WASHINGTON, Dec. 24 (Xinhua) -- U.S. orders for durable goods edged up 0.2 percent in November, weaker than expected, according to government data released Thursday.

The Commerce Department said new orders for manufactured durable goods, items expected to last at least three years, in November increased smaller because declines in demand for aircraft and autos offset strength in a number of other areas. Economists had expected a 0.5 percent gain.

However, November's increase was better than a 0.6 percent decline in October.

In November, orders for machinery rose by 3.5 percent, demand for primary metals such as steel grew 1.4 percent and orders for computers and electronic products jumped 3.7 percent, the biggest gain since February payday advance loans.

But the demand for transportation products dropped 5.5 percent as orders for motor vehicles and parts declined 0.2 percent, the weakest showing in five months. Demand for commercial aircraft plunged 32.6 percent.

The department said that demand for non-defense capital goods excluding aircraft rose by 2.9 percent in November, rebounding from a 2 percent drop in October. It was the best showing since a similar gain in September. This category is closely watched because economists considered it a good proxy for business investment. Special Report: Global Financial Crisis

U.S. durable goods orders rise 0.2% in November

LONDON (MarketWatch) -- European shares rebounded from early lows to trade with mild losses on Friday, as investors started to pick up shares in some companies battered in the previous session.

The pan-European Dow Jones Stoxx 600 index fell 0.5% to 238.75, off an intraday low of 235.91.

The index dropped 3.3% in a broad-based sell-off on Thursday following reports that Dubai is seeking to postpone repaying the debt of its corporate entity Dubai World.

Bank shares were particularly hard-hit on Thursday as investors tried to gauge exposure to Dubai woes but looked to be regaining some equilibrium on Friday.

"Overall we would argue the UAE direct loan exposure risk is to some extent over-discounted within global banks except for some selective banks," said analysts at J.P. Morgan.

"Within European banks, HSBC Holdings and Standard Chartered have the largest absolute exposures with $17.0 billion and $7.8 billion respectively, equivalent to 18% and 43% of group net asset value," the analysts added.

HSBC Holdings shares were down another 1.5% and Standard Chartered shares lost another 1.8% but many other lenders were higher.

National Bank of Greece shares were up 3.5% in Athens and Natixis shares advanced 1.9% in Paris.

Royal Bank of Scotland shares rose 4.4% in London after it also announced that it has officially signed a previously announced asset insurance deal with the U.K. government.

Regional equity markets were also off early lows.

The U.K. FTSE 100 index declined 0.4% to 5,171.09, the German DAX index fell 0.5% to 5,587.65 and the French CAC-40 index lost 0.3% to 3,668.65.

"I think that people are using [the Dubai drop] as a buying opportunity," said Heino Ruland, strategist at Ruland Research.

Whether markets in Europe can hold around current levels "will depend on what happens in today's short session in the U auto loan interest rates.S." Ruland added.

U.S. stock futures were pointing to a big drop on Wall Street. Dow Jones Industrial Average futures were down 237 points.

The U.S. markets were closed on Thursday for the Thanksgiving holiday so Friday will be investors' first chance to react to the news on Dubai. See Indications.

Ahead of the resumption of regular trading in New York for metals and oil, futures tumbled in electronic trading, with gold futures down $23.90 at $1,163.00. Read more on gold move.

Airlines and autos can be sensitive to changes in oil futures and there were gainers in both sectors on Friday in Europe, with BMW shares up 1.7% and Renault shares up 1.1% in the auto sector. Air France shares rose 1.5%.

Also, French consumer confidence jumped in November, boosted by rising optimism over personal finances and the general economic situation, the statistical agency Insee reported Friday.

"Recent data supports an upswing in European markets with leading indicators suggesting that the recovery is well under way" said Roger Guy and Guillaume Rambourg, managers of the Gartmore European Selected Opportunities Fund.

"Despite the recent consolidation we believe that the positive story for equities is pretty much intact for the next three-to-six months, with equity inflows, and yet more upgrades at the GDP and corporate earnings level," they added.

Companies that are less tied to the economic outlook were under pressure on Friday, with drugmaker Roche down 1.2% and food producer Nestle down 0.9%.

Europe Markets: Buyers emerge in battered Europe

WASHINGTON &<51; The Transportation Department imposed its first penalties for runway delays Tuesday, collecting $175,000 from three airlines for leaving 47 passengers of a regional jet stranded overnight in Rochester, Minn.

The agency said that Continental Airlines and its regional affiliate, ExpressJet Airlines, operating as Continental Express, had deceived passengers by promising, through a &S220;Customer First&S221; statement on Continental&S217;s Web site, to let passengers off planes within three hours when faced with an extended delay on the runway.

The two airlines argued that the promise was not enforceable by the government, but they agreed to pay $50,000 each in civil penalties.

A third airline, Mesaba, agreed to pay $75,000 because its employee told the Continental Express captain &<51; wrongly &<51; that the passengers could not be allowed into the terminal because the Transportation Security Administration was not present.

The Transportation Department said that Mesaba had shown &S220;indifference to the passengers&S221; that amounted to an unfair and deceptive practice. Mesaba also said it had not violated any law but agreed to pay the fine.

The flight, on Aug. 8, was supposed to go from Houston to Minneapolis but was diverted to Rochester because of bad weather. Continental Express does not serve Minneapolis, but asked Mesaba for help so the passengers could have access to the restrooms and vending machines.

