UPINewstrack business

U.S. stocks still down

NEW YORK, Dec. 19 (UPI) -- U.S. stocks continued their downward trend in late-morning trading Tuesday.

The Dow Jones industrials dropped 16.26 or 0.13 percent to 12,425.01. Nasdaq was down 14.23 or 0.58 percent to 2,421.34 and Standard & Poor was off 2.06 or 0.14 percent to 1,420.42.

Crude-oil prices fell 31 cents to $61.90 a barrel.

Bonds declined. The 10-year Treasury was flat, with the yield up a fraction at 4.59 percent Tuesday.

The dollar was lower. The euro was at $1.317 from $1.3101 late Monday, while the dollar was at 118.055 yen from 118.06 yen.

On the Asian market, Tokyo's Nikkei lost 1.1 percent to finish at 16,776.88.

U.S. wholesale prices soar

WASHINGTON, Dec. 19 (UPI) -- U.S. wholesale prices jumped last month with the producer price index for finished goods rising 2 percent, the highest increase since November 1974.

The Labor Department, in its monthly report released Tuesday, said the previous month's figure showed a 1.6-percent downfall.

The core PPI, excluding food and energy, was up 1.3 percent, the highest rate since July 1980, reversing October's 0.9-percent drop.

In November, food prices rose 0.1 percent and energy prices rose 6.1 percent. During the previous month, food and energy prices fell 0.8 percent and 5 percent, respectively.

Meanwhile, home construction climbed during November, rebounding partially from a sharp drop the month before, while permits for future building fell a 10th consecutive month.

Former Fannie Mae execs sued

WASHINGTON, Dec. 19 (UPI) -- Former Fannie Mae chief Franklin Raines and two others have been sued by federal regulators for allegedly manipulating earnings to beef up income.

The administrative complaint seeks to recoup more than $115 million the trio received while the government-chartered mortgage finance company's earnings were reportedly misstated, the Washington Post said. The charges will be reviewed by an administrative law judge.

Raines, former chief financial officer J. Timothy Howard and former controller Leanne Spencer were accused of using a variety of schemes to meet profit goals and boost their compensation.

Lawyers for the former executives said the allegations were false and politically motivated.

The three "did very serious harm to this company," James B. Lockhart III, director of the Office of Federal Housing Enterprise Oversight, said.

Delta recovery plan rejects US Airways bid

ATLANTA, Dec. 19 (UPI) -- Delta Air Lines filed a Chapter 11 reorganization plan Tuesday urging creditors to let the company work out of bankruptcy on its own.

The plan assured creditors of getting more of their money and sooner if Delta remains independent and a US Airways takeover bid is rejected.

It places a Delta value of between $9.4 billion and $12 billion, more than the recent $8.4 billion buyout offer from US Airways, The Atlanta Journal-Constitution said.

Estimating creditors would recover 63 to 80 percent of their bankruptcy claims under the Delta plan, the airline predicted an operating profit margin of 8 to 10 percent in the next four years.

AT&T-BellSouth deal faces new hurdle

WASHINGTON, Dec. 19 (UPI) -- AT&T's $84 billion bid to buy BellSouth faced a new snag but there appeared little doubt the U.S. Federal Communications Commission would approve the deal.

Now, however, the deal may involve unwanted conditions after Robert McDowell, an FCC member, said he would not vote in the matter because of ethical concerns.

This was not good news for the two companies involved. They had hoped that McDowell, a Republican, would break the partisan deadlock that has plagued the agency's review of the deal.

The two Democrats on the FCC want certain conditions; the two other Republicans oppose them. The Wall Street Journal said there is "little question" of FCC approval but that AT&T probably will be forced to accept some conditions involving "net neutrality" -- the idea that all Internet traffic should be treated equally.