MONEY talks, but can it also track your movements?

In a new government warning in the United States, the defence department has cautioned American contractors over what it described as a new espionage threat: coins with tiny radio frequency transmitters hidden inside.

The government said the mysterious coins were found planted on US contractors with classified security clearance on at least three separate occasions between October 2005 and January 2006 as they travelled through Canada.

Intelligence and technology experts said such transmitters, if they exist, could be used to surreptitiously track the movements of people carrying the spy coins. The CIA has acknowledged that its own spies have used hollowed silver dollars to hide messages and film.

The US report does not suggest who might be tracking the defence contractors or why.

Further details were secret, according to the defence security service, which issued the warning to the Pentagon’s classified contractors. The government insists the incidents happened and that the risk was genuine.

“What’s in the report is true,” said Martha Deutscher, a spokeswoman for the security service. “This is indeed a sanitised version, which leaves a lot of questions.”

Top suspects, according to outside experts are China, Russia or even France - all said to actively run espionage operations inside Canada with enough sophistication to produce such technology.

The Canadian Security Intelligence Service (CSIS) said it knew nothing about the coins. “This issue has just come to our attention,” Barbara Campion, a spokeswoman, said. “At this point, we don’t know of any basis for these claims.”

Experts were astonished about the disclosure. “It would seem unthinkable,” said David Harris, a former chief of strategic planning for the CSIS. “I wouldn’t expect to see any offensive operation against the Americans. There are certainly a lot of mysterious aspects to this.”

Experts said that such tiny transmitters would almost certainly have limited range to communicate with sensors no more than a few feet away, such as ones hidden inside a doorway.

The metal in the coins also could interfere with any signals.

“I’m not aware of any [transmitter] that would fit inside a coin and broadcast for kilometres,” said Katherine Albrecht, an activist who believes such technology carries serious privacy risks. “Whoever did this obviously has access to some pretty advanced technology.”

Experts said hiding tracking technology inside coins is fraught with risks because the spy’s target might inadvertently give away the coin or spend it buying coffee or a newspaper. They agreed, however, that a coin with a hidden tracking device might not arouse suspicion if it were discovered in a pocket or briefcase.

“It wouldn’t seem to be the best place to put something like that; you’d want to put it in something that wouldn’t be left behind or spent,” said Jeff Richelson, a researcher and author of books about the CIA and its gadgets. “It doesn’t seem to make a whole lot of sense.” Canada’s largest coins include its $2 “Toonie”, which is more than an inch across and thick enough to hide a tiny transmitter. ALL EYES

THE US government’s 29-page security threat report is filled with other espionage warnings.

It describes unrelated hacker attacks, eavesdropping with miniature pen recorders and the case of a female foreign spy who seduced her American boyfriend to steal his computer passwords.

In another case, a film processing company called the FBI after it developed pictures for a contractor that contained classified images of US satellites and their blueprints. The photo was taken from the window of an adjoining office.

The semiconductor equipment supplier’s Q4 net profit jumped almost fourfold to $265.2 mil, topping expectations. ASML’s () sales nearly doubled to $1.4 bil, beating views. Closely watched net bookings, which indicate future sales and profit, fell to 74 new machines, compared with 88 a quarter earlier, but well above analysts’ forecasts for 60. ASML sells nearly 60% of all chip lithography machines. Shares rose 9% to 26.29.

Lam Research beats; sales jump

The provider of production equipment to semiconductor makers said after hours that its Q2 EPS more than doubled to $1.15, topping views by 4 cents. Revenue jumped 77% to $633 mil, also above expectations. Lam Research’s () new orders booked increased 7% from Q1 to $779 mil. Its Q3 sales outlook is above views of $633 mil. Its Q3 EPS outlook is $1.03-$1.07, below views of $1.12. Lam said it had market share gains in its etch markets. Etching is the process by which chips are impressed onto silicon wafers. Shares fell 2% in late trading.

Wipro benefits from outsourcing

India’s No. 3 software company, Wipro () said Q3 net profit climbed 40% to $167 mil, helped by outsourcing orders from overseas. Revenue increased 41% to $899 mil; 72% of sales came from overseas, mostly from the U.S. India’s software and technology firms have seen a surge in profit growth as Western companies transfer more work to the country’s low-paid, skilled, English-speaking workers. Wipro’s rivals, Tata Consultancy Services and Infosys Technologies, () also reported surging Q3 profits.