A Mesaba ground agent, however, said the Transportation Security Administration forbade passengers from being in the terminal while it was closed. Later, however, the agency said that the passengers could have gotten off and reboarded if they stayed in the area inside the checkpoints, and that it had the ability to recall screeners in the middle of the night if necessary low fee pay day loans.

Instead, the passengers were kept on the plane from half past midnight until 6 in the morning, despite repeated efforts by the crew.

The secretary of transportation, Ray LaHood, said in a statement, &S220;I hope this sends a signal to the rest of the airline industry that we expect airlines to respect the rights of air travelers.

&S220;We will also use what we have learned form this investigation to strengthen protections for airline passengers subjected to long tarmac delays,&S221; Mr. LaHood said.

The department proposed a rule a year ago to require airlines to have a contingency plan for lengthy airport delays, and incorporate the plan into their contracts of carriage, which would make it easier for passengers to sue if the plans were violated. The department said that a final rule was expected by the end of the year.

The House of Representatives passed a passenger-rights bill earlier this year but it does not address runway delays, according to Kate Hanni, executive director of flyersrights.org, a consumer advocacy group. A Senate version, which does set limits on delays, is in the Commerce Committee and may reach the Senate floor early next year, she said.

&S220;I think it&S217;s awesome that the Department of Transportation has set down some punitive damages,&S221; Ms. Hanni said.

Airlines Pay For Stranding Passengers

Hot News: G.M. Plans to Decide Saab’s Fate Next Week

WASHINGTON (MarketWatch) -- Legislation mandating broad regulatory reform in the banking industry continued to take shape Tuesday, with lawmakers approving limits on the amount of taxpayer funds that could be used to dismantle insolvent, "too-big-to-fail" financial institutions.

The House Financial Services Committee made other changes to the bank reform bill, including alterations to the structure of the Federal Reserve.

The legislation seeks to amass funds from large financial institutions and hedge funds that would be used to make payments to creditors and counterparties of a large failing financial institution so that its collapse does not lead to their collapse, further unsettling the financial markets.

Bailout Nation: Are Newspapers Next?

Almost all of Wall Street has received government money - so why not a bailout for newspapers? Members of the Journal Editorial report team discuss. Watch the Journal Editorial Report on the FOX News Channel on Saturdays at 2 and 11 pm EDT.

Lawmakers approved a measure that would require funds from large financial institutions be used to pay to cover the costs of dismantling a financial institution.

"Wall Street companies and executives should have to pay for their own mistakes," said Rep. Paul Hodes, D-N.H., the provision's author. "This amendment ensures that financial companies, not taxpayers, will resolve the company."

According to committee spokesman Steven Adamske, the provision would not prohibit Congress from allowing bank regulators to use taxpayer funds to dismantle an institution as long as those costs would be recouped later from the financial industry and the industry-funded pool of capital had been tapped first. He added that the committee will consider the details of the funding later this week.

The White House and many lawmakers on Capital Hill, including Senate Banking Committee Chairman Christopher Dodd, D-Conn., the author of too-big-to-fail legislation in the Senate, are seeking to allow Congress to permit bank regulators to use taxpayer funds first to dismantle a failed institution and later recoup those costs from the industry.

Rep. Barney Frank, D-Mass., the committee's chairman, said he expects to support an amendment that is expected to be introduced later this week that would cap the amount that can be collected from financial institutions to $200 billion easy payday loans.

"The cap we have is $200 billion," Frank said.

Who would pay?

The Frank legislation would have financial institutions with $10 billion in capital or more pay fees to fund the pool of capital that could be used to unravel a failed supersized bank. Frank added that each institution will be assessed based on their size, interconnectedness and general riskiness. Roughly 120 financial institutions would be assessed fees had the provision been in effect today.

However, Rep. Brad Sherman, D-Calif., is expected to introduce a provision that would only have really large institutions with $75 billion, adjusted for inflation, pay into the fund. It's unclear whether lawmakers will support Sherman's measure or stick to the original legislation.

Changes at the Fed

The committee also approved an amendment introduced by Rep. Gary Peters, D-Mich., that would reduce the power of the presidents at the Federal Reserve's 12 regional banks, placing more authority in the hands of presidentially appointed and Senate-confirmed Federal Reserve Board of Governors. A similar provision was introduced by Dodd in the Senate.

According to the amendment, the Fed's board of governors would be prohibited from delegating the authority to make any voting decisions to the presidents of the Federal Reserve banks. At issue is Peters' concern about a lack of independence among regional Fed banks because their boards are made up, in part, of members of the banking community. The regional Fed bank boards, which also include members of the general public, pick their presidents. Peters said he didn't want the 12 regional bank presidents to have too much power over key decisions made by the central bank.

"We expect that voting authority to go to presidentially appointed, Senate-confirmed board of governors of the Federal Reserve System," Peters said.

Axe the board too

Lawmakers also approved a provision that would remove a dismantled, insolvent supersized financial institution's board, in addition to its top management.

The legislation had previously only sought to have a failed institution's management removed.

Panel: Big bank-failure costs to be paid by banks

NEW YORK &S212; News last week of the first major influx of Chinese capital and wind turbine manufacturing expertise into the renewable energy market in the United States &S212; a 600-megawatt wind farm planned for the plains of west Texas &S212; had many readers of the Green Inc. blog in a state of agitation.

