Business Highlights

AP News
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Posted: Dec 11, 2009 5:54 PM

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Major makeover of Wall Street regulations passes House

WASHINGTON (AP) _ The House passed the most ambitious restructuring of federal financial regulations since the New Deal on Friday, aiming to head off any replay of last year's Wall Street failures that plunged the nation deep into recession.

The sprawling legislation would give the government new powers to break up companies that threaten the economy, create a new agency to oversee consumer banking transactions and shine 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 administration, the legislation dilutes some of President Barack Obama's recommendations, carving out exceptions to some of its toughest provisions. The burden now shifts to the Senate, which is not expected to act on its version of a regulatory overhaul until early next year.

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Treasury pay czar limits pay at automakers, banks

WASHINGTON (AP) _ The Obama administration's pay czar is limiting the cash compensation for executives at companies that received the largest taxpayer bailouts to $500,000.

The 25th through the 100th top earners at Citigroup, GMAC, American International Group and General Motors also must take more than half their compensation in stock, and at least half must be delayed for three or more years, said Kenneth Feinberg, the Treasury Department's Special Master for Executive Compensation.

About 12 executives were granted exemptions to the $500,000 cash cap.

The rules will affect many workers' year-end bonuses and stock grants, Feinberg said. They also will serve as a starting point for negotiations next year over pay packages for 2010.

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Stronger retail sales and sentiment boost stocks

NEW YORK (AP) _ Stocks mostly rose Friday on signs that consumers and businesses are feeling more confident about the economy.

The Commerce Department said retail sales rose 1.3 percent in November, more than double the increase analysts had expected and better than the 1.1 percent rise in October.

The report boosted hopes that consumers are starting to feel more comfortable opening their wallets after months of building up their savings. A recovery in consumer spending, a major component of U.S. economic activity, is seen as one of the key elements to sustained growth.

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Oil below $70 for first time since October

NEW YORK (AP) _ A nine-month rally in oil prices appeared to falter as a gradual sell-off that began in late October gained momentum.

Crude prices declined Friday for the eighth day in a row. The contract for January delivery gave up 67 cents to settle at $69.87 a barrel on the New York Mercantile Exchange. It's the first time that oil has closed below $70 a barrel since early October.

Prices tumbled as the dollar gained strength and investors took a second look at paltry demand figures in the West.

The declines came even as the International Energy Agency predicted Friday that global oil demand will rise more than previously anticipated next year.

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Costs and security fears weigh on Iraq oil auction

BAGHDAD (AP) _ Iraqi officials cheered and clapped as the first oil field up for bid went to a major international consortium at the opening of the country's biggest postwar auction Friday. But from there, the chill set in.

Oil executives from around the world made deals on only two fields, both in Iraq's relatively stable south, while shunning six others in regions with sporadic violence _ and where the risk outweighs the profits that the Iraqi government is offering.

Iraqi officials portrayed the day as a success because they secured deals that will ramp up production in the two giant fields. But the lack of energetic bidding highlighted Iraq's difficulties in turning its wealth of oil _ the world's third largest reserves _ into a financial bonanza.

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Dem leader urges debt limit increase of $1.8-1.9T

WASHINGTON (AP) _ A top House Democratic leader said Friday Congress will have to permit at least $1.8 trillion in additional federal borrowing next year in order to avoid a default on the U.S. debt.

Majority Leader Steny Hoyer, D-Md., said that an increase in the so-called debt limit would have to be in the neighborhood of $1.8 trillion to $1.9 trillion in order to allow the government to borrow enough money to keep the government running through December of next year.

Democrats are struggling to pass an increase in the $12.1 trillion cap on borrowing before the end of the year and are trying to pass an increase large enough so that they won't have to vote again on the issue before next year's midterm elections. The bill would permit a total federal debt of about $14 trillion.

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SEC has widened probe into BofA, Merrill deal

WASHINGTON (AP) _ The Securities and Exchange Commission has expanded its probe of Bank of America to include the bank's possible failure to disclose mounting losses at Merrill Lynch, a top agency official said Friday.

The SEC has been pursuing civil charges against Bank of America over the failed disclosure to shareholders of bonuses to Merrill employees after it was acquired by the second-largest U.S. bank.

But when Ohio Democratic Rep. Dennis Kucinich asked at a hearing whether the agency has widened its investigation to include the disclosure of losses at Merrill, SEC Enforcement Director Robert Khuzami said: "That's a yes."

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Feds probe Calif. investor in Madoff affair

NEW YORK (AP) _ Federal prosecutors in Manhattan say there is a criminal investigation under way of a prominent California investment manager who did business with Bernard Madoff.

The prosecutors made the disclosure as they asked Friday for a delay in civil proceedings already brought against investment adviser Stanley Chais.

He's a longtime Beverly Hills philanthropist.

The Securities and Exchange Commission earlier this year announced civil fraud charges against Chais. They say he oversaw three funds that invested all of their assets with Madoff.

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Icahn buys 1st-lien debt of Trump's casino company

DES MOINES, Iowa (AP) _ Billionaire investor Carl C. Icahn said Friday he has agreed to buy a majority of the first-lien bank debt of Trump Entertainment Resorts Holdings, which owns three resorts in Atlantic City, N.J.

The deal is part of a bankruptcy reorganization plan Icahn negotiated to help the troubled casino company emerge from bankruptcy.

Trump Entertainment filed for bankruptcy protection in February, the third such filing for the company or its corporate predecessors. The company owns Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino, and Trump Marina Hotel Casino.

The deal was negotiated with Beal Bank and Beal Bank Nevada, which are headed by Donald Trump's friend Andy Beal.

Icahn said the plan offers the casino company the ability to weather current economic turmoil with no debt.

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By The Associated Press

The Dow Jones industrial average rose 65.67, or 0.6 percent, to 10,471.50. The Standard & Poor's 500 index gained 4.06, or 0.4 percent, to 1,106.41, while the Nasdaq composite index slipped 0.55, or less than 0.1 percent, to 2,190.31.

The contract for January delivery gave up 67 cents to settle at $69.87 a barrel on the New York Mercantile Exchange. It's the first time that oil has closed below $70 a barrel since early October.

In other Nymex trading in January contracts, heating oil added less than a penny to settle at $1.9085 a gallon while gasoline added less than a penny to settle at $1.8416 a gallon. Natural gas fell 13.5 cents to settle at $5.163 per 1,000 cubic feet.

In London, Brent crude for January delivery added 2 cents to settle at $71.88 on the ICE Futures exchange.