Amphenol sales, EPS beat views

The maker of electronic and fiber- optic connectors said Q4 EPS increased 39% to 85 cents, topping views by 4 cents. Amphenol’s revenue jumped 30% to $659 mil vs. views of $649 mil. This is the 13th consecutive quarter with at least a 20% earnings increase and 15% sales jump. It expects Q1 EPS of 80-82 cents vs. views of 80 cents. Shares rose 1.4% to 65.36.

Microsoft () and Nortel () rolled out 11 services and 3 products to deliver business communications over the Internet. Microsoft aims to capitalize on a shift to Internet-based calls. Nortel expects to make $1 bil over its 4-year agreement with the software maker. Microsoft dipped slightly. Nortel was flat.

RETAIL

McDonald’s raises Q4 guidance

The fast-food giant expects a Q4 EPS of 61 cents ex items, above views of 58 cents, due to strong demand for the new chicken Snack Wrap in the U.S. and a Monopoly game promotion in Germany. McDonald’s () Dec. same-store sales rose 7.2%, surpassing views of 4%. In Europe, seasonal menu items in France and Britain contributed to the sharp sales increase. Shares rose 0.7% to 44.86.

Law targeting Wal-Mart rejected

A federal appeals court upheld a ruling invalidating a Maryland law that would have forced Wal-Mart Stores () to spend more on employee health care, agreeing that the state law interferes with federal law. The law would have required nongovernmental employers with 10,000 or more workers to spend at least 8% of payroll on health care or pay the difference in taxes. The lower court ruled that the state law was pre-empted by the federal 1974 Employee Retirement Income Security Act. The ruling was announced after the markets had closed.

MEDIA

Cablevision rejects $8.9 bil buyout

The N.Y.-area cable TV provider turned down the Dolan family’s $30 a share offer to take the company private. The Dolans control Cablevision () through a special class of supervoting stock and had previously offered $27 a share. The company said the offer was inadequate and undervalued the cable provider. Since the initial offer, shares surged 20% on speculation of a buyout. Shares rose 2.7% to 29.25.

REAL ESTATE

Brookfield buys Mills for $1.35 bil

The Canadian asset manager will buy Mills Corp., () a shopping center developer, for $21 a share in cash. Including debt and preferred shares, the Brookfield deal is valued at $7.5 bil. The buyout was unanimously approved by Mills’ board but is still subject to stockholder approval. Mills lost about half its stock market value in the past year and had been considering its options amid an inquiry by the SEC into its accounting. Brookfield climbed 1% to 48.50. Mills leapt 26% to 22.46.

FINANCE

JPMorgan beats, outlook cloudy

The nation’s No. 3 bank, JPMorgan () said Q4 EPS surged 47% to $1.09 ex items, 14 cents above views. Revenue rose 19% to $16 bil. It cited problems in its retail financial banking unit, but said investment banking was up 36%. It cautioned that the weakening housing market and slowing economy may worsen credit quality, resulting in higher loan delinquencies and upcoming losses. Shares edged up 4 cents to 48.43.

Charles Schwab meets, sales up

The discount stock broker’s Q4 profit rose 50% to 21 cents a share ex items, matching views. Revenue increased 14% to $1.1 bil. Charles Schwab () lowered commissions, trimmed expenses and divested operations, such as U.S. Trust, that no longer seemed like a good fit for the business. Asset management and administration fees jumped 20% to $518 mil. Stock trading commissions dropped 9% to $181 mil. Shares fell 2.4% to 19.69.

Northern Trust meets Q4 views

The banking and trust services provider, Northern Trust () said Q4 profit increased 15% to 77 cents a share, matching views. Revenue rose 12% to $776 mil. Trust, investment and other servicing fees jumped 14% to $458.2 mil, representing 73% of total Q4 revenue. Net interest income grew 10% to $206.6 mil. The firm said client assets grew at a double-digit rate, with assets under custody increasing 21% to $3.5 tril and assets under management rising 13% to $697 bil.

State Street, () an institutional investment manager, said Q4 EPS increased 16% to 86 cents, besting views by 12 cents. Revenue grew 15% to $1.62 bil, above views. Shares rose 1.5% to 72.06.

Mellon Financial, () the asset management giant that is merging with Bank of New York, said its Q4 income rose 28% to 64 cents a share, excluding an 18-cent tax benefit and 10-cent charge, beating views by 7 cents. Shares fell 1.2% to 42.91.