&S220;I don&S217;t understand why China is exporting wind energy to the U.S.,&S221; wrote Mark from New York City. &S220;Isn&S217;t this exactly the kind of project a United States company could and should be doing?&S221;

Another reader &S212; Drew from Boston &S212; was more blunt: &S220;Again, China is playing the West for a sucker,&S221; he wrote. &S220;We send them our engineering, they get the manufacturing work and experience.&S221;

The details of the deal known so far: Contingent on financing from Chinese commercial banks &S212; and no small measure of funding from the U.S. economic stimulus package &S212; A-Power Energy Generation Systems, a Nasdaq-listed company based in the Chinese industrial city of Shenyang, would provide 240 of its 2.5-megawatt wind turbines for a 36,000-acre, or 14,600-hectare, utility-scale wind farm in west Texas to be operated by Cielo Wind Power, a developer based in Austin.

The total cost of the project, which was brokered in part by the U.S. Renewable Energy Group, an American private equity company, was estimated at $1.5 billion. At an event after the announcement in Washington on Thursday, Cappy McGarr, a managing partner at the company, was beaming.

&S220;This planned $1.5 billion investment in wind energy will spur tremendous growth in the renewable energy sector,&S221; Mr. McGarr was quoted in a news release as saying, &S220;and directly create hundreds of high-paying American jobs.&S221;

The devil, though &S212; as many observers pointed out by the end of the week &S212; is in the details.

The group&S217;s calculations last week put the number of American jobs at a little more than 300 &S212; most of them temporary construction jobs, along with about 30 permanent positions once the wind farm is operating. Mr. McGarr told The Wall Street Journal that more than 2,000 Chinese jobs would be created by the deal.

That, along with the fact that the project was hoping to secure 30 percent, or $450 million, of its financing from U.S. stimulus funds, was enough to send tempers flaring.

&S220;Why are U.S. stimulus funds being used to subsidize manufacturing jobs in China,&S221; wrote a reader at Green Inc., who pointed out that American officials had repeatedly warned that the United States could lose its competitive edge on renewable energy manufacturing to China.

And yet, he continued, &S220;the federal government gives stimulus monies to subsidize a project buying turbines made in China. Why?&S221;

Part of the agitation almost certainly arises from China&S217;s own reputation for green protectionism.

As Keith Bradsher wrote earlier this year in The New York Times, by establishing prohibitive quotas for homegrown solar and wind turbine equipment, and disqualifying bids from foreign companies on dubious grounds, the Chinese leadership has muscled out American and European manufacturers of clean energy seeking to gain a foothold in China&S217;s burgeoning market for renewables fast payday loan no faxing.

As it happens, American officials made inroads in combating such trade barriers during a meeting of the U.S.-China Joint Commission on Commerce and Trade in Hangzhou, China, last week. Among the outcomes of the meeting: China agreed to remove local-content requirements on wind turbines.

Still, with the American economy struggling to get back on its feet and with an analysis last week from The Associated Press suggesting that the White House may be guilty of overstating the number of American jobs its $787 billion stimulus package has so far created, news that a Texas wind farm would create thousands of green jobs in China was, for some, a bitter pill.

&S220;Thank you for killing the U.S. windmill industry,&S221; wrote a reader from Chicago at Green Inc. &S220;Thank-you, U.S. industrialists and financiers, for having us buy these things with financing and grants emanating from money borrowed from China.&S221;

The deal, however, was no surprise to Russ Choma, a reporter with the Investigative Reporting Workshop, a nonprofit investigative journalism project attached to the American University School of Communication in Washington.

In a somewhat intriguing coincidence of timing, Mr. Choma and his colleagues published, on the same day the Chinese-American wind farm deal was unveiled, a detailed analysis of where stimulus money aimed at creating renewable energy projects and jobs in the United States was flowing.

By Mr. Choma&S217;s reckoning, 84 percent of the $1.05 billion in clean-energy grants distributed by the government since Sept. 1 has gone to foreign renewable energy companies &S212; specifically, wind companies. Through its American subsidiary, Iberdrola, a global manufacturer of wind turbines based in Spain, commanded most of that funding: $545 million.

&S220;We broke down some of the numbers and found out that the program funded 11 projects that installed 982 turbines,&S221; Mr. Choma wrote in an e-mail message, &S220;and 695 were built by foreign manufacturers.&S221;

To some extent, this is hardly surprising. As Mr. Choma noted, the American clean energy manufacturing base &S212; particularly its wind turbine production capability &S212; is tiny compared with that of Europe.

And to be sure, the dispensation of the $22 billion in stimulus funding that is supposed to go toward renewable energy projects has only just begun.

But China&S217;s foray into the American wind power market comes alongside its dominance of the solar panel manufacturing industry, in which 95 percent of total output is exported to the United States and Europe.

And as Mr. Choma noted, when it comes to stimulating the economy, it is the manufacturing that matters. He points to a 2004 study from the Renewable Energy Policy Project, a research institute based in Washington. The institute found that every 1,000 megawatts of installed wind capacity had the potential to generate as many as 4,300 jobs, of which about 3,000 are created at the manufacturing level.

Green Inc. Column: Tempers Flare in U.S. Over Chinese Involvement in Wind Farm Planned for Texas

Stocks moved upward on Thursday, riding momentum from stronger-than-expected earnings reports despite a round of jobless figures that showed persistent weakness in the labor market.

An assortment of companies, from AT&&8;T to Xerox, reported higher-than-expected earnings, feeding the hopes of investors that the earnings season would remain positive. AT&&8;T said it earned $3.19 billion, or 54 cents a share, in the third quarter as the Apple iPhone helped attract two million new wireless customers. Its profit topped Wall Street forecasts for 50 cents a share.

Adding to the optimism, a report on leading economic indicators released Thursday showed an improved outlook for the general health of the economy.

