortune 500) said earnings fell 31% in the third quarter as oil prices sank.

Sprint (S, Fortune 500) reported a net loss in the third quarter that widened from the same period last year. Tech giants Apple (AAPL, Fortune 500) and Amazon (AMZN, Fortune 500) will report after the bell.

On the economic front, the government said initial jobless claims fell to 369,000 in the week ended October 20, down from 392,000 in the previous week. Economists had expected claims to fall to 375,000, according to a survey of analysts by Briefing.com.

The Census Bureau said new orders for durable goods rose 9.9% in September, up for the fifth month in a row. Durable goods orders were expected to have increased by 8%.

U.S. stocks closed slightly lower Wednesday, after trading in a narrow range for most of the day.

Fear & Greed Index

In Europe, the UK government reported that the gross domestic product grew 1% in the third quarter, lifting the nation's economy out of recession.

European markets were higher in morning trading. Britain's FTSE 100 rose 0.3%, the DAX in Germany added 0.5% and France's CAC 40 rose 0.5%.

Meanwhile, Asian markets ended mixed. The Shanghai Composite lost 0.7%, while the Hang Seng in Hong Kong gained 0.2%. The Nikkei jumped 1.1% on hopes the Bank of Japan will ease monetary policy when it meets next week.

Related: 5 hot emerging market blue chips

Companies: Zynga (ZNGA) shares surged 18% in premarket trading, after the social gaming firm reported sales on Wednesday that topped forecasts. Zynga also announced a partnership with bwin.party, an international gaming operator that will enable real money casino games like poker, slots and roulette in the UK.

Shares of F5 Networks (FFIV) sank 11% ahead of the bell, after the network technology firm reported quarterly earnings Wednesday that missed expectations.

Meanwhile, online security firm Symantec (SYMC, Fortune 500) jumped 10% in premarket trading, after offering strong guidance for the current quarter.

Currencies and commodities: The dollar fell against the euro and the British pound, but gained against the Japanese yen.

Oil for December delivery rose 75 cents to $86.47 a barrel.

Gold futures for December delivery rose $15.60 to $1,717.40 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.843% from 1.78% late Wednesday.

First Published: October 25, 2012: 6:10 AM ET

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Microsoft is risking an $18 billion empire on Windows 8

NEW YORK (CNNMoney) -- Windows has been Microsoft's most reliable cash cow for nearly three decades. The software giant is gambling all of that success on what it deems to be the company's future: a radically redesigned Windows 8.

Windows is the linchpin of Microsoft's empire. Without a significant design overhaul since 1995, the operating system has been essentially printing money for Microsoft. Last year, Windows brought in more than $18 billion in sales and $11.5 billion in profit. On its own, Windows would be big enough to place among the largest 150 U.S. companies by revenue, and its 62% profit margin would rank among the highest in the world.

But the Windows money tree is beginning to wilt. PC sales are slumping. Windows revenue has fallen for two straight years, and Microsoft is missing out on a rapidly growing tablet market that has begun to eat away at traditional computer demand. Just a few years ago, Windows ran about 90% of the world's Internet-connected computing devices, according to Net Applications. Now, with the rise of smartphones and tablets, Microsoft's share has fallen to about two-thirds.

Apple (AAPL, Fortune 500) alone has sold more than 100 million iPads in just two and a half years. At an event held Tuesday unveiling a new line of iPads, Apple CEO Tim Cook noted that his company shipped more iPads in the second quarter of 2012 than any single PC manufacturer shipped PCs.

"This has gotten a lot of attention," Cook quipped.

It sure has. Microsoft had two choices: Do something radically different to win the future or risk a slow death by cleaving to its past.

Microsoft picked the first option and created Windows 8. The touch-based operating system works both as a desktop PC and a tablet platform, and it's not hard to imagine Windows 8 running on a dizzying array of other devices, including table tops, wall screens, kitchen monitors and whatever new touchscreen gadgets we will be using in the future.

"This is an absolutely critical product," said Bill Gates, Microsoft's chairman, on a company video blog. "It's key to where personal computing is going."

Perhaps Microsoft's most radical change is opening up the Windows platform to devices powered by ARM-based processors. About 95% of tablets, smartphones and other mobile devices run on microchips designed by ARM (ARMH). With Windows RT, the ARM-compatible cousin to the Intel-based Windows 8, Microsoft gains access to a whole new array of mobile devices.

Windows 8 is Microsoft's attempt to set the tone of the next several years. Consumer acceptance is the big question mark.

Industry analysts think users will be startled and confused by the new software's starkly different look. Gestures, tiles, charms and tickles replace many of the functions from the familiar Start menu -- which is nowhere to be found in Windows 8. The operating system isn't difficult to use, but it's got a learning curve.

"Microsoft is making appropriate, significant changes to Windows, but it's going to be challenging for customers to embrace it wholeheartedly," said Frank Gillett, an analyst at Forrester Research.

As different as Windows 8 looks compared to its predecessors, its guts got an even more severe overhaul. Windows 8 now supports a new kind of tablet-like application software, and the only place users can get those apps will be the Windows Store.

That's the wave of the future, embraced early by Apple and Google and long ignored by Microsoft -- until now.

"Microsoft is responding to competitive pressures that have made it rethink not only how its products should look, but also how they should be architected," said Michael Silver, analyst at Gartner. "Fundamentally, the application model that worked well on the PC for so long needs to be changed for new classes of devices and new types of usage models."

It could be a lucrative change. Apple and Google each take a 30% cut off the top for each app sold on their devices. Microsoft currently makes zilch. If Adobe (ADBE) opts to release a Photoshop app for Windows 8 through the Windows Store, Microsoft would take home a percentage of those lucrative sales.

Microsoft's financial success with Windows going forward might well be measured in apps, as much or more than traditional operating system sales. That's a radical break from how the company has operated for decades.

Here's the catch: If Windows app development doesn't skyrocket, Microsoft's master plan is at risk.

"Microsoft will fail if it cannot convince developers to adopt Windows for future development quickly, especially for consumer applications," Silver said. "Microsoft is already late. It doesn't have a few more years."

First Published: October 25, 2012: 5:40 AM ET

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Earnings keep stocks 'stuck in a rut'

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NEW YORK (CNNMoney) -- U.S. stocks were mixed in midday trading Thursday as investors focused on solid economic data but mixed corporate results.

The Dow Jones Industrial Average edged down 0.1%. The S&P 500 and Nasdaq both gained 0.1%.

Procter & Gamble (PG, Fortune 500) was the biggest gainer on the Dow after it reported mixed quarterly results, but maintained its outlook for the full year. Rival consumer products maker Colgate (CL, Fortune 500) said sales fell in the most recent quarter and announced a restructuring plan that includes cutting its workforce by 6% over the next four years. Shares fell 3% in midday trading.

Unilever (UL), another consumer name, reported solid third-quarter results as growth in emerging markets offset weakness in developed economies.

ConocoPhillips (COP, Fortune 500) said earnings fell 31% in the third quarter as oil prices sank.

Sprint (S, Fortune 500) reported a net loss in the third quarter that widened from the same period last year. Tech giants Apple (AAPL, Fortune 500) and Amazon (AMZN, Fortune 500) will report after the bell.

Related: Fear & Greed Index dips back into fear

Earnings expectations were low, but the third quarter is still shaping up to be a disappointment, said David Levy, a portfolio manager at Kenjol Capital Management in Austin, TX.

"Overall, earnings are the main reason the market has been stuck in a rut for the last ten days," said Levy.

At the same time, the market has been stymied by uncertainty ahead of the U.S. presidential election and concerns about the economic time bomb known as the fiscal cliff.

But Thursday's economic reports offered a silver lining. The government said first-time claims for unemployment benefits fell more than expected last week, to 369,000. Reports on durable goods and pending home sales in September also came in above expectations.

Investors have also been encouraged by signs of progress in Europe, where officials are expected to push ahead with plans to give Greece more time to meet its budget goals, said David Lutz, head ETF trader at Stifel Nicolaus in St. Louis.

"Some of the stress is coming off in the eurozone," said Lutz, adding that stocks are also benefiting from a rotation of money out of U.S. Treasuries.

