The Treasury will sell $6 billion of AIG (NYSE: AIG) stock to exit its holdings completely. (Reuters)

The Apple (NASDAQ: AAPL) iPad adds enough new features to allow it to fend off most competition. (Reuters)

Toyota (NYSE: TM) recalls 681,000 cars and light trucks in the U.S. (Reuters)

The Justice Department may sue Apple and publishers over e-book pricing. (WSJ)

The U.S.-China Economic and Security Review Commission warns of a major cyberattack by the People’s Republic. (WSJ)

Greece nears to a bond swap with private investors. (WSJ)

Air France/KLM warns on its 2012 results. (WSJ)

AMR says it will not dissolve its pension plan. (WSJ)

Consumer borrowing rises in January, according to the Fed. (WSJ)

ADP says the private sector added 216,000 jobs. (WSJ)

Novartis (NYSE: NVS) tries to buy Pfizer’s (NYSE: PFE) animal health business for $16 billion, but the bid is rejected. (WSJ)

The Fed may set a bond-buying program to offset inflation if the economy grows. (WSJ)

Natural gas prices reach a 10-year low. (WSJ)

The cost of sequencing the human genome falls, which may help in the treatment of a number of diseases. (NYT)

China offers loans to BRIC nations as a way to help spread the use of the yuan. (FT)

Japan posts a record trade deficit for February. (MarketWatch)

Douglas A. McIntyre

In the past few days, firings have neared a recent peak among some of the largest companies in the U.S. One troubling sign is that the layoffs are happening across a wide number of industries. The “downsizings” could be a coincidence, or they may be a signal that growth has slowed in several sectors of the economy.

Novartis (NYSE: NVS), the drug giant, said it will fire 1,960 people in the U.S. New product introductions have slowed. Some current products have sales difficulties. But part of the problem is that revenue is off and the company does not see that recovering enough soon.

Layoffs at U.S. financial firms may reach as high as 60,000 this year. Most recently, RBS (NYSE: RBS) said it will cut 3,000 people. Many more cuts may be in the offing. Apparently the government has asked Bank of America (NYSE: BAC) to set a plan to pull out of a number of markets across the U.S. That cannot be done effectively without personnel cuts.

AMR, the parent of American Airlines, may be bought out by Delta (NYSE: DAL) or US Air (NYSE: LCC). News reports say that a deal will remain on hold as AMR eliminates a number of jobs while in Chapter 11, so that the costs to run the airline are lower.

Delhaize said it will shutter 113 of its Food Lion stores and cut 4,900 jobs in the U.S. In the general retail sector, Sears Holdings (NASDAQ: SHLD) is in the midst of closing 100 stores, and the layoffs done in the process will number in the thousands.

The press has reported that layoffs are imminent at Yahoo! (NASDAQ: YHOO) and Microsoft (NASDAQ: MSFT) as each tries to control margins while revenue growth slows.

And public sector firings continue, as well. More than 1,500 people on the Oakland, Calif., payroll have been “let go.”

Once again, all of this news could be a coincidence — thousands and thousand of people just got unlucky at the same time. That really is not the case, though. Most of the companies and public employers that have cut people, or are about to, are in financial trouble arising from problems linked to the economy.

Douglas A. McIntyre

Layoffs have surged recently. There is no telling why they happened all at about the same time. Drug giant Novartis (NYSE: NVS) said it will cut nearly 2,000 jobs. Food Lion will shut 113 stores, which will cause several thousand layoffs. RBS (NYSE: RBS) just fired 3,500 people. And on the sidelines sit Sears (NASDAQ: SHLD), Eastman Kodak (NYSE: EK), Bank of America (NYSE: BAC) and AMR, the parent of American Airlines. Media reports of the past day or so say that each of these likely will cut large numbers of people because of debt or profit considerations. It has been a long time since so many companies, well-known but in trouble, have fired legions of workers.