The Dow Jones industrial average rose 131.95 points, or 1.33 percent, to 10,081.31, one day after it closed below 10,000. The Standard &&8; Poor&S217;s 500-stock index jumped 11.51 points, or 1.06 percent, to 1,092.91. The Nasdaq composite index gained 14.56 points, or 0.68 percent, to 2,165.29.

At the same time, several banks and energy companies, including Fifth Third Bank and Consol Energy, showed disappointing earnings, but share prices of energy and utilities rebounded as the broad market rallied late in the session. Financial stocks drove much of the increase, as did better-than-expected reports from heavyweights like McDonald&S217;s and 3M.

After the market closed, there were more optimistic signs in quarterly reports from American Express and Capital One.

EBay surprised investors when it reported its earnings had dropped 29 percent, to $349.7 million, or 27 cents a share. Shares of eBay fell $1.06, or 4.23 percent, to $23.97. Amazon.com, by contrast, outpaced expectations, and investors said strong retail sales were boding well for the holiday season.

Several large companies, including the cigarette producer Philip Morris International, Xerox, and Dow Chemical, reported diminishing sales, but still outpaced expectations credit scores for free.

The generally upbeat company reports seemed to eclipse data from the Labor Department showing that the number of newly laid off workers filing jobless claims last week rose to 531,000 from 520,000 a week earlier. That figure was higher than economists had predicted, and it led to concern that the unemployment rate would continue its march upward.

Investors seemed to mostly ignore that bit of news, however, propelling stocks upward.

&S220;The sentiment right now is to drive this thing home strong and that remains constant and consistent,&S221; said Randy Cass, founder of First Coverage, which is based in Boson. &S220;Unless there is a completely unbelievable data point, they&S217;re not getting the heebie-jeebies.&S221;

Still, the jobless numbers were distressing to some investors.

&S220;The pickup there is definitely concerning,&S221; said Jeffrey A. Hirsch, editor of the Stock Trader&S217;s Almanac. &S220;It probably surprised a few people more so than they&S217;re willing to admit.&S221;

Overseas, the Nikkei stock average in Japan fell 0.64 percent. The FTSE 100 in Britain declined 0.96 percent, the DAX in Germany index fell 1.21 percent, and the CAC-40 in France dropped 1.35 percent.

The dollar, which fell to $1.50 against the euro on Wednesday, its lowest level in more than a year, continued to teeter at that threshold, though it rebounded slightly early in the day, prompting investors to turn away from other commodities like gold and oil. By the end of Thursday, it had returned to $1.50.

The price of crude oil hovered at $81.23, down slightly.

Interest rates were little changed. The Treasury&S217;s 10-year note fell 7/32, to 101 24/32, and the yield rose to 3.41 from 3.39 late Wednesday.

Trading Gains on Profits Despite Job Loss Reports

Hot News: Number of U.S. failed banks hits 100 this year

NEW YORK (Reuters) – Shares of Lazard Ltd (LAZ.N) dropped nearly 3 percent on Thursday following news that its chief executive, legendary Wall Street deal maker Bruce Wasserstein, had died at the age of 61.

Shares of Lazard hit a low of &&6;40.63, and traded at &&6;41.61, down 2.7 percent, or &&6;1.16, in morning trading. The stock has gained 38 percent so far this year.

Wasserstein&&9;s death on Wednesday left major questions about the future direction and leadership of the investment bank he headed.

Lazard said Steven Golub, vice chairman of the company, would serve as interim CEO. Other bankers, including Gary Parr and Terry Savage, are also under consideration for the CEO post, according to The Wall Street Journal.

"Any void in leadership creates uncertainty, and the market doesn&&9;t like uncertainty," said one trader who declined to be named because he was not authorized to speak to the press.

"The stock will likely face some pressure until the succession question gets answered and the new CEO spells out a strategy," the trader said advanced payday loan.

Lazard had announced on Sunday that Wasserstein, 61, had been hospitalized for an irregular heartbeat and his condition was "serious," but said he was "stable and recovering." On Wednesday, the company said the cause of death had not yet been determined.

Wasserstein, known as "Bid &&9;em up Bruce" -- a nickname he despised -- had been involved in one of the year&&9;s biggest potential deals, advising Kraft Foods Inc (KFT.N) in its proposed takeover of U.K. candy maker Cadbury Plc (CBRY.L).

Forbes magazine recently estimated his wealth at &&6;2.2 billion, ranking him 147th on its list of the 400 wealthiest Americans.

(Reporting by Ellis Mnyandu in New York, additional reporting by Jessica Hall in Philadelphia; Editing by James Dalgleish and Gerald E. McCormick)

Lazard's stock drops after CEO dies

LOS ANGELES (Reuters) – PepsiCo (PEP.N) and Anheuser-Busch have agreed to jointly purchase goods and services, from computers to travel, in the United States in a move one expert called a first for large companies.

While co-ops and other purchasing associations are common among small companies, "this is the first time you&&9;ve seen two giants do something like this," James Ellis, dean of the University of Southern California&&9;s Marshall School of Business, told Reuters.

The agreement, announced on Tuesday, would apply to goods and services not directly related to making the beverages they sell, such as information technology hardware, office supplies, travel and facilities services, transportation, and maintenance, repair and operating supplies, the companies said.

It also comes at a time when corporations are wringing out costs in a bid to improve profits.

Ellis said he saw no antitrust issues with the pact since PepsiCo and the U.S. brewer, owned by Anheuser-Busch InBev (ABI.BR)(BUD.N), are not direct rivals.

