Stocks surge as Italy, Greece allay debt fears
NEW YORK (AP) _ Stocks surged Friday, erasing their losses for the week, after Italy and Greece moved closer to getting their financial crises under control. The Dow Jones industrial average jumped back above 12,000.
Italy's benchmark stock index jumped 3.7 percent and its borrowing costs plunged after the country's Senate passed a crucial austerity budget demanded by the European Union. Other European stock markets and the euro also pushed higher as investors became more confident that Italy would avoid a fiscal disaster.
The passage clears the way for Italian Premier Silvio Berlusconi to step down. Berlusconi was widely considered an obstacle to serious economic reforms. The yield on Italy's benchmark two-year bond dropped 0.43 percentage point to 5.69 percent. That's a sign investors think Italy will succeed in managing its massive debt load.
Italy closer to new government after reforms vote
ROME (AP) _ Italy's Senate on Friday approved economic reforms demanded by the European Union. Premier Silvio Berlusconi could resign as early as this weekend and a transitional government formed.
The 156-12 vote took place after respected economist Mario Monti _ widely expected to become the interim prime minister _ was welcomed with sustained applause in the Senate chamber, where he was officially designated senator-for-life.
Italy's eagerly awaited political transition is expected to happen Saturday, when the lower chamber of parliament also votes on the reforms. It will follow a similar power shift in Greece, where an interim government this week took over under the leadership of former banker Lucas Papademos.
The hope is that politically neutral governments will have the strength to push through deeply unpopular and painful economic reforms needed to reduce the two countries' massive debt loads.
France lashes out at S&P's `shocking' error
PARIS (AP) _ France reacted with outrage after the Standard & Poor's ratings agency accidentally sent out a message saying it was downgrading France's prized "AAA" credit rating during a tumultuous week in Europe's protracted debt crisis.
Germany and the European Commission also bristled Friday, warning ratings agencies to act responsibly and underscoring European unease over the power they wield over governments.
The error stood for an hour and a half on Thursday while the U.S. and most European markets were open before it was corrected by the agency _ spooking investors by foreshadowing an event that would rock the 17-nation eurozone.
S&P's blunder came just as Greece and Italy seemed to be getting on the right track by establishing interim governments led by financial experts who might guide them out of their debt crises. For a moment, it seemed as if the crisis was again worsening in its one step forward, two steps back way.
Universal, Sony/ATV to buy EMI for $4.1 billion
LOS ANGELES (AP) _ EMI Group Ltd., the iconic British music company that is home to The Beatles, Coldplay and Katy Perry, is being split and sold for $4.1 billion.
The deals will open EMI's buyers, Universal Music and Sony/ATV, to regulatory scrutiny as they increase their dominance of the music industry.
Universal Music Group said Friday that it will pay 1.2 billion pounds ($1.9 billion) for the recording division, joining Universal artists including Lady Gaga and Eminem with EMI superstars such as David Guetta and Lady Antebellum.
A consortium led by Sony/ATV reached a separate deal to pay $2.2 billion for EMI's publishing division, according to a person familiar with the matter. That business is in charge of songwriting copyrights for such artists as Rihanna and Adele. The person wasn't authorized to speak publicly and spoke on condition of anonymity.
Sony/ATV, a joint venture between Sony Corp. and the Michael Jackson estate, is a 38 percent partner in the consortium. The other parties were not immediately known.
CME offers $300 million to help unfreeze MF Global funds
NEW YORK (AP) _ A futures exchange that handled trades by failed broker MF Global said Friday that it will cover as much as $300 million to help speed the release of funds frozen since the firm filed for bankruptcy protection.
CME Group's announcement that it will provide a "financial guarantee" to the trustee overseeing the liquidation of brokerage unit of MF Global followed the trustee's disclosure that he fired all of the unit's 1,066 employees.
CME said it was providing the funds to give the trustee "greater latitude" to distribute some of the $4 billion in customer funds. The funds were frozen by a bankruptcy judge as he evaluates competing claims for the money. MF Global is facing a legally complicated liquidation. In addition to the $4 billion in frozen customer money, regulators say $600 million in other client money is missing.
