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In an attempt to deflect rising anger among American drivers and political leaders, Exxon Mobil said Thursday that it makes relatively little money on gasoline, even as it reported a nearly $11 billion quarterly profit.

"We understand that it’s simply too irresistible for many politicians in times of high oil prices and high earnings — they feel they have to demonize our industry," said a statement from Exxon vice president Ken Cohen.

The statement argued Exxon is not to blame for the recent surge in gas prices, now above $4 a gallon in many areas.

Exxon argued that most of its profit comes from overseas operations, and that earnings in its refining business, which converts crude into gas, make up only 6% of its earnings.

The company said the recent surge in oil prices is due to strong global energy demand, and a stormy political climate in the Middle East and the weak U.S. dollar.

In addition, Exxon said federal and state taxes make up 40 to 60 cents of the price for a gallon of gas, compared with the 7 cents per gallon that the company earns.

Exxon also lashed out at the task force recently created by the Obama administration to crack down on speculation in the oil and gas market.

In response to recent criticism of tax loopholes for the oil industry, Exxon said it has paid nearly $59 billion in U.S. taxes over the past five years, including $9.8 billion last year.

The retort came after Exxon Mobil, the world’s largest publicly traded oil company, said it earned $10.7 billion in the first three months of 2011, up from $6.3 billion in the same period last year.

Exxon chief executive Rex Tillerson said the performance reflects higher crude oil and natural gas "realizations," using industry jargon for prices.

Tillerson also pointed to strength in Exxon’s chemicals business and improved refining margins.

Oil prices averaged $95 a barrel in the first quarter, compared with $79 a barrel in the first quarter of last year.

But the rally in the oil market accelerated toward the end of the quarter, with prices powering above $100 a barrel in March. In April, oil prices have averaged nearly $110 a barrel, up 20% from the start of the year.

The spike in gas prices has weighed on consumer spending, and put a damper on economic growth in the first quarter.

While oil prices remain below the record highs of nearly three years ago, the recent run has raised hopes among investors that 2011 could be another banner year for Exxon.

In 2008, Exxon reaped the largest annual profit of any company in U.S. history, reporting a whopping $45 billion on the back of high oil prices. Its largest quarterly profit, $14.8 billion, came in the third quarter of that year.

Other major oil companies have also benefited from the recent run-up, including Royal Dutch Shell (RDSA), which said Thursday that profits rose 40% in the first quarter to $6.9 billion. Chevron (CVX, Fortune 500), the world’s second-largest publicly owned oil company, is scheduled to report results Friday.

Despite the strong results, shares of Exxon (XOM, Fortune 500) edged down 0.6% to $87.27 each. But the stock is up 20% so far in 2011, making it the best performer in the Dow Jones industrial average after Caterpillar (CAT, Fortune 500). 

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Modest economic growth in the U.S. and mixed corporate earnings dampened stock market sentiment in Asia on Friday.

Hong Kong’s Hang Seng index was down 0.4 percent to 23,805.63, with yuan shares of Hui Xian Real Estate Investment Trust falling 3.6 percent in their trading debut. They are the first shares denominated in China’s currency to trade outside of mainland China.

South Korea’s Kospi index slipped 0.6 percent to 2,194.54, with technology shares dragging the index down.

Samsung Electronics lost 1.4 percent after the company announced its profit fell 30 percent in the first quarter on declines in memory chip prices and reduced profitability in liquid crystal displays and flat screen televisions. Rival Hynix Semiconductor Inc. slid 2.6 percent. LG Electronics lost 3.7 percent.

Australia’s S&P/ASX 200 was off 0.9 percentto 4,827.40, with mining shares among the big losers. The world’s biggest mining company, BHP Billiton Ltd., fell 1.1 percent. Shares in Rio Tinto Ltd. lost 1.5 percent.

Singapore’s FTSE Straits Times Index was lower, while benchmarks in Taiwan, Indonesia, and New Zealand rose. On the Chinese mainland, the Shanghai Composite Index was flat at 2,885.90.

Japan’s Nikkei 225 was closed for the start of Golden Week holiday.

On Wall Street, stocks closed at another 2011 high Thursday despite modest U.S. economic growth in the first quarter.