"They&&9;re in businesses that are not necessarily competing, but they&&9;re looking for similar types of goods short term personal loans. It&&9;s a great way to leverage their buying power," said Ellis, who noted that the agreement covers "back of the house" products and services.

"It&&9;s not anything that has to do with the customer, the product, the brand, or the advertising," he said.

While suppliers who lose business will certainly be unhappy about the agreement, others could use it as an opportunity to increase volume and potentially expand the number of products they are selling to the companies, Ellis said.

Specific cost-savings will depend on the negotiated terms for each purchase, the companies said.

PepsiCo shares closed at &&6;60.60 on the New York Stock Exchange, where Anheuser-Busch closed at &&6;47.55, before the announcement was issued. Shares of both companies were unchanged in after-hours trade.

(Reporting by Lisa Baertlein; Editing by Phil Berlowitz)

Pepsi, Anheuser to jointly buy goods, services

WASHINGTON (Reuters) &<51; Recent actions by credit card issuers prove that lawmakers should move up the date of new restrictions on interest rates and fees, Representative Barney Frank, Democrat of Massachusetts, said Thursday.

Mr. Frank said that financial companies had taken advantage of a delay in putting the credit card changes in place by raising customers&S217; rates.

&S220;This is not the type of protection that should wait, and we should move forward,&S221; Mr. Frank, chairman of the House Financial Services Committee, said Thursday during a hearing on credit card restructuring.

He said his committee would also take a more serious look at another credit card issue &<51; interchange fees.

Interchange fees are the fees that retailers like supermarkets and convenience stores pay to banks every time a customer uses a credit card.

Mr. Frank, along with another Democrat, Representative Carolyn B. Maloney of New York, have introduced legislation that would move up the date for the new credit card rules to Dec. 1, from Feb. 22, 2010.

The regulations were approved by Congress and signed into law this year by President Obama.

The rules will sharply restrict credit card issuers&S217; powers to raise interest rates on existing card balances, charge some types of fees, and burden cardholders with unreasonable penalties online cash advance lenders.

Legislation has also been introduced to give merchants greater access to negotiations with banks to establish interchange fees, but those bills are not close to becoming law.

Merchants contend the fees unfairly cut into their margins and drive up prices for consumers. Banks argue that the 50-year-old electronic payments system is efficient and based on a pricing system that benefits businesses and their customers.

The American Bankers Association told lawmakers that merchants paid a penny or two on each dollar of payment card transactions and that &S220;this is a very small price to pay for all of these benefits.&S221;

A recent study by the Merchants Payments Coalition &<51; which represents retailers like supermarkets and convenience stores &<51; said that rate was up to six times greater than fees in other countries.

Representative Jeb Hensarling, Republican of Texas, said Congress must be careful not to crack down too hard. He said the bill to increase the speed of credit card reforms and pending legislation to crack down on interchange fees could further restrict lending.

In House, a Bid to Hasten a Credit Card Law

Hot News: Upbeat Alcoa Report Gives Markets a Boost

NEW YORK/SEOUL (Reuters) – Prudential Financial Inc (PRU.N) may sell its investment and fund management businesses in South Korea, a deal which could fetch about &&6;850 million and could trigger a wave of consolidation in the country&&9;s brokerage and asset management sectors, where more than 100 companies compete.

Prudential, the second-largest U.S. life insurer, said on Sunday it was exploring options, including a sale, for Prudential Investments & Securities and Prudential Asset Management in South Korea, a move seen as part of an effort to shed non-core assets.

The prospective deal will bring in an estimated 700 billion won (&&6;597 million) to 1 trillion won (&&6;853 million), according to an earlier media report, more than double the amount the U.S. company paid to buy the businesses in 2004.

Yonhap news tipped KB Financial Group (KB.N), HSBC (HSBA.L) (0005.HK), Lotte Group and Hanwha Group as possible suitors for the Prudential units.

Earlier this year, an online news outlet reported that Prudential was in the early stages of talks with KB Financial about the sale of Prudential Investments & Securities.

A KB Financial spokesman said the company was looking at potential brokerage targets, but had not identified specific companies at this stage. The group (KB.N), the parent company of Kookmin Bank, raised 1.12 trillion won in a rights offering in August to prepare for new acquisitions business cards.

Prudential is the front runner among foreign fund houses embarking into the country&&9;s &&6;300 billion asset management sector in the past few years, betting on growth in the pension market.

But financial industry deregulation beginning earlier this year has stoked competition with new entrants. Steady money outflows from retail stock investors have also dealt a blow to fund houses.

South Korean banks and conglomerates are keen to make forays into brokerage and asset management markets to lower their reliance on interest margins and create synergies with their retail businesses.

Hanwha Group spokesman Joo Cheol-beom said it had not made any decision on the brokerage business, while HSBC declined to comment on market rumors.

Prudential bought the two companies from the South Korean government for 355.5 billion won in 2004, making the U.S. insurer the largest foreign fund manager in the country at the time.

Prudential said it plans to hold on to its life insurance business in Korea, Prudential Life Insurance Company of Korea.

Shares of Prudential closed at &&6;46.74 on the New York Stock Exchange on Friday.

(Reporting by Michael Erman and Kim Yeon-hee; Editing by Jan Paschal, Jonathan Hopfner and Valerie Lee)

Prudential mulls sale of South Korean units

PITTSBURGH &<51; President Obama will announce Friday that the once elite club of rich industrial nations known as the Group of 7 will be permanently replaced as a global forum for economic policy by the much broader Group of 20 that includes China, Brazil, India and other fast-growing developing countries, administration officials said Thursday.