Related: 5 hot emerging market blue chips

The UK government reported that the gross domestic product grew 1% in the third quarter, lifting the nation's economy out of recession.

European markets were mixed in afternoon trading. Britain's FTSE 100 rose 0.1% and the DAX in Germany added 0.4%. France's CAC 40 fell 0.3%.

Meanwhile, Asian markets ended mixed. The Shanghai Composite lost 0.7%, while the Hang Seng in Hong Kong gained 0.2%. The Nikkei jumped 1.1% on hopes the Bank of Japan will ease monetary policy when it meets next week.

Companies: Zynga (ZNGA) shares surged after the social gaming firm reported sales on Wednesday that topped forecasts. Zynga also announced a partnership with bwin.party, an international gaming operator that will enable real money casino games like poker, slots and roulette in the UK.

Shares of F5 Networks (FFIV) sank after the network technology firm reported quarterly earnings Wednesday that missed expectations.

Meanwhile, online security firm Symantec (SYMC, Fortune 500) jumped after offering strong guidance for the current quarter.

Shares of BestBuy (BBY, Fortune 500) fell after the retailer on Wednesday warned that third-quarter sales would be weaker than expected, and announced a management shakeup.

Currencies and commodities: The dollar fell against the euro and the British pound, but gained against the Japanese yen.

Oil for December delivery rose 1 cent to $85.75 a barrel.

Gold futures for December delivery rose $14.30 to $1,716 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, pushing the yield up to 1.85% from 1.78% late Wednesday.

First Published: October 25, 2012: 9:42 AM ET

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Ford closing two more European plants

The Ford plant in Southampton, England, one of two plants in the country that the company plans to close.

NEW YORK (CNNMoney) -- Ford Motor announced plans Thursday to close two plants in England in an effort to stem losses that it warned could top $1 billion in the second half of this year.

The two plants slated to close next year are Ford's assembly plant in Southampton and its stamping and tooling operations in Dagenham, a suburb of London. Together, they employ about 1,400 workers.

On Wednesday, Ford announced it would close an assembly line in Genk, Belgium, by 2014. That plant has 4,300 employees. The company previously announced plans to cut an additional 500 white collar jobs across the Continent.

Ford said it expects to eventually save between $450 million and $500 million a year from the cost-cutting moves.

Ford and rival General Motors have been reporting strong profits in the United States, but European losses have been mounting. Sales there are at a 20-year low due to high unemployment and recession conditions in many countries, brought about by the European sovereign debt crisis.

Europe also has labor laws that make it expensive and time-consuming to close plants, which has led to significant overcapacity in the auto industry there.

Ford lost $553 million in Europe in the first half of this year, while reporting company-wide net income of $2.4 billion during the same period. The company expects that the plant closures will bring its European operations to profitability by "mid-decade."

Related: European woes hit Detroit

But even with the rising European losses, Ford expects third-quarter earnings per share, excluding special charges, to top second-quarter results. That's a bit better than current forecast from analysts. Ford is set to report results Oct. 30.

Shares of Ford (F, Fortune 500) gained 1.6% in midday trading Thursday. Analysts generally applauded Ford's efforts to address overcapacity in Europe.

"Are Ford's European problems solved? Definitely not," said Adam Jonas, an analyst with Morgan Stanley. "But it's an important start and could set the tone [that] Ford is demonstrating the vision and industrial courage to make tough decisions today that will pay off long term."

Jonas said other automakers in Europe, including GM (GM, Fortune 500), need to be cutting capacity as well.

"The biggest unknown is, can others follow in Ford's footsteps?" he said.

First Published: October 25, 2012: 12:10 PM ET

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Best Buy stock plunges

NEW YORK (CNNMoney) -- Best Buy's stock plummeted, one day after the retailer unveiled a management shakeup and reduced its profit expectations for the third quarter.

Best Buy's (BBY, Fortune 500)stock dropped 10% in Thursday afternoon trading.

The company, which operates 1,400 stores selling electronics goods, warned Wednesday that it expects profits to drop by at least 10% in the third quarter, compared to last year.

Best Buy also expects sales to decline at a similar pace to what it has experienced earlier this year. Its sales fell 5.3% in the first quarter and 3.2% in the second quarter.

The company said Mike Vitelli, head of its U.S. business, will retire at the end of the year and Tim Sheehan, executive vice president of U.S. operations, will leave the company at the end of this month.

Shawn Score has been appointed to lead the U.S. retail stores business. Jude Buckley was promoted to head the mobile phones and tablets unit, known as its connectivity business, which Score led.

Best Buy has struggled in recent years, in the face of competition from online retailers like Amazon (AMZN, Fortune 500) and discount retailers like Wal-Mart Stores (WMT, Fortune 500). The changes come at a tough time for Best Buy as it girds itself for the holiday shopping season.

In August, Best Buy hired former travel executive Hubert Joly as its CEO. The company has gone through months of uncertainty, triggered by the abrupt departure of former CEO Brian Dunn in April after an internal investigation into his relationship with an employee.

First Published: October 25, 2012: 12:26 PM ET

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Stocks mixed in listless trading

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NEW YORK (CNNMoney) -- U.S. stocks were mixed Thursday as investors focused on weekly jobless claims and the latest sign of a slowdown in China.

The Dow Jones industrial average and the S&P 500 were up about 0.1%, while the Nasdaq fell 0.1%.

Shares of Dow component Travelers Cos. (TRV, Fortune 500) jumped after the insurer reported that its income more than doubled in the quarter, beating expectations, thanks to lower losses from natural disasters. Verizon (VZ, Fortune 500) shares rose after the company posted earnings that met expectations. Shares of IBM (IBM, Fortune 500) continued to be under pressure after the blue chip reported a dip in sales late Tuesday.

Beyond earnings, a report on initial jobless claims showed that the number of Americans filing for first-time unemployment benefits jumped by 46,000 to 388,000 last week. That's higher than the 360,000 that economists surveyed by Briefing.com had expected.

Separately, the Philadelphia branch of the Federal Reserve said manufacturing activity improved in the district during October.

"Jobless claims are certainly a factor," said Dan Greenhaus, market strategist at brokerage BTIG in New York. "But the China data dominated the early morning conversation."

Earlier, the Chinese government said economic growth slowed last quarter to its lowest level since early 2009. China's economy rose at a 7.4% rate in the third quarter compared to the previous year, the National Bureau of Statistics said Wednesday. China's economy had grown at a 7.6% rate in the prior quarter.

Asian markets still managed to close higher. The Shanghai Composite climbed 1.2%, the Hang Seng in Hong Kong added 0.5%, and Japan's Nikkei rose 2%.

Related: ETF price wars heat up

Meanwhile, investors will be on the lookout for any news out of a two-day summit of European leaders in Brussels. Leaders are expected to discuss proposed reforms of the banking sector and more integrated budget policies.

European stocks ended higher. Britain's FTSE 100 rose 0.2%, the DAX in Germany added 0.6%, while France's CAC 40 gained 0.6%.

Fear & Greed Index

In the United States, investors have more earnings results to sort through Thursday.

Morgan Stanley (MS, Fortune 500) reported earnings before the opening bell that topped analysts' forecasts, posting earnings per share of 28 cents and revenue of $7.6 billion -- compared to the 24 cents a share and $6.4 billion in revenue that had been expected.

U.S.-listed shares of Nokia (NOK) fell after the Finnish cellphone maker logged its sixth straight quarterly loss.

Asset manager Blackstone (BX) reported strong quarterly results, while earnings from Microsoft (MSFT, Fortune 500) and Google (GOOG, Fortune 500) are due out after the bell.

Overall, S&P Capital IQ projects that third-quarter earnings for the S&P 500 will decline 0.7% from a year ago, the weakest showing in three years.

Shares of Juniper Networks (JNPR) surged after a trade publication reported that it could be taken over by EMC (EMC, Fortune 500).

Related: Facts about oil and gas under Obama

Currencies and commodities: The dollar slipped against the euro and the British pound, but rose against the Japanese yen.

Oil for November delivery fell 38 cents to $91.75 a barrel.

