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New home sales hit seven-month low

WASHINGTON (Reuters) – Sales of newly built U.S. single-family homes unexpectedly fell to their lowest level in seven months in November, data showed on Wednesday, dealing a blow to the housing market&&9;s recovery.

The Commerce Department said sales dropped 11.3 percent, the biggest decline since January, to a 355,000 unit annual rate, from a downwardly revised 400,000 units in October.

Analysts polled by Reuters had expected new home sales to increase to a 440,000 annual pace from October&&9;s previously reported 430,000 units.

The data is a setback for the housing market which has been showing strong signs of stabilizing after a three-year slump. A Realtors survey on Tuesday showed sales of previously owned home surged to their highest level in nearly three years last month, while the decline in prices was starting to fade payday loan.

Housing was the main trigger of the worst U.S. recession since the 1930s.

Still there were some positive signs in the November new home sales report. The median sale price for a new home rose 3.8 percent from October to &&6;217,400, the highest level since May. Compared to a year-ago, the median sale price fell 1.9 percent.

The number of new homes on the market last month still fell to 235,000 units, the lowest since April 1971.

November&&9;s sales pace left the supply of homes available for sale at 7.9 months&&9; worth, from 7.2 months in October.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

New home sales hit seven-month low

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Stock futures signal more gains; eyes on data

(Reuters) – U.S. stock index futures pointed to a higher open on Wall Street on Tuesday, with futures for the S&P 500 up 0.28 percent, Dow Jones futures up 0.27 percent and Nasdaq 100 futures up 0.51 percent at 3:40 a.m. EST.

Investors were bracing for a flurry of macro data on Tuesday, including a final reading of third quarter gross domestic product, existing home sales for November and the Richmond Fed survey for December.

Oil edged up ahead of an OPEC meeting, with the firm dollar countering an expected fall in crude and distillate inventories in the United States along with the sustained strong demand in China.

Ford Motor Co (F.N) said on Monday it is offering its 41,000 U.S. factory workers buyouts and early retirement offers in a bid to reduce its payroll costs as it aims to return to profit by 2011.

Take-Two Interactive Software Inc (TTWO.O) said it will sell its Jack of All Games distribution business to Synnex Corp (SNX.N) for &&6;43.3 million, and slashed its forecasts for fiscal 2010 as a result, sending its shares down 5 percent in after-hours trading.

The proposed merger of two live music powerhouses, Live Nation Inc (LYV.N) and Ticketmaster Inc (TKTM.O), was given a huge boost on Tuesday when a British regulatory body dropped its objections and approved the deal paydayloans.

Japan&&9;s Nikkei average (.N225) rose 1.9 percent to reach a three-month closing high on Tuesday as a weaker yen lifted exporters, while Isuzu Motors (7202.T) jumped on a report that the truck maker wants to develop new diesel engines for General Motors (GM.UL). European stocks were up 0.6 percent in morning trade, led by oil and banks shares such as BP (BP.L) and Societe Generale (SOGN.PA).

U.S. stocks rose on Monday, with the Nasdaq hitting a 15-month high after brokerages upgraded two Dow components on improving profit prospects, while healthcare stocks rose after a bill to overhaul the U.S. healthcare system, which is perceived as less damaging to industry profits than expected, passed a crucial test in the U.S. Senate early Monday.

The Dow Jones industrial average (.DJI) shot up 85.25 points, or 0.83 percent, to end at 10,414.14. The Standard & Poor&&9;s 500 Index (.SPX) gained 11.58 points, or 1.05 percent, to 1,114.05. The Nasdaq Composite Index (.IXIC) rose 25.97 points, or 1.17 percent, to end at 2,237.66.

The S&P 500 is up 23.3 percent so far in 2009.

(Reporting by Blaise Robinson; Editing by Mike Nesbit)

Stock futures signal more gains; eyes on data

Hot News: HSBC seeks $8 billion in Shanghai listing: report
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Banks weigh on Asian shares, dollar steady

TOKYO (Reuters) – Asian share markets struggled to hold early gains on Monday, with bank shares pressuring some lower even as tech stocks gained, while the dollar held steady on the yen and hovered near a three-month high on the euro.

In Europe, Britain&&9;s FTSE 100 (.FTSE), Germany&&9;s DAX (.GDAXI) and France&&9;s CAC-40 (.FCHI) were expected to open as much as 0.7 percent up, reassured by export data out of Japan, which rose the most in seven years last month.

Shares in Hong Kong (.HSI) and Shanghai (.SSEC) slid as financial and property stocks fell on concern China would take steps to cool the property market, while banks such as HSBC (0005.HK) eased on worries they made need to make provision against exposure to debt in Dubai.

Debt-ridden conglomerate Dubai World is expected on Monday to ask key creditors for more time to pay off loans.

Seoul shares ended 0.17 percent lower, with banks including KB Financial Group (105560.KS) weighing but gains in technology exporters such as LG Electronics (066570.KS) lending support.

"Banks are under pressure amid recent news flows pointing to a tighter regulatory environment, potentially worsening net interest margins," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities.

Banks face having to set aside more funds or raise fresh capital in as little as three years, according to proposals by a global regulatory body that could change the way they do business.

The MSCI index of Asian stocks excluding Japan (.MIAPJ0000PUS) fell 0.5 percent.

Bucking the trend were Japan and Taiwan, which both finished higher, while

The Nikkei average (.N225) closed up 0.4 percent as stocks such as chip-tester maker Advantest Corp (6857.T) gained.

"Investors welcomed solid earnings results from Oracle and (BlackBerry maker) Research in Motion over the weekend, as well as a weaker yen," said Norihiro Fujito, general manager of investment research at Mitsubishi UFJ Securities in Tokyo.

"But trading volume is becoming thin as the year-end draws near and the market could easily turn south if the yen strengthens again no credit check payday loan."

Upbeat results from Oracle (ORCL.O) and Research In Motion (RIM.TO) (RIMM.O) helped boost the Nasdaq (.IXIC) on Friday, which ended up 1.45 percent.