The move highlights the growing economic importance of Asia and some Latin American countries, particularly since the United States and many European countries have found their banking systems crippled by an economic crisis originating in excesses in the American mortgage market.

For more than three decades, the main economic group was the Group of 7 &<51; the United States, Britain, Canada, France, Germany, Italy and Japan. During the Clinton years, Russia was gradually added, not because of the size of its economy, but to help integrate it with the West. Administration officials said the group would still meet twice a year to discuss security issues. But for practical purposes, the smaller group will become more like a dinner club that defers to the broader group on the economic issues that have dominated summit meetings for nearly three decades. The development, as Mr. Obama was hosting a summit meeting here for leaders of the Group of 20 &<51; 19 countries and the European Union &<51; also highlighted the lingering disparity between the elite group of mostly Western powers and the mass of poorer nations. For all of Mr. Obama&S217;s talk about greater inclusiveness for countries like Brazil and China, the meeting in Pittsburgh remains dominated by the financial crisis that began in the United States and has preoccupied the old boys&S217; club.

The issue that many developing countries feel much more strongly about &<51; knocking down barriers to trade, especially in politically sensitive sectors like agriculture &<51; is barely likely to be part of the official discussions.

Rather, the packed agenda includes proposals to raise capital requirements for financial institutions, rein in executive compensation and reduce imbalances between shop-till-you-drop countries like the United States and export behemoths like China, Germany and Japan.

Even as Mr. Obama participated in his first Group of 8 meeting in July in L&S217;Aquila, Italy, he seemed to have doubts about its suitability as a forum for solving the world&S217;s problems. At the time, his aides characterized the session as merely a way station between Group of 20 meetings.

&S220;We view this meeting and this discussion as a midpoint between the London G-20 summit and the Pittsburgh G-20 summit,&S221; said Mike Froman, the president&S217;s chief negotiator.

The merits of the different sizes of gathering &<51; 8 nations, 19 or sometimes something in between &<51; have been vigorously debated.

Proponents of the smaller group say the friendships it fosters are important when friction arises in the group or outside it in one-on-one policy disputes between nations. They also point to complications that arise when 20 countries with vastly different economies try to reach agreement on setting exchange rates or other complex financial questions.

Supporters of the larger group say the emerging nations, and the huge slice of the world&S217;s population that they represent, must have a seat at the table to debate not only economic issues, but also environmental issues like climate change.

Though the huge expansion of global trade has been at the heart of &S220;global imbalances&S221; that Obama officials say they want to address, European and Asian officials gathering here say they cannot tell whether Mr. Obama really wants to push for more open trade. He and his economic advisers have repeatedly warned against responding to the economic crisis by erecting barriers to imports.

But global leaders, noting that Mr. Obama&S217;s words are not always in sync with his actions, wonder if the president is a free trader or a protectionist.

Less than two weeks ago, he set off a dispute with China when he approved hefty new tariffs on imports of Chinese automobile and truck tires quick payday loan. Chinese leaders denounced the move and threatened to retaliate with barriers against American chicken exports.

European officials are quietly grumbling that the United States has yet to become engaged in an effort to revive work on a new global agreement to knock down barriers in areas like agriculture and business services.

That effort is also a top priority for fast-growing countries like Brazil, whose leaders have become important new players on the world stage.

&S220;With Obama&S217;s move on the tire tariffs, the hypocrisy on trade pledges is really quite apparent,&S221; said C. Fred Bergsten, director of the Peterson Institute for International Economics. &S220;I would expect the other countries to beat up on the U.S., and they deserve it.&S221;

Notwithstanding Mr. Obama&S217;s decision on Chinese tires, administration officials have strenuously avoided economic quarrels with China. For years, American officials have complained at international meetings that China was deliberately undervaluing its currency to give its exports a price advantage.

On Thursday, Treasury Secretary Timothy F. Geithner did not even mention the issue. He went out of his way to praise China for responding to the financial crisis by increasing domestic spending with one of the world&S217;s most aggressive economic stimulus programs.

&S220;If you look at what has happened in China, you will see they have made a very substantial effort to increase domestic demand,&S221; Mr. Geithner said.

But Mr. Obama has been largely silent about what he would like to accomplish on trade, especially when it comes to politically charged issues like American barriers to agricultural imports.

One reason for the United States&S217; hesitation is that trade-opening agreements are extremely unpopular with organized labor, which is always an important Democratic constituency, but is especially vital now because it is providing enormous support for Mr. Obama&S217;s campaign to expand health care coverage.

Senator Sherrod Brown, Democrat of Ohio and a leading critic of American trade agreements, held a news conference this week to argue that the leaders meeting in Pittsburgh should support trade laws that preserve or strengthen manufacturing companies. &S220;Leaders of the G-20 nations have an opportunity to clarify that legitimate government actions, like trade enforcement, are not acts of protectionism,&S221; Mr. Brown said.

Global trade went through wrenching reductions last fall, as countries around the world plunged into the deepest recessions that most of them had suffered in decades. Consumers in the United States and other wealthy countries slashed their spending, sending export-heavy countries like Japan and China into a tailspin.

Making matters worse, credit markets were so frozen that companies involved in trade often found it impossible to finance routine business deals.

Financial officials have been relieved that the economic crisis has not yet provoked a chain reaction of protectionist restrictions by countries trying to preserve their home industries.

But many governments have been less than enthusiastic about reviving efforts for a sweeping new global agreement to open more markets. The Doha round of trade talks, begun in 2001, stalled several years ago, and supporters have been unable thus far to rebuild momentum.