Gold futures for December delivery slid $6.60 to $1,746.50 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 1.82% from 1.81% late Wednesday.

First Published: October 18, 2012: 9:42 AM ET

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Why Facebook should pay you for your personal info

NEW YORK (CNNMoney) -- Facebook knows more about you than any company in history.

The social network's users willingly supply Facebook with deeply personal information, including likes, dislikes, their close associates, politics, religion and relationship status, just to name a few. That means Facebook is sitting on a treasure trove of data -- an advertiser's dream.

Yet the company hasn't been able to turn that potential gold mine into actual gold. Predominately through advertising sales, Facebook (FB) makes just $1.28 per user each quarter, compared to the $7 Google (GOOG, Fortune 500) makes on each of its users. The company's stock is worth half of what it was when it first started trading in May, mainly because of investors' fears that Facebook lacks a clear path to increasing the revenue it makes off of its subscribers -- despite having more than 1 billion of them.

That's why a pair of New York University business school professors are advocating a bold new strategy for Facebook: paying users for the privilege of selling their personal information.

On the surface, it sounds laughably implausible. But it might be just what the company needs to jolt its business -- and its lowly stock price.

Here's the idea: Facebook would pay its users a nominal fee -- say $10 a month -- for the right to send their relevant personal information to advertisers. Companies looking to advertise their products or brands to a specific group of people would pay Facebook for that data and for the ability to directly market to those individuals.

It's a potential win-win-win. With 1 billion users, Facebook could emerge as the world's preeminent market research platform. Advertisers would get near-instant access to information about targeted groups. And Facebook subscribers would get promotions and information about products they're actually interested in -- while getting paid for it.

Facebook could gain more than just a new revenue stream. For a site with a long history of privacy screw-ups, offering subscribers a share of the pie could boost the company's transparency and trustworthiness.

"This way, Facebook's intent becomes clear," said Vasant Dhar, a professor at NYU's Stern School of Business. "If users aren't making a conscious choice about what happens with their data, they end up feeling violated."

Facebook declined to comment for this story.

The idea that companies should pay for their users' data isn't new: The notion of an "information market" has been floated around by academics for nearly two decades. But the concept never took off, mainly because customers switch loyalties frequently and haven't been willing to cough up such personal information.

Facebook solves that problem, Dhar said -- its users don't really have anywhere else to go, and they've proven eager to post their secrets on the social network.

Facebook is also an ideal candidate to put information marketing to the test because its current revenue stream just isn't well-suited for a social network.

The decidedly "old world" Internet moneymaking strategy of sponsored search and product placements has worked well for many companies, including rival Google, whose users tell the company exactly what they are looking for. A search for "Volkswagen" typically offers up a Volkswagen ad on the results page, where the user is much more likely to click on it than they are on a random Volkswagen ad splashed across their Facebook page. On Google, people want information; on Facebook, they want to interact with their friends, not advertisers.

"Facebook's current ad model is at odds with its mission," said Arun Sundararajan, who is also a professor at NYU's Stern School of Business. "People are unhappy about it."

As a result, most advertising on Facebook goes to waste, Sundarajan believes. That's why Facebook ads are far cheaper than those on rivals like Google, Yahoo (YHOO, Fortune 500) and AOL (AOL), according to eMarketer.

But Facebook offers something its rivals can only dream of: precise personal data.

Others target users based on basic information like their age, gender and purchasing habits. Facebook -- with the right analytics -- could know which products and brands are likely to connect with us on an emotional level. It also knows how much influence we hold over our friends, family and other social contacts -- and how much they have over us. It's a sociological experiment on steroids, and its data is potentially far, far more valuable than your search history or a collection of your recent Target (TGT, Fortune 500) receipts.

If Facebook gets too aggressive with using that data, it risks alienating its user base. Letting users opt in to share the profits would go a long way toward winning their support.

"Right now, Facebook is leaving money on the table," Dhar said.

First Published: October 18, 2012: 10:07 AM ET

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The other unemployment rate

NEW YORK (CNNMoney) -- U.S. unemployment fell to 7.8% in September. But that doesn't mean the other 92.2% of adults are working.

The unemployment rate only measures people who have searched for jobs in the last four weeks, while millions of other out-of-work Americans aren't included.

But some economists think there's a better way to measure the health of the job market.

Along with the official unemployment rate, the Department of Labor also calculates something called the employment-population ratio, which measures the percent of the U.S. adult population that has a job.

The rate currently stands at 58.7%. While it jumps around slightly from month to month, it has essentially been stuck there for three years -- close to the lowest level since the 1980s.

That paints a much bleaker picture of the job market than the unemployment rate, which has fallen considerably in the last year.

"The employment-to-population ratio is the best measure of labor market conditions and it currently shows that there has been almost no improvement whatsoever over the past three years," Paul Ashworth, chief North American economist for Capital Economics said in a note to clients.

The ratio is also telling because it means that 41% of working-age Americans are out of a job for one reason or another.

So who are the non-working and why don't they have jobs?

Related: Why the unemployment rate won't keep dropping

About 5% of the adult population is "unemployed" in the technical sense of the word, meaning they don't have jobs but they looked for one in the last four weeks. Another 3% want a job but haven't search for one for at least a month.

That leaves about 82 million people who simply don't want a job. About 60% of them are either over age 65 or under age 25. Presumably, many are retirees or full-time students.

But the rest are in their prime working years, between ages 25 and 65.

Some could be stay-at-home parents, or people who can't work due to health problems. The wealthy day trader who lives off his investments is in this category too. So is the struggling artist or musician who might not want a traditional job.

Ultimately, the measure is really showing just how engaged the American population is in wage-earning jobs, arguably a better gauge of economy than the unemployment rate.

"The ratio expresses more clearly how many people find working to be a 'good or attractive deal,'" said Tyler Cowen, economist and director of the Mercatus Center at George Mason University.

Related: Teaching jobs finally coming back

But while the indicator is clearly more intuitive than the unemployment rate, it's not a perfect measure of the job market either.

Demographic trends can play a role. For example, as women started entering the workforce in greater numbers in the 1960s, the ratio increased rapidly. Gradually, a larger portion of the adult population became officially employed.

On the other hand, the measure can make the job market seem worse if large groups are leaving the work force. For example, the ratio fell from about 63% in 2007 to 59% just two years later. Part of that drop is due to people losing jobs in the financial crisis. Another part is due to Baby Boomers retiring.

One way to avoid retirees clouding the data, is to look at the employment-population ratio for the 25 to 54 age group, says Greg Mankiw, Harvard economist and adviser to Mitt Romney. That number has also shown little improvement over the last three years, and is near its lowest level since the 1980s.

"One should not overstate the differences in the pictures that the various statistics paint," he said. "They all show that the current recovery is meager compared with most previous recoveries."

Another problem with the ratio is that it can be just as politicized as the unemployment rate. Many Republicans cried foul when the unemployment rate unexpectedly dropped two weeks ago. Likewise, the employment-population ratio is also subject to political rhetoric and has been used to blame the incumbent leadership for underlying economic weakness.

"The ratio makes the employment problem look worse, and in that sense is bad for Obama," Cowen said. "A deeper look, however, shows the ratio has been declining for many years, and that its ongoing decline predates Obama and most likely represents longer-run trends about the world of work.

First Published: October 18, 2012: 9:37 AM ET

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Wall Street to Washington: Avoid the fiscal cliff!

CEOs Lloyd Blankfein of Goldman Sachs, Jamie Dimon of JPMorgan Chase and Brian Moynihan of Bank of America urge Washington leaders to avoid the fiscal cliff.

NEW YORK (CNNMoney) -- Several big Wall Street bank CEOs on Thursday urged Congress and President Obama to avoid the "fiscal cliff."

In an urgent letter dated Oct. 18, the Financial Services Forum pressed leaders to "reach a bipartisan deal to avoid" massive tax hikes and across-the-board program cuts that could lead to recession. If Congress doesn't act by Jan. 1, the United States will go over the fiscal cliff, triggering about $1.2 trillion worth of spending cuts over a decade.

"The consequences of inaction -- for stability in global financial markets, for economic growth, for millions of Americans still without work, and for the financial circumstances of American businesses and households -- would be very grave," wrote 16 CEOs who are members of the financial industry trade group.