Bank of America Disclosures

The list of what Bank of America conveniently forgets to tell stockholders has grown again. The Wall Street Journal reports that the Federal Reserve may force the bank to drop out of some businesses and let go of operations in regions around the country. A newspaper had to break the story. Bank of America management must not have considered it necessary to disclose. That lack of disclosure can be added to when the financial firm failed to say how deep its trouble was just ahead of an investment of $5 billion by Warren Buffett on terms not favorable to the bank, or the sales of its interest in China Construction Bank. It also has been left to the press to dig into Bank of America’s holdings of sovereign debt issued by weak nations in the eurozone. Suits against the firm over its mortgage practices and sales of mortgage securities also came out in the press or were issued in announcements by the government agencies planning to take action against the bank.

Goldman Sachs’ Forecast

Goldman Sachs (NYSE: GS) has joined a chorus of experts suggesting the price of oil may soar in 2012. The most obvious reason for the increase is trouble with Iran and unrest in Nigeria. Goldman has added one more reason to the list. OPEC may be unable to make up for a shortfall in supply. The markets have counted on members of the cartel, particularly Saudi Arabia, to temporarily increase production if necessary. Goldman points out, however, that, “With Saudi producing close to 10 million barrels a day, OPEC will be operating with a very thin layer of spare capacity, making the oil market much more vulnerable to additional disruptions, with supplies from Nigeria being a particular concern.”

iPhone Riots in China

The demand for the Apple (NASDAQ: AAPL) iPhone 4S in China nearly touched off riots at its flagship store there. Other Apple stores in the country apparently sold out of the smartphone quickly. After a crowd at the flagship location threw eggs and other debris, police gathered to disburse the crowd. Apple’s solution was simple. In China, it will sell the iPhone 4S only online for now. Many times, Apple has had too few units of new products, and that has irked potential customers. The violent outbreak, however, is a first.

Douglas A. McIntyre

President Obama to ask for a $1.2 trillion increase in the national debt ceiling. (Reuters)

China’s foreign currency reserves drop to $3.18 trillion, a sign that exports have slowed enough to change monetary policy. (Reuters)

Novartis (NYSE: NVS) will cut 2,000 jobs in the U.S. (Reuters)

Apple (NASDAQ: AAPL) stops iPhone sales in China when crowds become unruly. (Reuters)

Several buyers, including Delta (NYSE: DAL) and US Air (NYSE: LCC), may approach American Airlines parent AMR about a buyout. (Reuters)

Yields fall at Italy and Spain debt sales. (Reuters)

Research In Motion (NASDAQ: RIMM) may have retained Goldman Sachs (NYSE: GS) to look at strategic alternatives. (Reuters)

The Fed may force Bank of America (NYSE: BAC) to leave a number of businesses and some areas of the country. (WSJ)

Goldman Sachs approaches federal officials about buying the troubled bond portfolio of AIG (NYSE: AIG). (WSJ)

A strategic review of PepsiCo (NYSE: PEP) by its board likely will not prompt the firing of its CEO, Indra Nooyi. (WSJ)

China sets new rules to make it easier for foreign investors to put capital into the country. (WSJ)

A Wynn Resorts (NASDAQ: WYNN) shareholder files suit about a possible donation the company made to a university in Macau. (WSJ)

Low retail sales raise concerns about the pace of the recovery. (WSJ)

An agency of the U.S. government pressures AMR to keep its pension plans intact. (WSJ)

Eurozone factory output drops in November, based on year-over-year numbers. (WSJ)

The government probes potentially illegal financial activities at Diamond Foods (NASDAQ: DMND). (WSJ)

Several lenders to Sears Holdings’ (NASDAQ: SHLD) suppliers want faster payments to those suppliers. (WSJ)

BMW and Mercedes increase production in the U.S. (WSJ)

Peugeot would like to form a broad alliance with another car company. (WSJ)

International bond investors largely believe a deal on Greek debt will be done, but not on the terms Greece expects. (WSJ)

China may invest some of its foreign reserves in stocks to get better returns. (WSJ)

Corn prices fall on new, higher estimates of U.S. production. (WSJ)

Members of the 2006 Fed did not anticipate the housing collapse. (NYT)