Jos&>33; Manuel Barroso, the president of the European Commission, called Thursday for wealthy countries to complete negotiations on a new global agreement as quickly as possible. President Luiz In&>25;cio Lula da Silva of Brazil pleaded this week that a new trade agreement would &S220;greatly speed the global economic recovery.&S221;

But trade experts say no agreement is possible without a strong commitment by the United States, and financial officials from other countries say the Obama administration&S217;s silence suggests that it is not ready to make that kind of effort.

Global Economic Forum to Expand Permanently

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PittsburghLeaders of the Group of 20, the world's leading rich and developing countries, are set to meet Thursday and Friday to discuss preventing another world economic crisis and establishing sustainable growth.

U.S. President Barack Obama is hosting the meeting set in Pittsburgh, Pennsylvania, following up on similar meetings in London in April 2009 and Washington, D.C. in November 2008 regarding the global financial crisis.

Members are expected to build on their goals of restoring jobs and economic growth, repair lending systems, reform international financial systems, and prevent future recessions.

They are also expected to work on ways to promote global trade and build a sustainable model for recovery, and provide financial support to developing countries dealing with climate change issues payday loans.

Members of the G20 include the United States, Brazil, China, Indonesia, Mexico, France, and Germany.

The rest of the members are Argentina, Australia, Britain, Canada, India, Italy, Japan, Russia, Saudi Arabia, South Africa, South Korea, and Turkey.

Some information for this report was provided by AFP, AP and Reuters.

G20 to Discuss Economic Recovery, Cooperation

NEW YORK (Reuters) – A U.S. judge on Monday ruled against American International Group in the giant insurer&&9;s legal battle with Starr International Co, affirming a July jury verdict that Starr did not breach a trust.

At issue in the case were two claims that AIG made against Starr International, which is run by former AIG Chief Executive Maurice "Hank" Greenberg.

AIG sought &&6;4.3 billion of damages to recover millions of its shares held by Starr and to get compensation for stock sold. AIG also claimed that Starr International breached an oral agreement that Starr&&9;s AIG shares would be used to fund an executive retirement scheme for generations of AIG employees.

In a 58-page written judgment, Judge Jed Rakoff in U.S. District Court in Manhattan underlined a jury&&9;s July 7 finding that prevented the bailed-out insurer&&9;s bid to collect &&6;4.3 billion in damages.

He also said, "The court finds that AIG has failed to prove SICO&&9;s liability on AIG&&9;s counterclaim for breach of an express trust."

A spokesman for AIG declined to comment on the judge&&9;s ruling bad credit cash loans.

AIG had sought to establish that there was the creation of an oral trust in 1970, entrusting Starr International to use a block of AIG shares acquired in a company restructuring for company retirement programs for AIG employees. It charged Starr with breach of that trust, and with a second claim of conversion related to sales of the stock for the company&&9;s own use.

The jury ruled on the two claims and the judge was left with a final decision on the breach of trust claim.

Rakoff wrote that "the law will not recognize such an oral trust unless the evidence of its creation is unequivocal ... this is a burden that AIG has not come close to shouldering."

The case is: American International Group v Starr International Company Inc 05-6283 in U.S. District Court for the Southern District of New York (Manhattan)

(Reporting by Grant McCool)

U.S. judge rules against AIG in Starr case

NEW YORK (Reuters) – Oil prices fell 3 percent on Tuesday as dealers rushed to take profits from a rally that had culminated in a 10-month peak earlier in the day.

U.S. crude oil dropped &&6;2.32 to settle at &&6;72.05 a barrel, down from a high of &&6;75, in the biggest percentage loss since August 14. Brent crude dropped &&6;2.44 to &&6;71.82.

"It looks like crude tested the &&6;75 level and failed," said Tom Bentz, a trader with BNP Paribas.

Players said oil&&9;s more than 65 percent rally this year was a good opportunity for some to lock in profits.

"There&&9;s been profit-taking in the energy markets," said Tim Evans, analyst at Citi Futures Perspective in New York.

Oil prices had shot up in earlier trading after U.S. reports showed increased consumer confidence and higher home prices in the world&&9;s largest energy consumer -- adding to a string of encouraging economic indicators.

Wall Street stock indexes climbed to their highest levels since October&&9;s plunge (.N) on the back of the data, getting further support from news U.S. President Barack Obama renominated Ben Bernanke as chairman of the Federal Reserve.

Oil prices, which usually track equities markets closely, could hold around current levels next year, according to a Reuters survey of more than 30 analysts.

The analysts raised their consensus forecast for the fifth straight month on expectations higher fuel demand in an economic recovery would support prices.

Oil extended losses slightly after settlement in the wake of a report from the American Petroleum Institute showing a surprise 4.3-million-barrel build in U.S. crude stocks last week.

Analysts in a Reuters survey had forecast a 1.1-million-barrel decline in crude inventories, adding to last week&&9;s sharp fall pegged to weak imports.

The U.S. Energy Information Administration will release its report on nationwide petroleum stockpiles on Wednesday.

(Additional reporting by Ramthan Hussain in Singapore and Ikuko Kurahone on London; Editing by David Gregorio)

Oil tumbles from 10-month peak on profit-taking

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Jed S. Rakoff, a United States District Court judge in Manhattan, is not one to rubber-stamp administrative decisions.

Known as a maverick in legal circles, Judge Rakoff has in the past found the death penalty illegal, inserted himself into corporate governance reform at WorldCom, and pushed for the release of documents in private settlements.