Business leaders, including those from the Business Roundtable and U.S. Chamber of Commerce have sharpened their call for action over the past few weeks. Last week, JPMorgan Chase (JPM, Fortune 500)'s Jamie Dimon told a forum his bank wasted between $50 million and $100 million last summer as Congress and the White House squabbled over a deal to raise the debt ceiling.

Related: Economy IS improving. Don't mess it up, Congress!

Besides Dimon, signers of the letter included Brian Moynihan of Bank of America (BAC, Fortune 500) and Lloyd Blankfein of Goldman Sachs (GS, Fortune 500). Also signing was Michael Corbat of Citigroup (C, Fortune 500), who was named the bank's CEO just two days earlier.

The financial leaders warned in the letter that the nation's sputtering economy can't withstand the "impact of more gridlock from Washington."

"The solvency, productive capacity, and stability of the United States, as well as its moral authority as a global leader, require that its fiscal challenges be credibly met," the group wrote. "We trust that you will do everything you can to deliver the necessary leadership at this crucial time."

If the fiscal cliff isn't averted, it will lead to job losses in the private sector, which could push unemployment above 9% by the end of 2013, according to the Congressional Budget Office. And one study has suggested some 277,000 federal workers would be laid off.

First Published: October 18, 2012: 9:47 AM ET

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Verizon sold just 651,000 iPhone 5s last month

Long lines for the iPhone 5 didn't result in huge sales. Verizon did just fine anyway in the third quarter.

NEW YORK (CNNMoney) -- Verizon sold 3.1 million iPhones last quarter, only 651,000 of which were the new iPhone 5.

The nation's largest wireless carrier blamed Apple's iPhone 5 supply constraints, not weak demand, for the surprisingly low number of iPhone 5s sold in their first week on store shelves. The highly anticipated smartphone went on sale on Sept. 21, only 10 days before the end of the third quarter, yet Wall Street analysts were still expecting an iPhone 5 sales number almost twice as high as the one Verizon (VZ, Fortune 500) actually reported.

What might be a disappointing number for Apple (AAPL, Fortune 500) turned out to be a blessing for Verizon Wireless, which posted a record profit margin of 50%.

Thanks to its industry-high subsidy of about $400 per iPhone, Apple's smartphone tends to decimate carriers' profit margins, particularly when new iPhones launch. The iPhone can be quite lucrative for carriers in the long run, but the huge rush of subscribers upgrading to the new device tends to have a nasty immediate impact on their bottom lines.

Fran Shammo, Verizon's chief financial officer, said on a conference call with analysts that the company expects a higher volume of iPhone 5 sales in the current quarter, and, accordingly, "some deterioration of margin" over the next three months.

Yet Verizon has worked hard to insulate itself from the giant margin swings of the past. Over the past year, Verizon has instituted a $30 activation fee for new cell phones, ended a "New Every Two" subsidy for existing subscribers, forced new and upgrading customers to adopt tiered data plans, and introduced shared data plans that encourage higher data usage.

Though some of the new customer plans can actually prove cheaper than the one they're replacing, Verizon is still making more money overall on the new plans as customers ramp up their gigabytes. That increasing data usage is "more than making up for customers optimizing their accounts," Shammo said.

Despite the worse-than-expected iPhone 5 numbers, Verizon still managed to activate 6.5 million smartphones over the past three months -- more than any quarter in its history except for the fourth quarter of 2011, when the iPhone 4S first went on sale. Verizon's 1.5 million net new customers under contract was its highest number of customer additions in four years.

By posting a record profit margin in a quarter with such an extraordinary level of highly subsidized smartphone sales -- 53% of its customers now use smartphones -- Verizon proved that its tactics are starting to pay off. More than 13% of Verizon subscribers signed up for Share Everything Plans, exceeding the company's expectations.

In addition, Verizon said capital expenditures will be lower in 2012 than in the previous year, and they will continue to sink going forward, because the bulk of its 4G-LTE network rollout is behind it.

Verizon reported earnings of $4.3 billion for the quarter, up 21% from a year ago, on sales of $29 billion, up 4% from the third quarter of 2011. Both were in line with Wall Street's expectations.

Shares were up more than 1% in morning trading.

Rivals AT&T (T, Fortune 500) and Sprint (S, Fortune 500) are on tap to report their earnings next week.

Sprint, which recently agreed to sell a majority of the company to Japanese tech giant Softbank, secured a majority stake in wireless broadband company Clearwire (CLWR) on Thursday. Sprint had held a 48% stake in the company, which is a key supplier of wireless spectrum. It now holds just under 51% of the company.

First Published: October 18, 2012: 10:42 AM ET

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Jobless claims snap back up

A woman speaks to a potential employer at a New York state jobs fair.

NEW YORK (CNNMoney) -- First-time claims for unemployment benefits are on a roller coaster. The number snapped back up last week, after falling to a four-year low the week before.

About 388,000 people filed for first-time unemployment benefits in the week ended October 13, up 46,000 from the previous week, the Labor Department said Thursday.

The last two weeks have swung dramatically in both directions, with initial claims first dropping to a revised 342,000, the lowest level in four years, and then suddenly popping back up last week.

Economists attribute the volatility to the end of the quarter and the Columbus Day holiday.

"The volatility in the last few weeks appears to reflect seasonal adjustment challenges around the start of a quarter," said Jim O'Sullivan, chief U.S. economist for High Frequency Economics.

Related: State unemployment rates

Economists often prefer to look at a four-week moving average, to smooth out some of the large swings in the data.

That indicator increased to 365,500 last week and has been hovering in the 360,000 to 380,000 range since July. Claims around that level suggest layoffs remain low -- an encouraging sign for the economy -- but don't necessarily mean hiring has picked up.

"The labor market, just like the broader economy, is plodding along at a deliberate pace," said Thomas Simons, money market economist for Jefferies.

Meanwhile, about 3.3 million Americans continued to file for their second week of unemployment benefits in the week ended October 6, the most recent data available.

Did you recently find a job? Tweet @CNNMoney using the #igotajob hashtag, and you could be featured in an upcoming article.

First Published: October 18, 2012: 8:47 AM ET

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Newsweek to end publication of print edition

Newsweek will stop its print edition after the Dec. 31 issue.

NEW YORK (CNNMoney) -- Weekly news magazine Newsweek announced Thursday it will shift to online-only publication next year, discontinuing its print version after 80 years.

Tina Brown, the editor-in-chief of both Newsweek and The Daily Beast, the online news site that was combined with the magazine last year, made the announcement on line. She said the growing use of tablet computers by readers, combined with continued weakness in print advertising, forced the decision.

"Exiting print is an extremely difficult moment for all of us who love the romance of print and the unique weekly camaraderie of those hectic hours before the close on Friday night," she said in the statement. "But as we head for the 80th anniversary of Newsweek next year, we must sustain the journalism that gives the magazine its purpose—and embrace the all-digital future."

The final print edition will be the Dec. 31, 2012 issue.

For decades Newsweek was owned by the Washington Post (WPO). But the Post sold the magazine to audio industry pioneer Sidney Harman in August 2010. It was merged with The Daily Beast in a deal finalized in February 2011, creating a joint venture that was half-owned by IAC/InterActiveCorp (IACI). IAC/Interactive took a controlling interest in the joint venture earlier this year.

For its most recent quarter, IAC reported a $7.3 million operating loss from its media unit, of which Newsweek is a major component. Losses are expected to rise the rest of this year.

"The [Newsweek] brand is good," IAC CEO Barry Diller told investors during a conference call on company earnings in July. "What is the problem? The problem is in manufacturing, producing a weekly news magazine, and that has to be solved."

Shares of IAC were little changed in morning trading Thursday.

Newsweek's print edition had a paid circulation of 1.2 million copies over the last 12 months, while it had only 26,394 paid electronic copies on average, according to circulation data printed in the most recent edition. Its paid circulation was over 3.1 million as recently as 2006. Time, its primary competitor, has a paid circulation of 3.3 million for its print edition. CNNMoney and Time are both owned by Time Warner (TWX, Fortune 500).