MEDICAL

HMA plans one-time $10 payout

The hospital chain said it will return about $2.4 bil to shareholders through a one-time cash dividend of $10 a share, payable on March 1 to shareholders of record on Feb. 27. Health Management Associates () said the move would be made possible through $3.25 bil of new senior secured credit lines. It expects Q4 EPS of 28-29 cents ex items vs. views of 29 cents.

Novartis seen as top drug maker

The Swiss drug maker, Novartis () was named Bank of America’s () top drug pick for ‘07 due to its attractive late-stage pipeline and earnings growth potential. BofA said Novartis’ product portfolio has the company poised for 9% sales growth and 15% earnings growth over the next 5 years. Prudential Equity Group lifted Novartis’ Q4 EPS estimate to 79 cents, above views, but lowered its full-year EPS outlook to $3.38, still above views, citing higher costs associated with new product launches. Novartis rose 1% to 59.53.

TELECOM

Sony Ericsson takes market share

The joint venture of Sony and Ericsson that makes mobile phones said its Q4 profit more than tripled to $579 mil. The company’s sales were up 64% from 2005 to $4.9 bil. Sony Ericsson’s average price of a mobile phone increased, defying an industry trend that has hurt its competitors. The phone maker also saw record sales of its music and camera handsets, which helped the company gain market share. Sony rose 1.2% to 47.54. Ericsson climbed 1.6% to 41.34.

MACHINERY

Parker Hannifin boosts guidance

The maker of motion-control equipment said Q2 earnings soared 53% to $1.64 a share, smashing views by 24 cents. Revenue jumped 16% to $2.51 bil. Parker Hannifin’s () international segment rose 36%, while its aerospace division grew 16%. Parker Hannifin’s international industrial and aerospace units represent half the company’s revenue. The company raised its 2007 profit guidance to $6.35-$6.75 a share vs. views of $6.38. Shares climbed 3.8% to 81.33.

METALS

Russia clears giant aluminum deal

Russian regulators have tentatively approved a 3-way deal that would create the world’s largest aluminum producer, surpassing U.S.- based Alcoa, () the current industry leader. Under the deal, Russia’s No. 1 aluminum producer, OAO Rusal, will acquire Russian rival Sual as well as the aluminum assets of commodities trader Glencore Int’l of Switzerland. The new global giant would generate roughly 12% of global aluminum production.

REGULATION

Ex-Cendant chairman gets 12 yrs.

The former chairman of the car rental company was sentenced to 12 years and seven months in prison and ordered to pay $3.275 bil in restitution for leading one of the largest accounting fraud cases of the 1990s. Cendant has since become Avis Budget Group () and has since spun off its real estate and hotel businesses. In Oct., Walter Forbes was found guilty of conspiracy to commit securities fraud and making false statements. Cendant’s market value sank about $14 bil in one day after the fraud was disclosed in ‘98.

GIRLS as young as five are growing up at risk of psychological damage from a society that exposes them to clothes, toys and images carrying sexual overtones, a new report has warned.

The study, from the American Psychological Association (APA), said a generation of girls could face problems ranging from depression to eating disorders and unhealthy sexual development because the marketing industry wanted to “sexualise” them at an ever younger age.

It cited the availability of clothes aimed at children, including thongs carrying slogans such as “eye candy”, mini-skirts and low-cut tops, as examples of a society that was in danger of turning young girls into sexual objects.

The APA report also looked at toys, music and other media, such as films and magazines. One particular target was the Bratz dolls - which outsell Barbie in the UK - who wear raunchy gear such as hot pants, fishnet stockings and feather boas.

Even the Disney Corporation, which promotes family values, was criticised. The study singled out cartoons including The Little Mermaid and Pocahontas for featuring characters “which have more cleavage, fewer clothes, and are depicted as ’sexier’ than those of yesteryear”.

Eileen Zurbriggen, one of the APA report’s main authors, said: “The consequences of the sexualisation of girls in media today are very real and are likely to be a negative influence on girls’ healthy development.

“Girls develop their identities by modelling what they see older girls doing and by imitating the ways in which women are represented in the media.”

Other media - including magazines and rap music - are guilty of creating a climate in which teenage girls are encouraged to look sexually attractive to please men, according to the APA. It quotes the title of the Pussycat Dolls’ song Don’tcha wish your girlfriend was hot like me? as symptomatic of the problem.

The 72-page study urges parents to encourage their children not to fixate on appearance and to resist pressure to conform to celebrity notions of glamour.

The children’s charity NCH Scotland said it would welcome “more support and guidance” for parents and teachers.