The U.S. economy grew a 1.8 percent annual rate between January and March. That’s the weakest rate since last spring and underscores concerns about the strength of the U.S. recovery. Higher oil prices cut into consumer spending and bad weather slowed down construction projects.

The S&P 500 rose 4.82 points, or 0.4 percent, to 1,360.48. The Dow Jones industrial average rose 72.35, or 0.6 percent, to 12,763.31. The Nasdaq composite gained 2.65, or 0.1 percent, to 2,872.53.

Corporate earnings were mixed. Procter & Gamble Co. rose nearly 1 percent after the maker of Tide detergent and Pampers diapers reported higher earnings but cut its forecast for the year due to rising costs for raw materials. Exxon Mobil Corp. _ the world’s largest publicly traded company _ fell 0.5 percent even after the oil giant reported its best quarterly earnings since 2008 _ perhaps due to high expectations.

More people applied for unemployment benefits for the first time last week. The increase, the second in three weeks, suggests that the job market remains sluggish.

Benchmark crude for June delivery was down 40 cents to $112.46 in electronic trading on the New York Mercantile Exchange. The contract settled at $112.86 per barrel on the Nymex on Thursday.

The euro was minimally higher at $1.4823 from $1.4821 late Thursday in New York. It had peaked at $1.4881 Thursday, its highest point in nearly 17 months before softening slightly. The dollar weakened to 81.54 yen from 81.57 yen.

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Ford Motor combined strong sales and improved pricing to roar past earnings forecasts and post its best first-quarter profit since 1998.

Ford earned $2.6 billion, or 61 cents a share, up 22% from a year earlier, the company said Tuesday. The earnings not only topped the consensus forecast of 50 cents a share, they were better than the most bullish estimate of any analyst surveyed by earning tracker Thomson Reuters.

The last time Ford earned this much in the first quarter was in 1998, when the company sold part of its financial services unit. The past quarter’s performance underlined the continued turnaround at the company, which has now posted seven straight quarters of profit after years of losses.

Shares of Ford (F, Fortune 500) climbed nearly 3% in morning trading to $15.96. Ford’s stock has struggled since the company missed earnings forecasts with its fourth-quarter results, then was hit by investor worries about the impact of higher gas prices.

Revenue rose 18% to $33.1 billion, which also easily topped the most optimistic forecasts, as the number of vehicles Ford sold worldwide climbed 12%. In March, Ford’s U.S. sales topped those of rival General Motors (GM) for the first time since 1998.

"Our team delivered a great quarter, with solid growth and improvements in all regions," said CEO Alan Mulally in the company’s earnings statement.

Mulally told analysts and journalists that rising gas prices could slow economic growth both domestically and worldwide, but that Ford still anticipates stronger demand for cars the rest of the year paperless payday loans.

That forecast was buttressed by the consumer confidence survey released Tuesday by the research organization The Conference Board, which found 4.7% of consumers intending to buy a new car in the next six months, despite lingering concerns about the economy. That is the highest intention-to-buy reading in that part of the survey since 1999.

Mulally said the gas price rise is causing a shift towards smaller, fuel-efficient vehicles, which typically sell at a lower profit margin that larger cars and trucks. But he said Ford’s new lineup of small cars leaves it well positioned for this shift, and Ford is finding small car buyers willing to pay extra for more features on their cars.

While the number of vehicles sold was not a surprise, the revenue per car was stronger than analysts had expected, helping the company to exceed expectations. Improved pricing allowed it to post increased profits in all of its various regions worldwide.

Ford did not give a specific earnings target for the rest of the year, although it said it expects to continue to post improved results. But it warned that lower profit from its Ford Credit unit, higher commodity prices, seasonal factors and the need for increased investments and costs related to its longer-term plans will make it difficult to match the first quarter’s strong results later this year.

Still, Ford said it expects to continue to gain market share in both the U.S. and European markets. 

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Despite flat sales, Express Scripts was able to raise its first quarter profits by reducing costs.

The St. Louis-based pharmacy benefits manager reported a net income of $326.5 million, or 61 cents a share, compared to $260.2 million, or 47 cents a share, a year ago. Sales declined 0.4 percent to $11.1 billion.

When adjusted for non-recurring items, the earnings per share was 66 cents. This was below the average estimate of 69 cents among analysts polled by Bloomberg News.   