Related: Twitter to media honchos -- We're not the enemy

Brown said reaching readers in the future increasingly depends on the digital version, citing a Pew Research Center survey that said 39% of Americans get their news from an online source. And there are expected to be 70 million computer tablet users by the end of the year, she said, up from 13 million just two years ago.

Despite having so much more paid readership for its print version than its digital version, Newsweek's print advertising has been in a steep, steady decline in recent years, plunging by $334 million, or 70%, between 2007 and 2011, according to figures from the Publishers Information Bureau. While Newsweek enjoyed a rebound in ad revenue in the first six months of this year, that recouped only about 2% of the revenue it lost in the previous four years. And advertising has traditionally been the key to print profitability.

Related: The man reinventing the news

The new online publication will be called Newsweek Global.

"Regrettably, we anticipate staff reductions and the streamlining of our editorial and business operations both here in the U.S. and internationally," Brown said in the statement, although she did not give any details on the extent of the staffing cuts to come.

Richard Stengel, managing editor of Time, said in a television appearance Thursday that he believes there is still value in publishing a paper version of a magazine, despite the costs.

"That still is the single the most expensive thing, to chop down trees, to put ink on paper, put it on a truck and deliver it to your house," he said while on MSNBC's "Morning Joe." "But I do think that that becomes a premium product."

First Published: October 18, 2012: 7:41 AM ET

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Morgan Stanley profits from corporate bond boom

Morgan Stanley's shares are up 22% this year.

NEW YORK (CNNMoney) -- The corporate refinancing boom help drive Morgan Stanley's third-quarter earnings, which handily beat expectations.

During the third quarter, the bank's revenue from underwriting bonds more than doubled from a year earlier to $431 million.

"The rebound in fixed income & commodities sales and trading indicates that clients have re-engaged after the uncertainty of the rating review in the previous quarter," said Morgan Stanley CEO James Gorman in a statement.

Back in June, Moody's downgraded all major banks, but Morgan Stanley's rating took the biggest hit, falling two notches.

Overall, Morgan Stanley earned $561 million, or 28 cents per share, on revenue of $7.6 billion. That's better than the 24 cents a share and $6.4 billion of revenue that analysts had predicted.

Alongside its jump in revenue, the bank increased its compensation expenses by 8% to $3.9 billion.

Morgan Stanley's earnings were adversely affected by accounting quirks that force banks to adjust both revenue and profits to reflect how the market values its debt. In a stronger market, when a bank's credit is considered to be higher quality, the so-called debt valuation adjustment weighs on both earnings and profits.

Including DVA, Morgan Stanley reported a net loss of 55 cents per share and $5.3 billion of revenue.

Bank executives said the slow M&A environment weighed on revenue and profits. On a conference call Thursday morning, CFO Ruth Porat said that merger activity isn't rebounding with the broader markets because companies fear the U.S. fiscal cliff and potential developments related to Europe's sovereign debt crisis.

"We need to have more clarity about the changes here in the U.S. for activity to move forward," she said, while noting that "conversations are ongoing and the pipeline is healthy."

Related: Mortgages helped (and hurt) Bank of America

Like many of its rivals in the banking world, Morgan Stanley remains ensnared in litigation. The American Civil Liberties Union recently sued the bank, saying that it had discriminated against minority homeowners with its risky pre-financial crisis mortgage lending.

Still, over the past several years, Morgan Stanley has made a push to move away from the riskier side of investment banking, which had put the bank in peril during the financial crisis.

The bank is in the process of buying what was once Citigroup's Smith Barney wealth brokerage unit. In 2009, Morgan Stanley bought half of Smith Barney, which it has since renamed Morgan Stanley Wealth Management. It plans to buy the remainder it doesn't own by mid-2015 at the latest.

During Thursday's call, Gorman called the wealth management unit the "key to the future," of Morgan Stanley. He said the unit's deposits will provide a stable and less risky source of funding for the bank.

Under new requirements, banks need to show regulators that they hold sufficient capital reserves relative to the amount of what's deemed risky capital and deposits from Morgan Stanley's wealth management unit will bolster those reserves.

Shares of Morgan Stanley (MS, Fortune 500) dropped 1% Thursday. The bank's stock is up 22% this year.

Morgan Stanley is the sixth major U.S. bank to report earnings, following JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500), Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500), and Bank of America (BAC, Fortune 500). Overall, banks have reported better-than-expected results, driven largely by the rebound in housing and mortgage lending.

First Published: October 18, 2012: 7:59 AM ET

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Holiday gifts: What women want, men don't give

Half of wealthy women and a third of affluent men are likely to buy themselves presents this holiday season, according to a new survey.

NEW YORK (CNNMoney) -- When it comes to gifts, it's not the thought that counts. At least, not in America's wealthiest households.

Two-thirds of affluent American women want gift cards. But less than a fifth of men will give it to them, according to a report from American Express Publishing and the Harrison Group out Thursday.

Instead, 70% of women are gifted clothing or jewelry.

A survey of 625 households that represent the top 10% of the nation's wage earners found a wide gap between what people want and what they will actually get.

Related: 9 'fantasy gifts' of 2012

Men should also lower their expectations. They want food and alcohol -- a third hope to get gourmet foods and fine wine, and another third want gift cards. But women like to give none of those -- 30% are expected to give clothing, and another 15% books.

What wealthy shoppers are better suited for, is giving gifts to themselves.

Nearly half of women said they were extremely, or very likely, to buy themselves presents this holiday season. A third of men have similar intentions.

"Perhaps America is giving itself a bonus this year," said Jim Taylor, vice chairman of Harrison Group, in a statement.

Holiday retail sales are expected to increase 4.1% this year, according to estimates from the National Retail Federation. That's the most optimistic forecast from the group since the recession.

The American Express and Harrison Group survey found that gift giving will be down overall this year, but the top 10% will spend nearly 22% more on gifts this year than they did in 2011.

First Published: October 18, 2012: 11:38 AM ET

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Mortgage rates fall to record lows, again

NEW YORK (CNNMoney) -- Rates on the average 15-year, fixed-rate mortgage hit a new low this week, falling to 2.66%, according to mortgage giant Freddie Mac.

The 15-year is particularly popular with homeowners who want to refinance their old mortgages to a lower rate and pay off their loan more quickly.

Interest rates on 30-year loans, which are popular among first-time homebuyers, averaged 3.37%, a single tick above the record low of 3.36% set two weeks earlier.

Economists: Housing recovery finally here

Someone who bought a home five years ago with a 30-year, fixed rate loan of 6%, for example, would be paying $1,200 a month on a $200,000 mortgage. Refinancing the remaining balance of about $185,000 -- plus $5,000 in fees -- into a new 15-year loan at 2.66% would cost slightly more per month, $1,281 a month, but the loan would be paid off 10 years sooner.

Rates have inched down about 0.2 percentage points since the Federal Reserve announced plans in September to buy as much as $40 billion a month of mortgage-backed securities until the economic recovery started gaining momentum.

That may be happening already, according to Keith Gumbinger, of mortgage information company HSH.com.

"If the economy continues to show signs of improvement this fall, mortgage rates could firm a little more," he said. "For that to occur though, we'll need a lot more evidence that forward momentum is building."

Frank Nothaft, Freddie Mac's chief economist, said rates remained unchanged this week as "home construction builds up steam."

He noted that construction on single-family homes continues to rise, as does homebuilder confidence, both of which point to an improving housing market.

First Published: October 18, 2012: 12:48 PM ET

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Oil workers win big as U.S. wages climb

Overall, U.S. workers received a pay raise in the past year. But oil and gas workers received the biggest wages.

NEW YORK (CNNMoney) -- Big pay hikes in the energy industry have helped fuel the biggest jump in U.S. wages in more than five years, according to an industry report released Wednesday.

PayScale, which analyzes data from more than 10 million U.S. workers, reported that workers in the mining, oil and gas exploration industry have seen their pay increase by an average of 4.9% over the past 12 months and that has helped to push the average U.S. worker's paycheck 3% higher over the same period.

That's the biggest increase since PayScale began monitoring compensation in early 2007. After languishing at or below 1% for 12 straight quarters beginning in the spring of 2009, wages have recorded strong gains the past six months.

