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Online marketplace operator eBay Inc. reports its first-quarter results Wednesday. The following is a summary of key developments and analyst commentary related to the period.

OVERVIEW: During its first quarter, San Jose, Calif.-based eBay continued to weather the global economic downturn and acknowledged that its marketplace business - which it has been struggling to improve - has a way to go. The company also talked up its online payments business, PayPal, and predicted that business will double in size by 2011.

Speaking during a day of analyst briefings in March, Chief Executive John Donahoe and other executives laid out changes to eBay's marketplace business, including focusing more on the market for offseason or liquidation-ready items, refining onsite search capabilities and working even more on cultivating buyers' trust.

EBay also said it expects PayPal, which is its second-largest business, to process between $100 billion and $120 billion in annual payments by 2011. In 2008, the service, which has 70 million active user accounts, processed $60 billion in transactions.

BY THE NUMBERS: In January, eBay forecast first-quarter earnings of 21 cents to 23 cents per share - or 32 cents to 34 cents per share when excluding items. The company also predicted $1.80 billion to $2.05 billion in revenue.

At the time, this was well below what analysts polled by Thomson Reuters were anticipating. Now, however, they expect eBay to report first-quarter adjusted earnings of 33 cents per share on $1.94 billion in revenue.

ANALYST TAKE: In a note to clients, Jefferies & Co. analyst Youssef Squali predicted the company's results will meet "muted expectations" and that management will maintain a cautious outlook for the rest of the year due to weakened consumer demand and eBay's ongoing work to improve its marketplace.

Squali rates eBay shares "Buy" with a $20 price target.

WHAT'S AHEAD: EBay is increasingly trying to focus on its marketplace and payment businesses and shed parts of the business that don't really fit in. This month, the company agreed to pay up to $1.2 billion to buy all outstanding common shares and American Depositary Shares of South Korea's biggest online marketplace, Gmarket.

Just two days earlier, eBay had said it plans to separate Internet communications service Skype from the rest of the company through an initial public offering in 2010. EBay bought Skype for $2.6 billion in 2005, but later wrote down much of its value - essentially an acknowledgment that the company had hugely overvalued it.

STOCK PERFORMANCE: Shares declined 10 percent during the quarter to close at $12.56 on March 31. The stock has since rebounded and traded at $13.94 in afternoon trading Monday, down 45 cents.

Copyright 2009 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Slowing tax revenues and a historic bailout of the U.S. financial system will drive the annual budget deficit to nearly $1.2 trillion this year, even without the massive economic stimulus package now under review by Congress, the Congressional Budget Office reported this morning.

The payroll processor reported 693,000 jobs lost in the U.S. private sector during the month, 223,000 more than forecast.

Wall Street struggled to find direction Thursday morning as mixed reports from the economy and the corporate sector had the market wobbling.

With the holiday week fast-approaching, volumes were light and investors appeared to shy away from aggressive moves in the equity markets, but there was plenty of action in commodities, currencies and government debt.

The Labor Department kicked off the day, reporting that initial jobless claims inched down to 554,000 last week, from 575,000 the week before. Meanwhile, continuing claims edged back below 4.4 million. The decline was positive news, but the hits keep coming; health insurance outfit Aetna (nyse: AET - news - people ) said it will cut its workforce by 1,000 jobs. (See "December 2008 Layoffs.")

A closely-watched reading on manufacturing activity was not as bad as feared; the Philadelphia Fed index came in at negative 32.9 for December. The figure indicates regional activity in the sector slowed less than expected, following a negative 39.3 reading in November.

Major indexes were little changed by midday, as the Dow was down 10 points, or 0.1%, to 8,814; the S&P 500 was up 2 points, or 0.3%, to 907; and the Nasdaq gained 3 points, or 0.2%, to 1,582. There was more action in other markets during the seesaw session though.

Traders scoffed at Wednesday's production cut of 2.2 million barrels of oil a day by the Organization of Petroleum Exporting Countries, sending crude down $1.98, to $38.08 a barrel. United States Oil Fund (nyse: USO - news - people ), an exchange-traded vehicle that seeks to mirror the movement of crude and other products, lost $1.64, or 4.7%, to $33.17. (See "Russia Dashes OPEC's Hopes.")

