Holiday Gifts: Building Sets for Girls Take Off

Morning Business Memo…

One of the hot holiday trends in toyland is construction sets for girls. Lego Friends is a line of pastel construction toys and it's been a hit this year. "We were very skeptical to begin with," says Stephanie Oppenheim of the ratings and testing site, Most building sets for girls involve shopping malls or beauty shops, but this line is different, says Oppenheim. "What it did was wonderful: it had girls interested in building."

For the first time in its history, Mattel has introduced a Barbie line of construction sets. "That underscores a huge shift in the marketplace," declares today's New York Times. "Fathers are doing more of the family shopping just as girls are being encouraged more than ever by hyper vigilant parents to play with toys (as boys already do) that develop math and science skills early on."

In other business news today, executives in the defense industry have a bad case of cliff concern. They've issued a public warning about what could happen to jobs and factories if Congress and the White House tumble over the fiscal cliff next month. Executives of more than 100 defense contractors warn that spending cuts triggered by the cliff are hiring their companies and the economy. "Companies are hesitant to hire due to uncertainty," says Wes Bush, chairman of Northrop Grumman. American manufacturing contracted in November for the first time in three months…Factories cut back on hiring with uncertainty about the fiscal cliff. The Institute for Supply Management's index of manufacturing activity fell to its lowest level in three years.

The risk of higher taxes next year is prompting more companies to boost cash dividends. Oracle is the latest, announcing that it will pre-pay $867 million that were not due until next year. Automatic tax increases may be triggered next month, and Congress is considering a series of changes to the tax code that may include an increase on rates for dividends and capital gains. Last week Costco announced a big dividend payout to shareholders, aimed at beating the year-end deadline.

As forecast yesterday by the Morning Business Memo, car and truck sales posted a big gain last month, rising to their highest level in over four years. Most major companies from Chrysler to Toyota announced solid increases compared with the year before. Only General Motors was close to even with a small 3 percent sales gain. Superstorm Sandy gave an added push to vehicle sales. Ford estimates that the storm added 20,000 to 30,000 sales industry wide in November, mostly from people who planned to buy cars during the October storm but had to delay their purchases. People who need to replace storm-damaged vehicles are expected to drive sales for several more months. GM estimates that 50,000 to 100,000 vehicles will eventually need to be replaced.

Richard Davies Business Correspondent ABC NEWS Radio

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