"The pay picture is brighter than it has been for a while," said Katie Bardaro, lead economist for PayScale. "The increases seem to be accelerating."

After a brief slowdown in oil and gas exploration early in the recession, there has been a boom in the field. Drilling companies are flocking to places like North Dakota and the Northeast and prices at the pump have skyrocketed, nearly tripling since 2008.

Related: Double your salary in the middle of nowhere, N.D.

Oil and gas workers aren't the only ones coming home with fatter paychecks. In fact, all of the job categories that PayScale tracks saw pay increases during the past 12 months.

Information technology workers averaged a 4.5% increase in pay over the past 12 months. In places like Seattle, "there has been an almost crazy demand for IT workers," said Bardaro.

Pay raises in the utilities industry have also been strong, up 4.4% since September 2011.

Social services workers saw the smallest increase over the past 12 months, with their earnings up a paltry 0.4%. According to Bardaro, social workers suffered a drop in demand for their services when the economy began to brighten and there were fewer out-of-work Americans. In the early years of the recession, demand for counseling for substance abuse, health problems and troubled marriages was much stronger.

Pay raises varied a lot with location. Of the 20 largest U.S. metro areas, Houston recorded the biggest annual salary increase, 3.9%, followed by Dallas, San Francisco and Boston. All of these cities have heavy concentrations of either oil industry employers or high tech companies.

Phoenix, St. Louis and Baltimore workers fared the worst, with gains of 1.6%.

Related: America's most dangerous jobs

The pay hikes contrast sharply with pay trends at the depth of the recession. In 2009, the average U.S. worker's paycheck declined by 1.3% for the year.

A major contributor to the improvement is an increase in corporate profits. However, many companies -- still gun shy about weaknesses in the economy -- are reluctant to hire workers.

"Not everyone is hiring but they want to continue to increase productivity," said Bardaro. "It's cheaper to give someone a raise than to hire a new person."

First Published: October 11, 2012: 5:57 AM ET

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Disabled voters face Election Day challenges

Disability rights advocates say more polling stations must be made accessible, as this polling station in Revere, Mass., was in 2006.

NEW YORK (CNNMoney) -- On Nov. 6, there's a very real possibility that many Americans with disabilities will not be able to vote because their local polling places will be inaccessible.

Advocates for the disabled are worried that local governments aren't doing enough to prepare -- as are some of the small businesses that outfit polling sites with ramps.

"We've gotten quite a few inquiries from major municipalities, but they're not following through to actual sales," said Dave Henderson, sales manager at EZ-Access in
Algona, Wash.

The family-owned business makes portable wheelchair ramps. Prices range from $500 for a four-foot ramp with handrails to as much as $4,000 for a 30-foot modular model.

In 2008, as many as 1,000 polling centers were retrofitted with the company's ramps, Henderson said. "For us, the election can be a big revenue generator."

This year, Henderson says he has gotten about 600 to 800 orders, and he's uncertain how the next few weeks will go.

Julian Gordon has similar concerns.

Gordon is the founder of Amramp, a Boston-based ramp-rental company that has locations in 46 cities. More than 100 polling places will be using its services this year, he said.

"Compared to last election, we could be doing about the same in business," he said. "What our franchisees are hearing is that in many places, money isn't being spent on buying or renting ramps for the polling sites."

EZ-Access and Amramp are at the forefront of what the disability rights community says has become a persistent problem.

According to a report from the Government Accountability Office, only 27.3% of polling places were fully accessible on Election Day 2008.

Related story: Obama vs. Romney: How they'd tackle deficits

The problems included a lack of steel ramps or curb cuts in the parking area, unpaved surfaces and 1/2- inch-high bumps in doorways. The main focus of the report was people who use wheelchairs, although it also chronicled some obstacles for visually-impaired voters.

Federal law, including the Americans with Disabilities Act, requires polling places to be accessible to eligible voters for federal elections. And through the 2002 Help America Vote Act, states can get federal funds to improve polling center accessibility.

Still, disability rights advocates say problems remain.

Recent reports from the field are troubling, said Curt Decker, executive director of the National Disability Rights Network, which gets federal funding to conduct a national sampling of polling centers ahead of general elections.

One example: "I've heard from our folks that some polling centers in Detroit are clearly inaccessible," Decker said.

Mark Cody, legal director at NDRN's Michigan division, said his office recently found several Detroit polling facilities that "didn't even pass the eyeball" test of accessibility. The vast majority of 67 polling stations evaluated were found to be inaccessible during the Michigan primary in August; the test covered about a third of Detroit's polling centers.

Janice Winfrey, city clerk for Detroit, said she and an election official visited all of the sites evaluated by Cody's office and determined that all met the minimum requirement by law to be accessible to voters with disabilities.

Related story: Obama vs. Romney on the fiscal cliff

"Do they have the best [wheelchair] ramps? No. But they are there. The elevator in one site may not be in the best location, but it's there," Winfrey said.

Advocates for the disabled in New York are also concerned.

"For the past nine years, random samplings of New York City polling places have found many with a 70% to 80% barrier to access for individuals with disabilities," said Julia Pinover, an attorney with nonprofit group Disability Rights Advocates.

The New York City Board of Elections told CNNMoney that it has determined that 57 of its 1,255 polling sites do not meet ADA standards. Among other things, it is mailing letters to offer voters at those 57 sites the option of transferring their registration to nearby sites that are accessible.

Advocates, as well as the small business people working in the field, say officials often cite a lack of funding as the reason more polling stations aren't accessible.

According to the U.S. Election Assistance Commission, Congress gave states about $3.25 billion from 2003 until 2010 to improve the voting process, the vast amount of which was for purchasing fully accessible voting equipment and computerized statewide voter registration lists. But a very small piece of that funding was made available to make polling centers themselves accessible.

Doug Lewis, executive director of the National Association of Election Officials, said polling center accessibility is better today than in the past.

"But are we fully compliant with the law all over the country? No," he said. "There is a money crunch right now. When that happens, progress stops."

First Published: October 11, 2012: 6:46 AM ET

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Stocks look to snap slide

Click on charts for more premarkets data.

NEW YORK (CNNMoney) -- U.S. stock futures turned higher Thursday following an unexpected drop in the number of people filing first-time unemployment claims.

A flurry of economic reports came in better than expected Thursday morning. The number of people filing for jobless claims fell 30,000 to 339,000 last week, according to the Labor Department.

The U.S. Census Bureau said the trade deficit fell slightly to $44.2 billion from July to August. The Labor Department also reported import prices rose 1.1% in September while export prices rose 0.8%.

Also adding fuel to the morning's positive trading was a report that Japan's Softbank is in talks to acquire telecom operator Sprint Nextel.

Sprint (S, Fortune 500) shares surged 19% in premarket trading following a Wall Street Journal report, citing a person close to the negotiations, that SoftBank (SFTBF) is nearing a deal to buy the third largest U.S. carrier for about $12.8 billion. As of August, SoftBank's mobile arm has more than 30 million subscribers.

Earlier this week, there had been speculation that Sprint may make a play for rival MetroPCs (PCS, Fortune 500), which last week agreed to partner with T-Mobile USA operator Deutsche Telekom.

Related: M&A drought not letting up

Meanwhile in Europe, credit rating agency S&P downgraded Spain late Wednesday, and warned that the latest plan to recapitalize Spanish banks "still lacks predictability."

Joe Heider, managing principal of Rehmann Financial, said many investors were seeing the downgrade as a positive catalyst that could force Spain to finally seek a bailout.

European stocks started off lower, but rebounded as the morning progressed. Britain's FTSE 100 added 0.4%, the DAX in Germany rose 0.7% and France's CAC 40 edged higher 0.3%.

Meanwhile in Asia, South Korea's central bank lowered interest rates for the second time this year. Markets ended the day mixed. The Shanghai Composite slid 0.8% and Japan's Nikkei shed 0.6%, while the Hang Seng in Hong Kong ticked up 0.4%.

Fear & Greed Index

It will be a relatively quiet day for earnings in the corporate world, with companies including grocery chain Safeway (SWY, Fortune 500) scheduled to report. Results are due Friday morning from megabanks JPMorgan (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500).