The Dow Jones industrial average (.DJI) closed up 0.20 percent and the Standard & Poor&&9;s 500 Index (.SPX) rose 0.58 percent. (.N)

Australian stocks slipped 0.3 percent (.AXJO) but top airline Qantas Airways Ltd (QAN.AX) jumped after flagging a return to profit.

Banking shares were mostly lower after leading a rise of nearly 47 percent in the benchmark share index from a five-year low reached in early March.

DOLLAR HOLDS PATTERN

The dollar hovered near its highest point in more than three months against the euro as traders anticipated more year-end dollar short-covering until the Christmas break later this week.

A brighter outlook for the U.S. economy after stronger figures on the job market and retail sales earlier this month has helped the dollar pull back from a long-running downtrend.

"The dollar may extend gains a little more as momentum buyers could chase the dollar up while it stays in an uptrend," said Masafumi Yamamoto, chief FX strategist for Barclays Capital in Japan.

The euro was steady at &&6;1.4344 after dipping to &&6;1.4262 on Friday, its lowest since early September. The dollar was unchanged at 90.40 yen, after touching its strongest level for six weeks on Friday.

U.S. crude futures edged down, paring Friday&&9;s 1 percent rise after news Iranian troops had partly withdrawn from a disputed oil area claimed by both Tehran and Baghdad, easing tensions between two major crude exporters. NYMEX crude for January delivery was down 13 cents at &&6;73.23 a barrel.

U.S. Treasury debt prices were steady while Japan&&9;s five-year government bond yield fell to a four-year low, following comments last week by the Bank of Japan that it would not tolerate deflation.

(Additional reporting by Jungyoun Park in Seoul, Denny Thomas in Sydney; Editing by Kazunori Takada)

Banks weigh on Asian shares, dollar steady

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Citadel to file bankruptcy as soon as Sunday: report

CHICAGO (Reuters) – Citadel Broadcasting Corp (CTDB.OB), the third largest U.S. radio broadcaster, plans to file for bankruptcy as soon as Sunday, the Wall Street Journal reported on Saturday.

Citadel is expected to file in a deal supported by many lenders collectively owed &&6;2 billion, known as a "prearranged" deal, the newspaper said, citing people familiar with the matter that it did not identify.

Those lenders plan to swap a big portion of their debt for equity in a reorganized Citadel, effectively handing them control, the Journal said.

Citadel officials could not be reached to comment.

The deal would reduce Citadel&&9;s debt load to about &&6;762.5 million, the Journal said, citing the sources. The company will need to solicit more creditor support in court to get its reorganization plan approved by a judge.

Citadel&&9;s board approved the filing in recent days, the newspaper said payday loan lenders.

Citadel CEO Farid Suleman will likely remain in charge after the company leaves Chapter 11 bankruptcy protection, the sources told the Journal.

Citadel&&9;s network consists of 165 FM stations and 58 AM stations, and the company owns and operates the ABC Radio Networks, which it took on debt to buy from the Walt Disney Co (DIS.N) in 2006.

In November, the company reported having &&6;1.4 billion in total assets and &&6;2.48 billion in total liabilities in the quarter ended September 30, 2009, according to a 10Q filing with the U.S. Securities & Exchange Commission.

(Reporting by Ben Klayman, editing by Jackie Frank)

Citadel to file bankruptcy as soon as Sunday: report

Hot News: Shares Swing in a Choppy Day of Trading
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London Markets: British shares end lower as banks weigh

LONDON (MarketWatch) -- U.K. stocks closed lower again on Friday as worries about capital requirements continued to weigh on banks, offsetting gains in the commodity sector.

The FTSE 100 index reversed earlier gains to finish down 0.4%, or 20.80 points, to 5,196.81. The index lost 1.2% this week. Other European shares also ended in the red. See Europe Markets.

Banks fell once again, with Lloyds Banking Group the index' top decliner, down 4.7%. Royal Bank of Scotland shares fell 3% and Barclays shares declined 3.5%..

"The Basel Committee has published its latest thoughts on capital and liquidity. We are still digesting the main implications of this, but at first read it looks pretty punitive on the sector," said Credit Suisse analysts.

"Our first read is that U.K. banks, in particular Lloyds and RBS, look substantially exposed," they said. The sector's equity tier 1 capital would fall by about 20% were the new proposals to be introduced at December 2009 and risk-weighted assets would rise 20%, they added.

"On this basis, we would expect the sector's equity tier 1 ratio to fall from about 9.8% to 6.5% at December 2009 in a worst case scenario. This is the equivalent of over 50 billion pounds of equity capital, on our numbers," the analysts said.

Still, Lloyds CEO Eric Daniels said in an interview with the Financial Times out Friday that loan impairments have peaked and the bank hasn't changed yet its guidance to take out 1.5 billion pounds of costs by 2011 quick guaranteed personal loans.

Exane BNP Paribas analysts upgraded Lloyds to outperform from neutral on Friday.

"Whereas it is undeniably true that the scale and severity of losses destroyed the deal economics of the HBOS acquisition, we expect 2010 to become a year of delivery, as realized deal synergies overtake incremental investment spend," they said.

On the upside, shares of oil giant BP rose 0.4% after it was upgraded to buy from neutral at Goldman Sachs. The broker cited the firm's increasing leverage to oil prices and relatively low capital expenditure levels for the move.

Also in the sector, natural-gas producer BG Group rose 0.1% and mining giant BHP Billiton rose 1.1%.

Miners advanced as metal futures climbed, with Vedanta Resources shares up 0.8%.

Outside the top index, shares of temporary power supplier Aggreko rose 7.9%.

Fourth-quarter trading was better than anticipated, the firm said, driven by a strong performance in international power projects. It now expects 2009 revenue to exceed 1 billion pounds and operating profit to reach around 260 million pounds.