Now he is tussling with the Securities and Exchange Commission and Bank of America, which will both file reports to him Monday detailing who knew what about $3.6 billion in bonuses paid out by Merrill Lynch just before Bank of America took it over last year.

The Merrill payouts have been at the center of hearings in Congress as well as an investigation by the New York attorney general. But Judge Rakoff is the first to demand that Bank of America reveal who decided not to disclose the bonuses to shareholders before the merger with Merrill closed.

In an interview last week, shortly after he rejected a settlement between the agency and the bank that was meant to put the matter to rest, he remembered a time when executives were held more directly accountable for actions taken by their companies.

Decades ago, when he began his career in the securities fraud unit of the Southern District of New York, prosecutors placed greater accountability on individual executives at companies, he recalled. Charges tended to be filed mostly against those people, rather than against the corporation.

&S220;The feeling then,&S221; he said, &S220;was if a crime had been committed, it was important to discover who the persons were who made the wrongful decisions.&S221;

Now Judge Rakoff is raising questions about executives at Bank of America, as well as the S.E.C.&S217;s logic in imposing a $33 million fine on the bank. At a hearing Aug. 11, he said it appeared the bank had &S220;effectively lied to its shareholders&S221; about Merrill&S217;s bonuses, which he said had been paid by American taxpayers, since the bank received a second bailout shortly afterward.

And besides, he wanted to know, shouldn&S217;t a much higher fine be imposed directly on &S220;the individuals who were responsible&S221; for the mess?

It is not the first time Judge Rakoff has ruffled feathers in the business world. In 2003, for example, he refused to approve what he saw as a low settlement the S.E.C. had negotiated with WorldCom, the phone company that collapsed in an $11 billion accounting fraud.

Lawyers said Judge Rakoff is known for his push for transparency, which he believes is needed for the courts to keep the public&S217;s confidence. For instance, he has some of the strictest rules limiting what sorts of material in cases before him may be kept confidential, said Gregory Diskant, a lawyer who worked with Judge Rakoff in the 1970s, when they were both federal prosecutors. (Judge Rakoff also recently ruled in favor of The New York Times in a freedom of information act case.)

&S220;Everything needs to be public,&S221; the judge said. &S220;The legitimacy of the courts comes from the fact that they reason openly, on the record, based on facts.&S221;

The facts, of course, have been particularly elusive in Bank of America&S217;s merger with Merrill Lynch. Even after a series of hearings before Congress, and an investigation by the New York attorney general, it remains unclear who at the bank knew what about Merrill&S217;s bonuses or its mounting losses on the eve of the merger. The judge will release the bank&S217;s and commission&S217;s filings on Monday.

At the heart of Judge Rakoff&S217;s inquiry is a question of blame. The S.E.C.&S217;s complaint against Bank of America made no charges against individuals, meaning that the fine the agency imposed would be paid by the bank&S217;s shareholders &<51; the very people who were allegedly harmed by the bank&S217;s secrecy.

Rewarding &<51; and punishing &<51; the right parties was at the fore of Judge Rakoff&S217;s thinking in the WorldCom case six years ago. Shareholders of that company had already lost out. So when the judge forced the S.E.C. to increase the $500 million fine it was levying against the firm to $750 million, he also demanded that the money be paid out to the company&S217;s shareholders, rather than to the agency.

But he also decided not to make the fine too high.

&S220;I could have put the company out of business,&S221; he acknowledged. &S220;But it seemed to me that would have been 60,000 jobs needlessly lost.&S221;

To put the company on a healthier track, he then oversaw a review of WorldCom&S217;s corporate governance practices.

It is the kind of intervention that would make many a spine shiver on Wall Street, where banks have generally tried to keep the government out of their business even as they have accepted bailout money.

When asked if he is anti-Wall Street, however, Judge Rakoff sat straight up. &S220;The plaintiffs bar sometimes thinks I&S217;m pro,&S221; he said, adding that he had dismissed a number of shareholder cases against companies for lack of evidence.

Changing the subject, he rose and walked to a corner of his office, where he pointed to a photo montage from the court&S217;s annual Courthouse Follies. There stood three singing hobos, judges all, performing a song written by Judge Rakoff. One of his singing partners had a familiar look &<51; it was Sonia Sotomayor, the recently appointed Supreme Court justice. She wore a red bandanna, while Judge Rakoff sported a fake black tooth and smudges on his cheeks.

&S220;I have a past of making a fool of myself,&S221; he said, chuckling.

He also presented a visitor with a copy of a mock legal opinion he recently wrote &<51; this one in favor of a banker. The ruling, written partly as a poem, was based on &S220;The Merchant of Venice&S221; by Shakespeare. Judge Rakoff ruled that Shylock, the Venetian money lender, should win his appeal to receive some recompense from Antonio, a borrower &<51; even if it wasn&S217;t a pound of flesh.

The judge declined to discuss his plans for Bank of America, but lawyers said the judge might hold another hearing with both sides after receiving the filings and responses he has requested. If he does not approve the settlement, the S.E.C. could choose to drop the case, renegotiate the settlement or take Bank of America to court.

In the meantime, Wall Street could be in for a bit more blunt talk from the bench.

&S220;The S.E.C. has to have noticed by now that most of the country agrees with the sentiments expressed by Rakoff,&S221; said John C. Coffee, a Columbia Law School professor who has taught a course along with Judge Rakoff for 21 years. &S220;This builds up pressure on Bank of America and the S.E.C.&S221;

Plain Talk From Judge Weighing Merrill Case

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