U.S. stocks fell Wednesday.

Companies Shares of Ruby Tuesday (RT) fell nearly 5% after the casual restaurant chain reported quarterly earnings that missed expectations.

Realogy, the parent of Century 21, ERA, Coldwell Banker and Sotheby's International, will start trading on the NYSE under the ticker RLGY after the company priced its IPO at the top end of its estimated range. The IPO is the third largest this year.

Currencies and commodities: The dollar fell versus the euro and British pound, but it gained against the Japanese yen.

Oil for November delivery added 87 cents to $92.12 a barrel.

Gold futures for December delivery rose $5.90 to $1,771.00 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 1.70% from 1.69% late Wednesday.

First Published: October 11, 2012: 6:21 AM ET

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Obama and Romney should get serious on jobs (no more BS, please)

NEW YORK (CNNMoney) -- The most recent polling confirms what both Barack Obama and Mitt Romney know: that the shape of the U.S. economy remains, by a wide margin, the single biggest issue facing American voters. 

Despite talk of debt and deficit reduction that has dominated Congressional debate for the last two years, the sub-category of greatest concern to Americans isn't federal spending; it's job creation. 

All of those warnings about how America could easily become like Greece aren't resonating.  What Americans seem to want is a president and Congress that will work marginally as hard on creating jobs as they seem to do fighting about debt.

To that end, both candidates have made grand and, potentially, impossible promises. 

It started with a claim by the Romney camp that a Republican administration would result in 12 million U.S. jobs created in 4 years, though he provided no details as to how that would be achieved. 

The Obama administration made the quick calculation that the a lofty unsubstantiated promise trumps the evidence at hand, and within days proclaimed the Romney pledge "a low bar," suggesting that that many jobs would be created no matter who was in the Oval Office.

But the facts tell a different story.  The current rate of job growth in the U.S. is about 2 million jobs a year, so both candidates are talking about 50% growth in job creation over the next presidential term.  Putting aside how much influence a U.S. president can actually have over job creation, history provides some context about the relationship between job creation and economic growth.

Related: Obama may be a job creator after all

 The U.S. has created 12 million jobs in 4 years 3 times before.  The first was during World War Two, from August 1939 to July 1943. 

More recent history provides us with two examples. The first was from September 1983 to August 1987, during Ronald Reagan's term in office, when economic growth averaged 4.5%.  The second time was between August 1996 and July 2000, under Bill Clinton, when GDP growth averaged 4.3%.

The U.S. is nowhere near that now, and won't be anytime soon. The most recent measure of U.S. economic growth, from the second quarter, is 1.3%, and the highest estimates for 2013, assuming the European doesn't deteriorate further, is around 3%, much lower than the 4% or higher that history suggests is needed to meet the claims. 

Assuming the economy grows faster in the subsequent 3 years of the next presidential term, it would still need to grow at a rate not currently projected, for either candidate's claims to come true.

It would likely serve the U.S. voter better not to be presented with a "blue skies" version of the future that is unlikely to come to pass. Rather, a bold candidate may want to suggest that the U.S. economic hole is deep, and likely to take considerable time to be filled. It would serve voters further to hear specifics about how a higher-than-normal number of jobs might be created.  Neither enhanced "consumer confidence" nor "tax cuts" will likely, on their own, add 50% to the projected base of job creation. 

Economists on both sides, when pressed, point to a rebound in U.S home sales and prices, combined with record low interest rates, as a potential driver for employment.  Others suggest a massive infrastructure push, but the appetite among U.S taxpayers for greater government intervention into the economy, after the much maligned "stimulus" of 2009, is small.

 With less than a month to go until the election, there will be an ebb-and-flow in the absolute influence of the economy on voters, but concern over jobs have trumped all other issues, economic or not, for the last 4 years.  Americans are eager for a plan that will see that concern, finally, fade into the background.

First Published: October 11, 2012: 10:31 AM ET

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Stocks rise after 4-day losing streak

Click the chart for more stock market data.

NEW YORK (CNNMoney) -- U.S. stocks advanced Thursday, with the S&P 500 and Nasdaq snapping a 4-day losing streak, as investors welcomed an unexpected drop in the number of people filing first-time unemployment claims.

The number of jobless claims fell 30,000 to 339,000 last week, hitting the lowest level since February 2008.

While the significant drop was caused by an anomaly -- one state posted a large decline in claims, which is not typical during the last week in September -- it still helped drive stocks higher following weakness in the early part of the week.

The Dow Jones industrial average added 0.2%, while the S&P 500 rose 0.4% and the Nasdaq gained 0.2%.

Financial stocks were big gainers, as Bank of America (BAC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) drove the Dow higher.

Other economic data was also encouraging. The U.S. Census Bureau said the trade deficit fell slightly to $44.2 billion in August. The Labor Department also reported import prices rose 1.1% in September, while export prices rose 0.8%.

Also adding fuel to the morning's positive trading was news that Japan's Softbank is in talks to acquire telecom operator Sprint Nextel, said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams.

Sprint (S, Fortune 500) shares surged 13% on news that SoftBank (SFTBF) is nearing a deal to buy a controlling stake in the third largest U.S. carrier for about $12.8 billion. Softbank's mobile arm had more than 30 million subscribers as of August. Sprint networking partner Clearwire (CLWR) soared more than 30% on reports that it may also be taken over as part of the deal.

Earlier this week, there had been speculation that Sprint might make a play for rival MetroPCs (PCS, Fortune 500), which last week agreed to merge with T-Mobile USA operator Deutsche Telekom.

Related: M&A drought not letting up

In Europe, credit rating agency S&P downgraded Spain late Wednesday, warning that the latest plan to recapitalize Spanish banks "still lacks predictability."

Joe Heider, managing principal of Rehmann Financial, said many investors were seeing the downgrade as a positive catalyst that could force Spain to finally seek a bailout.

European stocks started off lower, but rebounded to finish sharply higher. Britain's FTSE 100 added 0.9%, the DAX in Germany rose 1.1%, and France's CAC 40 climbed 1.4%.

Meanwhile in Asia, South Korea's central bank lowered interest rates for the second time this year. Markets ended the day mixed. The Shanghai Composite slid 0.8% and Japan's Nikkei shed 0.6%, while the Hang Seng in Hong Kong ticked up 0.4%.

Fear & Greed Index

Companies: Third-quarter earnings season is underway, but only a handful of companies reported Thursday, including hardware supply store Fastenal and Safeway. Fastenal (FAST) shares jumped as the company met earnings expectations, while Safeway (SWY, Fortune 500) shares declined after the company posted weak same-store sales.

Realogy, the parent of real estate brokers Century 21, ERA and Coldwell Banker, began trading on the New York Stock Exchange under the ticker RLGY after the company priced its IPO at the top end of its estimated range. Shares of Realogy (RLGY) rose 24% from their offering price.

Shares of Shutterstock (SSTK) jumped more than 30% in their market debut. The online stock photography company also priced its shares above the expected range in its IPO.

Currencies and commodities: The dollar fell versus the euro and British pound, but it gained against the Japanese yen.

Oil for November delivery added 60 cents to $91.85 a barrel.

Gold futures for December delivery rose $7.90 to $1,773 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury edged lower, pushing the yield up to 1.70% from 1.69% late Wednesday.

First Published: October 11, 2012: 9:40 AM ET

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Jobless claims fall to four-year low

NEW YORK (CNNMoney) -- Claims for unemployment benefits fell sharply last week to their lowest level in more than four years, but the drop was due mostly to a technical issue.

About 339,000 people filed for first-time unemployment benefits in the week ended October 6, down 30,000 from the previous week, the Labor Department said Thursday.

That's a dramatic drop in just one week and represents the lowest level of initial claim filings since February 2008.

The weekly claims figure is often seen as a proxy for layoffs, so when it drops, it's considered an encouraging sign that the job market is improving. But the figure is extremely volatile and has failed to hold a consistent trend this year.

Much of the drop last week was caused by an anomaly, a Labor Department analyst told CNNMoney. One state posted a large decline in claims, which is not typical during the last week in September.