CVS Caremark (NYSE: CVS) pays $5 million for charging too much for some drugs. (NYT)

Target (NYSE: TGT) will set up small Apple stores inside its retail locations. (NYT)

The creditworthiness of U.S. companies fell over the past 30 years, according to S&P. (FT)

Google (NASDAQ: GOOG) and LG discuss a new TV project. (Bloomberg)

Eastman Kodak (NYSE: EK) approaches Citigroup (NYSE: C) for capital it might use as part of a bankruptcy. (Bloomberg)

Douglas A. McIntyre

Washington Mutual shareholders and creditors set a deal that could allow an exit from bankruptcy. (Reuters)

The policy meeting of the Federal Reserve could end with no actions at all. (Reuters)

Low availability of water makes it a profitable investment for many global financial organizations. (Reuters)

AT&T (NYSE: T) may try to change its plan to buy T-Mobile due to government resistance. (Reuters)

Another MF Global official says he does not know what happened to $1 billion of the firm’s money. (Reuters)

Jive Software will post its IPO slightly above the expected range. (Reuters)

Deutsche Boerse and NYSE Euronext (NYSE: NYX) will offer more concessions to close a merger deal. (Reuters)

Martin Marietta (NYSE: MLM) makes an offer of $4.8 billion to buy Vulcan Materials (NYSE: VMC). (Reuters)

Apple (NASDAQ: AAPL) softens its approach to selling its iAd inventory as Google (NASDAQ: GOOG) has had success in the mobile ad market. (WSJ)

The euro reaches a 10-month low. (WSJ)

McDonald’s (NYSE: MCD) begins delivery services in Asia. (WSJ)

Bank of America (NYSE: BAC), JPMorgan Chase (NYSE JPM) and Citigroup (NYSE: C) try to settle charges of mortgage fraud. (WSJ)

Pfizer (NYSE: PFE) increases its dividend and share buyout. (WSJ)

Italian unions stage strikes because of austerity plans. (WSJ)

Novartis’s (NYSE: NVS) multiple-sclerosis pill Gilenya has safety problems. (WSJ)

Diamond Foods (NASDAQ: DMND), faced with accounting problems, will delay its next quarterly filing. (WSJ)

LSE says it will buy the remaining 50% stake in FTSE that it does not already own from Pearson (NYSE: PSO). (WSJ)

The share of U.S. income earned by the top 1% dropped to 17% in 2009 from 23% in 2007. (NYT)

Experts prepare in case Greece leaves the eurozone. (NYT)

Google’s buyout of Motorola Mobility (NYSE: MMI) is delayed by EU authorities. (NYT)

Newspaper chain Lee Enterprises (NYSE: LEE) files for Chapter 11. (NYT)

Some EU-based banks are selling their most valuable assets as regional debt weighs upon their balance sheets. (Bloomberg)

Douglas A. McIntyre

France and Germany continue to press new eurozone treaty measures that would help trigger new financing for the region. (Reuters)

Japan says it is not aware of a $600 billion IMF plan for Europe. (Reuters)

The Department of Health blocks wider distribution of the morning-after birth control pill. (Reuters)

Japan’s government may set a bailout fund from crippled TEPCO. The fund may be as high as $19 billion. (Reuters)

Two large electronics retailers in China increase e-commerce efforts. (Reuters)

Nintendo says its lead game designer, Shigeru Miyamoto, will not leave. (Reuters)

AT&T (NYSE: T) says it will continue its campaign to buy T-Mobile. (Reuters)

A Wall Street Journal analysis shows the SEC allowed 50 money managers to avoid disclosing ownership in corporations. (WSJ)

Natural gas will replace coal as the primary means to generate electricity in the U.S. by 2025. (WSJ)

Regulators may decide U.S. banks do not have to set risk parameters based on credit rating agency opinions. (WSJ)

A deal between Deutsche Boerse and NYSE Euronext (NYSE: NYX) faces more regulator scrutiny. (WSJ)

Macy’s (NYSE: M) may try to block a deal between Martha Stewart Living Omnimedia (NYSE: MSO) and JCPenney (NYSE: JCP). (WSJ)