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Portugal’s 2010 budget deficit was revised to 9.1 percent of gross domestic product from 8.6 percent after the government added three highways onto its accounts, the National Statistics Agency said today in an e- mailed statement.

The government in March reported an 8.6 percent deficit for 2010, missing its target of 7.3 percent. Accounting changes ordered by Eurostat, the European Union’s statistics agency, forced the state to add more than 2 billion euros ($2.9 billion) to the 2010 deficit for impairment costs stemming from the 2008 seizure of Banco Portugues de Negocios SA and also for charges linked to the public-transportation system.

Without those additional charges, the deficit would have been 6.8 percent of GDP, Finance Minister Fernando Teixeira dos Santos said at the time.

Today’s revision had to do with charges related to three highways, two of which previously had been free until the government introduced tolls.

“The economic rationale is that when final users pay the majority of the cost of the service, the investment is to be recorded on the balance sheet of the institutional unit receiving these fees,” according to the statement. “As the government receives these tolls, this implies that the assets integrated in these contracts are considered as an investment of the General Government, affecting in consequence the respective net borrowing.”

The statistics office also revised the 2009 budget to 10.1 percent of GDP from 10 percent. These changes will lead to a reduction in the deficits in the future, according to the statement.

Portugal earlier this month became the third country to request aid from the EU, after Greece and Ireland. International Monetary Fund, European Commission and European Central Bank officials are in Lisbon to prepare an estimated 80 billion-euro aid program.

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Ingersoll-Rand announced this morning that it is seeking to sell its Hussmann refrigerated display unit, which employs more than 500 people in the St. Louis area, but a buyer has not yet been identified.

Last month, news service Reuters, citing anonymous sources, reported Hussmann was being shopped to private equity firms for under $1 billion.

The sale is part of Ingersoll-Rand’s efforts realign its product portfolio to focus on its core businesses, which include Trane commercial HVAC systems, Thermo King temperature control systems, Club Car golf carts, Schlage security systems and Ingersoll-Rand compressed air systems, tools and pumps no fax payday loans.

Companywide, Ingersoll-Rand had $14 billion in revenue last year, a 7.5 percent increase over 2009.

Hussmann, which had $800 million in revenue in 2010, manufactures refrigerated display cases used in grocery stores and other retail outlets. It has five manufacturing facilities, including a 1.6 million-square-foot facility in Bridgeton. Companywide, Hussmann has 3,400 employees.

Ingersoll-Rand has 990 employees in the St. Louis area, including those employed at Hussmann and some other business units owned by Ingersoll-Rand.

Last month, Gary Reay, president of United Steelworkers of America Local 9014, said Hussmann employs 525 steelworkers, down from 2,200 in 2000.

Ingersoll-Rand spokeswoman Misty Zelent said  Ingersoll-Rand would not comment on the timing of the sale. Hussmann employees were notified of the pending sale Thursday, she said. 

Hussmann was founded in St. Louis in 1906 and sold to Ingersoll-Rand in 2000 for $1.55 billion.

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Online discount broker E-Trade Financial Corp. on Wednesday posted a first-quarter profit that beat Wall Street estimates as it set aside less money to cover bad loans.

The company, which also offers banking services and mortgages, said it earned $45 million, or 16 cents per share, in the three months ended March 31. That compares with a loss of $47.8 million, or 25 cents per share, in the year-ago period.

Analysts on average expected a profit of 12 cents per share, according to FactSet.

The company said it set aside $116 million in provisions from loan losses for the quarter, which is less than half the $268 million it set aside a year ago. Total net revenue was flat at $537 million.

E-Trade, based in New York, has been working to recover from credit losses linked to bad loans during the financial crisis. The company said it shrank its loan portfolio by $900 million in the quarter, leaving the portfolio at $15.2 billion. E-Trade has said it plans to continue shrinking the portfolio by an average of $800 million a quarter.

CEO Steve Freiberg noted that the company’s overall balance sheet has not been shrinking, however, as it continues adding customer assets.

In the latest quarter, E-trade recorded 51,000 net new brokerage accounts, compared with 28,000 in the prior quarter and just 2,000 a year ago. Net new brokerage assets were $3.9 billion, up from $2.2 billion a year ago. Daily average revenue trades rose 14 percent to 177,000.