MF Global collapsed after making a disastrous bet on European debt. The company traded derivatives contracts whose value was based on the value of an underlying asset, like interest rates, oil prices or currency rates. It filed for bankruptcy protection on Oct. 31.
SEC disciplines 8 employees over Madoff failure
WASHINGTON (AP) _ The Securities and Exchange Commission says it has disciplined eight employees for failing to uncover the Bernard Madoff's Ponzi scheme over a 16-year period. None of the employees were fired.
SEC spokesman John Nester says the discipline varied. Three employees had their pay reduced. Two received 30-day suspensions without pay, one of whom also received a pay cut. The others received shorter suspension or counseling memos. The actions were based on recommendations by a law firm hired by the agency.
Two years ago, the SEC inspector general questioned the conduct of 21 employees in a report on the Madoff affair. Ten of those employees have since left the agency.
The SEC has been criticized for failing to spot the Ponzi scheme. Madoff is serving a 150-year sentence for securities fraud.
D.R. Horton reports fiscal fourth-quarter profit
LOS ANGELES (AP) _ D.R. Horton ended fiscal 2011 in the black for the second time in as many years, as the homebuilder cut costs aggressively in the face of fewer home sales.
The company also reported a return to profitability in the fourth quarter, aided by a 17 percent increase in home closings and a 7 percent bump new home orders.
The sales trends echo those of other major homebuilders, some of which have reported improved sales for the July-to-September quarter.
This year's numbers, however, are stacked up next to last year, when tax credits aimed at spurring sales expired and sent demand down sharply.
Electric car battery catches fire after crash test
WASHINGTON (AP) _ A Chevrolet Volt that caught fire three weeks after its lithium-ion battery was damaged in a government crash test has regulators taking a harder look at the safety of electric car batteries, federal officials said Friday.
But based on testing so far, regulators believe the batteries are safe and don't pose a greater fire risk than gasoline-powered engines, a National Highway Traffic Safety Administration official told The Associated Press. The official requested anonymity in order to speak freely.
The car that caught fire was tested May 12 by an agency contractor at a Wisconsin facility using a relatively new side-impact test intended to replicate crashing into a pole or a tree, the official said. Three weeks later, while the car was parked at the test facility, it caught fire and set several nearby vehicles on fire. A NHTSA investigation concluded the crash test damaged the battery, which later led to the fire.
Lithium-ion batteries, which are used in a vast array of consumer electronics, have a history of sometimes catching fire when damaged.
Latest `Call of Duty' game breaks sales record
NEW YORK (AP) _ By the third time around, it really shouldn't be a surprise. The latest "Call of Duty" video game set a first-day sales record this week, generating $400 million in sales in its first 24 hours in stores. That breaks the record its predecessor set this time last year.
"Call of Duty: Modern Warfare 3" is the third game in the military shooter series to set such a record. Last year, "Call of Duty: Black Ops" raked in $360 million in its first 24 hours on sale. "Call of Duty, Modern Warfare 2," sold 4.7 million copies in its first 24 hours to reap $310 million
The latest installment of the game from Activision Blizzard Inc. went on sale at midnight Tuesday in North America and the U.K.
By The Associated Press(equals)
The Dow Jones industrial average jumped 259.89 points, or 2.2 percent, to 12,153.68. The S&P 500 rose 24.16, or 2 percent, to 1,263.85. The Nasdaq composite rose 53.60, or 2 percent, to 2,678.75.
Benchmark crude rose $1.21 to end the day at $98.99 per barrel in New York. Brent crude, which is used to price many foreign oil varieties, increased 45 cents to finish at $114.16 in London.
In other energy trading on Friday, heating oil rose 2 cents to end at $3.1716 per gallon, and gasoline futures fell 3 cents to finish at $2.6038 per gallon. Natural gas fell 6 cents to end the day at $3.5840 per 1,000 cubic feet.