Thursday morning headlines

Stocks plunging: A rise in new jobless claims dampens hopes that the January employment report due tomorrow will show a net gain of new jobs. Plus, other stuff. Dow is down about 170 points.

Prius brake update: Toyota admits there have been problems with the 2010 model of its popular hybrid. Apparently, the brakes failed to work immediately on bumpy or slippery roads. From the NYT:

Toyota's manager in charge of quality, Hiroyuki Yokoyama, said the company had identified the problem and corrected the glitch for Priuses sold since late January. He said the company was still considering what actions to take for cars already on the road and had not ruled out a recall. Mr. Yokoyama told reporters that the new Priuses experienced "a slight unresponsiveness" of the brakes that he said was easy to resolve by pressing harder on the brake pedal. The problem occurred, he said, because the technologically advanced Prius has two braking systems, and a glitch sometimes prevented the car from transitioning smoothly between the two.

Toyota turns profit: That's for the October-December quarter, before the current crisis erupted. Ironically, the carmaker cited stronger sales for the Prius. From AP:

Toyota for the first time gave an estimate of the costs of the global recall at up to 180 billion yen ($2 billion), with 100 billion yen ($1.1 billion) for repairs and 70 billion yen ($770 million) to 80 billion yen ($880 million) in lost sales.

Retailers show modest gains: Macy's reports solid sales for January, thanks to a restructuring. It's lifting its fourth-quarter earnings forecast. Costco and Limited also did well for the month. (AP)

Council delays cuts: Still no action in dealing with the city's massive deficit. The council voted to seek another list of possible job cuts and promised not to vote on layoffs for 30 days. Best line of the day comes from Councilman Herb Wesson: "I just have this weird feeling that we are going in the wrong direction." (LAT)

New taxes?: Councilman Bill Rosendahl suggests placing a parcel tax on the November ballot as a way of generating more revenue. Councilwoman Janice Hahn is looking at a variety of tax increases. From the Daily News:

If formally proposed, a new tax is likely to meet with opposition from taxpayer groups and local activists. Jon Coupal, president of the Howard Jarvis Taxpayers Association, said he would oppose the tax. He noted that city voters approved an increase in trash fees four years ago to help expand the Los Angeles Police Department, yet even that agency may be subject to potential cuts now. "The bad decisions the city has made relative to its pensions in the past are coming home to roost," Coupal said.

NASA stifles defense firms: The decision to scrap a moon mission is bad news for the companies that would have been developing new rockets and spacecraft. From the LAT:

But NASA's new direction could be a boon to private space entrepreneurs, who have thus far been funding their ventures mostly on their own dime. If the plan makes it through Congress -- a big if at that -- funding for spacecraft development could shift dramatically from entrenched defense firms to privately funded start-ups.

Hollywood Video parent files for bankruptcy: Movie Gallery plans to close 805 poorly performing U.S. stores (in addition to locations that have closed in the past year). Company is getting killed by Netflix and Redbox. (Reuters)

NBCU being studied: Comcast COO Stephen Burke has been picking the brain of Randy Falco, a former top network executive, to see who should stay and who should go when the cable giant takes over. (NY Post)

Blogging loses luster: Shhhh, don't tell anybody, but a new Pew Research study says teenagers and young adults spent less time blogging during the past three years and more time on Facebook. Twitter has failed to catch on with most teens. (SF Chronicle)