Freiberg noted that customer retention also improved, with attrition at less than 10 percent in the quarter. That’s compared with the company’s traditional attrition rate of 15 percent a year.

“I wouldn’t say that was a proud tradition,” Freiberg said.

But he noted that the company made progress with adjustments to its pricing strategy last year and a continued focus on improving service. The company is also looking to broaden its relationship with higher net worth customers.

In the latest quarter, commissions, fees and service charges, principal transactions and other revenue totaled $201 million, compared with $196 million a year ago.

The company has also been working to control costs; total operating expenses rose slightly to $298 million, from $295 million a year ago. That’s even as advertising and marketing costs were stepped up to $44.4 million, from $38.1 million a year ago.

Freiberg was hired about a year ago to replace interim CEO Robert Druskin, who had taken over after Donald Layton left the top spot. Layton, a former JPMorgan Chase & Co. executive, had been hired in March 2008 to help extricate E-Trade from its steep investment losses.

Shares of E-Trade were up 54 cents, or about 3 percent, at $16.46 in after-hours electronic trading. The stock closed up 18 cents at $15.92 during the regular session.

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Egypt’s benchmark stock index tumbled over 3 percent on Monday, pulling the market lower for a second consecutive day as investor worries mounted that an investigation into the head of a leading Mideast private equity firm signaled a major widening in anti-corruption probes.

The Egyptian Exchange’s benchmark EGX30 was off 3.2 percent by 1:15 p.m. Cairo time, building on the previous day’s 3.43 percent decline.

The drop pushed the index’s year to date losses to over 30 percent _ a clear reflection of the crisis of investor confidence confronting the Arab world’s most populous nation in the wake of the uprising that ousted former President Hosni Mubarak.

Brokers said the drop was fueled by authorities’ decision to ban Ahmed Heikal, the chairman of Citadel Capital, from traveling abroad and a decision late last week by an Egyptian government agency to rescind preliminary approval to sell 20 million meters of land to the Egyptian Resorts Company.

One of ERC’s board members is already under investigation for alleged links to violence against the protesters in the initial days of the uprising.

“It’s clear people are panicked because of these decisions,” said Khaled Naga, a senior broker with Mega Investments.

Egypt’s new military rulers and civilian authorities, under pressure from protesters to move forward more quickly with pledges to hold accountable former regime officials and businessmen seen as benefiting from links to Mubarak and the then-ruling National Democratic Party, have stepped up investigations against these individuals.

In the span of about a week, authorities have ordered Mubarak detained in hospital, placed his two sons in detention in Cairo’s notorious Tora prison and charged a former prime minister and two other ministers with corruption.

Those moves have largely been welcomed as evidence of political reform. But the cozy links between the regime and top businessmen has also sparked worries that the investigations could affect some of the country’s blue chip companies payday loans for bad credit.

Economists and analysts say that the rampant corruption in Egypt under Mubarak meant that success in business involved having to cozy up to the regime. While there needs to be a reckoning, it must be within certain bounds so that the broader economy is not affected, economists said.

“Instead of going after every businessman, they should be much more mindful of fixing the system so that it becomes more transparent,” said John Sfakianakis, chief economist with the Riyadh, Saudi Arabia-based Banque Saudi-Fransi, adding that the new Egyptian government cannot simply “react to popular sentiment” calling for broader crackdowns.

“They should be looking at the system instead of the actors. The system was corrupt,” he said.

The order barring Heikal from travel, announced last week at roughly the same time that a government agency rescinded a deal to sell 20 million meters of land to ERC, appeared to be cases in point of how such allegations of cronyism could impact the market.

The stock market’s big board was awash in red. Of the 181 listed companies, 172 were posting losses, according to the exchange’s Web site.

Citadel’s shares were down 9.59 percent, while investment bank EFG-Hermes saw its shares tumble 9.9 percent, according to information on financial data Web site, Zawya.com.

Heikal, Citadel’s chairman, had been a managing director at EFG before founding the private equity firm and the investment bank’s shares appeared to be taking a beating in part because of his prior links to the institution.

EFG, in a statement filed with the Egyptian Exchange, also said that its brokerage head, Sherif Cararah, had decided to resign effective June 30. The statement did not provide a reason.