A spokesman said: “We are concerned about the highly sexualised environment in which children are growing up today. It is unfortunately now impossible to put the genie entirely back in the bottle, though NCH would support moves to examine the scope for tougher regulation.”

Parental pressure in the UK has in the past forced chains to withdraw some children’s clothing. Four years ago, BHS withdrew its “Little Miss Naughty” range of knickers and padded bras aimed at younger girls after public criticism.

In 2005, Asda withdrew some lingerie, including a push-up bra aimed at young girls. In 2002, the fashion chain Next withdrew T-shirts for six-year-old girls carrying the slogan “So many boys, so little time” after a similar outcry. However, the issue remains a live one. In May last year, the Tory leader David Cameron launched an attack on high-street stores which sold “harmful and creepy” clothes for children.

UK teenage magazines such as Mizz and Bliss have been criticised in the past for sexual content aimed at teenage readers. However, the industry insisted it was acting responsibly.

Dr Fleur Fisher, from the Teenage Magazine Arbitration Panel, said: “The issue of sexualisation of young girls is a real issue and the magazine editors are aware of it. Their approach is to try and encourage young women to think positively about themselves.” SHORT STEP FROM BABY TO ‘SUPER CUTE BABE’

PARENTS shopping on the high street face many examples of clothes which some campaigners say are unacceptably adult in tone.

Boob tubes aimed at children as young as nine are among some of the fashion items on offer from Littlewoods Direct.

Marks & Spencer’s Girls’ Boutique range - aimed at seven- to 14-year-olds - meanwhile, sells a T-shirt carrying the slogan “Super Cute Babe”.

While it may be an innocent slogan for the wearer, the American Psychological Association study suggests some adults with paedophile leanings may take the branding on children’s clothes as giving an entirely unintended signal.

Tammy, part of the BHS chain aimed at young teenagers, also offers a “spa boob tube” in colours including “party pink” for 5.

The same chain sells a “baby doll vest” for 6.

BHS has been in trouble before - for selling a range of knickers and padded bras for pre-teen girls under the now-withdrawn Miss Naughty logo.

Matalan, the budget clothing chain, is selling a “halter-neck sequin bodice with bow” aimed at children from seven to 13 years for 6.

While the APA says the sexualisation of girls is taking place at an ever younger age, it points out the trend started to creep into advertising more than two decades ago.

One controversial advertisement in 1981 depicted a girl in jeans, dropping her rag doll by her side with the ambiguous headline “13 going on 18″. There was also criticism of a Calvin Klein advertisement in which actress Brooke Shields, then aged 15, was pictured with the slogan “Nothing comes between me and my Calvins”.

Psychologists say the trend to emphasise female sexuality has even crept into something as innocuous as Halloween outfits. The study found that boys were targeted with straightforward ghoul outfits, while girls’ costumes used names such as “sexy devil” and “bewitched”. ‘I don’t want daughters to look like little tarts’

WHEN I was a little girl I always wanted “little-and-big clothes”, and my mum could never understand what that was. I wanted what she was wearing, basically. They didn’t make it, and rightly so.

Now they do make little-and-big clothes. I don’t want my children wearing black velvet cocktail dresses at Christmas, because they are seven and four, but, sadly, you can buy them. If it’s available, kids will buy it, because there are no boundaries any more.

At Christmas time there was a black velvet off-one-shoulder dress for children. There’s no way I would ever let them wear that; it’s completely inappropriate. But they want it because it’s available.

Why do children of seven need things like lacy underwear? About two years ago I was so cross that I wrote to Marks & Spencer because they had a turquoise and brown lace thing that looked like a bra and a pair of matching knickers for five-year-olds. I didn’t get a reply but I noticed it went out of the shop - whether that was because it sold out or I was one of many people who complained I don’t know.

I don’t mind with 12, 13 or 14-year-olds, I have no issue with that and I know kids grow up a lot sooner than I did. When my seven-year-old looks at things, I don’t understand why there is a need to sell that.

I can buy the same outfit as my seven-year-old in some shops - there is no difference in the clothes except the size. It’s putting profits above morals.

Someone, somewhere, should take a stand on this. I don’t buy it, so that’s my stand. I actually buy a lot of my kids’ clothes online now because I find some children’s clothes so grown up.

I want my little girls to look like little girls. I don’t want them to look like little tarts. I want them to wear dresses like seven-year-olds should.

Janet Nicol, 41, has two daughters, Natasha and Gabriella, aged seven and four. She lives in the Morningside area of Edinburgh and runs the MacGregor hairdressing salon.