Treasury yields and the dollar continued to soften, after the Federal Reserve slashed its benchmark fed funds rate effectively to zero on Tuesday. The 10-year note's yield was down to 2.10%, from 2.20% Wednesday. The iShares Lehman 10-20 Year Treasury Bond Fund (nyse: TLH - news - people ), which tracks longer maturities, was up $1.92, or 1.6%, to $123.80. The euro sustained recent strength early, trading over $1.44 Thursday morning, but shed its gain and fell back to $1.429 by midday. (See "Helicopter Ben Goes ZIRP!")

The Senate Armed Services Committee report accuses Rumsfeld and his deputies of being the principal architects of the plan to use harsh interrogation techniques on captured fighters and terrorism suspects, rejecting the Bush administration's contention that the policies originated lower down the command chain.

"The abuse of detainees in U.S. custody cannot simply be attributed to the actions of 'a few bad apples' acting on their own," the panel concludes. "The fact is that senior officials in the United States government solicited information on how to use aggressive techniques, redefined the law to create the appearance of their legality, and authorized their use against detainees."

The report, released by  Sens. Carl Levin (D-Mich.) and  John McCain (R-Ariz.) and based on a nearly two-year investigation, said that both the policies and resulting controversies tarnished the reputation of the United States and undermined national security. "Those efforts damaged our ability to collect accurate intelligence that could save lives, strengthened the hand of our enemies, and compromised our moral authority," it said.

The panel's investigation focused on the Defense Department's use of controversial interrogation practices, including forced nudity, painful stress positions, sleep deprivation, extreme temperatures and use of dogs. The practices, some of which had already been adopted by the CIA at its secret prisons, were adapted for interrogations at Guantanamo Bay and later migrated to U.S. detention camps in Afghanistan and Iraq, including the infamous Abu Ghraib prison.

"The Committee's report details the inexcusable link between abusive interrogation techniques used by our enemies who ignored the Geneva Conventions and interrogation policy for detainees in U.S. custody," McCain, himself a former prisoner of war in Vietnam, said in a statement. "These policies are wrong and must never be repeated."

White House officials have maintained the measures were approved in response to demands from field officers who complained that traditional interrogation methods weren't working on some of the more hardened captives. But Senate investigators, relying on documents and hours of hearing testimony, arrived at a different conclusion.

The true genesis of the decision to use coercive techniques, the report said, was a memo signed by President Bush on Feb. 7, 2002, declaring that the Geneva Convention's standards for humane treatment did not apply to captured al-Qaeda and Taliban fighters. As early as that spring, the panel said, top administration officials, including National Security Adviser Condoleezza Rice, participated in meetings in which the use of coercive measures was discussed. The panel drew on a written statement by Rice, released earlier this year, to support that conclusion.

In July 2002, Rumseld's senior staff began compiling information about techniques used in military survival schools to simulate conditions that U.S. airmen might face if captured by an enemy that did not follow the Geneva conditions. Those techniques -- borrowed from a training program known as Survival, Evasion, Resistance and Escape, or SERE -- included waterboarding, or simulated drowning, and were loosely based on methods adopted by Chinese communists to coerce propaganda confessions from captured U.S. soldiers during the Korean war.

The SERE program became the template for interrogation methods that were ultimately approved by Rumsfeld himself, the report says. In the field, U.S. military interrogators used the techniques with little oversight and frequently abusive results, the panel found.

"It is particularly troubling that senior officials approved the use of interrogation techniques that were originally designed to simulate abusive tactics used by our enemies against our own soldiersand that were modeled, in part, on tactics used by the Communist Chinese to elicit false confessions from U.S. military personnel," the report said.

Levin, chairman of the Senate Armed Services Committee, said in a statement that "SERE training techniques were designed to give our troops a taste of what they might be subjected to if captured by a ruthless, lawless enemy so that they would be better prepared to resist. The techniques were never intended to be used against detainees in U.S. custody."

Defenders of the techniques have argued that such measures were justified because of al-Qaeda's demonstrated disregard for human life. But the panel members cited the views of Gen. David H. Petraeus, now the head of U.S. Central Command, who in a May, 2007 letter to his troops said humane treatment of prisoners allows Americans to occupy the moral high ground.

"Our values and the laws governing warfare teach us to respect human dignity, maintain our integrity, and do what is right," wrote Petraeus, who at the time was the top U.S. commander in Iraq. "Adherence to our values distinguishes us from our enemy."

In Pictures: What's Your Economic Outlook?

You know the economic outlook for much of the country is rough, with unemployment rising, home prices falling, credit short and manufacturing, retail and services all in decline. Bad news indeed. But--surprise--there are bright spots across the country.