Shares of imaging and diagnostics firm Genetix soared 31% to 82 pence in London after Danaher Corp. of the U.S. offered to buy the firm for 85 pence a share, or 63.4 million pounds ($102.8 million).

London Markets: British shares end lower as banks weigh

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First-Time Jobless Filings Rise Unexpectedly

WASHINGTON (AP) -- The number of newly laid off workers filing claims for unemployment benefits unexpectedly rose last week as the recovery of the nation&S217;s battered labor market proceeds in fits and starts.

The Labor Department said Thursday that the number of new jobless claims rose to 480,000 last week, up 7,000 from the previous week. Economists had expected a decline to 465,000.

The four-week average for claims, which smoothes out fluctuations, did fall, however, dipping to 467,500, the 15th straight decline, viewed as an encouraging sign that the labor market is gradually improving. The four-week average is now at its lowest point since late September 2008, the period when the financial crisis was hitting with full force.

Unemployment claims have been on a downward trend since this summer. That improvement is seen as a sign that jobs cuts are slowing and hiring could pick up as soon as early next year. But the rise in weekly claims of 7,000 last week, which had followed an increase of 19,000 the previous week, shows that the improvement has been halting.

Economists closely monitor jobless claims, which are considered a crucial gauge of the pace of layoffs with continuing claims viewed as an indication of how quickly laid off workers are getting new jobs.

Analysts believe that claims need to fall to about 425,000 for several weeks to signal the economy is beginning to add jobs business cards.

The government said that the number of people receiving regular benefits rose 5,000 to 5.19 million for the week ended on Saturday. That figure does not include millions of people who have used up the regular 26 weeks of benefits typically provided by the state and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

The people receiving extended benefits jumped to 4.73 million for the week ended Nov. 28, an increase of 143,759 from the previous week. That big rise reflected the fact that a total of 17 states are now processing claims for the extended benefits that Congress approved last month.

There were 29 states with increases of more than 1,000 claims for the week ending Dec. 5 led by California, with a rise of 28,353, which it attributed in part to the fact that the unemployment offices were open for the full week giving applicants more time to file after the Thanksgiving holiday. Other states with big gains were Georgia, New York, North Carolina and Pennsylvania.

The two states with declines of more than 1,000 were Kansas, with a drop of 3,803, and Kentucky, down by 2,048.

First-Time Jobless Filings Rise Unexpectedly

Hot News: Air Routes in Asia Stir Bidding War
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Hopes Are Fading for Climate Accord at Copenhagen

COPENHAGEN &<51; With just two days remaining in historic and contentious climate talks here, China signaled overnight that it sees virtually no possibility that the nearly 200 nations gathered would find agreement by Friday.

A participant in the talks said that China would agree only to a brief political declaration that left unresolved virtually all the major issues.

The conference has deadlocked over emissions cuts by, and financing for, developing nations, including China, who say they will bear the brunt of a planetary problem they did little to create. Leaders had hoped to conclude an interim agreement on the major issues that would have &S220;immediate operational effect.&S221; The Chinese, it appears, are not willing to go that far at this meeting.

Whether the Chinese position represents political brinkmanship as senior ministers and heads of state begin arriving in Copenhagen for the final 48 hours of negotiations, or a genuine signal that Chinese officials are not inclined to settle the wide differences separating it and developed nations, was unclear on Thursday morning.

Secretary of State Hillary Rodham Clinton, who arrived in Copenhagen overnight, announced on Thursday that the United States would participate in a $100 billion fund to help poor and vulnerable nations adapt to climate change and build more energy efficient economies. She cautioned, however, that American participation in the fund was contingent on reaching a firm agreement this week.

It was the first time the Obama administration had made a commitment to a medium-term financing effort and a clear effort to unblock a negotiation that has been stalled. She said the money would be a mix of public and private funds, including &S220;alternative sources of finance,&S221; which she did not specify.

Nor did she say what the American share of the fund would be, although typically in such multilateral financial efforts the United States contributes about 20 percent. She said the money should chiefly flow to the poorest and most vulnerable nations and should contain a sizeable fund to slow deforestation, which contributes to carbon dioxide concentrations in the atmosphere.

The $100 billion figure is in line with pledges from Britain and the European Union, although at the low end.

&S220;A hundred billion can have tangible effects,&S221; Mrs. Clinton said. &S220;We actually think $100 billion is appropriate, usable and will be effective.&S221;

The world&S217;s two richest blocs, the European Union and the United States, have been slow to put pledges on the table for long-term financing, which under most estimates would require them to pay hundreds of billions of dollars each year by 2020. Last Friday, European Union leaders agreed on short-term financing totaling $10.5 billion over the next three years to help poor countries begin tackling the effects of global warming. But the bloc has so far failed to agree how much they would give in long-term financing. E.U. experts have recommended that fund should total about $150 billion annually by the end of the next decade.

President Obama is to arrive on Friday, joining some100 other heads of state who plan to come to Copenhagen to put a high-level stamp on whatever document might arise from the meeting.

But with the clock ticking, continued bickering among delegations would seem to be making the likelihood of a significant breakthrough increasingly slim.

&S220;I still believe it&S217;s possible to reach a real success,&S221; said the United Nations climate secretary, Yvo de Boer, at a press conference Wednesday night. &S220;But I must say that in that context, the next 24 hours are absolutely crucial and need to be used productively.&S221;

The continued deadlock is due in large measure to delays and diversions created by a group of poor and emerging nations intent on making their dissatisfaction clear. The Group of 77, as it is called, has raised repeated objections to what its members see as the economic and environmental tyranny of the industrial world, often in florid language.

&S220;The rich are destroying the planet,&S221; said Hugo Ch&>25;vez, the socialist president of Venezuela, on Wednesday. &S220;Perhaps they think they&S217;re going off to another one after they&S217;ve destroyed this one.&S221;

On Monday, African nations briefly brought the climate talks to a standstill. China, by far the largest economic power in the group, has dragged its feet throughout the week by raising one technical objection after another to the basic negotiating text infra red heaters. And on Wednesday night, the group refused to take part in negotiations that conference organizers had hoped would produce a definitive negotiating text by Thursday morning. Instead, many Group of 77 leaders spent the day hurling accusations at wealthier countries.