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China will continue tightening monetary policy for “some time,” central bank Governor Zhou Xiaochuan said a day after the world’s second-biggest economy reported inflation accelerated to the fastest pace since 2008.

“We will remove the monetary factors that are related to inflation,” Zhou said at a briefing today in the southern Chinese province of Hainan, where he’s attending the Boao Forum for Asia. “Our monetary policy will continue to move from moderately loose to prudent. This means properly tightening. The trend will continue for some time.”

China may increase the reserve requirement ratio for the nation’s banks this month in an effort to curb inflation, which the government said yesterday accelerated to 5.4 percent in March, according to Barclays Capital and Citic Securities Co. The People’s Bank of China has raised interest rates four times and increased reserve requirements six times since the third quarter of last year in a bid to rein in consumer prices.

“Policy tightening should remain firm,” Chang Jian, a Hong Kong-based economist with Barclays Capital, said by phone today. “Inflation risk remains significant. If they maintain the tightening stance and continue to withdraw liquidity and continue to control credit as well as the pace of lending, that at least gives you a higher chance of success.”

Economic Growth

China’s economy grew 9.7 percent in the first quarter, faster than the 9.4 percent median estimate in a Bloomberg survey, according to figures released by the National Bureau of Statistics yesterday.

The central bank reported a day earlier that M2 money supply grew a faster-than-expected 16 guaranteed cash advance.6 percent in March, and that new yuan loans for the month also exceeded economists’ estimates at 679.4 billion yuan.

China last increased the reserve requirement effective from March 25 and raised benchmark lending and deposit rates from April 6. The central bank has also imposed differentiated reserve requirements on the nation’s lenders. The reserve ratio is 20 percent for China’s biggest banks and the one-year benchmark for borrowing costs is 6.31 percent.

Zhou said today China would continue to use differentiated regulations for financial institutions based on their systemic importance. He also said there isn’t an absolute ceiling for the level of banks’ reserve requirements.

“I agree with the general view that there is no absolute line or limit for where to set the reserve requirement ratio,” Zhou said. “It depends on many conditions. When those conditions change, the force and room for reserve requirement ratio adjustments will also change.”

Inflation in March was largely driven by food costs, which rose 12 percent last month from a year earlier. Non-food inflation accelerated to 2.7 percent.

–Eva Woo, Henry Sanderson. With assistance from Huang Zhe in Beijing. Editors: Bloomberg News, Reinie Booysen

To contact Bloomberg News staff on this story: Eva Woo in Beijing at +86-10-6649-7537 or ewoo9@bloomberg.net

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China’s central bank governor has renewed promises to ease controversial exchange rate controls _ but says change will be gradual.

Zhou Xiaochuan said Friday that the exchange rate of China’s yuan will be made “more flexible” but in a “step by step” way, the official Xinhua News Agency reported.

Washington and other governments complain China keeps the yuan undervalued, distorting trade and hampering a global recovery. Officials of the Group of 20 major economies meeting Friday in Washington agreed to look at “currency misalignments,” a response to frequent complaints about the yuan.

Beijing promised more flexibility in June, but the U.S. Treasury Department says the 4.5 percent increase in the yuan, also known as the renminbi, against the dollar since then has been too slow.

“China will continue to carry out reform in the financial department, including currency reform, pushing forward development of an ‘exchangeable renminbi’ and making the renminbi exchange mechanism more flexible,” Zhou said at a conference in the southern Chinese city of Bo’ao, according to Xinhua.

“This is what we want to do, and we should do it step by step,” Zhou said.

Beijing’s controls require it to buy dollars and other foreign currency to restrain the yuan’s rise. China’s foreign reserves soared above $3 trillion in March, a sign the central bank is still intervening in currency markets despite the June promise.

In a report this week, the International Monetary Fund cited Beijing’s currency controls as one factor that might weaken a global economic recovery.

Officials including Premier Wen Jiabao have ruled out a fast appreciation of the yuan, saying that might hurt Chinese companies and cost jobs.

Analysts expect Beijing to allow the yuan to rise to cool inflation, which surged to a 32-month high of 5.4 percent in March. A stronger yuan would help to restrain prices by making oil and other imported goods cheaper in Chinese currency terms.

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