General Motors (NYSE: GM) says Volt fires were cause by welded parts in the cars. (WSJ)

Verizon’s (NYSE: VZ) 4G network not working in some areas. (WSJ)

Some central banks in Europe set plans in the event the eurozone does not survive. (WSJ)

New York State raises a tax on the wealthy. (WSJ)

Avon (NYSE: AVP) has a gap between earnings and free cash flow that limits its operations. (WSJ)

Discovery Communications (NASDAQ: DISCA) says its investment in the Oprah network continues to rise. (WSJ)

Pacific Sunware of California (NASDAQ: PSUN) will close 200 stores. (WSJ)

Southwest Air (NYSE: LUV) is close to a transaction to buy 100 Boeing (NYSE: BA) planes. (WSJ)

Pfizer (NYSE: PFE) has advanced approval of a new kidney cancer drug. (WSJ)

AstraZeneca (NYSE: AZN) says it will cut its U.S. workforce by 24%. (WSJ)

LivingSocial will try to raise $400 million and probably put IPO plans on hold. (WSJ)

Developers buy closed auto plants because of cheap property values. (NYT)

Boeing (NYSE: BA) workers approve a new four-year contract. (NYT)

Genetech and Novartis (NYSE: NVS) develop a drug that may slow the advance of breast cancer. (NYT)

Nokia (NYSE: NOK) may sell its luxury operations. (FT)

JPMorgan (NYSE: JPM) says it will increase lending in Europe. (FT)

Apple (NASDAQ: AAPL) loses a key trademark case in China. (FT)

McGraw-Hill (NYSE: MHP) to cuts jobs in its education unit. (FT)

A Bloomberg poll says investors expect a banking crisis in China. (Bloomberg)

Douglas A. McIntyre

A new study by Booz & Co. shows that pharmaceutical multinationals are among the companies that spend the most on R&D. They have little to show for it. Each of these corporations, from Merck (NYSE: MRK) to Pfizer (NYSE: PFE), has been unable to develop a large portfolio of blockbuster drugs — the kind that sustained them with tens of billions of dollars in sales. Consequently, these companies will begin to slip down the Booz list of big R&D spenders. It is not one they can afford to head anymore.

One answer to pharma’s endless problems has been a series of mergers and layoffs. Merck bought Schering-Plough for $41 billion in 2009. Pfizer bought Wyeth for $68 billion in the same year. Each deal called for layoffs in the tens of thousands. What the drug companies could not create from new sales-based R&D, they tried to accomplish with M&A based on balance sheets that patented product sales had helped build over decades.

The Novartis disclosure shows that the dream that large pharmaceutical companies might reestablish robust product pipelines has been abandoned. There is little left these firms can do but to cut costs as quickly as they can.

Douglas A. McIntyre

Netflix (NASDAQ: NFLX) warns that more subscribers will cancel and shares fall 24%. (Reuters)

Nearly 35% of News Corp. (NYSE: NWS) investors vote against James Murdoch as a member of the board. (Reuters)

Zynga will have its IPO in late November. (Reuters)

Amazon.com’s (NASADQ: AMZN) results could be hurt by the expense of the Kindle Fire. (Reuters)

The Federal Reserve may work to drive interest rates down again to help the home market. (Reuters)

The drop in BP’s (NYSE: BP) production has reached a bottom. (Reuters)

A judge turns down a Sprint-Nextel (NYSE: S) request to get internal documents from AT&T (NYSE: T). (Reuters)

Regulators examine more trades at SAC, some of which go back nine years. (WSJ)

Credit cards may use personal information to target advertising. (WSJ)

UBS (NYSE: UBS) profits fall. (WSJ)

More worries arise about an EU region recession. (WSJ)

Eastman Kodak (NYSE: EK) talks with hedge funds about financing. (WSJ)

Fedex (NYSE: FDX) predicts its holiday shipment volume will be strong. (WSJ)

Walmart (NYSE: WMT) reopens 13 stores in China. (WSJ)