President Obama and other world leaders have said that the Copenhagen meetings are unlikely to produce a binding treaty; some sort of interim political agreement is far more likely, they said. But few appreciated the depth of anger in the developing world and the height of grandstanding that would consume so much of the conference&S217;s time. Now it is hard to find someone who confidently predicts even that much success.

The Group of 77 is a group in name only. Made up of 130 countries, it represents tiny island nations like Vanuatu and advanced middle-income states like Argentina. Its nominal leader is Lumumba Stanislaus Di-Aping, a Sudanese diplomat who speaks on behalf of the group and who led a walkout on Monday, saying the developed nations&S217; offer of $10 billion in &S220;quick-start&S221; financing after completion of a deal here was wholly inadequate.

Many developing nations have united under the group&S217;s auspices because they can take advantage of the far greater negotiating power and resources of countries like China and Brazil. Many small countries have neither a big enough delegation nor the organizational structure to negotiate effectively on their own.

China has been a natural godfather to many of the Group of 77 countries because its government has extensive investments in Africa and Latin America, often involving lucrative deals to bring oil and minerals home.

The coalition is united on a few central issues. They include making sure that industrialized countries keep the emissions reductions pledges they made as part of the 1997 Kyoto Protocol and that the Copenhagen conference produces enough money for poorer countries to adapt to climate change, said Mar&>37;a Fernanda Espinosa, Ecuador&S217;s minister of cultural and ecological patrimony.

But the group is neither a tight negotiating unit, nor particularly well organized. While larger countries like Brazil and China have well-appointed headquarters in one part of the Bella Center, where the negotiations are being held, the Group of 77 office itself is made up of two spartan rooms equipped with two computers, where some delegates from the poorest African nations sat Wednesday morning drinking soda and nibbling biscuits.

&S220;The G-77 is an incredibly diverse group,&S221; said Michael A. Levi, a climate change specialist at the Council on Foreign Relations who is attending the Copenhagen meeting. &S220;Its richest countries are 50 times as wealthy on a per-capita basis as its poorest ones. All of this makes a common yet constructive position very difficult. The easiest thing to agree on is to obstruct action.&S221;

The cost of such obstruction is growing higher by the day. On Thursday and Friday, ministers and heads of government are expected to fashion a complex political agreement encompassing a host of issues that have divided them for years. Seldom, if ever, have national leaders engaged in negotiations as complex &<51; and as poorly prepared &<51; as these.

The strain is showing both inside the Bella Center and outside. On Wednesday, hundreds of demonstrators tried to storm the hall, but were pushed back by truncheon-wielding riot police officers who made 260 arrests. Inside, numerous groups staged demonstrations, sit-ins and noisy disruptions of public sessions.

Mr. de Boer, the United Nations official in charge of the conference, said that he was concerned about the safety of the arriving leaders and the rest of the participants. &S220;The incidents that have taken place today inside the conference center test my courage to continue in this way,&S221; he said, suggesting he would sharply limit access to the hall for the final two days.

In recent days, various officials have given gloomy assessments of the talks, including Connie Hedegaard, the former Danish environment minister who stepped down on Wednesday as president of the conference, yielding the chair to the Danish prime minister, Lars Lokke Rasmussen. Officials said the turnover was dictated by protocol because the conference president shares a stage with fellow heads of government.

Elisabeth Rosenthal contributed reporting.

Hopes Are Fading for Climate Accord at Copenhagen

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Dogs of the Dow live up to name as GE, AT&T fall

SAN FRANCISCO (MarketWatch) -- Established companies with steep dividends compared to their share prices underperformed this year, putting an investment theory called the "Dogs of the Dow" squarely in -- you guessed it -- the doghouse.

The severe sell-off in financial stocks during the first part of the year was largely to blame.

The 10 stocks that qualified as dogs of the Dow at the start of this year -- including Bank of America Corp. , General Electric Co. , Pfizer Inc. and Alcoa Inc. -- on average gained just more than 11% as of mid-December, according to Bespoke Investment Group LLC.

In contrast, the average change for all 30 component stocks in the Dow Jones Industrial Average was 23% as of Friday.

(Unlike Bespoke's calculations, the Dow Jones Industrial Average's publishers give different weightings to the benchmark's components based on their prices. The index itself had gained about 19% as of Friday.)

DOW INDUSTRIALS (DJIA)

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Those 20 stocks not considered "dogs" rose an average 29%, according to research recently published by the Harrison, N.Y.-based investment strategists.

Dogs of the Dow, a strategy that gained popularity in the 1990s and was the subject of a 1991 bestseller, suggests picking the Dow industrials stocks with the highest dividend yields at the start of the year. See related Mark Hulbert column.

Yields are calculated by dividing dividends paid per share by a company's share price. High dividend yields are usually an indication that shares have been beaten down and so have more opportunity to rebound.

"It's an appealing strategy," said Ken Tower, senior vice president of research at Quantitative Analysis Service Inc. "At least you know the stocks aren't overvalued and aren't media darlings."

But looking at dividend yields only goes so far. Investors also need to look at prospects for recovery.

"Sometimes the dogs one year are the dogs the next," Tower added.

The pack of 2010

Performance for some of the high-yielding Dow components came under pressure this year as their boards cut their dividends. These moves, which became common during the past year's credit crisis, were unusual for big, established companies that make up the Dow average and reflected the deterioration in their businesses, which prompted investors to dump shares.

Dividend cuts made by Bank of America, GE, J.P. Morgan Chase and Alcoa also means they're no longer fit to run with the pack of 2010 Dogs of the Dow, wrote Bespoke.

Instead, the highest-yielding Dow components -- and those most likely to rise next year, if the theory holds true -- include McDonald's Corp low interest auto loans. , Chevron Corp. , Home Depot Inc. and Intel Corp. .