According to the Federal Reserve's Beige Book report on regional economies, released Wednesday, areas around Boston, St. Louis, Chicago and San Francisco have seen increased demand in aerospace manufacturing. St. Louis, Dallas and San Francisco saw gains in food processing. Most of the Midwest has seen agriculture hold up well, and in Nebraska and Kansas, farmland prices continue to rise.

The Great Plains and East Coast (particularly around the mid-Atlantic) have seen relatively stronger demand for lower- and middle-priced "starter homes." The troubles of New York banks have actually led to increased volumes for banks in Pennsylvania and Ohio, as people turn from the national chains to regional firms.

Eight times a year, the Fed collects surveys from the 12 Federal Reserve districts, representing every region of the country. On Tuesday, the Bureau of Labor Statistics released its first look at unemployment in the country's metro areas for the month of October. Together, these two reports were the first deep look into how parts of the country are doing in the wake of this summer's banking implosion.

Though the regions are named after the city in which the Federal Reserve bank is located, they represent broader regions. Because the system was established nearly a century ago, the regions are not equally sized. The Boston Fed's domain is only the Northeast, whereas the San Francisco Federal Reserve covers the entire West Coast. But activity reported by the Fed's different districts represents the activity of entire regions, not just the central cities. (See a map of the Federal Reserve districts.)

The mood of the Fed's report is, on the whole, grim. In the dry parlance of the Fed report, New York's economy "deteriorated substantially"--worse than San Francisco's "weakened decidedly." Both regions would have been happy with the Fed's appraisal of Philadelphia's economy which "remained generally weak" or Boston's, which merely "slowed further."

News of a rapidly weakening job sent stocks falling Friday as investors feared that the recession will be deeper and more prolonged than many have expected. The major indexes were all down more than 1 percent and the Dow Jones industrials fell 180 points.

The Labor Department's report that employers slashed 533,000 jobs in November came in much higher than the 320,000 that economists forecast. The job losses were severe enough to add to expectations that Washington will have to take even bigger steps to boost the economy.

Although stocks fell after the report, analysts said Friday's retreat likely would have been steeper if the market hadn't tumbled in the final hour of trading Thursday in anticipation of a weak reading.

"What we're seeing here is the market telling you that a downward drop in employment was somewhat expected," said Craig Peckham, equity trading strategist at Jefferies & Co.

"In a kind of paradoxical sense, the really ugly employment numbers probably helped the case for more help from Washington, whether it's through the broader stimulus plan or more targeted industry measures."

Job losses were widespread, hitting manufacturing, construction, retail, financial and other sectors. It was the biggest monthly loss of jobs since 1974.

While the rise in the unemployment rate wasn't as steep as the 6.8 percent forecast, investors clearly believe the employment outlook remains bleak - especially as the layoffs keep coming. On Thursday, bellwether companies like AT&T Inc. and DuPont Co. announced they were cutting thousands of jobs.

The fear on Wall Street is that a rising unemployment rate will, among other things, lead to a more severe pullback in consumer spending, which is a crucial component to helping the economy rebound. Weak retail sales reports for the month of November released Thursday added to these concerns.

"The news is consistently dreadful and is likely to remain so for some time as layoffs continue and economic reports come in," said Gary Townsend, president and chief executive of private investment group Hill-Townsend Capital Inc.

In midmorning trading, the Dow Jones industrial average fell 180.40, or 2.15 percent, to 8,195.84 after falling 216 points Thursday.

Broader stock indicators also declined. The Standard & Poor's 500 index fell 17.93, or 2.12 percent, to 827.29, and the Nasdaq composite index fell 24.08, or 1.67 percent, to 1,421.48.

The Russell 2000 index of smaller companies fell 8.42, or 1.92 percent, to 431.11.

Five stocks fell for every one that rose on the New York Stock Exchange, where trading volume came to a moderate 302.2 million shares.

Bond prices showed modest movements Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, inched up to 2.57 percent from 2.56 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.02 percent from below 0.01 percent late Thursday, but still indicated extreme fear among investors.

The dollar rose against other major currencies, while gold prices fell.

Light, sweet crude fell $1.71 to $41.96 a barrel on the New York Mercantile Exchange. Concerns about the economy and weakening energy demand have kept oil prices down near four-year lows. The price of oil has fallen a staggering 70 percent since peaking at $147.27 in July.

Independent investment strategist Edward Yardeni said Friday's employment snapshot confirms the nation is mired in a difficult recession but that the extent of the weakness likely will galvanize government officials.

