Wine and spirits firm bucks trend

Drinks maker Pernod Ricard has reported a rise in half year net profits as consumers continue to buy wine and spirits despite the economic downturn.

The French group said profits rose 5% to 615m euros ($793m; £547m) for the six months to the end of December 2008.

Sales for the period rose 13% to 4.2bn euros, and the firm forecast "strong organic growth" for the full year.

Shares in Pernod, whose brands include Jacob's Creek wine and Absolut vodka, were up 6% in early trade.

"Although visibility is limited for the second half of the year, we anticipate that the wine and spirits sector will on the whole continue to show excellent resilience," Pernod said.

Pernod is the second biggest alcoholic drinks group in the world after Diageo.

On Thursday Diageo reported a 3.2% rise in half-year profits but cut its forecast for the full year.

Microsoft to launch retail chain

Computer software giant Microsoft has announced plans to open its own stores, at a time when many other retailers are struggling in the economic downturn.

The company plans to sell computers installed with Microsoft software and other products, Microsoft chief operating officer Kevin Turner said.

The stores will also promote new operating system Windows 7 and updates of Windows Live and Windows Mobile.

Ex-Wal-Mart executive David Porter will head the new retail division.

The company's rival Apple already has high-profile stores located around the world.

'Tremendous opportunities'

"This is an exciting time with our strong line-up of upcoming product releases," Mr Turner said in a statement.

"There are tremendous opportunities ahead to create a world-class shopping experience for our customers."

Mr Porter, corporate vice-president of retail stores, will devise a strategy outlining when the stores would be launched and where they would be located.

The decision comes after Microsoft launched a $300 million (£207m) advertising campaign last autumn in a bid to revive its Windows Vista operating system, which was widely criticized for being too slow.

In January the company cut 1,400 jobs and said it would axe 3,600 more workers over the next 18 months.

Oil rises on stimulus plan hopes

Oil prices jumped after a week of falling crude prices on hopes US President Barack Obama's stimulus plan will revive the economy and demand.

US crude for March delivery rose $3.53 to $37.51 a barrel. Brent oil added $1.22 to $44.81 a barrel.

"It looks like a bounce on stimulus hopes," said Tom Bentz at BNP Paribas Commodity Futures.

In earlier trade prices dipped below $34 as oil producers' cartel Opec warned that demand would fall in 2009.

The House of Representatives has approved Mr Obama's revised emergency plan, including tax cuts and spending aimed at rescuing the US economy, and the Senate is expected to do so later.

But analysts have questioned how much the oil price will benefit from it.

'Steep decline'

The global slowdown has seen oil prices fall more than $110 off the highs seen in July last year and Opec forecasts that demand will fall by 0.67% in 2009.

Opec now forecasts that global oil demand will fall by 580,000 barrels a day to average 85.13 million barrels a day. It had earlier forecast that demand would fall by 180,000 barrels a day.

"World oil demand continues its steep decline from last year and is expected to follow this strong negative pattern at least for the first three quarters of the year," the oil producers' cartel said in its February report.

Oil demand in industrialised countries "is experiencing a steep decline resulting from the region's economic depression", the cartel said.

Earlier this week, the Energy Information Administration reported a seventh consecutive weekly increase in nationwide crude oil stocks as the economic crisis crushed business and consumer demand for fuel.

And rising unemployment has led to further fears of weakening demand for oil among US consumers.

New claims for unemployment benefit remain close to record highs.

The US jobless rate rose to 7.6% in January, up from 7.2% in December, according to official figures - the highest level since 1992.

The rapid rise in unemployment suggests the US recession is deepening.

US Congress passes stimulus plan

The US Senate has voted in favour of Barack Obama's $787bn (£548bn) economic stimulus plan - clearing the way for it to be signed into law.

The vote came hours after the House of Representatives passed the measure without Republican backing.

Mr Obama has said the plan - a package of tax cuts and spending - will "save or create more than 3.5 million jobs".

Republicans argue the tax cuts are insufficient, and that the economy will be saddled with debt for years to come.

Members of both houses of Congress reached a deal over the content of the stimulus package on Wednesday.

All 176 Republicans and seven Democrats voted against the revised package in the House. It was backed by 246 House Democrats.

In the Senate just three Republicans voted for the package.

The rebel votes were however enough under Congress rules to stop the Republican Party using blocking tactics to delay the stimulus plan, and it passed 60-38.

'Shot in the arm'

The approved version of the plan is split into 36% for tax cuts and 64% percent in spending and money for social programmes.

Running to more than 1,000 pages, it includes new road building, cash to pay police in hard-up cities, and tax breaks for consumers buying houses and cars.

The package also imposes new limits on cash bonuses and other incentive compensation for executives on Wall Street, which are much tougher than those proposed by the Obama administration last week.

The provision, inserted by Senate Democrats, targets senior executives at financial institutions receiving government bail-out funds.

The colossal package is all to be funded with borrowed money.

Republicans had insisted on larger tax cuts instead of big spending programmes.

Republican Senate minority leader Mitch McConnell said: "This isn't Monopoly money. It's real. It adds up, and it has to be paid back, by our children and by their children."

The Democratic leader of the Senate, Harry Reid, praised the three Republicans who had voted for the bill and said it was the most important piece of legislation he had worked on.

"The country is in trouble and we're so fortunate we were able to get it passed," he said.

"It's going to give this country a shot in the arm."

Earlier, Mr Obama had said that in the longer term the government needed to rein in spending, and that "we are going to have to once again live within our means".

The president told members of the Business Council in Washington that the package was "only the beginning of what I think all of you understand is going to be a long and difficult process of turning our economy around."

Presidential pressure

"We have a once-in-a-generation chance to act boldly, and turn adversity into opportunity, and to use this crisis as a chance to transform our economy for the twenty-first century," Mr Obama said.

Among the measures in the approved package is a "Buy American" clause that had caused alarm among US trading partners.

The EU and Canada said that provisions favouring American-produced materials for government projects risked provoking retaliatory protectionist measures.

In the face of this reaction, the clause was softened to a version requiring the government not to violate trade agreements.

Last week, the House had approved an earlier $825bn version of the package without any Republican support.

The Senate voted to approve a different $838bn version on Tuesday, with few Republicans opting to back it.

The two versions had to be reconciled in a joint House-Senate committee before facing final votes in the two chambers.

President Obama increased the pressure on Congress this week, saying he wanted the bill on his desk ready to sign by the weekend.