Not a typical year

Some of the past year's dogs, such as J.P. Morgan Chase & Co. and aluminum producer Alcoa, have made the promised rebound.

The blue-chip shares of J.P. Morgan, which started off the year with a dividend yield of 4.8%, had gained 30% as of mid-December, as its capital-markets businesses revived and as investors became more confident the banking company would be able to handle its customers' credit problems.

Alcoa's shares added more than 26%, helped by expectations of a global recovery in industrial production. It started the year with a dividend yield of just over 6%.

But for several of the Dow dogs, the sell-off in financial-related stocks early in the year was too steep to overcome.

Bank of America shares have rebounded by a multiple of five from early March, when the stock dropped as low as $3 intraday. Still, the stock had gained just over 9% for the year as of Friday, depressed by a 78% plunge in its shares between Jan. 1 and March 6.

"Financial stocks got hit very hard in the first part of the year," said Bespoke co-founder Justin Walters. "Even though they came back a lot since their March lows, since they had gone down so much, they weren't able to make it all back."

Obama Attacks 'Fat Cat' Bankers

On CBS's "60 Minutes," President Obama decries "fat cat bankers" ahead of Monday evening's meeting between White House officials and banking representatives. Video courtesy of Fox News.

GE's stock chart tells a similar story. Hurt by investor fear about the potential losses at its finance arm, shares plunged during the first two months of the year. A rebound since March hasn't been able to drag the company's stock into a gain for the year.

Other Dow dogs were also on track to post annual losses, including AT&T Inc. , Verizon Communications and, as of last week, Kraft Foods Inc. .

On Monday, U.S. stocks edged higher, helped by Exxon Mobil Corp. and its $41 billion takeover agreement for XTO Energy Inc. as well a financial bailout for debt-ridden Dubai.

Financial stocks -- playing off the House of Representatives' passage of a landmark financial-regulation bill late last week -- kept the advance in check. Read more on Exxon and XTO.

The S&P 500 Index gained 7.7 points, or 0.7%, to 1,114, while the Nasdaq Composite Index added 22 points, or 1%, to 2,212.

The Dow industrials lagged among the equity benchmarks, rising 30 points, or 0.3%, to 10,501 for its first close above 10,500 since Oct. 1, 2008.

'Dogs of the Dow' live up to name as GE, AT&T fall

Hot News: Dubai bailout, Citi TARP deal lift futures
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Bond Vigilantes Prowling Europe

The bond market vigilantes are back.

But this time they are roaming mostly through Europe rather than the United States &S212; at least for now &S212; seeking to impose fiscal rectitude on governments politically unable or unwilling to take the painful steps necessary to close gaping budget deficits.

You remember the bond vigilantes, don&S217;t you? As big investors in the credit markets, they developed a fearsome reputation in the early 1990s by collectively putting pressure on a newly elected U.S. president, Bill Clinton, to abandon his campaign promise of tax cuts. Instead, Mr. Clinton followed the advice of Robert Rubin, who joined the Clinton administration from his post at the top of Goldman Sachs and who made the case that a policy of budgetary restraint would keep interest rates on U.S. government bonds relatively low.

Now, the bond market posse is on the hunt again, turning its attention most acutely on Britain and Greece, where left-leaning governments are struggling to demonstrate that they have a workable plan to reduce deficits that are the highest in Europe &S212; about 13 percent of gross domestic product.

In Greece, the spreads between Greek 10-year bonds and their benchmark German counterparts soared to highs of 250 basis points last week as concerns grew over Greece&S217;s ability to service its enormous debt.

In Britain, bond investors greeted a prebudget Labour Party report that skimped on details of spending cuts with a sell-off that pushed gilt yields to their highest level since the depths of the financial crisis.

In Ireland, by contrast, the government presented the most severe budget in the country&S217;s history, largely to prove to wary bond investors that it was serious about cutting its own deficit.

And it is not just Europe that is feeling the heat. In Dubai, the bondholders of Dubai World&S217;s foundering real estate company, Nakheel, have adopted a highly confrontational approach as they have contemplated forcing Dubai World into default to lay claim to its assets.

&S220;There is a greater market focus now on who the fiscally vulnerable countries are,&S221; said Michael Saunders, the head of European economics at Citigroup.

In particular, Mr. Saunders sees the Labour government in Britain &S212; which is facing an uphill election battle &S212; as being more concerned with pleasing voters than investors, a stance that he says could lead to a bond market rout if gilt holders, a large proportion of them foreign, come to the conclusion that cutting the deficit is not a top priority.

The power of the bond trader once elicited the pointed remark from James Carville, Mr. Clinton&S217;s witty political strategist, that he wished to be reincarnated as a bond trader because, &S220;you can intimidate everybody.&S221;

For most of the past decade, though, the vigilantes have been in abeyance, since public-sector deficits were not an investor concern.

With the onset of the credit crisis last year, they surfed the global liquidity wave, buying up government debt all over the world in the view that, just as most big banks were too big to fail, so were sovereign economies, no matter how crushing their fiscal picture pay day advance.

But Dubai World&S217;s decision to delay payment on its debt has been a slap in the face of complacent bondholders. The immediate result has been a demand on their part for higher interest rates in the most vulnerable countries, adding to the potential borrowing costs of countries like Britain, Greece, Ireland and Spain that have benefited from lower rates because of the dearth of private borrowers in the global downturn.

The United States and Japan also face unusually high debt levels, spurred by huge stimulus programs. For the time being, investors are still willing to lend to them at generous rates. But bondholders are running out of patience with the most vulnerable countries.

In the euro zone, the European Central Bank&S217;s interest in keeping inflation low means that it is likely to maintain a stable euro, leaving the peripheral economies with no opportunity for a cheaper currency to help generate growth from exports.

As a result, governments in Portugal, Ireland, Greece and Spain have had to turn to increasingly dubious bond markets to raise funds while waiting for their economies to recover through the far more painful process of squeezing wages and shedding jobs to restore competitiveness.