"The number was a shocker to such an extent that it's clearly going to require an enormous stimulus response from Washington," he said. "Cleary the Fed and the Treasury are going to move even faster."

The Federal Reserve and the Treasury have been taking unprecedented steps to revive the economy since the mid-September bankruptcy of Lehman Brothers Holdings Inc. Other programs have sprung from the government's $700 billion bailout of the banking sector. The Treasury said Thursday it is considering a plan to encourage banks to make mortgage loans at low rates. That could help patch up the troubled housing market, which many analysts say is crucial to any economic recovery.

Wall Street has reacted with both optimism and indifference in recent months as policymakers have tried to revive troubled credit markets and stabilize wobbly banks. Some analysts have been hopeful that relative quiet in the markets for more than a week portends a return of some stability because of the government's efforts, while others warn that the volatility in the market will continue.

"The markets are, in my view, acting not stable at all but with excessive volatility and unpredictability," Townsend said. "It's a very difficult market to invest into and a very difficult market to trade."

Part of investors' uncertainty centers on the automakers. Investors are observing a second day of congressional hearings with the heads of Detroit's top three automakers, who are appearing on Capitol Hill in an effort to save their troubled industry.

General Motors Corp., Ford Motor Co. and Chrysler LLC are collectively seeking $34 billion in emergency funding. While the market largely expects the companies will win some sort of government aid, support for the troubled carmakers isn't assured. Friday's jobs report likely put added pressure on lawmakers to offer a lifeline that would let the companies avoid bankruptcy.

GM fell 5 cents, or 1.2 percent, to $4.06, while Ford rose 9 cents, or 3.4 percent, to $2.75. Chrysler isn't publicly traded.

Meanwhile, Merrill Lynch & Co. shareholders approved the investment bank's sale to Bank of America Corp. early Friday, in a move that will create the nation's largest financial services firm.

Bank of America agreed to buy Merrill for $50 billion after the collapse of rival investment firm Lehman Brothers Holdings Inc. in September raised doubts about the viability of independent investment banks in general. The value of the all-stock deal has since fallen to about $20 billion, based on Bank of America's Thursday closing price of $14.34.

Bank of America shareholders were set to vote on the acquisition at 11 a.m. EST. The deal is expected to close during the first quarter.

Optimism that buoyed some overseas markets following massive interest rate cuts across Europe Thursday deflated following the report on U.S. jobs. In afternoon trading, Britain's FTSE 100 fell 2.26 percent, Germany's DAX index fell 4.71 percent, and France's CAC-40 declined 5.72 percent. Japan's Nikkei stock average slipped 0.08 percent on the day.

Copyright 2008 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

Government reported a much higher than expected 533,000 jobs evaporated, and the jobless rate reached 6.7%, from 6.5% in October.

The government released a quartet of reports Wednesday that paint a bleak picture of the nation's economy: Jobless claims remain at recessionary levels, Americans cut back on their spending by the largest amount since the 2001 terrorist attacks, orders to U.S. factories plummeted and homes sales fell to the lowest level in nearly 18 years.

The Labor Department reported that initial requests for unemployment benefits fell to a seasonally adjusted 529,000 from the previous week's upwardly revised figure of 543,000. But claims remain at recessionary levels. The four-week average, which smooths out fluctuations, rose to 518,000, its highest level since January 1983, when the economy was emerging from a steep recession.

One minor bright spot showed the number of people continuing to claim unemployment insurance dropped unexpectedly to 3.96 million, from the previous week's 4.02 million, which was the highest level in 25 years. The labor market has grown by about half since 1983.

Meanwhile, the Commerce Department reported that consumer spending plunged by 1 percent in October, even worse than the 0.9 percent decline that had been expected. Consumer spending accounts for two-thirds of total economic activity.

Orders to U.S. factories for big-ticket manufactured goods also plunged last month by the largest amount in two years. Orders for durable goods dropped by 6.2 percent, more than double the decline economists expected. The Commerce Department report showed widespread declines throughout manufacturing led by decreases in autos and airplanes.

The department also reported that new home sales decreased 5.3 percent last month to a seasonally adjusted annual sales pace of 433,000 homes, the lowest level since January 1991, another period when the country was undergoing a steep housing downturn.

The median price of a new home sold in October fell to $218,000, down 7 percent from a year ago, and the lowest since September 2004.