The drop probably occurred because that state didn't fully process end-of-quarter claims, the Labor Department analyst said. If that's the case, it's possible initial claims could shoot back up next week, once those claims are processed.

Usually, most states report a rise in initial claims at the end of the quarter. The Labor Department seasonally adjusts its figures to account for those trends, but this year the rise was smaller than expected because of that state.

Many economists speculated that the state is California, but the Labor Department will not confirm that until it publishes its state breakdown next week.

"It was likely a state with a large population and we suspect that it was California based on the occasional massive swings that have occurred in its claims data in the past," said Daniel Silver, economist at JPMorgan, in a note to clients.

The Labor Department publishes the state breakdown with a lag, so next week's report will shed more light on the issue.

The latest jobless claims figures come less than a week after a strong monthly jobs report raised eyebrows and unleashed a political firestorm, with former GE CEO Jack Welch alleging that the numbers were manipulated. There's no evidence of any misconduct and Labor Secretary Hilda Solis has called the conspiracy theories "insulting."

The report showed the unemployment rate fell to 7.8% in September, the lowest rate since President Obama was inaugurated in January 2009.

First Published: October 11, 2012: 8:47 AM ET

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Coca-Cola bottler quits Greece

LONDON (CNNMoney) -- Coca-Cola Hellenic, the world's second biggest bottler of Coke, is moving its headquarters out of Greece, dealing a symbolic blow to the crisis-stricken eurozone economy.

The company is Greece's biggest by market value ($7.6 billion) but generates only 5% of its business domestically.

Coca-Cola Hellenic (CCH) picked Switzerland as its new home, citing the country's stable economic and regulatory environment. It will also move its primary stock listing to the London Stock Exchange through a share exchange with Swiss-based Coca-Cola HBC AG. Coca-Cola Hellenic has listings in London, New York and Athens. It's also the largest holding in the Global X FTSE Greece 20 ETF (GREK), which lists the National Bank of Greece (NBG) as its second biggest holding.

Coca-Cola Hellenic Chief Executive Dimitris Lois said the transaction made "clear business sense."

"It will give us access to the largest pool of international investors, on the most liquid equity market in Europe providing flexibility to fund our future growth on competitive terms," he said in a statement.

Coca-Cola Hellenic's Athens base will continue to support operations in 28 countries, including Italy, Ireland, Nigeria and Russia.

"There will be no impact on jobs, compensation or benefits for any employees of the Coca-Cola Hellenic Group as a result of the transaction," the company said.

A majority of shareholders, including U.S.-based Coca-Cola Co. (KO, Fortune 500), which has a 23% stake, have accepted the share exchange offer.

Greece's economy is contracting rapidly as it grapples to bring its sovereign debt crisis under control and meet the demands of a bailout program backed by fellow eurozone members and the IMF.

The government has been cutting spending and raising taxes in a bid to keep Greece in the eurozone but the austerity drive has sparked waves of social unrest and political instability, and prompted a flight of capital.

Coca-Cola Hellenic is not the first company to leave Athens in search of a more stable environment. Greek dairy group FAGE said earlier this month it was moving to Luxembourg.

The Athens stock exchange has plummeted to 20-year lows but some foreign investors still see opportunities despite the turmoil.

Related: Why a U.S. buyout firm is investing in Greece

New York-based private equity firm Paine & Partners said this week it had agreed to pay $58 million for of Eurodrip SA, an Athens-listed provider of irrigation solutions.

"We decided that the Greek issues we see today should not have long-term negative impacts on the company," Paine & Partners investor Mitchell Presser told Fortune.

First Published: October 11, 2012: 10:58 AM ET

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Sprint's stock surges on potential Softbank deal

NEW YORK (CNNMoney) -- Shares of Sprint Nextel surged Thursday as it negotiated with Japanese wireless carrier Softbank, which might buy a controlling stake in the company.

Sprint Nextel's (S, Fortune 500) stock jumped 18% in morning trading.

"Sprint is currently involved in discussions with Softbank regarding a potential substantial investment by Softbank in Sprint," said Sprint in a prepared statement.

Sprint said "such a transaction could involve a change of control," but it emphasized that there are "no assurances" that the deal will go through.

The share price for Internet service provider Clearwire (CLWR) also surged, climbing 40% in morning trading, as CNBC reported that Clearwire might also get taken over as part of the deal.

Sprint Nextel is the third-largest wireless carrier in the United States, trailing AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) in market share. But the company has continued to lose money, despite finally adding Apple's (AAPL, Fortune 500) iPhone to its network last year.

Related: M&A drought not letting up

A spokesperson for Softbank Corp (SFTBF) was not immediately available for comment.

There had been speculation that Sprint Nextel would make a counteroffer for MetroPCS (PCS, Fortune 500), which recently agreed to merge with Deutsche Telekom's T-Mobile USA unit. Shares of MetroPCS fell 5% in early trading.

First Published: October 11, 2012: 8:19 AM ET

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Analysts sour on Facebook after Zynga's downbeat outlook

NEW YORK (CNNMoney) -- Facebook's close relationship with Zynga means the social network has raked in tons of money from the success of games like FarmVille. But that partnership has a flip side: Bad news for Zynga also means bad news for Facebook.

One week ago, Zynga unveiled "preliminary financial results" a few weeks ahead of its official earnings report -- which is rarely a sign of anything good. The FarmVille maker scaled back its outlook for 2012, citing a bunch of problems: "reduced expectations" for certain games, delays in launching new titles and a huge write-down on its purchase of game maker OMGPOP.

Shares of Zynga (ZNGA) plunged 17% after the announcement, but its stock wasn't the only casualty.

The ripple effects spread to Facebook (FB), which depends on Zynga for a significant portion of its sales. In Facebook's latest earnings report, it revealed Zynga accounted for 14% of its revenue in the first six months of 2012. That includes payment processing fees, advertising, and other related activity.

So when Zynga unveiled its bad news, analysts were quick to extend the gloomy outlook to Facebook. The social network is scheduled to report its third-quarter earnings October 23.

JPMorgan's Doug Anmuth was one of the first out of the gate, with in a note to clients sent just hours after Zynga's preliminary earnings announcement. He cut his estimates for Facebook's payments revenue for 2013 to $582 million, down 28% from his previous estimate.

Zynga users who play games on Facebook use the site's payment system for purchases within apps and games. Facebook typically keeps 30% of the revenue from those payments and passes the remaining 70% on to the app developer. So when Zynga pulls in less than expected, that loss is passed on to Facebook.

Anmuth had already cut his estimates for Facebook's payments sector last month on concerns about Zynga's weak performance and "broader gaming challenges" for Facebook.

In his new note, he wrote: "The bottom line is that Zynga's numbers -- and likely the outlook for 2013 -- are even worse than expected."

Other analysts added their own downbeat research notes over the past week. Brian Wieser at Pivotal Research Group cut his 2013 price target for Facebook's stock to $28, down from $32.

Wieser's pessimism was contained, and he noted that Facebook "has been diversifying away from relying on Zynga for payments revenue." But Zynga's news was still bad enough to recast his financial estimates as "overly optimistic" and prompt a downward revision.

BTIG's Richard Greenfield downgraded Facebook's stock to "sell," from his previous "neutral" rating. The decline in Facebook's payments revenue leaves it with "only one major 'lever to pull' -- advertising." Bigger, more annoying ads could erode the user experience, he wrote.

But not all analysts were down on Facebook. Brian Pitz at Jefferies & Company released a research note on Facebook the morning after Zynga's announcement, and he didn't even mention the FarmVille maker. In fact, Pitz said he's "increasingly optimistic over FB's long-term prospects."

He cheered Facebook's plans for leveraging its ad offerings, particularly a program called Facebook Ad Exchange that just ended a beta testing period. The system, also known as "FBX," will offer advertisers real-time bidding for the site's ad inventory.

It remains to be seen whether those ad offerings will help boost shares of Facebook, which have lost half their value in 2012. Still, its stock is faring better than that of Zynga, which is down 75% year-to-date and languishes well below the $3 mark.

First Published: October 11, 2012: 11:49 AM ET

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