A report from Standard Chartered said as much last Friday, forecasting bailouts, if not actual ejections, from the euro zone for Greece and Ireland once investors decide to pull the plug and stop refinancing the countries&S217; debts.

&S220;The idea that currency unions can&S217;t break up is rubbish,&S221; said Tim Congdon, an economist and admitted Euroskeptic who has advised Conservative governments in Britain. &S220;The critical issue is whether governments can repay their debts in new currencies or euros once they leave.&S221;

If they can pay back bond investors in new and cheaper currencies, then it is in the interests of countries like Greece to go out on their own, Mr. Congdon said.

But with other countries seeking the shelter of the euro and leaders like Angela Merkel of Germany hinting that the big powers would come to the rescue of Greece and other distressed countries if necessary, most economists argue that the euro zone is unlikely to crack.

Still, that hasn&S217;t stopped bond investors from talking up a new divergence trade in Europe &S212; the flip side to the convergence trade earlier this decade, during which Irish, Greek and Spanish government bonds were bought on the theory that a grand economic harmony would sweep Europe.

In Britain, what was once unthinkable is now being discussed: a possible downgrade of the country&S217;s triple-A rating. Moody&S217;s recently affirmed the rating, citing the ease with which the Treasury had been able to raise funds, but some analysts are convinced that a downgrade is inevitable.

&S220;There is a clear drop in confidence on the part of bond investors,&S221; said Mark Schofield, a fixed-income strategist at Citigroup in London. &S220;I think it is all beginning to unravel.&S221;

Bond Vigilantes Prowling Europe

Hot News: House Approves Tougher Rules on Wall Street
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Losses at Dubai World Unit Add to Jitters

DUBAI &S212; Concern over the debts of Dubai&S217;s utility provider and losses at Nakheel, the builder of the emirate&S217;s palm-shaped housing development, affected markets Wednesday, drowning out assurances by top officials that Arab economies in the Gulf were sound.

The Dubai debt saga has shaken global investors since the emirate&S217;s Nov. 25 announcement that it wanted a standstill on $26 billion in debt owed by Dubai World as it restructured the government-owned company, which builds and operates everything from ports to luxury apartments.

Nakheel, the property developer owned by Dubai World, added to the already battered sentiment Wednesday after its financial statements showed liabilities increasing 7.2 percent to 73.3 billion dirhams, or $20 billion, in the first half of this year.

Nakheel said it had a first-half loss of 13.4 billion dirhams.

The Dubai stock index tumbled 5.9 percent to a 32-week low in midday trade, with construction and real estate companies all down by the daily limit.

The British bank Standard Chartered, which is one of Dubai World&S217;s creditors, said any losses that it suffered in Dubai were unlikely to be material.

Its shares have fallen 12 percent since Dubai World&S217;s announcement.

While Dubai has tried to separate its profitable companies from the debt restructuring, the exercise has led to credit downgrades for all government-linked companies amid investor fears that state aid would not be forthcoming if these companies ran into trouble.

Ratings agencies said such downgrades could lead to an accelerated payment clause for the $2 billion debt of Dubai&S217;s power and water provider, Dewa, though an official there dismissed the report as speculation.

Adding to confusion among investors, Dubai&S217;s finance chief said Tuesday that the emirate would need at least six months to restructure Dubai World.

According to a banker who is close to discussions between Dubai World and its creditors but not authorized to speak to the media, Dubai World had yet to show creditors a proposal.

Underscoring the grim mood, a group representing a minority of those who hold Nakheel bonds has written to Dubai World rejecting a standstill on payments, a person familiar with the matter, but not authorized to speak to the media, said Tuesday.

&S220;Investors, especially foreign institutions, want a strong statement from Dubai officials that they&S217;ve found a clear way to help these companies,&S221; said Samer al-Jaouni, general manager of Middle East Financial Brokerage. &S220;There&S217;s no reason to buy back into the market without having a clear picture on what&S217;s going on. Confidence has been lost.&S221;

Nakheel&S217;s Islamic bond maturing on Dec saving account payday loan. 14 fell three basis points to 47 cents on the dollar Wednesday, compared with 110 cents to the dollar just before Dubai World&S217;s announcement.

&S220;This does not really enhance Nakheel&S217;s ability to meet near-term obligations,&S221; said Roy Cherry, vice president research, real estate and construction at Shuaa Capital.

Dubai&S217;s government has said that its assets, including Emirates airlines, would not be involved in any sale aimed at plugging Dubai World&S217;s debt, though some assets belonging to Dubai World could be sold. Dubai World has already said assets from Istithmar World, including Barneys New York, a luxury retail chain; DP World, a profitable port operator; and the Jebel Ali economic zone, would not be part of the wider $26 billion debt restructuring program.

On Tuesday, it added its ship-building unit, Dubai Drydocks World, to the list of businesses not for sale.

Dubai&S217;s predicament stands in stark contrast to the boom years when it bought assets around the world, lured celebrities with luxury villas and exclusive hotels and courted the media with projects like the world&S217;s tallest building.

But while neighbors funded their economic growth with proceeds from soaring oil prices, Dubai borrowed heavily to transform itself into a trade and tourism hub for the region. Creditors apparently lent to Dubai companies on the understanding that they would be backed by the central government of the oil-exporting United Arab Emirates, of which Dubai is a part.

President Sheik Khalifa bin Zayed al-Nahyan of the United Arab Emirates sought to reassure markets again Wednesday, saying the country was determined to contain the effect of the global economic crisis on its &S220;solid&S221; economy.

The Saudi oil minister, Ali al-Naimi, echoed those remarks in a speech in Dubai, saying that the Gulf economies were strong despite anxieties over financial strains in the region.

In a sign of the struggles Dubai World could face to keep its prized assets, Istithmar World lost its W Hotel in New York in a foreclosure auction Tuesday. The hotel was sold for $2 million. Istithmar World bought the property for $282 million in 2006.