Wall Street appeared ready to give back some of its recent gains as investors reacted to the downbeat economic readings. The Dow Jones industrial average fell more than 60 points in early trading Wednesday. The stock market is coming off of three sessions of gains, so some giveback, especially with disappointing data, is to be expected.

With the economy showing further signs that it is headed into a steep swoon, the administration and the Federal Reserve rolled out two new programs Tuesday that would provide up to $800 billion in an effort to get more loans flowing in such critical areas as mortgage lending, credit cards, auto loans and small business loans.

Credit markets liked the new efforts, but private economists said the new moves were not likely to be the last changes in the government's vast rescue program, which has already undergone significant alterations since it was passed by Congress on Oct. 3.

Analysts believe more work will need to be done because of their expectations that the economy's vital signs will continue to worsen as the country slips into what many believe could be the worst recession since the early 1980s.

The unemployment rate has hit a 14-year high of 6.5 percent, putting pressure on personal incomes. The government reported Tuesday that the overall economy, as measured by the gross domestic product, shrank at an annual rate of 0.5 percent in the July-September quarter, reflecting the fact that consumer spending fell at the fastest pace in 28 years.

Nariman Behravesh, an economist at IHS Global Insight, said he was expecting GDP to shrink at a 4 percent rate in the current quarter, reflecting the battering consumers are taking from the worst financial crisis since the 1930s. He predicted that the economy would remain in recession through the first half of next year.

"We are in the early stages of one of the worst recessions in the postwar period, even factoring in a massive stimulus program," Behravesh.

To revive the economy, President-elect Barack Obama has said a top priority will be working with Congress to enact a stimulus package with the goal of creating 2.5 million new jobs over the next two years. Analysts believe such an effort will require spending between $500 billion to $700 billion, a figure that would be on top of all the money being spent to stabilize the financial system.

In the latest efforts to stabilize the financial system, the Federal Reserve announced Tuesday that it will buy $200 billion in securities backed by different types of debt including credit card loans, auto loans, student loans and loans to small businesses. That market essentially froze in October. These types of loans as a result have become harder to obtain and have carried higher interest rates

The Fed also announced that it will spend $500 billion to buy mortgage-backed securities guaranteed by mortgage giants Fannie Mae and Freddie Mac and another $100 billion to directly purchase mortgages held by Fannie, Freddie and the Federal Home Loan Banks.

This would greatly expand an initial modest effort announced in September with the goal of creating increased demand for mortgage-related assets. The hope is that this will drive down the price of mortgages and make home loans more available.

Analysts predict the Fed program could send mortgage rates down by as much as one-half to a full percentage point in coming months, helping to spur demand in the beleaguered housing market, which is suffering its worst downturn in decades.

The latest federal moves raised U.S. commitments to contain the financial crisis to nearly $7 trillion -- though no one thinks the government will actually spend anything like that figure.

In the case of the Federal Reserve, the amount covers huge loans that financial institutions will have to pay back. In the case of the Treasury rescue effort, the government will at some point sell the stock it owns back to the banks, presumably when the banking system is doing better and the stock will be worth more.

Shares of Borders Group Inc. plunged Friday after its top competitor reported disappointing third-quarter results, setting a dark stage for Borders to report its results next week.

Shares of Borders fell 26 cents, or 19 percent, to $1.11 Friday. Earlier in trading shares reached 72 cents, their lowest point ever.

Booksellers have been struggling more recently as consumers limit their spending on discretionary items such as books and music. They also face increased competition from discounters such as Wal-Mart and Target and online sellers such as Amazon.com.

Although Borders has been in a turnaround, it has been unable to find a buyer for the bulk of its business.

And its larger competitor Barnes & Noble reported a larger-than-anticipated loss Thursday, which doesn't bode well for Ann Arbor, Mich.-based Borders. The company is expected to report its third-quarter results Tuesday after the market closes.

Analysts surveyed by Thomson Reuters expect Borders to post a loss of 50 cents per share, on average, on revenue of $726.5 million. That compares with a loss of $161.1 million, or $2.74 per share, on revenue of $813.6 million in the year-ago quarter. The loss from continuing operations was 66 cents per share.

Standard & Poor's Equity Research reiterated its "Hold" recommendation on Borders but widened its per-share loss estimated to 60 cents from 45 cents, based on drops in traffic and increased promotion activity that could hurt margins.

S&P analyst Michael Souers said the trend is likely to continue and lowered his profit estimates for fiscal 2009 and 2010 and cut his target price to $1 from $7.