Research In Motion (NASDAQ: RIMM) begins to lure app developers for the BlackBerry. (WSJ)

Dow Chemical (NYSE: DOW) to put $250 million into 11 universities over the next several years to bring in top students. (WSJ)

The FAA requests that tail parts on Boeing (NYSE: BA) 757s be checked. (WSJ)

Mattel buys children’s toy company HIT Entertainment. (WSJ)

Nokia (NYSE: NOK) has to quickly make new Microsoft (NASDAQ: MSFT) Windows-powered smartphones for the holiday season. (WSJ)

Morgan Stanley (NYSE: MS) to sell its subprime mortgage service company Saxon Mortgage Services. (WSJ)

Banks have few ways to make money on huge deposit pools. (NYT)

Greek bondholders resist plans for them to take 60% write-downs on the nation’s sovereign paper as a part of a restructuring. (FT)

U.S. mortgage bonds hit a six-month low on Obama’s home refinance program plans. (FT)

EU officials want more time to create a bailout facility. (Bloomberg)

Novartis (NYSE: NVS) to cut 2,000 people. (Bloomberg)

Banks in Italy and Spain may take the largest hits in an EU rescue plan. (Bloomberg)

Douglas A. McIntyre

Booz reports that: “As our annual Global Innovation 1000 study, now in its sixth year, has consistently demonstrated, the success of these companies is not a matter of how much these companies spend on research and development, but rather how they spend it.”

It is easy to guess that Apple (NASDAQ: AAPL) is in the top spot on the list, followed by Google (NASDAQ: GOOG), and 3M (NYSE: MMM). Facebook is in the top 10 for the first time. These companies will be the targets of the next wave of innovation, which means they will have to spend more and more to hold the positions they already have.

The overlap of these “innovators” with the firms that spent the most money on R&D last year is small. Most of the companies with massive R&D budgets are in the pharmaceutical industry. Roche, Pfizer (NYSE: PFE), Novartis (NYSE: NVS), and Merck (NASDAQ: MRK) are among the top 10 by dollars spent on R&D. Old world tech companies, such as IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT), Nokia (NYSE: NOK), Intel (NASDAQ: INTC) and Cisco (NASDAQ: CSCO), are also high on the list of companies that spent the most money last year. The group of largest R&D spenders also includes auto manufacturers Toyota (NYSE: TM), General Motors (NYSE: GM), Volkswagen and Honda (NYSE: HMC).

The difference between the two lists is that the largest spenders mostly invest dollars to stay in the places they already hold in the business world. Pharma companies need to replace drugs that are about to come off patent, or already have. Old world tech companies like Microsoft and Intel need to keep pace with firms that have new successful hardware and software products that challenge their sales. Auto companies are in a race to make their cars and light trucks safer and more useful to consumers.

But Apple, Facebook, and Google are only a few years away from the need to spend R&D money to hold their own rather than advance rapidly within their own industries. Almost no one believes it about Apple, but eventually there will come a time when its revenue growth is no longer in the high double digits. Google’s products like

Android and some of its search features already have stiff competition. Google might wish it had spent more R&D money on Android in the recent past. It has been assaulted by Microsoft over intellectual property issues. Android customers  now pay Microsoft IP licence fees in many cases.

It is easy to believe that the companies growing the fastest and with the most attractive products to consumers and businesses are the most innovative. This will not last for those firms. Eventually all companies spend R&D money to hold their positions within their industries. It is just a matter of the age of the each company’s products and the state of new competition, which is always entering the market — often aimed at the innovators with sharply growing sales.

Douglas A. McIntyre

Icahn Enterprise was thumped after it made a bid for Clorox, which was rejected. Boeing was hit because large customer American may buy jets from rival Airbus.

Microsoft sold off, probably because of news that smartphone partner is in more trouble

The Flame Index started as a research tool in 2008 at the NY Innovation Design Lab (nyidlab). It was used as a general metric to evaluate companies and their risk in the media. Publicly traded Fortune 500 companies are used as a measure to calculate an overall market of negative news and the companies are ranked within that market

Data and ranking provided by the Flame Index.