Company officials said the loss was unconnected to Dubai World&S217;s debt talks.

&S220;We are disappointed that the lender has chosen this route as we felt that real progress was being made in negotiations with the various lenders to restructure the debt&S221; of the hotel, a spokesman at Istithmar World said.

Reuters

Losses at Dubai World Unit Add to Jitters

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House passes broad Wall Street regulatory overhaul

WASHINGTON – A year after Wall Street failures plunged the nation into recession, the House on Friday passed the most ambitious restructuring of financial regulation since the New Deal.

The sprawling legislation gives the government new powers to break up companies that threaten the economy, creates a new agency to oversee consumer banking transactions and shines a light into shadow financial markets that have escaped the oversight of regulators.

The vote was a party-line 223-202. No Republicans voted for the bill; 27 Democrats voted against it.

While a victory for the Obama administration, the legislation dilutes some of the president's recommendations, carving out exceptions to some of its toughest provision. The burden now shifts to the Senate, which is not expected to act on its version of a regulatory overhaul until early next year.

The legislation would govern the simplest payday loan and the most complicated high-finance trades direct payday loans. In its breadth, the measure seeks to impose restrictions on every house of finance, from two-teller neighborhood thrifts to huge interconnected conglomerates.

Democratic leaders had to fend off a last-minute attempt to kill a proposed consumer agency, a central element of the legislation and one the features pushed by President Barack Obama. The agency would strip consumer protection powers from current banking regulators, and big banks and the U.S. Chamber of Commerce vigorously opposed the idea.

Democrats said the legislation would help address the shortfalls that led to last year's calamitous financial crisis. Republicans argued that the regulations would overreach and would institutionalize bailouts for the financial industry.

House passes broad Wall Street regulatory overhaul

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Dollar Strengthens and Wall Street Tries to Rally

Wall Street stocks were able to close higher on Friday, as a better-than-expected jobless report failed to convince investors that the worst was over for the American economy.

Shares rose more than 1.1 percent at the open as traders responded to the jobs report. But stocks then stumbled, the dollar strengthened and the markets spend much of the afternoon meandering between gains and losses.

At the close, the Dow Jones industrial average was 22.07 points or 0.21 percent higher. The Standard &&8; Poor&S217;s 500-stock index was up 5.96 points or 0.54 percent, and the Nasdaq was up 21.21 points or 0.98 percent.

&S220;Those numbers caught pretty much everyone flat-footed,&S221; Stephen Wood, chief market strategist at Russell Investments, said of the jobs report, pointing in particular to sharp upward revisions in the data for previous months &S220;This confirms that we&S217;ve moved away from the edge of the precipice where we stood last year, the recovery story is real.&S221;

Stock market investors nonetheless recognize, Mr. wood said that &S220;this is going to be more of a grind upward than a euphoric tide lifting all boats.&S221;

Yet, he noted, the data also could lead the Federal Reserve to move earlier than some analysts had expected to tighten interest rates from their rock-bottom levels. He predicted the Fed would raise its benchmark overnight rate target, the Federal funds rate, to between 0.5 percent and 1.0 percent by the end of 2010.

That possibility bolstered the dollar, which strengthen against other major currencies.

The euro fell to $1.4876 from $1.5053 Thursday, and the British pound fell to $1.6498 from $1.6540. The dollar rose to 89.99 yen from 88.26 yen.

As the dollar rose, crude oil declined, settling down 99 cents at $75.47 a barrel.

The Labor Department said in Washington that the United States lost 11,000 jobs in November, less than a tenth of the roughly 125,000 job losses economists had been expecting. The unemployment rate improved to 10 percent from 10.2 percent in October.

While companies are still shedding workers, the pace was the best since the recession began in December 2007, and suggested to some analysts that the economy is headed toward recovery low fee payday loans.

Jeffrey Saut, chief investment strategist for Raymond James, characterized the November job-loss number as &S220;an outlier.&S221;

&S220;There&S217;s no doubt the recession is in the rear-view mirror,&S221; he said, &S220;but I wouldn&S217;t be surprised to see the jobless rate ticking up again in the months ahead.&S221;

Unemployment, he added, is a lagging indicator, so investors who wait for the labor market to turn around have historically missed out on major market gains.

Lawrence Glazer, managing partner at Mayflower Advisors in Boston, said would-be stock buyers remained somewhat cautious, despite the surprising data.

&S220;You&S217;re not seeing the level of volume to suggest retail investors are convinced,&S221; he said. &S220;There&S217;s still a healthy dose of skepticism in the market, because we&S217;re looking at unemployment at a 25-year high.&S221;

&S220;Investors are still seeing a divergence between Wall Street&S217;s gains and Main Street&S217;s malaise,&S221; Mr. Glazer said. &S220;The market has been anticipating better data all along. The question hasn&S217;t been &S216;is the market pricing in a recovery,&S217; but &S216;is the market pricing in too big of a recovery.&S217;&S221;

Mr. Glazer said institutional investors had already begun to close positions and did not want to be reshuffling portfolios toward the end of the year, damping the effect of the positive surprise.

In other economic news, the Commerce Department reported that orders to American factories unexpectedly rose 0.6 percent in October, which was better than the flat reading that economists had expected.

In Europe, the Dow Jones Euro Stoxx 50 index of euro zone heavyweights settled 1.19 percent higher, while the FTSE-100 index in London was up 0.18 percent. In Asian trading, the Tokyo benchmark Nikkei 225 stock average rose 0.5 percent. European markets had been down before the American jobs report was released.

Dollar Strengthens and Wall Street Tries to Rally

Hot News: Realty Q&A: The never-ending mortgage modification trial
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Senate to begin health-care votes Thursday

WASHINGTON (MarketWatch) -- The Senate will begin voting on amendments to a sweeping health-care reform bill on Thursday, Majority Leader Harry Reid said, taking up proposals related to Medicare and women's health on the fourth day of debate on President Barack Obama's top domestic priority.

Voting will get underway after Democrats and Republicans have hotly accused each other of delay on the bill, which seeks to extend insurance coverage to 94% of Americans and bar insurers from denying coverage to the sick, among many other things.

"Even for the United States Senate, this is a slow pace," said Sen. Max Baucus, the Montana Democrat who chairs the Senate Finance Committee, on Thursday morning. Debate on the bill began Monday.

Four measures are on deck. The first two deal with women's health: Sen. Barbara Mikulski, D-Md., is seeking to provide coverage for mammograms and other preventive measures at little or even no cost to patients. Sen. Lisa Murkowski, an Alaska Republican, has offered an alternative to Mikulski's amendment that she says would ensure patients get doctor recommendations about preventive health services "without interference from government-appointed advisers get a free credit report."

Senators will also vote on a proposal by Sen. John McCain, R-Ariz., that would send the bill back to the Senate Finance Committee for a re-write, and strip out proposed cuts to the Medicare program. If it passes, McCain's proposal would have the effect of killing the bill, since its financing relies partly on slowing Medicare's rate of growth and cuts to the Medicare Advantage program, a federal government-subsidized program which allows seniors to choose health plans run by insurance companies.

Democrats say basic Medicare benefits will be preserved under the bill and are offering an amendment to make that explicit.

Republicans argue that the Democrats' bill imperils the program.

"The fact is, cuts to Medicare Advantage are cuts to Medicare," said Senate Republican Leader Mitch McConnell on Thursday.

All amendments need 60 votes to pass.

Democrats are aiming to pass the health bill before Christmas, and Reid has warned that senators will need to put in hours on the weekends for debate.

Senate to begin health-care votes Thursday

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World Business Briefing | the Americas: Brazil: Chinese Buy Stake in MMX Steel

The Wuhan Iron &&8; Steel Group, a Chinese steelmaker, agreed to pay $400 million for a stake in Brazil&S217;s MMX Mineracao e Metalicos to broaden its supply of iron ore. Wuhan Steel, based in Hubei province, will appoint two board members to MMX and become the second-biggest shareholder of the Brazilian company with a 21.52 percent stake, the Chinese company said. MMX, which is based in Rio de Janeiro, has a market value of 3.7 billion reais ($2.1 billion), according to Bloomberg data. China, the world&S217;s biggest steel producer, is investing in iron-ore projects globally to reduce dependence on Vale, the Rio Tinto Group and BHP Billiton pay day loan lenders. Wuhan Iron and EBX, MMX&S217;s holding company, also signed an accord to build a steel plant in Brazil, said a Wuhan Steel spokesman, Bai Fang.

World Business Briefing | the Americas: Brazil: Chinese Buy Stake in MMX Steel

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Dubai World $26 billion debt plan soothes contagion fears

DUBAI (Reuters) – Efforts by Dubai World to restructure about &&6;26 billion in debt out of the estimated &&6;59 billion it owes reassured investors that the emirate&&9;s debt problems can be contained, helping global markets edge higher on Tuesday.

Dubai World, the government-controlled conglomerate that led the transformation of Dubai into a regional hub for finance, investment and tourism, unveiled details of a restructuring plan late on Monday that would cover debt owed by its main property firms, Nakheel and Limitless.

"Initial discussions have commenced with the banks of Dubai World and are proceeding on a constructive basis," Dubai World said in a statement, its first comment since the crisis began.

Dubai threw global markets into a tailspin last week when it said it would ask creditors of Dubai World and Nakheel to agree to a standstill on billions of dollars of debt as a first step to restructuring.

News of the restructuring plan helped soothe some investor nerves after the Dubai government on Monday disclaimed responsibility for the debts of Dubai World, crushing assumptions by creditors that the emirate would guarantee its liabilities.

Hassaim Arabi, chief executive at Gulfmena Alternative Investments, said Dubai World&&9;s restructuring statement offered support to worried markets but was not likely to completely stem selling.

"This is definitely good news, it shows they are still committed to their payments and it removes all fears that this is a complete default."

NO CONTAGION SEEN

Stock markets in Dubai and Abu Dhabi tumbled on Monday, the first day of trade since the announcement made on the eve of a four-day public holiday.

Abu Dhabi&&9;s 8.3 percent plunge was its worst one-day fall on record, while Dubai&&9;s 7.3 percent slide was the biggest in more than a year cheap payday advance.

Gulfmena&&9;s Arabi said UAE markets could slide further as foreign investors bailed for the exits while other Gulf markets in Qatar and Kuwait, reopening after the Eid holiday, were seen playing catch-up to Monday&&9;s declines.

But after initial sharp falls last week, markets in Asia and the United States rallied on Monday and Asian stocks extended gains on Tuesday.

"Dubai is still a risk but most of Asia has very limited exposure to Dubai other than isolated banks. So people may want to avoid the banks but most other companies are okay," said Francis Cheung, an equities strategist at CLSA in Hong Kong.

Major Wall Street indexes rose 0.3 to 0.4 percent on Monday, while MSCI&&9;s index of Asia-Pacific stocks outside of Japan rose 0.6 percent.

Dubai World said its restructuring efforts would not include other firms such as Infinity World Holding, Istithmar World and Ports & Free Zone World, which includes DP World, Economic Zones World, P&O Ferries and Jebel Ali Free Zone, or JAFZA. Dubai World said those firms were financially stable.

The statement said the restructuring plan would look at options for deleveraging, including asset sales, funding requirements and the formulation of restructuring proposals to financial creditors.

"It&&9;s a step in the right direction," said Raj Madha, a banking analyst at EFG Hermes in Dubai.

"I&&9;d like to see the details it promises basically: Which entities they&&9;re talking about (selling), how big a haircut they&&9;re going to take."

(Additional reporting by Rania Oteify and Tamara Walid; Writing by Lincoln Feast; Editing by Tomasz Janowski)

Dubai World $26 billion debt plan soothes contagion fears

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